Morgan Sindall Group Plc · LSE:MGNS
Morgan Sindall — H1 2011 Earnings Presentation
34 slides from Morgan Sindall's earnings presentation, 2011
Slide 1: Half Year Results 2011
Morgan Sindall Group plc Half Year Results 2011
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Slide 3: Overview
Overview Group delivered a solid performance in line with our expectations, in market conditions that remain challenging Remain cautious on short-term outlook for construction markets Positioning Group for market recovery 2013+ Construction businesses growing revenues but margins under press
Slide 4: 2011 Financial Highlights
2011 Financial Highlights Adjusted profit before tax1 at £19.5m (2010: £23.1m) on slightly increased revenue of £1.09bn (2010: £0.98bn) Profit before tax at £16.7m (2010: £18.4m) Adjusted earnings per share1 of 35.1p (2010: 42.0p) Non-recurring items in period of £0.9m (2010: £1.9m), relatin
Slide 5: Financial Summary
Financial Summary £m Six months to Six months to June 2011 June 2010 Revenue 1,087 982 Adjusted PBT 19.5 23.1 Non-recurring costs (0.9) (1.9) Amortisation (1.9) (2.8) Profit before tax 16.7 18.4 Effective tax rate 27% 29% Tax charge 2 (1.8) (5.3) Profit after tax 14.9 13.1 Net assets 225.0 209.3 Adj
Slide 6: Financial Summary – Income Tax Expense
Financial Summary – Income Tax Expense £m Six months to Six months to June 2011 June 2010 Current tax UK tax 4.4 5.3 Prior period adjustment (22.4) - Current tax expense (18.0) 5.3 Deferred tax Current year - - Prior period adjustment 19.8 - Deferred tax expense 19.8 - Income tax expense 1.8 5.3 S
Slide 7: Balance Sheet
Balance Sheet £m June 2011 June 2010 Intangible FA 229.0 203.3 Tangible FA 25.5 30.1 Investments (incl. Joint ventures) 53.8 47.7 Shared equity loan receivables 15.7 11.4 Inventories 157.7 147.3 Other working capital (294.3) (339.3) Current and deferred tax (25.6) (26.3) Pension scheme (1.7) (3.0) C
Slide 8: Cashflow
Cashflow £m Six months to Six months to June 2011 June 2010 Operating profit 16.8 18.0 Non-cash and other adjustments 7.5 4.9 Working capital movement (86.2) 25.2 Net investment in PPE (3.4) (0.6) Income tax (3.6) (3.4) Dividends (12.7) (12.7) Interest (0.2) 0.9 Payment for acquisitions/JVs (0.5) (1
Slide 9: Market Overview
Market Overview 2011 est. Market sectors Change £bn Construction & Infrastructure 11.2 +1% Infrastructure Private Industrial & Commercial 26.6 +1% Public Non-Residential 11.9 -10% Urban Regeneration Private Housing 12.5 +3% Public Housing (incl R&M) 9.6 -9% Affordable Private Housing R&M 9.9 -3% Hou
Slide 10: Market Positioning
Market Positioning Construction & Infrastructure: focus on growth sectors of rail, airports, commercial/industrial and power distribution Affordable Housing: building on market leading position offering full service capability; increasing investment in mixed tenure Fit Out: growing market shar
Slide 11: Market Trends
Market Trends Public sector declining, commercial sector growing, regulated sector steady London-led commercial recovery Switch from investment in social to economic infrastructure Investment-led, land-swap and mixed tenure housing schemes growing in importance 11
Slide 12: Segmental Analysis
Segmental Analysis £m Six months to June 2011 Six months to June 2010 Revenue Profit Margin Revenue Profit Margin Construction & Infrastructure 617 9.5 1.5% 612 12.2 2.0% Affordable Housing 228 8.3 3.6% 173 6.9 4.0% Fit Out 222 6.1 2.7% 179 6.9 3.8% Urban Regeneration 19 1.0 - 15 0.8 - Investments 1
Slide 13: Construction & Infrastructure
Construction & Infrastructure iESE Tier 1 Framework – Bay House School, Gosport Pudding Mill Lane 13
Slide 14: Construction & Infrastructure – Market & Trading Highlights
Construction & Infrastructure – Market & Trading Highlights Revenue Adjusted Operating Profit 2011 2010 Change 2011 2010 Change £617m £612m +1% £9.5m £12.2m -22% Market remains competitive Recovery of London commercial sector Construction revenue £402m (2010: £345m) and Infrastructure revenue
Slide 15: Construction & Infrastructure – Integrated Capabilities
Construction & Infrastructure – Integrated Capabilities Capabilities Sectors 2011 est. £bn Trend Utilities Services Water 2.9 Gas 1.0 Tunnelling Electricity 1.5 Infrastructure Construction Road 3.4 Rail 3.0 Professional Services Aviation 1.0 Focus on growth sectors; driven by Defence/other public
Slide 16: Construction & Infrastructure – Outlook
Construction & Infrastructure – Outlook Market will remain highly competitive Heavy impact of public sector spending cuts over next two years Increasing investment in economic infrastructure Focus on growth sectors of rail, airports and energy distribution Also focus on London commercial s
Slide 17: Affordable Housing
Affordable Housing Renaissance Scheme, Nuneaton Northshore Regeneration Scheme, Stockton-on-Tees (part of the Camp Hill regeneration programme) (Lovell/Muse JV) 17
Slide 18: Affordable Housing – Market & Trading Highlights
Affordable Housing – Market & Trading Highlights Revenue Adjusted Operating Profit 2011 2010 Change 2011 2010 Change £228m £173m +32% £8.3m £6.9m +20% Market holding steady but competitive; new build, planned and response maintenance resilient Open market remains constrained by lack of mortgage
Slide 19: Affordable Housing – Market Sectors
Affordable Housing – Market Sectors 2009 half year 2010 half year 2011 half year 53 64 81 85 82 99 26 21 24 41 3 Revenue £178m £173m £228m Planned Maintenance Response Maintenance Open Market New Building Social Housing Full service capability Growing response maintenance Expect mixed tenure t
Slide 20: Affordable Housing – Outlook
Affordable Housing – Outlook Market pursuing alternative funding models; bond finance, institutional funding and affordable rent Full-service offering provides growth potential; particular focus on mixed tenure and integrated maintenance opportunities Remain cautious on open market recovery
Slide 21: Fit Out
Fit Out Macquarie Group, London HSBC, London 21
Slide 22: Fit Out – Market & Trading Highlights
Fit Out – Market & Trading Highlights Revenue Operating Profit 2011 2010 Change 2011 2010 Change £222m £179m +24% £6.1m £6.9m -12% Credible performance in very challenging market conditions which have impacted margins in the short term Key opportunities secured; overall growth in market share he
Slide 23: Fit Out – Outlook
Fit Out – Outlook Market remains tight due to lack of large project opportunities; availability of grade A space remains tight Expect market to begin to gradually improve from 2012 as new commercial property eases constraints on market Refurbishment focus in short term Expect to maintain rev
Slide 24: Urban Regeneration
Urban Regeneration Rathbone Market, Canning Town Wakefield Council offices, Wakefield 24
Slide 25: Urban Regeneration – Market & Trading Highlights
Urban Regeneration – Market & Trading Highlights Revenue Adjusted Operating Profit 2011 2010 Change 2011 2010 Change £19m £15m +27% £1.0m £0.8m +25% Overall level of activity continues to improve slowly; on site with £110m of construction work (2010: £58m) Acquired partner’s share of North Shore
Slide 26: Urban Regeneration – Outlook
Urban Regeneration – Outlook Market slowly recovering Increasing importance of regeneration in medium term; investing in projects to drive growth Quality of portfolio of development agreements remains excellent Muse shortlisted for a number of development opportunities Long term pipeline g
Slide 27: Investments
Investments Hull BSF Bournemouth LABV 27
Slide 28: Investments – Portfolio and Highlights
Investments – Portfolio and Highlights Capital value MS equity/loan stock £m £m Health 292 4.3 Emergency Services 71 1.8 Roads 137 6.0 Community 368 2.3 Invested to date 14.4 Directors’ valuation at discount rates (7-9%) 42.0 Committed but not invested 12.0 Current carrying value 19.0 Operating co
Slide 29: Investments – Outlook
Investments – Outlook Funding allocated for schools PFI; expect to be competitively bid Further Local Asset Backed Vehicle (“LABV”) partnership model opportunities Land-swap opportunities; draw on joined-up skills of the Group Bidding photo-voltaic opportunities in conjunction with Affordabl
Slide 30: Order Book Profile
Order Book Profile £m 1400 1200 Regeneration Pipeline 1000 Affordable Housing 800 Fit Out Construction & Infrastructure 600 400 200 0 2011 2012 2013 2014 2015 2016 2017 2018 2019+ 70% covered for next 12 months 30% of order book in frameworks Growing regeneration pipeline 30
Slide 31: Summary – Outlook & Prospects
Summary – Outlook & Prospects Short term expect market to remain challenging Positioning business to exploit regeneration opportunities; increase in regeneration pipeline Focus on more complex projects; more joined-up approaches Also focus on growth sectors in traditional contracting markets
Slide 32: Notes
Notes MORGAN SINDALL 2
Slide 33: Notes
Notes MORGAN SINDALL x
Slide 34: morgansindall.com
morgansindall.com Morgan Sindall Group plc, Kent House, 14-17 Market Place, London W1W 8AJ Tel: 020 7307 9200 [email protected] 34 34