Morgan Sindall Group Plc · LSE:MGNS
Morgan Sindall — FY2010 Earnings Presentation
35 slides from Morgan Sindall's earnings presentation, 2011
Slide 1: Morgan Sindall Group plc Preliminary Results 2010
Morgan Sindall Group plc Preliminary Results 2010
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Slide 3: Overview
Overview Group delivered a robust performance underpinned by breadth of capabilities and spread of activities Strategic acquisitions created a market leading integrated maintenance business at Affordable Housing Merger of Construction and Infrastructure Services divisions to create integrated
Slide 4: 2010 Financial Highlights
2010 Financial Highlights Adjusted profit before tax1 at £51.3m (2009: £51.5m) on revenue of £2.1bn (2009: £2.2bn) Profit before tax at £40.7m (2009: £44.7m) Adjusted earnings per share1 of 92.9p (2009: 93.9p) Total dividend held at 42.0p (2009: 42.0p) Strong cash performance – Net cash at
Slide 5: 2010 Financial Highlights
2010 Financial Highlights Non-recurring items in year of £5.1m – £3.2m relating to reorganisation of Construction and Infrastructure Services divisions – £3.9m relating to maintenance acquisitions – £2.0m one-off gain linked to Muse’s acquisition of partners’ JV interests £21m of annualised cost
Slide 6: Financial Summary
Financial Summary £m December 2010 December 2009 Revenue 2,102 2,214 Adjusted PBT1 51.3 51.5 Non-recurring items (5.1) - Amortisation (5.5) (6.8) Profit before tax 40.7 44.7 Income tax expense (10.9) (11.8) Profit after tax 29.8 32.9 Adjusted EPS1 92.9p 93.9p Total dividend per share 42.0p 42.0p 1 B
Slide 7: Balance Sheet
Balance Sheet £m December 2010 December 2009 YOY Movement Intangible FA 229.8 201.0 +28.8 Tangible FA 27.8 31.3 -3.5 Investments (incl. Joint ventures) 49.8 52.1 -2.3 Shared equity loan receivables 13.9 9.0 +4.9 Inventories 141.1 141.2 -0.1 Other working capital (360.0) (316.3) -43.7 Current and def
Slide 8: Cashflow
Cashflow £m Year to Year to December 2010 December 2009 Operating profit 41.8 43.7 Non-cash and other adjustments 6.2 6.7 Working capital movement 53.7 (31.3) Net investment in PPE (2.0) (6.5) Income tax (6.4) 7.7 Dividends (17.8) (17.7) Interest (0.3) 1.6 Payment for acquisitions/JVs (39.5) (5.3) O
Slide 9: Market Overview
Market Overview 2010 est. Market sectors £bn Construction & Infrastructure 11.4 Infrastructure Private Industrial & Commercial 26.0 Public Non-Residential 12.9 Urban Regeneration Private Housing 11.9 Public Housing (incl R&M) 10.0 Affordable Housing Private Housing R&M 9.8 Public Non-Residential R&M
Slide 10: Strategic and Operational Highlights
Strategic and Operational Highlights Development of response and planned maintenance capability to create a market leading, full service offering at Affordable Housing Merger of Construction and Infrastructure Services divisions Further annualised savings realised of £21m on top of £38m realis
Slide 11: Segmental Analysis
Segmental Analysis £m December 2010 December 2009 Revenue Profit Margin Revenue Profit Margin Construction & Infrastructure 1,250 26.9 2.2% 1,513 30.1 2.0% Affordable Housing 387 16.1 4.2% 374 14.9 4.0% Fit Out 415 14.8 3.6% 291 13.8 4.7% Urban Regeneration 46 2.0 - 32 0.7 - Investments 4 (3.3) - 3
Slide 12: Construction & Infrastructure
Construction & Infrastructure M74 completion, Glasgow Marylebone Station, London 12
Slide 13: Construction & Infrastructure – Market & Trading Highlights
Construction & Infrastructure – Market & Trading Highlights Revenue Adjusted Operating Profit 2010 2009 % 2010 2009 % Construction 737 743 14.3 13.0 Infrastructure 513 770 12.6 17.1 Total £1,250m £1,513m -16% £26.9m £30.1m -11% Blended margin improved to 2.2% (2009: 2.0%) Construction margin to
Slide 14: Construction & Infrastructure – Integrated Capabilities
Construction & Infrastructure – Integrated Capabilities Capabilities Sectors 2010 est. £bn Trend Water 2.9 Utilities Services Gas 1.0 Electric 1.3 Waste Renewable energy Tunnelling Nuclear Road 3.7 Infrastructure Rail 2.6 Aviation 1.0 Construction Defence/other public 2.6 Education 6.0 Health 2.3 Pr
Slide 15: Construction & Infrastructure – Outlook
Construction & Infrastructure – Outlook Public sector capex set to reduce 22% over next five years Infrastructure spending to increase over next five years Growth opportunities in gas, electric, renewable energy, nuclear, waste, rail, aviation and commercial/industrial Continue to drive Perf
Slide 16: Affordable Housing
Affordable Housing River Clyde Homes, Port Glasgow, Scotland Integrated maintenance expands 16
Slide 17: Affordable Housing – Market & Trading Highlights
Affordable Housing – Market & Trading Highlights Revenue Adjusted Operating Profit 2010 2009 % 2010 2009 % £387m £374m +3% £16.1m £14.9m +8% Expanded through Connaught acquisition to create full-service offering; response and planned maintenance, new build of social and affordable housing Secure
Slide 18: Affordable Housing – Market Sectors
Affordable Housing – Market Sectors 2008 2009 2010 134 102 130 185 191 204 68 47 52 25 Revenue £377m £374m £387m Planned Maintenance Response Maintenance Open Market New Building Social Housing 18
Slide 19: Affordable Housing – Connaught Update
Affordable Housing – Connaught Update Consideration £28m Contract FV adjustments £11m Other FV adjustments £15m £54m WIP/debt recovery £28m Goodwill/intangible asset £26m Acquisition transformational for Lovell Creating new opportunities; 8 integrated maintenance frameworks, photo voltaic instal
Slide 20: Affordable Housing – Outlook
Affordable Housing – Outlook Full-service offering provides growth potential Remain cautious on open market recovery Continued outsourcing of maintenance More innovation for housing funding; mixed-tenure coming back to the fore Retrofit opportunities; Decent Homes 2 Order book increased
Slide 21: Fit Out
Fit Out Rackspace office, London Queen’s Theatre, London 21
Slide 22: Fit Out – Market & Trading Highlights
Fit Out – Market & Trading Highlights Revenue Operating Profit 2010 2009 % 2010 2009 % £415m £291m +43% £14.8m £13.8m +7% Market remained very competitive Recovery of demand for larger projects in financial services sector in London Maintained focus on profitable projects with appropriate risk
Slide 23: Fit Out – Outlook
Fit Out – Outlook Market expected to contract in 2011 with lack of newly developed office space, especially larger projects Opportunities in hotel sector pre-Olympics Improved forward order book at £180m (2009: £171m) but increased price pressure and pipeline of opportunities is weaker 23
Slide 24: Urban Regeneration
Urban Regeneration Doncaster Regeneration North Shore, Homezone Phase 1, Stockton-on-Tees 24
Slide 25: Urban Regeneration – Market & Trading Highlights
Urban Regeneration – Market & Trading Highlights Revenue Adjusted Operating Profit 2010 2009 % 2010 2009 % £46m £32m +44% £2.0m £0.7m +186% Overall activity remains low as expected for this point in the cycle Transaction volumes have improved; creating opportunities Acquired partners’ share in
Slide 26: Urban Regeneration – Historic Performance
Urban Regeneration – Historic Performance Operating 35 Profit 30 £m 25 20 15 10 5 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Return subdued in short term Longer-term returns over cycle Average return on capital employed 20% (1997 to 2010) Capital employed current
Slide 27: Urban Regeneration – Outlook
Urban Regeneration – Outlook Market expected to remain at a low level of activity Continue to move forward existing schemes Food retail, public sector and residential lead opportunities Quality of portfolio of development agreements remains excellent Long term pipeline remains healthy with
Slide 28: Investments
Investments Wigan Life Centre Hull BSF 28
Slide 29: Investments – Portfolio and Highlights
Investments – Portfolio and Highlights Capital value MS equity/loan stock £m £m Health 292 4.7 Emergency Services 71 1.9 Roads 137 6.0 Community 368 13.9 Invested and committed to date1 26.5 Directors’ valuation at discount rates (7-9%) 53.0 Operating cost £4.1m (2009: £3.0m) Income from JVs £0.
Slide 30: Investments – Outlook
Investments – Outlook Post-PFI need for more innovation in funding of construction projects Interest in Local Asset Backed Vehicle (“LABV”) partnership model Preferred bidder – Bournemouth Regeneration (£300m+) Shortlisted opportunities – 2 waste – 3 leisure – 2 extra-care – 1 education and
Slide 31: Order Book Profile
Order Book Profile £m 1800 1600 1400 Urban Regeneration Pipeline 1200 Affordable Housing Fit Out 1000 Construction & Infrastructure 800 600 400 200 0 2011 2012 2013 2014 2015 2016 2017 2018 2019+ 31
Slide 32: Summary – Outlook & Prospects
Summary – Outlook & Prospects Market remains challenging; Fit Out tough in short term Financial strength, spread of activities and breadth of capabilities provides resilience in competitive market Operational focus will continue; proven ability to manage costs tightly as required Strategic d
Slide 33: Notes
Notes MORGAN SINDALL x
Slide 34: Notes
Notes MORGAN SINDALL «
Slide 35: morgansindall.com
morgansindall.com Morgan Sindall Group plc, Kent House, 14-17 Market Place, London W1W 8AJ Tel: 020 7307 9200 [email protected] 35 35