Version : For personal use only 29 August 2011 · 2011. 8. 28. · 2.50% 3.30% 4.00% 3.00% 4.00% p...
Transcript of Version : For personal use only 29 August 2011 · 2011. 8. 28. · 2.50% 3.30% 4.00% 3.00% 4.00% p...
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Version :
2011 Full Year ResultsDavid Harris Group Managing Director & CEO
Chris WoodwardFinance Director
29 August 2011
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Agenda
Business OverviewBusiness Overview
Highlights FY 2011
Fi i l P f Financial Performance
Business Reviews
Strategy
Outlook
“Leading international designer, installer and maintainer of technical services to the building
and infrastructure sectors”
Hastie Group 2011 FY Results | 2
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Business Overview
RotaryM h i l El t i l &
Hastie M h i l El t i l Pl bi (MEP) Fi &
Hastie & Rotary Mechanical, Electrical &Mechanical, Electrical &
Plumbing (MEP) systemsMechanical, Electrical, Plumbing (MEP), Fire & Refrigeration systems and Maintenance Services
Mechanical, Electrical & Plumbing (MEP) systems
14% OF FY11 REVENUE 77% OF FY11 REVENUE 9% OF FY11 REVENUE
Employees 7,000+
Revenue FY 2011 A$1.8 bn
Hastie Group 2011 FY Results | 3
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2011 Full Year Results
Revenue $1,848m
Underlying EBIT result in line with Prospectus (June 2011)
Underlying EBIT 1 $ 47.5m
NPAT ($ 87.8m)
Underlying EBIT result in line with Prospectus (June 2011)
Impacted by difficult trading conditions and inclement weather
Working Capital at 30 June 2011 significantly increased (+$82m) due to voluntary suspension and standstill agreement period (8 April 2011 to 18 July 2011)
$2.5bn of Work-in-Hand2 at 30 June 2011 - new contract wins and active tender pipeline
$160m (gross) capital raising completed in July 2011 of which $43m raised pre June 2011
New syndicated debt facilities agreed with banks providing funding and committedNew syndicated debt facilities agreed with banks providing funding and committed project bonding and letter of credit (LC) facilities until FY2014 and FY2015
No dividend declared for FY2011
Hastie Group 2011 FY Results | 4
1. FY11 Underlying EBIT adjusted for acquisition costs of $0.3m expensed in line with revised accounting standards, provision for aged doubtful debts mainly in the Middle East and Republic of Ireland of $33.5m, a goodwill impairment charge of $69.1m in respect of Rotary businesses in the Middle East, a write down of $1.3m of Rotary brand name in Middle East markets and fees of $2.3m for the banks’ advisor during the standstill agreement. 2. Work-in-Hand includes orders in hand, letters of intent, expected project extensions/variations, small project sales and recurring service revenues.
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Business Description
Leading supplier of technical building solutions and maintenance services to a g gdiverse customer base
Unique integrated multi service capability – Mechanical (air conditioning), Electrical,Plumbing (MEP), Fire, Refrigeration and Maintenance Services
services co-ordination from a single source
greater opportunity to value engineer integrated MEP offerings
Hastie has the most extensive resource base in the industry
engineering/design (D&C) capability
project management experience across all project typesproject management experience across all project types
experienced site personnel including supervisors
Track record of successful project delivery, high quality of service and reliabilitylti i t i t f tresulting in certainty of outcome
Excellent safety performer, 35% average annual reduction in LTIFR since IPO in 2005 -leader in driving industry safety initiatives
Hastie Group 2011 FY Results | 5
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Operational Status Post Capital Raising
Trade credit insurance to Hastie’s suppliers reinstated – trading terms withTrade credit insurance to Hastie s suppliers reinstated trading terms with suppliers being reinstated
Internal organisation settling down
R l ti hi ith t d li li i t t dRelationships with customers and suppliers normalising - new contracts secured
Market conditions still challenging
Focus on improving margins and cash management – reducing working capitalp g g g g g p
Middle East strategic review in progress
Engaged external firm (Flagstaff Wild Consulting) to review MEP Australia’s forecasting and budgeting processesforecasting and budgeting processes.
Hastie Group 2011 FY Results | 6
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Financial Snapshot
A$m 2010 2011 Change
R 1 651 1 1 848 8 11 9%Revenue 1,651.1 1,848.8 11.9%
Underlying EBIT 77.8 47.5 (38.9%)
Underlying EBIT Margin (%) 4.7% 2.6% (44.7%)
Acquisition Costs (2.2) (0.3)
Gain on Spectrum Acquisition 1.6 -Abnormal Project Provision (4.7) (33.5)
Goodwill Impairment in respect of Rotary operations in Middle East - (69.1)
Write off of Rotary brand name in respect of Middle East operations - (1.3)p
Banks' advisor fees in respect of standstill period - (2.3)
EBIT 72.5 (59.0)
N t Fi i C t ( (20 6) (35 1)Net Financing Costs (see next page) (20.6) (35.1)
Income Tax benefit / (expense) (11.3) 6.3
Minority Interest (0.7) -
Hastie Group 2011 FY Results | 7
Net Profit After Tax 39.8 (87.8)
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Financial Snapshot
A$ 2010 2011A$m 2010 2011
Net Financing Costs
Interest Income 1.0 0.5
Loan interest and fees (17.1) (21.0)
Interest on contingent acquisition consideration (0.1) (0.3)
Bank and Guarantee fees (2.7) (5.8)( ) ( )
Loan Establishment fees (1.5) (5.1)
Bank Standstill fees - (2.6)
N t f i h l (0 3) (0 9)Net foreign exchange losses (0.3) (0.9)
Total (20.6) (35.1)
Hastie Group 2011 FY Results | 8
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7 Year Financial Performance
Revenue ($m) EBIT1 ($m)
90.1
77.8
1781.0
1651.1
1848.8
67.51270.7
47.6
39.7
41.3
47.5
923.1
808.7900778.6
11 7
18.2
26.922.1
18.4
25.0
353.9
506.3370.0
479.4
10.0 11.7
2005 2006 2007 2008 2009 2010 2011
180.4 216.5
2005 2006 2007 2008 2009 2010 2011
1H 2H
Hastie Group 2011 FY Results | 9
1. FY11 Underlying EBIT adjusted for acquisition costs of $0.3m expensed in line with revised accounting standards, provision for aged doubtful debts mainly in the Middle East and Republic of Ireland of $33.5m, a goodwill impairment charge of $69.1m in respect of Rotary businesses in the Middle East, a write down of $1.3m of Rotary brand name in Middle East markets and fees of $2.3m for the banks’ advisor during the standstill. FY10 Underlying EBIT of $77.8million adjusted for one-off acquisition costs of $2.2m expensed in line with revised accounting standards, abnormal $4.7m hospital project provision in the Caribbean and gain on acquisition of Spectrum Fire $1.6m.
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Cash Reconciliation
N t h f $62 illi t 30 J 2011Net cash of $62 million at 30 June 2011
62.6
40 0
39.8 ‐ 82.3
‐ 7.4
‐ 9.6 ‐ 12.4
‐ 5.7
80.8 62.0
40.0 ‐ 10.1
‐ 33.5
Net Cash 30 June 2010
EBITDA Increase in Working Capital
Tax Paid Net Capital Expenditure
Net Financing costs
Net Proceeds from Equity
Net increase in
Borrowings
Dividends & Minority Interests
Net Acquisition
Costs
ForeignExchange & Other Sundry Movements
Net Cash30 June 2011
Hastie Group 2011 FY Results | 10
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Working Capital
Working capital abnormally high at 30 June 2011 due to the impact of the voluntary suspension and standstill agreement period in 2H-FY2011:suspension and standstill agreement period in 2H FY2011: increase in contract WIP due to under certification by customers tightening in trade credit terms by Hastie suppliers due to reduction in trade
credit insurancecredit insurance
Expectation is for Working Capital to begin to trend towards normalised levels during FY2012 with supplier trade credit insurance being reinstated
4.20% 4 00%
6.00%
5.00%
6.00%
les
2.49%2.20%
1 70%
2.40%1.90%
2.50%
3.30%
4.20% 4.00%
3.00%
4.00%
pita
l as
% o
f Sal
1.70%
‐0.10%0.00%
1.00%
2.00%
Wor
king
Cap
Hastie Group 2011 FY Results | 11
‐1.00%2006 FY 2007 1H 2007 FY 2008 1H 2008 FY 2009 1H 2009 FY 2010 1H 2010 FY 2011 1H 2011 FY
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Restructured Debt Facilities
In conjunction with the Capital Raising, Hastie Group entered into restructured debt, project bonding and LC arrangements which provide significantly increased financial flexibilitybonding and LC arrangements which provide significantly increased financial flexibility
Staggered maturity profile, with the firstmaturity being 31 July 2013 (see profile on
Term debt and RCF maturity postthe Offer and Debt Repayment
y g y ( pthe right)
Pricing grid on market terms
Amended covenant package including
39
100
200
millions
Amended covenant package, includingremoval of the Adjusted Gross LeverageRatio and appropriate covenant headroom(see table below)
134
66
21
0FY2012F FY2013F FY2014F FY2015F
$ m
( )
Previous 30 Sep 11 31 Dec 11 31 Mar 12 30 Jun 12 Thereafter
LTM Interest Cover Ratio1 >3 00x ≥ 1 85x ≥ 1 90x ≥ 2 25x ≥ 2 40x ≥ 2 40x
Amended covenant package
Drawn Undrawn
LTM Interest Cover Ratio1 >3.00x ≥ 1.85x ≥ 1.90x ≥ 2.25x ≥ 2.40x ≥ 2.40x
Gross Leverage (Gross Debt / EBITDA) na ≤ 3.75x ≤ 3.75x ≤ 3.75x ≤ 3.50x ≤ 3.50x
Gross Debt / Total Assets less intangible assets ≤ 60% ≤ 60% ≤ 60% ≤ 60% ≤ 60% ≤ 60%
Hastie Group 2011 FY Results | 12
1. For the purposes of calculating the Interest Cover ratio, net interest excludes bonding facility fees and amortising establishment fees and calculated on a rolling 12 months basis.
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Safety Performance
100
120
s W
orke
d FY11 another year of excellent performance
80
100
ion
Man
Hou
rs
6th consecutive year of sustained improvement in safety performance
60
y R
ate
per M
illi
35% p.a. reduction in lost time frequency rates and 32% p.a.
d ti i t t l
20
40
jury
Fre
quen
cy reduction in total recordable injuries since IPO
I d t l d
02005 2006 2007 2008 2009 2010 2011
Inj Industry leader
proactively driving industry wide safety initiatives
Hastie Group 2011 FY Results | 13
Lost Time Injury Frequency Rate Total Recordable Injury Frequency Rate
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Underlying Divisional Performance
A$m 2010 2011 Change
R 1 041 4 1 139 5 9 4%
MEP ANZRevenue 1,041.4 1,139.5 9.4%
EBIT 52.9 27.2 (48.6%)
Margin 5.1% 2.4% (52.9%)
R 217 8 305 1 40 1%
Maintenance Services Revenue 217.8 305.1 40.1%
EBIT 9.4 10.6 12.7%
Margin 4.3% 3.5% (18.6%)
Revenue 294 3 240 9 (18 1%)
MEP UK & Rep of Ireland Revenue 294.3 240.9 (18.1%)
EBIT1 6.3 7.6 20.6%
Margin 2.1% 3.1% 47.6%
Revenue 97 7 163 3 67 2%
MEP Middle EastRevenue 97.7 163.3 67.2%
EBIT 4.5 2.1 (53.3%)
Margin 4.7% 1.3% (72.3%)
Revenue 1 651 1 1 848 8 12 0%
TotalRevenue 1,651.1 1,848.8 12.0%
EBIT2 73.1 47.5 (35.0%)
Margin 4.4% 2.6% (40.9)%
Hastie Group 2011 FY Results | 14
1. Rotary impacted by further weakening of GBP by $1.0m unfavourable translation of earnings between FY11 and FY10 exchange rates.
2. FY11 Underlying EBIT adjusted for acquisition costs of $0.3m expensed in line with revised accounting standards, provision for aged doubtful debts mainly in the Middle East and Republic of Ireland of $33.5m, a goodwill impairment charge of $69.1m in respect of Rotary businesses in the Middle East, a write down of $1.3m of Rotary brand name in Middle East markets and fees of $2.3m for the banks’ advisor during the standstill agreement period. FY10 EBIT adjusted for abnormal $4.7m hospital project provision in the Caribbean.
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FY12 Group Outlook
Focus on stabilising relationships and improving cash flow and margins
1.5
2.0
n
Forward Work-in-Hand
$2.5 billion Work-in-Hand1 at 30 June 2011 8 % f d FY2012
1.85 1.64
0.88
0 0
0.5
1.0
$ billion2011 - 85% of expected FY2012 revenue
covered$5 billion of tenders awaiting award, currently being worked onPoor performing plumbing businesses addressedRisk-managed approach strengthened :
0.0
FY2011 FY2012 FY2013Revenue Work‐in‐Hand
currently being worked on
Middle East review in progress
Flagstaff Wild Consulting engaged to review internal MEP forecasting and budgeting processes
Increased scrutiny/review on cash management and forecasting
Strengthened risk management review processes
Challenging market conditions remain – unknown impact from on-going volatility inglobal financial marketsNo change in forecast FY2012 earnings of $58m EBIT as per Prospectus
Hastie Group 2011 FY Results | 151. Work-in-Hand includes orders in hand, letters of intent, expected project extensions/variations, small project sales and recurring service revenues.
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Disclaimer
The information in this presentation:p
Is not an offer or recommendation to purchase or subscribe for securities in HastieGroup Limited or to retain any securities currently held
Does not take into account the potential and current individual investment objectivesor the financial situation of investors
Was prepared with due care and attention and is current at the date of theWas prepared with due care and attention and is current at the date of thepresentation
Actual results may materially vary positively or negatively from any forecasts (whereapplicable) in this presentation. Before making or varying any investment in securities inHastie Group Limited, all investors should consider the appropriateness of that investmentin light of their individual investment objectives and financial situation and should seekg jtheir own professional advice.
Hastie Group 2011 FY Results | 16
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“Leading international designer, i t ll d i t i f t h i linstaller and maintainer of technical
services to the building and i f t t t ”infrastructure sectors -”
www.hastiegroup.com.auHastie Group LimitedHastie Group LimitedLevel 5, 20 Highgate StreetAuburn NSW 2144 Australia+61 2 9714 460261 2 9714 4602
Hastie Group 2011 FY Results | 17
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Supplementary Information
“Leading international designer installer anddesigner, installer and maintainer of technical
services to the building and i f t t t ”infrastructure sectors”
Hastie Group 2011 FY Results | 18
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Geographic Revenue Split
Revenue 2010 Revenue 2011
Australia & New
$1.8bn$1.7bn 0%
Australia & New Zealand
77%
Middle East &0%
Australia & New Zealand76%
Middle East & Other $1.8bn$1.7bn 0%
0%0%
UK & Republic
Middle East & Other
International 9%
0%
0%0%
UK & Republic of Ireland 17%
International 7%
UK & Republic of Ireland 14%
Ireland 17%
Hastie Group 2011 FY Results | 19
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MEP (Mechanical, Electrical, Commercial Plumbing) -ANZANZ
“Leading supplier of technical building solutions and refrigerationsystems to a diverse customer base”
Significant losses in QLD and NSW plumbing businesses impacted results
systems to a diverse customer base
A$m 2010 2011 Change (%)plumbing businesses impacted results – actions taken to address thisRevenue maintained despite subdued non-residential construction sector
Revenue 1,041.4 1,139.5 9.4%
EBIT 52.9 27.2 (48.6%)
Margin 5.1% 2.4% (53.9%)
Margins adversely impacted by continuing challenging market conditions
Examples of Recent Contract Awards
Delays on two key projects in AustraliaLack of capital invested in refrigeration systems by supermarket groups
Royal Adelaide Hospital (final negotiations)Equinix Data Centre161 Castlereagh Street (Sydney)
Floods in Brisbane adversely impacted Queensland performance in 2H-FY2011Some better quality new work secured with order book up 20% on prior year
161 Castlereagh Street (Sydney)700 Bourke Street (Melbourne)Royal Brisbane Women’s HospitalO C t l P k (S d )with order book up 20% on prior year
Hastie Group 2011 1H Results | 20
One Central Park (Sydney)
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Maintenance Services - ANZ
“Full suite of technical maintenance services, for more than 8,000 customersA t li d N Z l d”
Revenue growth primarily due toSpectrum (Fire) - performing to
across Australia and New Zealand”
A$m 2010 2011 Change (%)expectationUnseasonally mild summer severelyimpacted 1H service call levels –reduced HVAC PM uplift
(%)
Revenue 217.8 305.1 40.1%
EBIT 9.4 10.6 12.7%
Margin 4.3% 3.5% (18.6%)reduced HVAC PM upliftFloods and cyclone in Qld impactedHVAC revenue in 2HDiscretionary HVAC maintenance
g ( )
Examples of RecentContract Awards
Discretionary HVAC maintenancespend at historical lows with highlycompetitive tendering – marginimpact
Australia Post – HVAC maintenanceWoolworths Distribution Centres -HVAC maintenance
“Green Solutions” launched - energyaudits and energy reductionstrategies for building owners andtenants
AMP Commercial – Fire services Royal Brisbane – Fire servicesFitness First (national) – energytenants
Hastie Group 2011 1H Results | 21
Fitness First (national) energy reduction solution
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MEP – United Kingdom and ROI
“Specialising in mechanical, electrical and commercialplumbing systems across the UK and Republic of Ireland”
AUD appreciation impacting translationof earnings – $1.0m unfavourable
plumbing systems across the UK and Republic of Ireland
GBPm 2010 2011 Change(%)
Revenue 164 1 149 7 (8 8%)Bid margins remain tight due toaggressive tendering - some ability topass onto subcontractors.
A$m 2010 2011 Change(%)
Revenue 164.1 149.7 (8.8%)
EBIT 4.5 5.9 31.1%
UK remains subdued although signs ofsome recovery with privately fundeddevelopments - active tender pipelineMargin improvement in FY11 positively
$ g ( )
Revenue 294.3 240.9 (18.0%)
EBIT 6.3 7.6 20.6%
Margin 2.1% 3.1% 47.6%Margin improvement in FY11 positivelyimpacted by favourable closure of majorprojectsIreland continues to be tough (loss in
Examples of RecentContract Awards
Ireland continues to be tough (loss inFY2011 of $1.2m) Leeds Arena (Leeds)
Snow Hill (Birmingham offices)Sheffield Schools program (Sheffield)
Hastie Group 2011 1H Results | 22
S e e d Sc oo s p og a (S e e d)St Vincent’s Hospital (Dublin)
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MEP – Middle East
“Specialising in air conditioning, electrical and commercial plumbingsystems across the Middle East”
AUD appreciation impacting translation of earnings – $0.6m unfavourable
systems across the Middle East
A$m 2010 2011 Change (%)earnings $0.6m unfavourable Focus remains on key builders & clients in preferred market sectors aligned with government priorities – health and education
$ (%)
Revenue 97.7 163.3 67.2%
EBIT 4.5 2.1 (53.3%)
Some delays on existing contracts impacted short terms resultsCash collection a major focus – payments
Margin 4.7% 1.3% (72.3%)
continue to be drawn outDelays in issuing project bonds for new projects and trade letters of credit caused a delay in revenue and profit recognitiondelay in revenue and profit recognition. Key projects delivered on time – Zayed University ($140m CV - Abu Dhabi) Al Ain University ($30m CV - Abu Dhabi)
Hastie Group 2011 1H Results | 23
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Operating Cash Flow
A$,000s Jun‐10 Jun‐11
Cash generated from operations 59,726 (19,748)
Income tax paid (8,117) (7,438)
Net cash generated by operating activities 51,609 (27,186)g y p g , ( , )
Net Capital Expenditure (10,715) (10,148)
Acquisition related (23,682) (12,420)
Ad ( ) / f l d i (1 336) 80Advances (to) / from related parties (1,336) 80
Proceeds (Repayment) of borrowings 15,009 39,810
Proceeds (Payment) for share issue (114) 40,012
Interest and other costs of finance paid (20,074) (33,516)
Dividends and non‐controlling interests (14,765) (9,589)
Net increase (decrease) in cash (4,068) (12,957)
Opening Net Cash 87,599 80,835
FX Differences & Sundry Movements (2,696) (5,784)
Closing Net Cash 80 835 62 094
Hastie Group 2011 FY Results | 24
Closing Net Cash 80,835 62,094
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Balance Sheet
A$,000s Jun‐10 Jun‐11
Cash 84 051 71 665Cash 84,051 71,665
Trade and other receivables 406,501 387,898
Inventories 34,450 83,001
Other 9,700 15,964
Current Assets 534,702 558,528
Property, plant and equipment 54,967 49,790
Goodwill 424,039 320,056
Other 40,221 37,327
Non Current Assets 519,227 407,173
Total Assets 1,053,929 965,701
Payables 322,953 306,894
Interest Bearing Liabilities 9 478 34 705Interest Bearing Liabilities 9,478 34,705
Provisions 53,439 58,155
Other 12,926 8,608
Current liabilities 398,796 408,362
Total liabilities 666,701 690,248
Net assets 387,228 275,453
Capital and Reserves 292,935 280,134
Retained earnings 92,734 (4,681)
Hastie Group 2011 FY Results | 25
g , ( , )
Minorities 1,559 ‐
Total Shareholder Funds 387,228 275,453
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Forecasts
Australian Non-Residential Construction Forecast
A$m
Australian Non Residential Construction
All Sectors Excluding Education
35,000
40,000
45,000
A$m All Sectors Excluding Education
15,000
20,000
25,000
30,000
0
5,000
10,000
,
2006 07 2007 08 2008 09 2009 10 2010 11 2011 12 2012 13 2013 14 2014 15 2015 16 2016 17 2017 18 2018 19
Source : Australian Construction Industry Forum (ACIF), April 2011
2006‐07 2007‐08 2008‐09 2009‐10 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19
Hastie Group 2011 FY Results | 26
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Forecasts
UK Non-Residential Construction Forecast
UK Non Residential Construction
35,000
40,000
45,000
£m Private Commercial Private Industrial Gov't Non Residential
15 000
20,000
25,000
30,000
,
0
5,000
10,000
15,000
2006 2007 2008 2009 2010 2011 2012 2013
Source : Experian, Construction Forecasting and Research: Vol 17, Summer 2011
2006 2007 2008 2009 2010 2011 2012 2013
Hastie Group 2011 FY Results | 27
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