1
play

1 Market Overview and Financial Results Tom Honan Chief Financial - PowerPoint PPT Presentation

Jan 20, 2023 •474 likes •1k views

Interim Results 2003 Presentation 6 March 2003 1 Market Overview and Financial Results Tom Honan Chief Financial Officer 2 Summary of results Normalised EPS 0.8 cents EBITDA in line with forecast at $54.9 m Generated operating

  1. Interim Results 2003 Presentation 6 March 2003 1

  2. Market Overview and Financial Results Tom Honan Chief Financial Officer 2

  3. Summary of results � Normalised EPS – 0.8 cents � EBITDA in line with forecast at $54.9 m � Generated operating cash flows of $33.1 m � Capital Expenditure of $11.5 m, 60% down on prior year � Share Buy-Back - 18.7 m shares acquired � Interim ordinary share dividend 2.5 cents, fully franked � Net Debt - $74 m, Funding Capacity of A$250 m 3

  4. Context of the Results � 1H normalised EBITDA in line with forecast � Revenues impacted by slow down in corporate actions activity and low interest rates � Continued operating cost savings, but not as rapid as revenue declines � Technology spend declines � Capital expenditure down 60% � Changed composition of Board – increased Non-Executive Directors 4

  5. This presentation is structured around the following framework Market Financial CEO’s Report Overview Results 5

  6. Market Overview CPU Revenues are driven by multiple factors Revenue type Revenue Driver Risk mitigation 2% Register Maint. & Growth in clients Retain existing Recoveries and holders clients, win market 22% share Corporate Actions Market conditions, Win new business; M&A activity link to key stakeholders, clients 8% Margin Income Interest rates, Hedging, flow on hedging balances effort from 62% Maintenance & Corp 6% Actions Non- Registry Growth in non- Increase proportion registry on non-registry Register Maint. & Recoveries Corporate Actions businesses business Margin Income Non Registry Other 6

  7. Market Overview Global Equities Market Historical Equity Issuance Data M&A Value of M&A Number of Transactions (US$m) Transactions 2,500,000.0 18,000 16,000 2,000,000.0 14,000 12,000 1,500,000.0 10,000 8,000 1,000,000.0 6,000 4,000 500,000.0 2,000 0.0 0 1H92 2H92 1H93 2H93 1H94 2H94 1H95 2H95 1H96 2H96 1H97 2H97 1H98 2H98 1H99 2H99 1H00 2H00 1H01 2H01 1H02 2H02 M&A Value of Transactions (US$m) (LHS) M&A Number of Transactions (RHS) Source: Thomson Financial 7

  8. Market Overview Global Interest Rate Market % % UK US 8 8 6 6 4 4 2 2 0 0 1996 1997 1998 1999 2000 2001 2002 2003 1996 1997 1998 1999 2000 2001 2002 2003 % Canada 8 6 4 2 0 1996 1997 1998 1999 2000 2001 2002 2003 8

  9. Market Financial CEO’s Report Overview Results 9

  10. Financial Results Group Financial Performance A$m’s Revenue 1H’02 2H’02 1H’03 Registry maintenance 177.4 169.5 168.0 Corporate actions 34.8 22.8 21.8 Margin income (including sharesave admin) 41.9 30.6 28.1 Non Registry fees/sales 77.4 76.1 75.2 Recoveries 59.5 65.3 49.3 Interest income 2.5 1.7 1.8 Other 3.0 18.5 4.5 Total Revenue 396.5 384.5 348.7 Operating costs 323.5 309.9 293.8 EBITDA 73.0 74.6 54.9 Expenses Depreciation and amortisation 11.7 13.6 15.4 Amortisation of goodwill 15.0 14.9 16.2 Borrowing costs 6.9 3.3 3.8 Other 0.0 (1.5) (1.4) Non-recurring items 0.0 0.0 7.1 Pre tax Profit 39.4 44.3 13.9 Income tax 15.2 10.8 9.0 NPAT before OEI 24.2 33.6 4.8 NPAT after OEI 24.5 46.8 3.9 Normalised NPAT after OEI 24.5 33.4 13.2 10

  11. Financial Results Half Year Comparison Revenue Breakdown A$m A$m 414.7 177.4 169.5 168.0 396.5 384.5 348.7 339.6 77.4 76.1 75.2 41.9 79.7 74.6 71.9 73.0 34.8 28.1 30.6 54.9 21.8 22.8 1H'01 2H'01 1H'02 2H'02 1H'03 Register Main Corp Actions Margin Income Non Registry Sales/Fees 1H'02 2H'02 1H'03 Revenue EBITDA 11

  12. Financial Results Revenue Analysis Total Revenue Revenue Breakdown A$m 59.4 57.0 32% 51.6 35% 28.0 25.8 20.7 21.4 15.3 13.7 13.7 13.3 9.0 33% 6.0 6.8 0.7 Asia Pacific Europe North America Register Corp Actions Margin Recoveries Non Registry Main Income Sales/Fees Asia Pacific Europe North America 12

  13. Financial Results Cost Analysis A$m Operating Cost Breakdown Operating Costs A$m 335.0 149.6 323.5 309.9 141.0 293.8 136.5 267.7 64.8 61.2 49.7 44.9 40.6 41.0 40.4 38.9 36.7 23.0 18.0 15.7 10.7 8.6 5.9 Recov Exp Personnel Occupancy Other Direct Technology Corporate 1H'01 2H'01 1H'02 2H'02 1H'03 1H'02 2H'02 1H'03 13

  14. Financial Results EBITDA generated from diversified portfolio Total EBITDA EBITDA Breakdown A$m 1H'03 79.7 18% 74.6 73.0 71.9 54.9 45% 37% 1H'01 2H'01 1H'02 2H'02 1H'03 Asia Pacific Europe North America 14

  15. Financial Results Analysis of NPAT Explanation Tax losses written off A$m Non-Recurring • Normalised NPAT for 1H’03 Actual NPAT 40 was $13.2m 30 16.2 2.5 20 33.4 24.5 4.7 20.4 10 18.3 4.6 3.9 0 1H'01 2H'01 1H'02 2H'02 1H'03 Note: Actual NPAT + Non-Recurring + Tax losses written off = Normalised NPAT 15

  16. Financial Results Effective Tax Rate � Headline effective tax rate 1H03 65.2% (1H02 38.6%) � Normalised headline effective tax rate 1H03 30.3% (1H02 32.3%) � Headline rate adversely affected by benefit of losses not brought to account $4.7 m (1H02 $2.5 m) � Underlying effective tax rate 1H03 10.6% (1H02 26.5%) � Trend in regard to both normalised headline and underlying effective tax rate is lower 16

  17. Financial Results Headcount Total FTE's 5,321 5,165 4,966 5,000 4,300 4,000 3,000 2,591 2,053 2,000 1,000 0 June '98 June '99 June '00 June '01 June '02 Dec '02 17

  18. Financial Results Headcount * Geographic Breakdown 1,183 � Gross reduction of 296 FTE’s 1,200 1,038 � Redundancy programs in 1,000 894 Australia, UK and Canada 800 655 � Headcount increases in high 548 600 growth businesses (i.e. Non 400 Registry) 154 200 77 74 0 Australia Hong Kong N. Zealand UK Ireland S. Africa US Canada * Headcount excludes Technology and Corporate Services 18

  19. Financial Results Technology Costs – Establishing Global Platform 50 All A$m – internal cash costs only 41.0 40.4 38.9 All technology costs are expensed 40 Major events: 30 � SCRIP implementation: US, Canada and Hong Kong � Global Options system development 20 (including BP) 10 0 1H'02 2H'02 1H'03 19

  20. Financial Results Analysis of Technology Costs Category Cost Type Occupancy Admin 3% 8% External External bureau bureau 17% 17% Development Computer 36% Costs 9% Personnel & Comms on-costs 4% 67% Maintenance 21% Infrastructure 18% 20

  21. Financial Results Analysis of Technology Costs A$m 60.0 54.7 52.0 48.4 50.0 15.8 11.0 8.0 External Bureau 40.0 6.2 8.6 Infrastructure Maintenance 8.2 30.0 Application Maintenance 15.3 10.3 11.9 Administration 20.0 3.7 1.0 1.8 Development 10.0 18.5 17.8 17.0 0.0 1H'02 2H'02 1H'03 21

  22. Financial Results Balance Sheet Strength Net Debt / Equity = 11.8% Net Debt = A$ 74m Committed Debt facility = A$ 250m Net Debt / Equity has increased as a result of the share buy-back and increased dividends 22

  23. Financial Results Cash Flow A$m 60.0 51.6 � Gearing on a net debt to 50.0 equity basis – 11.8% 41.2 40.0 � Committed resources 33.1 A$250m 28.4 27.8 28.5 30.0 27.1 23.4 � Debtors days 19.9 20.0 outstanding have fallen 11.5 from 70 to 69 days 10.0 0.0 1H'01 2H'01 1H'02 2H'02 1H'03 Cashflow from Ops Cap Ex - PPE 23

  24. Financial Results Capital Expenditure down 60% from Dec ‘01 CPU Group Capex A$ M Occupancy 2.0 Document Services Facilities 0.1 Information Technology 8.8 Other 0.6 TOTAL 11.5 24

  25. Financial Results Working Capital Management Improving but not enough 80 75 70 69 70 60 8% reduction in trade receivable balances 50 Receivable days 40 33 33 Payable days 31 30 20 10 0 FY'01 FY'02 1H'03 days 25

  26. Financial Results Margin Income – Interest Rate Sensitivity Margin Income Exposure A$m PBT 100 Impact 80 60 40 20 0 -2.50% -2.00% -1.50% -1.00% -0.50% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% -20 -40 Exposure Hedged exposure 100% Hedged -60 26

  27. Financial Results Risk Management - Funds Balances at 31 December 2002 By Category By Country Australia Dividend US Plans 1% 15% 12% 21% Dissenter Canada 11% 42% Broker Trust Corporate UK 23% Actions 45% 17% Regular Trust 13% CY02 average balance range A$3.1b – A$4.5b 27

  28. Financial Results Risk Management - Interest Rate Sensitivity No Exposure to exposure interest rates 34% 30% Interest Rate Hedging Strategy: - Minimise downside risk in current low interest rate environment Policy: - Minimum hedge of 25% / Maximum hedge of 75% Effective - Minimum term 1 year / Maximum term 5 years hedging in - Current hedging: 36% place - both natural & synthetic 36% 28

  29. Financial Results Equity Management – Fully Franked Interim Dividend of 2.5 cps - EPS – Normalised 0.8 cents - Dividend 5 cents per year - Current yield * 2.9% - Franking Benefit – Total return 4.1% * Based on share price of A$ 1.70 29

  30. Financial Results Equity Management – Share Buy Back � Commenced 11 th September 2002 � Acquired 18,710,000 shares � Average price A$2.05 � Scheduled to complete 11 th March 2003 30

Recommend

More recommend