600 Group Plc Preliminary Results – year ended 29 March 2014 www.600group.com
Contents Overview Financial Review Operating Review & Strategy Summary & Prospects Appendices www.600group.com 2
Overview “Much improved underlying earnings and further strengthening of market position…” Increased market share in key geographical markets Enhanced margins and operating efficiency Significant progress on product development Growth in order intake and pipeline AGM proposal to restore distributable reserves Strategic acquisitions under evaluation www.600group.com 3
Financial Review Neil Carrick – Group CFO MACH exhibition, NEC, April 2014 www.600group.com 4 4
Financial Highlights Group PBT* £1.97m (2013: £0.51m) Underlying earnings* per share of 1.90p (2013: 0.59p) Revenues £41.71m (2013: £41.79m) Order intake up by 13.7% Gross margin up by 150 b.p. to 33.2% Operating margins up – group 5.6% (2013: 2.3%) Group net debt reduced to £5.31m (2013: £5.41m) * Denotes from continuing activities, before pension credit interest, amortisation of shareholder loan costs and special items . www.600group.com 5
Summarised Results £millions FY14 FY13 Revenues* 41.71 41.79 Gross Profit* 13.86 13.25 Gross Margin* 33.2% 31.7% Operating Profit* 2.35 0.97 Operating Margin* 5.6% 2.3% Profit Before Taxation* 1.97 0.51 Taxation (0.62) 0.65 Other items 0.50 0.90 Profit attributable to equity 1.85 2.06 Adjusted earnings per share 1.90p 0.59p (p)* 2.19p 2.75p Total earnings per share (p) * Denotes from continuing activities, before pension credit interest, amortisation of shareholder loan costs and special items . www.600group.com 6
Segmental analysis Group Operating Costs Group Operating Profit Machine Tools Laser Marking 4 0.42 3 0.21 2.35 £M 2 0.97 0.22 0.31 2.96 2.15 1 1.56 1.47 1.39 1.03 0 FY 12 FY 13 FY 14 FY 12 FY 12 FY 13 FY13 FY14 FY14 Group Laser Marking Machine Tools 10 Operating Margin % 8.6 6.1 5.6 5.6 4.8 5 4.7 3 2.3 0.6 0 FY 12 FY 13 FY14 “Continued improving trend across each business segment..…” www.600group.com 7
Financial Position Gearing (%) FY 14 FY 13 120% FIXED ASSETS 6.13 5.80 100% 80% NET PENSION SURPLUS 12.36 11.77 60% Net of associated deferred taxation 40% WORKING CAPITAL 20% Inventory 8.50 10.27 0% Receivables 6.21 6.18 FY12 FY13 FY14 Payables (6.42) (6.97) 8.29 9.48 NET DEBT Net debt: EBITDA ratio Cash & cash equivalents 1.15 1.02 7 Bank and financial leases (4.17) (4.27) 6 Shareholder loans (2.29) (2.16) 5 (5.31) (5.41) Net Debt (£m) 4 OTHER ASSETS (NET) 1.08 0.02 3 2 NET ASSETS 22.55 21.66 1 0 FY12 FY13 FY14 www.600group.com 8
Net Debt position Facilities Utilised Headroom Next Review UK bank 3.47* 2.61 0.86* June 2014* Overseas 1.98 0.12 1.86 March 2015 banks Shareholder 2.29 2.29 - August 2015 loan Total 7.74 5.02 2.72 * May 14 - Extended UK available facilities to £4.77m and pro-forma headroom to £2.16m, committed to May 2017 www.600group.com 9
Order Books Quarterly order intake £ millions Order intake up by 13.7% in FY14 14 Book-to-bill of 101.8% (FY13: 12 89.4%) 10 8 Order book of £7.02m (FY13: 6 £6.87m) 4 2 FY15 Q1trading ahead of the 0 corresponding period last year www.600group.com 10
Operating Review & Strategy Nigel Rogers – Group CEO Mackay Training Centre, Queensland, Australia www.600group.com 11 11
Operational Excellence Product innovation Core Brand Cost Values Effective Supply Customer Service www.600group.com 12 12
Product Innovation OiD Control introduced Clausing “Made in Tornado EL range the USA” launched drill range Generate d >£1m of revenues www.600group.com 13
Product Innovation Gripfast combination chuck Gripmeter safety device EMS workstations range Scriba EVO software imminent www.600group.com 14
Cost Effectiveness Tornado EL – material cost down Site compression at Full hardware redesign Heckmondwike Reduced material cost Decreased build time Lower working capital Secured price concessions on bought in equipment Continued tight control of overheads www.600group.com 15
Customer Service Unrivalled technical support Brought lead times to industry standard levels Increased inventory availability Measured improvement in on-time delivery Distributors involved in product development Reduced lead times to 6-8 weeks Measured improvement in on-time Market leading inventory availability delivery IT systems to facilitate distributor interface Rapid response, strong aftersales support www.600group.com 16
Market outlook for 2014* UK up 14% EU up Asia 13% US up up 2% 9% Aus up 18% World up 7% Source – Gardner Research, World machine Tool Output & Consumption Survey 2014 www.600group.com 17 17
Strategic objectives Maintain focus on delivery of KPI targets: Double digit top line growth >7.5% Group operating margin (after central costs) Cash conversion Seek out and deliver earnings enhancing acquisitions Laser Marking Addition of “third leg” activity Monitor possible consolidation in listed company space www.600group.com 18
Summary & Outlook Much improved performance in FY14 Momentum in order intake Market conditions expected to improve in FY15 Positive outlook and prospects Evaluating opportunities to invest & grow www.600group.com 19
Appendices 6 x 1.3 metre Large Swing Lathe, Installed at Halliburton (Malaysia) by Clausing www.600group.com 20 20
Revenue Analyses By product category By Destination MT - Turning N America 11% MT - Other 15% 15% UK 36% Components 17% 54% Europe (ex-UK) 20% Laser 16% 16% Marking RoW Aftermarket www.600group.com 21
Revenue – relative growth 2 40 0.5 0 30 -2.3 -2 20 31 -4 10 Gardner Research 2013 Forecast - Feb 13 -9 -6 0 Gardner Research 2013 Actual - Feb 14 -5 -9 -8 -10 600 Group Actual - FY 14 -10 -20 4 NORTH AMERICA UK 2 2.4 0 Growth % -0.2 -2 -4 -9 2 10 -6 8 1 1.7 -8 0 0 -10 -15 -1.4 -1 WORLD -10 -21.3 -3.5 -2 -20 -3 -4 -30 ROW EUROPE (excl. UK) www.600group.com 22
Key Performance Indicators Target FY14 FY13 FY12 Revenue growth >10% -0.2% 11.2% 4.2% Book-to-bill ratio >110% 101.8% 89.4% n/a Order backlog (months) 2.0-3.0 1.9 2.0 3.9 Gross Margin (%) >33% 33.2% 31.7% 32.3% Operating Margin (%) >7.5% 5.6% 2.3% 0.6% Working Capital (%) <25% 20.0% 21.5% 20.7% Inventory Turns >3.5x 3.3x 2.8x 2.8x Receivables (days) <60 54 55 63 www.600group.com 23
Cash Flow Statement £ millions FY 14 FY 13 PROFIT FOR PERIOD 1.85 2.06 Adjustment for non-cash items 0.86 (0.96) Working capital movements (0.72) (2.82) TRADING CASH FLOW 1.99 (1.72) Interest and taxation paid (0.79) (0.51) OPERATING CASH FLOW 1.20 (2.23) Investing activities (1.00) 3.48 Equity raised 0.03 1.42 Debt repaid (0.02) (1.57) INCREASE IN CASH EQUIVALENTS 0.21 1.10 Debt repaid 0.02 1.57 Adjustment for non-cash items (0.13) (0.08) MOVEMENT IN NET DEBT 0.10 2.59 www.600group.com 24
UK Pension Funding FY12 FY13 FY13 FY13 FY13 FY14 FY14 FY14 FY14 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 £ 30 m 20 10 Buy Out 0 Tech Prov -10 IAS 19 -20 -30 -40 -50 -60 Buy-out and Technical Provisions data based on actuarial estimates. IAS 19 stated before deferred taxation, and was not recognised on the Group balance sheet prior to FY13 under IFRIC 14 criteria. www.600group.com 25
Share Price Movements 600 Group Plc - share price 25 20 15 Close 90 day MA 10 5 0 www.600group.com 26
Appendices Golden Gate Bridge, San Francisco, CA Maintenance workshop fitted out by Clausing, 2013 www.600group.com 27 27
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