PRELIMINARY RESULTS Full year ended 31 March 2015 2 June 2015 - PowerPoint PPT Presentation

PRELIMINARY RESULTS Full year ended 31 March 2015 2 June 2015

Overview  Very good full year results and continued delivery of strategy  31% increase in underlying EPS driven by acquisitions and organic growth  Revenue up 36% CER to £271m  Underlying operating profit doubled to £13.4m  Despite foreign exchange headwinds  Significant step forward in the transition to a highly differentiated Group  Design & Manufacturing revenues increasing as a proportion of Group sales  Two important acquisitions – Noratel & Foss  Cross-selling initiatives generating new business  Both new acquisitions performing well  Noratel second half sales growth  Foss integrating quickly  Full year dividend increased by 12% Note: Growth rates quoted at constant exchange rates (CER) PRELIMINARY RESULTS│ 2 nd June 2015 2

Financial review PRELIMINARY RESULTS│ 2 nd June 2015 3

Good results CER Reported FY 15 FY 14 Growth (1) Growth £271.1m £211.6m +28% +36% Revenue £13.4m £7.1m +89% +106% Underlying operating profit 4.9% 3.4% +1.5ppts Underlying operating margin £11.8m £6.3m +87% Underlying profit before tax Reported profit before tax £4.3m £4.2m 11.8p (2) 15.4p +31% Underlying diluted EPS Reported EPS 4.8p 2.8p 6.8p (2) Dividend per share 7.6p +12%  Gross margin up 1.3ppt to 31.1%  Free cash flow of £9.0m (76% of underlying PBT)  ROTCE (4) at 24%  Working capital at 13.6% of sales 1. Revenue at constant exchange rates (CER) No. of shares rebased following rights issue (see Appendix III) 2. Underlying profits exclude exceptional costs, amortisation of acquired intangible assets and IAS 19 legacy pension charge (see Appendices I and II) 3. Return on trading capital employed excludes goodw ill and uses annualised result for Foss and Noratel acquisitions 4. PRELIMINARY RESULTS│ 2 nd June 2015 4

Growing revenue and gross margin Revenue (1) (£m) Revenue (£271.1m) 59  Reported revenue up 28%  8% translation impact (weaker € & Nordic currencies) 42 36 16  Up 36% CER  Custom Distribution +4% 170 164 155  Design & Manufacturing +182%  Like-for-like sales growth +3% FY 13 FY 14 FY 15  Custom Distribution +2% Distribution Noratel/Foss Other D&M  Design & Manufacturing +9% Gross Margin Gross Profit (£84.4m)  Gross profit up 42% CER 31.1% 30.7% 29.8%  Gross margin up 1.3ppt  Up 5ppts in last 6yrs FY 13 FY 14 FY 15 1. Revenue at constant exchange rates (CER) PRELIMINARY RESULTS│ 2 nd June 2015 5

Costs controlled FY 15 FY 14 % Like-for-like costs 52.9 51.5 +3% Acquisitions/disposals 18.1 1.4  Like-for-like costs up 3% Underlying (CER) 71.0 52.9 +34%  Investing in D&M growth FX (translation) - 3.0  Custom Distribution +1% Acquisition/integration 3.3 0.2  Underlying adjustments Restructuring 1.7 0.5  Acquisition/integration related Amortisation 2.1 1.0  Restructure of ABFi UK IAS 19 Pension 0.2 0.2 Reported (IFRS) 78.3 57.8 +35% 1. Underlying adjustments for FY15 total £7.5m being £7.3m in operational costs above and £0.2m IAS19 interest charge in finance costs. PRELIMINARY RESULTS│ 2 nd June 2015 6

Increased operating margin Operating Operating Profit £m Margin % 15.0 5.5%  Operating profit (1) of £13.4m, up £6.3m (+89%) 5.0%  Up £6.9m at CER (+106%) 12.0 4.5% 9.0  Operating margin (1) of 4.9%, up 1.5ppts 4.0%  Driven by D&M growth 6.0  H1: 4.5%; H2: 5.3% 3.5% 3.0 3.0% 0.0 2.5% FY 13 FY 14 FY 15 Underlying operating profit (CER) % of revenue (CER) 1. Underlying operating profit and margin exclude exceptional items, amortisation of acquired intangible assets and IAS19 legacy pension cost (see Appendix I and II) PRELIMINARY RESULTS│ 2 nd June 2015 7

Divisional performance £m FY 15 FY 14 (CER) Sales Growth Revenue Operating % Revenue Operating % CER Like for like (1) profit profit Custom Distribution 169.8 6.7 3.9% 163.7 6.4 3.9% 4% 2% Design & Manufacture 101.3 11.4 11.3% 35.9 4.4 12.3% 182% 9% Unallocated (4.7) (4.3) Total (CER) 271.1 13.4 4.9% 199.6 6.5 3.3% 36% 3% FX (translation) 12.0 0.6 0.1% Total (IFRS) 271.1 13.4 4.9% 211.6 7.1 3.4%  Custom Distribution – profit up £0.3m CER (37% of Group profit contribution (2) )  Improving demand in all territories except UK (H1: 0%, H2: 3%)  Design & Manufacturing – profit up £7.0m CER (63% of Group profit contribution (2) )  37% of Group sales  Like-for-like sales up 9% with growth from all businesses  Strong operating margins at over 11% Like-for-like sales exclude companies acquired since last year - YEG (Custom Distribution); Noratel, Foss and RSG (D&M) 1. Underlying operating profit excluding unallocated costs 2. PRELIMINARY RESULTS│ 2 nd June 2015 8

Strong earnings per share growth £m FY 15 FY 14  Underlying PBT up 87% Operating profit 13.4 7.1 Finance costs (1.6) (0.8)  Underlying EPS of 15.4p up 31% Underlying PBT 11.8 6.3  Up 57% in 2 yrs Effective tax rate 20% 14% Underlying PAT 9.4 5.4 Fully diluted shares (1) (m) 60.9 45.9 Underlying EPS Underlying diluted EPS (p) 15.4p 11.8p £m FY 15 Underlying PBT 11.8 15.4p Underlying adjustments (2) (7.5) IFRS PBT 4.3 11.8p 9.8p IFRS EPS (p) 4.8p FY 13 FY 14 FY 15 1. No of shares for FY 14 rebased follow ing rights issue (see Appendix III) 2. Underlying PBT excludes exceptional costs (£5.0m), amortisation of acquired intangible assets (£2.1m) and IAS 19 legacy pension cost (£0.4m) (see Appendix I and II) PRELIMINARY RESULTS│ 2 nd June 2015 9

Consistent cash flow  Free cash flow up £3.6m to £9.0m  76% of PBT FY 15 FY 14  Average of 78% PBT over last 3 years Underlying profit before tax 11.8 6.3 Finance cost 1.6 0.8 FY 15 Non cash items (1) 3.4 1.9 Net cash at 31 March 2014 2.3 EBITDA 16.8 9.0 Cash flow from continuing operations (1.5) Working capital (0.5) (0.5) Acquisitions/disposals (3) (74.2) Capex & FA disposals (2.4) (1.4) Net equity proceeds 52.7 Operating cash flow 13.9 7.1 Cash flow from discontinued operations (0.2) Interest (1.6) (0.8) FX (translation) 1.9 Tax (3.3) (0.9) Net cash at 31 March 2015 (19.0) Free cash 9.0 5.4 Exceptional payments (2.1) (2.5)  Gearing ratio (4) of c 1.0x Customer prepayment (3.2) 0.6 Legacy pension (1.6) (1.5)  Average net debt of £24m since Foss acquisition Dividends (3.6) (2.7) Cash flow (pre equity) (1.5) (0.7)  5 year revolving credit facility of £70m  Excellent long term, committed funding 1. Non-cash items: D&A and share based payments 2. Working capital adjusted over last 3 yrs for a significant customer prepayment of £3.2m (FY13: £2.6m, FY14: £0.6m), invoicedthis yr. 3. FY15 - Acquisition of Noratel and Foss less receipt from sale of Enterprise, plus associated acquisition/disposal costs Net debt at 31 March 2015 as a ratio of adjusted EBITDA (being the Group underlying EBITDA adjusted for a full year’s inclus 4. ion of the underlying EBITDA of acquisitions). PRELIMINARY RESULTS│ 2 nd June 2015 10

Progressive dividend Dividend per share (1)  Full year dividend up 12% 7.6p  Reflects strong results 6.8p 6.2p 5.8p 5.4p 5.1p  FY15 underlying dividend cover of 2.0 5.4p  Aim: 2-3x cover (underlying basis) 5.0p 4.4p 4.0p 3.7p 3.4p  Delivered 49% growth FY10 - FY15  8.3% CAGR 2.2p 1.8p 1.8p 1.8p 1.7p 1.7p  Full impact of rights issue from next year FY10 FY11 FY12 FY13 FY14 FY15  Cash cost £4.8m (£3.6m FY15) No. of shares for FY10 to FY14 rebased follow ing rights issue (see Appendix III) 1. PRELIMINARY RESULTS│ 2 nd June 2015 11

Summary financial highlights  Solid organic sales growth  Excellent performance from higher margin D&M  Acquisitions all performing well  Strong contribution from Noratel  Significant growth in profits, margins and EPS  Despite translational impact of weaker currencies  Tight control of costs and capital  Dividend up 12% PRELIMINARY RESULTS│ 2 nd June 2015 12

Operating review PRELIMINARY RESULTS│ 2 nd June 2015 13

Strong operational performance  GDP+ organic growth in most countries  Widespread growth in Germany  Soft in UK (general manufacturing market & re-organisation disruption) and Norway (oil price)  New markets of North America & Asia growing well  Acquiring high quality businesses that are proving a very good fit  Focus is on Design & Manufacturing but also Custom Distribution  Noratel second half grew 7% YoY with Foss similar early signs  Validates a key part of our strategy  Cross-selling & web programmes generated £5.5m in new business  Growing profitability with excellent working capital efficiency  New operating margin target of 6-7%  Working capital efficiency remains <14% of sales  Delivering significant shareholder value  Upper quartile FTSE Small Cap TSR performance over each of the last 3 years  TSR growth of 101% in the last 3 years, c.400% over the last 6 years PRELIMINARY RESULTS│ 2 nd June 2015 14