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1
26 February 2010
Interim Results to 31 December 2009
2
Presenting Team
Martin Ward
Group Managing Director
Ian Wardle
Chief Financial Officer
3
Contents
• Summary Highlights
• Operational Highlights
• December 2008 Issues, December 2009 update
• Current Agenda
• Current Progress, Moving to Drive phase
• Financials
- Current Status
- Profit and Loss
- Exceptionals
- Balance Sheet/Working Capital
- Cash/Borrowings
• Summary
4
Introduction
Summary Highlights
• Adjusted operating profit up 12.4% to £10.0m (2008: £8.9m)
• Net operating cash inflow of £20.2m (2008: £2.9m outflow)
• Net debt reduced by £30.4m since June 2009 (Dec 2008: £347.7m Dec 2009: £209.1m)
• ABI Cash receipts at 110% of adjusted ABI hire and repair revenue (2008: 89%)
• Debtor days reduced by 11.7% to 234 days (2008: 265 days)
• Statutory loss before tax of £0.4m (2008: £59.3m loss) after £6.0m exceptionals (2008: £62.3m)
• Unutilised fleet and working capital bank facilities of £44.6m at 31 December 2009
5
• Annualised overhead reduction of £44.0m from December 2008 to December 2009
• Total open case count reduced by 24% to approximately 92,000 cases at 31 December 2009 (2008: 121,000)
• Fleet utilisation averaging 85.7% in the period to 31 December 2009 (2008: 72.0%)
• Reduction of £88.4m in operating working capital, including fleet, since February 2009
• Consolidation of operational centres, management teams and IT platform leading to improved productivity and cost per case
• New fixed price services being piloted or agreed with 13% of current claims market
• New referral contract wins underpinning future case volumes and strong pipeline of new business opportunities
Operational Highlights
6
Issues
December 2008 Issues December 2009 ‘Focus’ Update
Hire length deteriorating Now stabilised
Over fleeted – low utilisation Right sized with 85%+ utilisation
Average Hire Length
17
19
21
23
25
27
JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
2007
2008
2009
2010
Total Fleet & Utilisation
74.4%70.2%
75.7%
69.7%
80.1% 88.3%
0
5,000
10,000
15,000
20,000
25,000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Operational Units Corporate Hire Units
7
Issues
December 2008 Issues December 2009 ‘Focus’ Update
Debtor days rising Decrease of 11.7% to 234 days (2008:265 days)
Profit not turning into timely cash flow ABI Cash running at 110% of ABI revenue
Debtor Days
202 234223265257225213 235
0
50
100
150
200
250
300
JUN'06 DEC'06 JUN'07 DEC'07 JUN'08 DEC'08 JUN'09 DEC'09
ABI Cash Receipts vs ABI Revenue
57.887.8
141.0
194.9
255.1
135.3
183.2171.5
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
FY04 FY05 FY06 FY07 FY08 H1 09 H2 09 H1 10
ABI CASH COLLECTED
8
Issues
December 2008 Issues December 2009 ‘Focus’ Update
High cost base £44.0m annualised reduction (Dec 2008- Dec 2009)
High open case volume Decrease of 29,000 cases since Dec 2008
High levels of borrowing Total net debt, including fleet, down £138.6m
Total Net Debt Borrowings Including Fleet
£150m
£200m
£250m
£300m
£350m
£400m
Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
Helphire Group - Total Cases Outstanding
80,000
85,000
90,000
95,000
100,000
105,000
110,000
115,000
120,000
125,000
Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
9
Current Agenda
Current Agenda Management Plans
Complete Focus phase Restructuring complete by June 2010
Debtor days Target case closure and receivables plan continuing
Ageing fleet asset Rotation plan in 2010 to improve costs/quality
Open case volume Litigation and legacy case actions
Risk management Improve operational capability
10
• Right size – Right shape
• Ready to return to controlled growth
• New business model opportunity
• Stronger operational focus
• One business
June 2010- ‘Drive’ Phase – ‘Changing Gear’
Financial overview
Current Status
• Hire length recovering – January peak due to weather
• Own Fleet Revenue Utilisation consistently above +80% target
• Fleet Holding Costs stable, December/January cost premium due to planned 20% sub-contract content to meet seasonal peak demand
• All above driving improved gross margin +2.1% pts vs. 2H FY09
• Overheads £44.0m annualised reduction December 2008 – December 2009; 1,118 headcount reduction through January 2010, more to come
3 Month Rolling Average Hire Length
18.50
19.50
20.50
21.50
22.50
23.50
JAN'09 FEB'09 MAR'09 APR'09 MAY'09 JUN'09 JUL'09 AUG'09 SEP'09 OCT'09 NOV'09 DEC'09 JAN'10
Revenue % Utilisation- Own Fleet
60.0%
65.0%
70.0%
75.0%
80.0%
85.0%
90.0%
JAN'09 FEB'09 MAR'09 APR'09 MAY'09 JUN'09 JUL'09 AUG'09 SEP'09 OCT'09 NOV'09 DEC'09 JAN'10
Holding Costs as a % of Net Hire Revenue
15.0%
20.0%
25.0%
30.0%
35.0%
JAN'09 FEB'09 MAR'09 APR'09 MAY'09 JUN'09 JUL'09 AUG'09 SEP'09 OCT'09 NOV'09 DEC'09 JAN'10
Sub-contract cost premium to service peak on-rent
12
Financial overview
Summary Profit & Loss
• Cost driven turnaround
- Gross Margin repaired
- Overheads tracking down
• Performance Stabilised
- Case volume
- Hire length
- Utilisation
1H FY10
6 mths
31/12/09
£m
2H FY09
6 mths
30/06/09
£m
1H FY09
6 mths
31/12/08
£m
Accident Management 108.1 120.8 144.3
Credit Repair 44.4 48.0 61.0
Adjusted Revenue 152.5 168.8 205.3
Adjusted Gross Profit / Margin 44.2 44.1 59.9
% Gross Margin 29.0% 26.1% 29.2%
Overheads 34.2 48.3 51.0
Adjusted Operating Profit 10.0 -4.2 8.9
% Operating Margin 6.6% -2.5% 4.3%
KPI’s
Hire Cases ‘000s 77.5 88.2 98.8
Hire Days ‘000s 1557.2 1799.2 2187.7
Hire Length 20.1 20.4 22.1
% Fleet holding cost to Hire Revenue
19.0% 23.9% 28.5%
% Revenue Utilisation 85.7% 70.2% 72.0%
13
Financial overview
Exceptionals
Restructuring: target completion by 30 June 2010
£m 1H FY10
31/12/09
2H FY10
30/06/10
Full Year
30/06/10
Closure of TSS / Legal Services 3.4 0.1 3.5
Expedite IT Decommissioning 0.8 0.1 0.9
General Redundancy 1.4 0.6 2.0
Share-based Payment / Intangible 0.7 0.4 1.1
Other (0.3) (0.3)
Operational Plan 8.5 8.5
Data Network 0.3 0.3
6.0 10.0 16.0
Cash 3.2 1.8 5.0
Non-Cash 2.8 8.2 11.0
14
Financial overview
Balance Sheet / Working Capital Progress – Project Century
• Further £25.3m reduction in Operational Working Capital – Project Century Focus
• Net Debt outstanding reduced by £30.7m*
• Profitable Cash Flow after debt service etc
£m 31/12/09 30/06/09 Change
Goodwill / Intangibles 44.9 45.2
Fixed Assets Exc. Fleet 15.8 19.5
Other Non-Current 2.1 2.1
Total Non-Current Exc. Fleet 62.8 66.8
Fleet 109.7 132.2 -22.5
Receivables 198.6 202.8 -4.2
Trade / Other payables -69.8 -71.2 1.4
Operating Working Capital 238.5 263.8 -25.3
Other Assets / Liabilities -4.6 -2.3
Total Assets/ Liabilities 296.7 328.3
*Net Debt excl unamortised fees
212.1 242.8 -30.7
Net Assets 84.6 85.5
15
Financial overview
Cash/Borrowings
• Net debt outstanding reduced by £30.7m*
• 31 December 2009 unutilised Corporate working capital and fleet bank facilities of £44.6m
£m 31 Dec 2009
30 June
2009
Change
Cash / Cash Equivalents 1.0 11.5 -10.5
Corporate Debt Due < 1 Year -8.7 -7.8
Asset Finance Leases Due < 1 Year
-65.6 -71.9
Net Current -74.3 -79.7 5.4
Mix 34.9% 31.3%
Corporate Debt Due > 1 Year -103.6 -117.9
Asset Finance Lease Due > 1 Year
-35.2 -56.7
Net Non-Current -138.8 -174.6 35.8
Mix 65.1% 68.7%
*Total Net Debt exc unamortised bank fees
212.1 242.8 30.7
16
Summary
• Business trading performing to expectations
• Good demand for services with strong prospect pipeline
• Overhead substantially reduced and further improvements
crystallising
• New protocol model emerging which changes cash profile
• Development of new service concepts – early stages of ‘Broaden’
phase