AEA Annual Results 31 March 2007 Andrew McCree and Alice Cummings 14 th June, 2007 Linklaters, One Silk Street, London
Jan 02, 2016
AEA Annual Results 31 March 2007Andrew McCree and Alice Cummings
14th June, 2007
Linklaters, One Silk Street, London
Group highlights
Financial performance• Turnover up 35%• Adjusted Operating Profit up 121%• Good operating cash performance• Net debt has reduced by £7.9m to £21.4m
Good market• Energy & climate change• Orders up 26% to £91m
Growth strategy• Organic and acquisition • Successful disposal of non-core businesses to Vision Capital
Management• Significant strengthening of the management team
Financial reviewAlice Cummings, CFO
14th June 2007
Financial summary
£m 2007 2006
Turnover 75.2 55.8
Adjusted Operating Profit 8.6 3.9
PBT 8.0 8.5
Cash flow used in operations
(4.8)(12.2)
Net Debt 21.4 29.3
Adjusted Operating Profit
£m 2007 2006
Environment 12.4 11.1
Central costs
(3.8)(7.2)
Adjusted Operating Profit 8.6 3.9
Central costs reduction programme achieved• Annualised run rate of £3.0m• 48 staff have left
PBT
£m 2007 2006
Adjusted Operating Profit 8.6 3.9
Non-recurring items
Pension gain 1.2 12.3
Re-financing costs (0.4) (3.0)
Redundancy costs - (1.6)
0.8 7.7
Operating profit 9.4 11.6
Net finance costs (1.4) (3.1)
PBT 8.0 8.5
Cash flow
£m 2007 2006
Cash flow from operations (4.8) (12.2)
Net interest / tax
(2.8)(6.2)
Capital expenditure (1.7) (5.7)
Disposal proceeds (net) 17.4 22.3
Share issue - 30.2
Other (0.2) 1.3
Movement in Net Debt 7.9 29.7
Opening Net Debt (29.3) (59.0)
Closing Net Debt (21.4) (29.3)
Cash flow from operations
£m 2007 2006
Cash flow from operations (4.8)
(12.2)
Disposed business outflow 6.0 13.1
Legacy outflow 6.9 3.1
Cash from continuing operations 8.1 4.0
Legacy provisions
£m 2007 2006
Provisions 26.0 35.8
Current element 10.8 8.9
Pension benefit liability
£m 2007 2006
Liabilities (366.9) (546.2)
Assets 274.7 430.0
(92.2) (116.2)
Assets Funding
Equity 217.3 340.4
Corporate Bonds 22.7 55.0
Government Bonds 21.5 23.0
Infrastructure 6.3 10.6
Other assets 6.9 1.0
274.7 430.0
Summary
Financial Performance• Adjusted Operating Profit up • Profit to cash conversion 94%• Central cost reduction achieved
Balance Sheet• Good headroom on facilities • Legacy provisions down to £26.0m
Going Forward• Continued cost control• Increasing investment for growth
Business reviewAndrew McCree, CEO
14th June 2007
Performance highlights
Sales• Sales up 35% from £55.8m to £75.2m
Orders• Orders up 26% from £72.5m to £91.0m• Secured sales for the new year 57% (2006: 52%)• Pipeline ~ £220m
Utilisation• 83%• Half year 78%
AEA – Markets and customers
Markets• Energy• Air quality• Resource efficiency – waste policy• Transport• Knowledge management
Customer base• 76% Government• 5% Devolved Administrations• 13% Private sector• 6% International
Contract life cycle
Commoditised programme management
Technical committees
Policy
Policy implementation
Programmemanagement
Contract Life Cycle
UK highlights
Policy support• Defra: Market transformation programme• DfT: Transport environmental impacts• TFL: London low emission zone scientific framework
Policy implementation• Carbon Trust: Applied research portfolio management • Defra: Envirowise England• Defra: National air emissions inventory • Defra: Construction waste platform • DfT: SAFED for vans • DTI: Emerging energy technologies programme• DTI: Knowledge transfer partnerships programme• Scottish Executive: Air quality archive• Scottish Executive: Envirowise Scotland
Private sector• Big Lottery Fund: Research grant programme
EC and international highlights
Policy support• Sales to the EC rose by 34% from £3.5m to £4.7m• Major energy security project• Ten new environmental policy support contracts
Policy implementation• Energy and Environment Programme for Chinese Government• UK-Russia Closed Cities Partnership• Impacts of Climate Change on Chinese agriculture
Growth update
A growing market
EU• Enlargement
- Romania
Global drivers• Climate change
• Energy security
Growth - organic & acquisitions
Organic – White Paper• Energy efficiency & carbon management • Carbon trading and reduction• Government estate• Resource efficiency• Low carbon transport
Organic – other• Scotland & Wales• EU expansion and aid
Acquisitions• Energy, environment, buildings & transport consultancies• Policy, programme management & technical services• Quality of earnings/clients – integration risk• Good funnel – strong prospects in US, UK
Strategic goals
Double revenues• Aggressive organic growth
• Focused acquisition programme
Sustain mid-teen margins• Increase utilisation
• Maintain cost control
Enhance management• Focus on commercial & marketing skills
Summary
Good market
Focus on organic & acquisition growth
Management team strengthened
Performance is getting stronger
AEA Annual Results 31 March 2007Andrew McCree and Alice Cummings
14th June, 2007
Linklaters, One Silk Street, London