Investor Pack Introduction to Your Presenters
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Investor Pack Introduction to your presenters Mark Lawrence Group Chief Executive Officer Appointed to Board, 2nd May 2003 Mark has had 36 years with the company and started his career here by completing an electrical apprenticeship in 1987. He progressed through the company, becoming Technical Director in 1997, Executive Director in 2003 and Managing Director, London Operations in 2007. As Group Chief Executive Officer since January 2010, Mark has led strategic changes across the group and remains a hands-on leader, taking personal accountability and pride in Clarke's performance and, ultimately our shareholders’ and clients’ satisfaction. He regularly walks project sites and gets involved personally with many of our clients, contractors and our supply chain. Trevor Mitchell Group Finance Director Appointed to the Board on 1st February 2018 Trevor is a Chartered Accountant and accomplished finance professional with extensive experience across many sectors, including financial services, construction and maintenance, education and retail, working with organisations such as Balfour Beatty plc, Kier Group plc, Rok plc, Clerical Medical Group and Halifax plc. Prior to his appointment, Trevor had been working with TClarke since October 2016, assisting with simplifying the structure and improving the Group’s financial controls and procedures. 1 Our first class teams have Our results the knowledge, skills and reputation to continue to be ABERDEEN regarded as one of the best Revenue Infographic contractors in the sector. Established 1889 £231.9m TClarke is an industry leader in the design, FALKIRK 2019: £334.6m installation, integration and maintenance of the digital, mechanical and electrical technologies and infrastructures that a 21st century Profit building needs for control, performance and sustainability. before tax DUMFRIES Across the UK, we provide a large-scale, flexible resource of specialist expertise, based in NEWCASTLE £1.2m Forward market-leading Engineering Services and digital capabilities, to help our customers deliver 2019: £9.0m order book their construction programmes safely. LEEDS £456m Our reputation for high quality and the successful application of new technologies has been 2019: £403m built over 130 years. LIVERPOOL MANCHESTER Net cash OXFORD DERBY New office PETERBOROUGH £10.2m coming soon BIRMINGHAM 2019: £12.4 HUNTINGDON NEWPORT STANSTED COLCHESTER LONDON PORTISHEAD SITTINGBOURNE PLYMOUTH 90% of turnover in 2020 was ST AUSTELL with repeat clients £500m UK NORTH LONDON UK SOUTH 3 YEAR PLAN 5 year accident Reduction Continued and persistent focus on Where we operate TClarke provides a complete UK coverage from accidents and incidents As we enter 2021 the nineteen locations nationwide from three regions Board has set itself Annual group accidents in order to allow us maximum agility in tendering an ambitious three and delivering the projects we target. year plan to deliver £500m annual revenue. 123 113 Our strategy Our strategy is to sustain world class engineering 102 73 services capability and build a ‘growth-ready’ platform capable of existing and fast-changing 47 Apprentices People opportunities for value creation. Directly employed, high Renowned for our 2016 2017 2018 2019 2020 quality engineering apprentice programme services personnel with highest intake in our sector Infrastructure Residential & Facilities Engineering Technologies Hotels Management Services 2 Financial Highlights GROUP REVENUE UNDERLYING OPERATING MARGIN UNDERLYING OPERATINGPROFIT PROFIT BEFORETAX £ m £ m 231.9 2.6% 3.0 £6.0m 1.2 334.6 326.8 311.2 2.7 9.0 2.5 2.6 10.2 278.6 2.3 8.8 7.8 231.9 7.1 6.9 7.3 6.0 3.7 1.2 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 UNDERLYING EARNINGS PER DIVIDEND FORWARD ORDER BOOK NETCASH SHARE 18.81 £456m 456 £10.2m 10.29p p 4.4 4.4 4.4 411 12.4 12.4 15.38 4.0 403 11.7 3.5 10.2 12.37 330 337 11.60 10.29 3.2 9.3 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 3 Cash Flow Cash Performance £m 22 20 18 3.0 (2.0) 16 (1.5) (1.9) 14 12.4 12 6.0 (3.7) 10 (2.1) 10.2 8 6 4 2 0 1 Jan 2020 Underlying Working Investment Pension Dividends Restructuring Other 31 Dec 2020 Net cash operating capital deficit costs Net cash profit movements reduction 4 2020 2019 Balance Sheet £m £m Non-current assets Intangible assets 25.3 25.5 Property, plant and equipment 8.0 9.0 Deferred tax assets 6.2 4.8 Trade and other receivables 3.6 5.0 Total non-current assets 43.1 44.3 Current assets Inventories 0.4 0.2 Amounts due from customers under construction contracts 41.7 44.6 Trade and other receivables 34.5 36.9 Current tax receivables 0.7 - Cash and cash equivalents 25.2 12.4 Total current assets 102.5 94.1 Total assets 145.6 138.4 Current liabilities Bank loans (15.0) - Amounts due to customers under construction contracts (1.1) (0.1) Trade and other payables (77.5) (82.9) Current tax liabilities - (0.2) Obligations under leases (1.3) (1.4) Total current liabilities (94.9) (84.6) Net current assets 7.6 9.5 Non-current liabilities Obligations under leases (2.2) (2.8) Trade and other payables (2.6) (1.7) Retirement benefit obligations (30.2) (26.4) Total non-current liabilities (35.0) (30.9) Total liabilities (129.9) (115.5) Total net assets 15.7 22.9 5 Our strategy 1 2 3 4 5 Sustainable 3% £500m Revenue Target Remain contractor of Maintain a balanced Build long-term lasting Operating margin choice for landmark business relationships projects Through successful targeted We focus on five market There is a substantial We balance our business We will continue to grow, tendering and operational sectors. We intend to grow premium market of major by strategic management supporting principal efficiency we will focus on our market share organically London projects and their of our order book with a contractors and our clients delivering a 3% operating by winning and delivering complexity and scale means blend of existing markets working on major projects margin. large scale opportunities few can deliver the same of Infrastructure, across the UK, leveraging across all sectors throughout quality of work, depth of Residential and Hotels, the quality of our regional the UK. In addition we resource and integrated Engineering Services, resources and national continue to target Data services offering as TClarke. renewing FM contracts and brand reputation. Centres in Europe on a new markets such as selective basis We will continue to target Technologies. and deliver this work and increase our market and engineering leadership. 2020 Achievement Highlights 2020 Achievement Highlights 2020 Achievement Highlights 2020 Achievement Highlights 2020 Achievement Highlights • Operating margin of 3.0% • Strategic partnership • 8, 22, 100 & 150 • No dependence on one • 90% of turnover in 2020 For Q1, H2 2020 established with smart Bishopsgate, London market sector in respect of was with repeat clients • One Nine Elms, London Breakeven Q2 2020 technology provider revenue: Record order book £456m • KGX1, Kings Cross, London • Number of significant • Beaufort Park, London Engineering Services 38% tenders waiting decision • The Peninsula Hotel, London Infrastructure 22% • Battersea Power Station, Residential & Hotels 25% London Technologies 10% Facilities Management 4% 6 Investor Case EPS Growth and Progressive Balanced Business Model Improving Profitability Disciplined and Robust Risk Management Dividend Policy We are focused upon margin We operate a highly effective and Sustainable revenues across our five We strive to increase earnings over sustainability at 3% but always selective approach to tendering and market sectors. An integrated the cycle and are committed to a seeking ways to improve upon this. potential customer risk assessment. offering and expertise in technology progressive dividend policy, whilst We seek to sustain this alongside a We adopt a robust and consistent solutions differentiates us from balancing the rewards to shareholders growing orderbook. approach with regard to profit competitors and we strive to be the with the interests of our wider recognition and claims provisioning. contractor of choice for all projects. stakeholders. 90% of our revenue comes from existing clients. Strong Cash Flow and Growth Strategy Forward Revenue Visibility Balance Sheet We have a revenue target of £500m Our cash generation is strong and Our secured forward order book at within 3 years whilst maintaining our planned capital investment for 31st December 2020 stood at £456 operating margin. efficiency and growth is funded from million, including £168 million booked internal resources. At 31st December for 2022 and beyond. Pipeline bid 2020 net cash stood at £10.2 million. opportunities typically exceed £1 billion. 7 Recent Projects Secured -London • Ruskin Square, Croydon • Charlotte Street, London W1 • Facebook Fitout, Kings Cross • Data Centre, Brent Cross • 8 Bishopsgate • 99 Bishopsgate • Apple Fit Out, Battersea Facebook Fitout, London, Kings Cross, London • Bankside Yards West Bankside Yards West, Southwick Apple Fit Out, Battersea, London 8 Bishopsgate, London Ruskin Square, Croydon Data Centre, Brent Cross, North London 8 Recent Projects Secured UK North and UK South Royal Cornwall hospital MRI and Haematology Oncology Seafield Gardens, Ayr Bristol Beacon Thirsk Leisure Centre, North Yorkshire Royal Cornwall Hospital Women’s and Children’s Hospital Pre-Construction Services MSD Pharma Building Cramlington, Northumberland Morpeth Leisure Centre, Northumberland 9 On our Journey to £500m Turnover Our five target sectors can support a step change in scale for TClarke and 2020’s project wins have set us in a strong position. Infrastructure Residential Facilities Engineering Technologies & Hotels Management Services £100m £115m £19m £175m £47m Forward order book Forward order book Forward order book Forward order book Forward order book 2019: £89m 2019: £110m 2019: £12m 2019: £142m 2019: £50m £59m £42m £18m £81m £32m 2020 Revenue – 2019 £56m 2020 Revenue – 2019 £56m 2020 Revenue – 2019 £29m 2020 Revenue – 2019 £148m 2020 Revenue – 2019 £45m No.