IMPROVING HOMES, IMPROVING NEIGHBOURHOODS, IMPROVING LIVES'

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(No Transcript)
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Todays presentation
Page 1

• Highlights
• Financial performance
• Order book and pipeline
• Market overview
• Community and strategy
• Outlook

IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Highlights of the first half
Page 2

• 22.5 organic revenue increase
• 170m from 10 customers
• Laidlaw Scott acquisition
• 102 of operating profit
• 1.1bn
• 78 of 2007, 64 of 2008
• 1.5bn of bids under consideration

• Strong growth continues
• Substantial new contract wins
• Strategic Scottish presence
• Continued good cash conversion
• Record forward order book
• High visibility of future revenues
• Robust bid pipeline

No significant contracts due to end until 2010
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Financial performance
Page 3

• Turnover 118.0m up 22.5
• Profit before tax 5.3m up 23.4
• Diluted earnings per share 6.17p
  up 24.6
• Dividend per share 0.9p up 28.6

IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Segmental analysis
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000 Turnover Op. profit Op.
margin 2006 2005 2006 2005
2006 2005 Social housing 88,027 68,394
4,903 3,910 5.6
5.7 Mechanical electrical 25,982 23,470
523 462 2.0 2.0 Vehicle
collection 3,989 4,431
167 184 4.2 4.2 Totals

117,998 96,295 5,593 4,556 4.7 4.7 Stated
pre share-based payments
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Operating cash flow
Page 5
000
2006 2005 Operating profit 5,323
4,321 Share-based payments 270
235 Depreciation 720 659 Stock /
WIP (535) (2,717) Debtors
(3,371) (3,872) Cre
ditors 3,015 6,334 Operating cash flow
5,422
4,960 102 of operating profit converted into
operating cash flow ( 2005 115)
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Cash flow
Page 6
000
2006 2005 Opening cash
balance 6,942 2,818 Operating cash
flow 5,422 4,960 Interest
received 13 5 Tax (1,523)
(875) Capital expenditure (622) (1,850)
Free cash flow 3,290 2,240 Acquisitions
(2,220) (520) Financing 250
(35) Net movement 1,320
1,685 Closing cash balance 8,262 4,503
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Balance sheet
Page 7
000
2006 2005 Assets non
current intangible 14,610 11,069
tangible 5,941 5,593 deferred
tax 3,300 2,835
Stock/WIP 8,588
7,345 Debtors 33,783 34,331
Bank 8,262 4,503 Current
liabilities (40,200) (40,929)
Net current assets 10,433 5,250 Long
term provisions (3,280)
(1,713) Net assets
31,004 23,034
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Free cash flow and conversion
Page 8
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Contract wins
Page 9
RM DH

• Ealing Homes 4 years v
• GM Procure 4 years v
• Maidstone Housing Trust 5 years v
• Cross Keys Homes (2) 5/7 years v
• Twynham HA 2 years v
• Town Country HA 5 years v
• Orbit Homes 5 years v
• Total contracts 170m
• RM - Response Maintenance DH - Decent Homes

IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Order book
Page 10
Possible extensions of 170m on 16 contracts
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Opportunity pipeline
Page 11
Current bid pipeline No. Value - Awaiting
decision 10 124m - Currently being prepared
6 133m - Tenders due 7
306m Bid pipeline
563m Current prequal pipeline - Awaiting
decision 31 630m - Currently being prepared
5 180m - Prequals due 8
112m Prequal pipeline
922m Total opportunity
1,485m Pre sales pipeline
1,170m
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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High visibility of planned revenue
Page 12
Market consensus forecast 2007 295m 2008 325m
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Our market - forecasts
Page 13
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Market overview
Page 14

• Housing Policy moved from ODPM to DCLG
• Housing and Regeneration review
• Decent Communities - the third sector
• CIH, LGA, NHF and Shelter - joint submission for
  2007 spending review
• Audit Commission working up resident inspection
  proposal
• Stronger linkage of repairs and capital
  expenditure
• Governance of sector (Lyons and Lockhart)

IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Community affairs
Page 15
140 projects and 10,000 volunteer hours
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Community affairs - the core of our strategy
Page 16
IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Recent developments
Page 17

• Laidlaw Scott acquisition
• Contract mobilisation
• Reorganisation of our social housing business
• IIP accreditation achieved
• External recognition - 8 awards secured
• Raising customer service standards NVQ
  programme
• Decent communities strategy review

IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.
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Outlook
Page 18

• Excellent platform for future growth
• Record order book maintaining high visibility of
  earnings
• Well positioned for Decent Communities agenda
• Exceptional market opportunity
• Continued confidence in future prospects

IMPROVING HOMES, IMPROVING NEIGHBOURHOODS,
IMPROVING LIVES.