3. • NFI 34% higher at £30.5m (2017: £22.8m)
• Proforma NFI growth:
Group 14% (14% CC)
EMEA 7% (7% CC)
APAC 15% (17% CC)
USA 110% (118% CC)
• Underlying PBT increased by 264% to £3.0m (2017: £0.8m)
• Strong cash generation with cash from operations of £6.1m (2017: outflow of £2.5m)
• Net cash £4.9m (2017: net debt £0.4m)
• Underlying EPS of 8.0p (2017: 3.2p)
• Proposed final dividend of 1.0p. Full year dividend 1.5p, an increase of 88%
3
Financial and Operational Highlights
5. 8.9 8.9
9.4
13.4
14.8
15.7
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
15.0
16.0
2016 H1 2016 H2 2017 H1 2017 H2 2018 H1 2018 H2
Six monthly NFI - £m's
5
2020 targets substantively achieved two years early
2020 Targets 2018 Actuals
Grow NFI by over 10%
pa
14% organic NFI
growth
Increase underlying
PBT to NFI conversion
from 4.5% to 10%
9.7% conversion of
NFI to Underlying PBT
Growing underlying
EPS from 3.3p to 6.8p
8.0p Underlying EPS
6. Purpose, mission & vision – Hydrogen Group
Powering customer relationships
Enabling people to achieve their goals.
A world where more people
love their work and achieve
their goals.
Group Purpose
Using technology, expertise and
insight to help our businesses deliver
deep and effortless customer
relationships in disrupted markets.
Group Mission Group Vision
6
7. 7
Operating model
By being closer to niche
disrupted markets we will take
advantage of job creation
Adopting a growth mindset, we
develop our people so they can
over-deliver and reap the rewards
Powering our business with
technology to drive productivity
and build closer customer
relationships
Deeper understanding of data
informs decisions and ensures
we achieve our goals
Proposition
Performance Platform
People
Core current
principles
8. 8
Team Journey
Financial:
10% - 20% EBIT conversion
Financial:
Breakeven
Incubator
Up to £100k NFI over two quarters
Fast Growth
£100k minimum NFI per quarter
Market Leader
£200k minimum NFI per quarter
What’s next?
What’s next?
Focus:
- Proving there is a
market that we can get
to Market Leader
- Grow NFI
Focus:
- Grow profit
- Leverage position
Focus:
- Growing NFI &
what needs to
happen to get you
to Market Leader
Financial:
30% to 50% EBIT conversion
10. Building Market Leading businesses
Case study – Technology Texas
£
Q4 17 Q1 18 Q2 18 Q3 18
Incubator Fast growth Market leader
NFI £81k
PPH £9k
EBIT 0%
NFI £120k
PPH £10k
EBIT 11%
NFI £362k
PPH £18k
EBIT 41%
10
11. 11
Trading summary
2018 2017
Revenue £135.7m £125.9m
Gross profit (Net fee income) £30.5m £22.8m
- Permanent NFI £17.8m £11.5m
- Contract NFI £12.7m £11.3m
Operating costs (£28.2m) (£22.6m)
Other income £0.5m £0.5m
Operating profit before exceptional items £2.8m £0.7m
Underlying profit before tax* £3.0m £0.8m
*Altered for non-controlling interest, foreign exchange gains, amortisation of acquired brand and database, share based payments and exceptional items.
12. 12
Balance sheet
2018 2017
Non-current assets £14.4m £14.4m
- Intangible assets £13.0m £13.0m
- Tangible assets £0.9m £0.9m
- Other assets £0.5m £0.5m
Current assets £24.9m £26.8m
- Debtors £19.7m £24.0m
- Cash and cash equivalents £5.2m £2.8m
Total assets £39.3m £41.2m
- Current liabilities £15.6m £19.4m
- Non-current liabilities £2.6m £1.6m
Total liabilities £18.2m £21.0m
Net assets £21.1m £20.2m
Current Ratio 1.6 1.4
Day Sales Outstanding 28 days 40 days
13. 13
Cashflow statement
2018 2017
Operating cashflow before movement in working capital £3.3m £1.3m
Movement in working capital £3.2m (£2.8m)
Tax and financing costs (£0.5m) (£0.4m)
Net cashflows arising from exceptional items £0.1m (£0.6m)
Net cashflows from operating activities £6.1m (£2.5m)
Dividends & share buy-back £0.6m -
Cash at year end £5.2m £2.7m
Borrowings at year end (£0.3m) (£3.1m)
Net cash/(debt) £4.9m (£0.4m)
Average available funds £8.4m £5.8m
15. 15
M&A Strategy
STAGE 1
Objective fit
• > £5m NFI
• > £1m EBITDA
• Contract led
• Complementary service lines
• Developed markets/ economies
STAGE 2
How we add value
16. • Trading in line with expectations
• Growing contract margins
• High growth businesses sustaining their growth
• Mindful of potential impact of Brexit
• Confidence in continued growth
• Actively pursuing acquisition opportunities
16
Outlook and current trading
Proposition - By being closer to niche disrupted markets we will take advantage of job creation and focus on what our clients and candidates need
People - Adopting a growth mindset, we develop our people so they can over-deliver and reap the rewards
Platform - Powering us to become leaders in machine-enabled customer intimacy. We are developing our processes so you can focus on the things that make you successful.
Performance - Deeper understanding of data informs decisions and ensures we achieve our goals