1 / 36

Annual Results 27 th June 2007

Annual Results 27 th June 2007. Definitions. Like-for-like refers to the comparison of businesses and individual operating units that have been part of the Group throughout the whole of the most recent financial year and the immediately preceding financial year.

anthonycox
Download Presentation

Annual Results 27 th June 2007

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Annual Results27th June 2007

  2. Definitions • Like-for-like refers to the comparison of businesses and individual operating units that have been part of the Group throughout the whole of the most recent financial year and the immediately preceding financial year. • Operating profit for a particular business unit or division within the Group refers to profit before net finance income/charges, taxation, intangible asset expenses, exceptional items and restructuring costs. • Operating margin for a particular business unit or division within the Group means operating profit as a percentage of revenue. • Exceptional items means items which individually or, if of a similar type, in aggregate need to be disclosed by virtue of their nature, size or incidence in order to allow a proper understanding of the underlying financial performance of the Group.

  3. Robert SpeirsChairman

  4. Highlights • Good underlying revenue growth in all core divisions • 63 pence per ordinary share returned to shareholders in May/June 2007 • Full year dividend of 4.1p, up 10.8% • Further strong growth in profit • Adjusted earnings per ordinary share up 10.4% • Strong start to new South Western rail franchise • New franchise wins: East Midlands, Manchester Metrolink

  5. Martin GriffithsFinance Director

  6. Financial summary Year to 30 April 07 Year to 30 April 06 Change Revenue – continuing operations Operating margin* - continuing operations (%) Adjusted earnings per ordinary share* Basic earnings per ordinary share Net funds/(debt)+ Dividend per ordinary share £1,504.6m 9.8% 11.7p 25.4p £186.4m 4.1p £1,343.9m 9.5% 10.6p 10.7p £(135.9)m 3.7p 12.0% 0.3% 10.4% 137.4% n/a 10.8% * excluding exceptional items and intangible asset expenses + UK GAAP

  7. Summary income statement Year to 30 April 07 £m Year to 30 April 06 £m Change £m UK Bus operating profit – like-for-like UK Bus operating profit – 2005/6 acquisitions North America operating profit Rail operating profit Share of joint ventures’ profit Restructuring and group overheads Finance income/(charges) (net) Tax Profit excluding intangibles and exceptionals Intangibles and exceptionals, net of tax Reported profit from continuing operations 82.5 2.0 18.1 58.8 14.2 (14.3) 0.7 (37.8) 124.2 16.3 140.5 65.0 (1.9) 16.9 58.9 5.6 (11.5) (15.9) (25.3) 91.8 (20.6) 71.2 17.5 3.9 1.2 (0.1) 8.6 (2.8) 16.6 (12.5) 32.4 36.9 69.3

  8. Development of UK Bus • Operating profit increased • and £267.8m collected from London sale! Year to 30 April 07 £m Year to 30 April 06 £m Change £m Operating profit: Like-for-like 2005/06 acquisitions London 82.5 2.0 5.2 89.7 65.0 (1.9) 23.6 86.7 17.5 3.9 (18.4) 3.0

  9. UK Bus (like-for-like) Year to 30 April 07 Year to 30 April 06 Change Revenue (£m) Operating profit (£m) Operating margin Passenger journeys (m) 608.0 82.5 13.6% 547.9 551.1 65.0 11.8% 513.9 10.3% 26.9% 1.8% 6.6% • Revenue and journeys benefiting from strong marketing, competitive fares strategy, concessionary travel schemes and continued fleet investment • Continued underlying revenue and volume growth • Some benefit in second half from more stable crude oil prices • Pension scheme changes mitigated potential cost increases in second half • Stable insurance & claims costs

  10. UK Bus (2005/6 acquisitions) Year to 30 April 07 Year to 30 April 06* Change Revenue (£m) Operating profit (£m) Operating margin 82.4 2.0 2.4% 38.5 (1.9) (4.9)% 114.0% n/a 7.3% • Margin improvement from integration of acquired businesses • Further margin improvement expected * Partial year, 2007 represents full year

  11. North America Year to 30 April 07 Year to 30 April 06 Change Revenue (US$m) Like-for-like revenue (US$m)* Operating profit (US$m) Operating margin 463.6 455.6 34.6 7.5% 439.5 417.6 30.0 6.8% 5.5% 9.1% 15.3% 0.7% * Adjusted to exclude revenue from businesses sold or closed during the two years and to include revenue from Canada on a constant currency basis • Further margin improvement from optimising asset deployment • Double digit margin targeted by 30 April 2009 • Excellent response in the US to Megabus • Launch of Splash Tours in New York

  12. North America revenue breakdown Year to 30 April 2007 US$m Year to 30 April 2006 US$m % Growth Scheduled service/line run/commuter Charter Sightseeing & tour School bus & contract Like-for-like revenue Closed operations and Canada fx Total 191.8 86.5 87.2 90.1 455.6 8.0 463.6 174.3 79.9 79.6 83.8 417.6 21.9 439.5 10.0% 8.3% 9.5% 7.5% 9.1% (63.5)% 5.5%

  13. Rail (wholly-owned) Year to 30 April 07 Year to 30 April 06 Change Revenue (£m) Operating profit (£m) Operating margin Passenger miles (000’s) 571.5 58.8 10.3% 3,051.6 506.7 58.9 11.6% 2,802.1 12.8% (0.2)% (1.3)% 8.9% • Strong start to new South Western franchise • Challenging but deliverable revenue and cost targets • Manchester Metrolink from July 2007 • East Midlands from November 2007 • Sheffield Supertram record passenger volumes

  14. Virgin Rail Group Year to 30 April 07 Year to 30 April 06 Change Revenue – 49% share (£m) • West Coast • CrossCountry Operating profit – 49% share (£m) Operating margin Dividends received (£m) Passenger miles (000’s) 412.5 271.5 141.0 12.4 3.0% 31.1 4,156.1 357.4 231.9 125.5 5.3 1.5% Nil 3,742.3 15.4% 17.1% 12.4% 134.0% 1.5% n/a 11.1% • Good prospects for re-negotiated West Coast franchise • Winning market share from airlines • Further yield management • Successful marketing campaigns • Capacity increases in December 2007 & December 2008

  15. Scottish Citylink/Megabus JV Year to 30 April 07 Year to 30 April 06* Change Revenue – 35% share (£m) Operating profit – 35% share (£m) Operating margin 8.5 1.3 15.3% 3.8 0.1 2.6% 123.7% 1200.0% 12.7% • JV has delivered enormous passenger benefits • Better value-for-money • More sensible co-ordination of routes, timetables, etc. • More services • Strong support from passengers, politicians and other stakeholders • Concerning decision from Competition Commission * Partial year, 2007 represents full year

  16. Miscellaneous income statement items Year to 30 April 07 Year to 30 April 06 Change Intangible asset expenses (£m) Group overheads (£m) Restructuring costs (£m) Pre-tax exceptional items (£m) (14.7) (11.1) (3.2) 169.6 (20.5) (10.0) (1.5) 17.4 28.3% (11.0)% (113.3)% 874.7% • Exceptional gains include sale of London Bus and restructuring of main Group pension scheme • £4.3m further gain in second half from London Bus completion accounts and tax finalisation • Further pension credit in second half of £6.1m

  17. Finance income/(charges) and credit ratios Year to 30 April 07 Year to 30 April 06 Change Net finance income/(charges) (£m) EBITDA from continuing operations and joint ventures excl exceptional items (£m) Year-end net funds/(debt) (£m) Net Debt/EBITDA - Net funds increased by £726m for Return of Value & special pension contributions 0.7 229.6 186.4 n/a 2.3 (15.9) 194.0 (135.9) 0.7 0.7 16.6 35.6 322.3 n/a 1.6

  18. Interest rate risk £m 30 April 2007 net funds Approximate return of value (including costs) Special pension contribution – June 2007 Pro forma net debt 186.4 (696.0) (30.0) (539.6) £324.6m 60.2% Fixed Rate at 6.2% blended* £215.0m 39.8% Floating Rate * Taking account of interest rate derivatives

  19. Taxation 2007 Pre-tax Profit* £m Tax* £m Rate % Excluding intangible asset expenses and exceptional items - Before joint ventures - Joint ventures Intangible asset expenses Exceptional items Joint venture tax Reported in income statement Cash tax paid (net) 147.8 17.2 165.0 (14.7) 36.8 187.1 (3.0) 184.1 (37.8) (3.0) (40.8) 2.9 (8.7) (46.6) 3.0 (43.6) 22.9 25.6% 17.4% 24.7% 19.7% 23.6% 24.9% 23.7% * Excludes London Bus

  20. Capital structure • c.£700m return of value completed • Reflects robust business model • Quantum determined with reference to credit ratios, including Net Debt/EBITDA and Debt Service Cover • Ordinary shares currently in issue 707.9m • 2007/08 pro forma average Ordinary shares in issue 724.3m

  21. Pensions • £21.7m* total pension costs (2006: £33.4m) • £18.1m* (2006: £27.1m) continuing operations • IAS 19 pre-tax deficit of £36.2m (2006: £222.2m) for Group • c.£107m of additional contributions to reduce deficit • £77m paid by 30 April 2007 • £30m paid in June 2007  further deficit reduction • Rail pension schemes: under IFRS, only the part of the deficit that we expect to fund during the relevant franchise is recognised • Positive changes to schemes * excluding past service adjustment

  22. Movement in net debt 30 April 2007 £m EBITDA from Group companies before exceptionals EBITDA from discontinued operations Dividends from joint ventures Movement in retirement benefit obligations Working capital and other operating cash movements Net interest paid Tax paid Net cash from operating activities Net capital expenditure including new hire purchase Acquisitions of businesses, intangibles and investments Disposals of businesses and investments Movement in loans to joint ventures Token sales and redemptions Foreign exchange/other Reduction in net debt before cashflows with shareholders Equity dividends Other share capital movements Reduction in net debt Opening net debt Closing net funds 215.4 7.7 31.1 (94.9) 29.8 (3.9) (22.9) 162.3 (82.5) (2.2) 267.2 1.4 (2.3) 16.4 360.3 (41.5) 3.5 322.3 (135.9) 186.4

  23. Capital expenditure Capex on new hire purchase £m Impact of capex on net debt £m Disposal proceeds** £m Net £m Cash spent on capex* £m UK Bus North America Rail 49.0 Nil Nil 49.0 68.1 21.4 4.0 93.5 (8.2) (2.8) Nil (11.0) 59.9 18.6 4.0 82.5 19.1 21.4 4.0 44.5 * Excludes capitalised intangible assets of £13.3m (2006: £0.6m) ** Excludes proceeds from selling businesses Note: Vehicles with a capital value of £12.1m were acquired by UK Bus during the year on operating leases (2006: £Nil)

  24. Brian SouterChief Executive

  25. Five-year track record Year ended 30 April 2003 2004 2005 2006 2007 CAGR Adjusted EPS* Dividend per Ordinary Share Share Price Return of value announced 6.4p 2.6p 44.0p - 6.7p 2.9p 82.25p £240m 9.5p 3.3p 103.0p - 10.6p 3.7p 108.5p - 11.7p 4.1p 186.75p £700m 16.3% 12.1% 43.5% + dividends * Before intangible asset expenses and exceptional items (2002 – 2004: UK GAAP; 2005 – 2007: IFRS)

  26. The Stagecoach Differential UK Bus • Revenue growth* 10.3% (22.6% higher than average market revenue growth of 8.4%**) • Underlying full fare passenger volume growth of approximately 2.4% • Like-for-like operating profit up 26.9%* from £65.0m to £82.5m • Lower than average weekly ticket prices • increases financial flexibility • underpins volume growth and long term prospects • High fleet reliability • Getting modal shift from innovation and marketing * Like-for-like ** Determined from most recently rolling 12 months’ revenues available for UK Bus divisions of major UK-listed Groups

  27. The Stagecoach Differential North America • “Sweating” the assets; units closed; segment profitability • revenue growth* 9.1% • further margin improvement from 7.1% to 7.9% • Product developments • Splash Tours • megabus.com • internet selling • Targeting 10% margin on core business by April 2009 * Like-for-like constant currency

  28. The Stagecoach Differential UK Rail • Winning Franchises • South Western • East Midlands  strong momentum • Manchester Metrolink • Revenue growth* 12.9% (9.3% higher than the London and South East TOC average of 11.8%*) • Passenger Performance Measure – Punctuality+ • South Western 90.3% • West Coast 87.2% • CrossCountry 84.3% • Passenger Satisfaction** • South Western 81% • West Coast 87% • CrossCountry 84% • London & South East TOCs 89.3% • Long distance TOCs 85.2% • Industry 79% + Industry passenger performance measure for calendar year 2006 * Year to 31 March 2007 ** Percentage of passengers satisfied overall as determined by Spring 2007 National Passenger Survey

  29. The Stagecoach Differential “Addressing the issues” • CAPITAL STRUCTURE • Consistently generating surplus cash for investment & shareholder return • £940m returned to shareholders in three years • Plus continued dividend growth • PENSIONS • Accelerating funding • Securing employee pensions  affordable pension scheme • Managing cost and volatility • INVESTMENT • UK Bus Fleet • Addressing the “London” issue • Modern fleet for a modern business

  30. Current trading and outlook • Strong start to new financial year • Current trading in line with our expectations • Continued focus on organic growth and bolt-on acquisitions • Good potential for further growth

  31. Annual Results27th June 2007

  32. Appendices

  33. Finance income Average balance* £m Finance income/ (charges) £m Annual effective rate % (332.0) 428.0 96.0 (16.6) 20.6 4.0 (0.8) (0.5) (2.9) 0.3 1.2 1.3 ** 5.0 4.8 4.2 Gross debt & related derivatives Interest bearing cash balances Non-utilisation/commitment fees Insurance letters of credit Discount on insurance provisions Interest on notes receivable Other * Average of month end debt/cash balances ** £0.7m reported as net finance income in income statement and £0.6m relating to London Bus reported within profit from discontinued operations

  34. Fuel hedging Forecast 2007/08 Forecast 2008/09 Forecast 2009/10 % of Group fuel hedged - fixed - cap/floor Average hedge price (crude price US$/barrel) - fixed - cap/floor 37% 51% $59 US$59/US$28 Nil 44% n/a US$89/US$58 Nil Nil n/a n/a • Continuing Bus divisions use 1.6m barrels of fuel a year • Each US$10 per barrel movement in crude oil price impacts variable fuel costs by approximately • US$16m if no hedging in place • 2006/07 year-on-year increase of £21m in fuel costs of continuing operations

  35. Exchange rates April 2007 April 2006 Closing rate Average rate Closing rate Average rate US$ NZ$* C$ 1.9999 n/a 2.2102 1.9103 n/a 2.1738 1.8176 2.4606 2.0368 1.7751 2.5641 2.1079 * Average and closing rates up to date of disposal used – 29 November 2005

  36. Annual Results27th June 2007

More Related