presentation to capconnect investor forumthis presentation is intended to provide background...
TRANSCRIPT
protecting people, property and environments
14 October 2008 The Company Announcements Platform Australian Securities Exchange Limited Level 4, 20 Bridge Street SYDNEY NSW 2000 Via e‐lodgements
Dear Sir / Madam
Re: Presentation to CapConnect Investor Forum Please find attached a PowerPoint presentation being given by the Managing Director tomorrow in Melbourne and in Sydney Thursday to the CapConnect Investor Forum Please contact me should you require anything further, Yours faithfully, Jeffrey Broun FCA Managing Director [email protected] Ph: 1300 782 841 anytime Encl: PowerPoint in pdf format
Greencap Limited ABN 24 006 631 769 East coast office: West coast office: Level 3, 818 Whitehorse Road Level 7, 182 St George’s Terrace Box Hill Victoria 3128 Perth, Western Australia 6000 Ph: 613-9896-8600 Ph: 618-9289-8377 Fax: 613-9890-8911 Fax: 618-9322-4251
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Greencap Limitedwww.greencap.com.au
Protecting people, property & environments
Presentation by Jeffrey Broun MD
To: CAPCONNECT FORUM
15th & 16th October 2008
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Disclaimer
The information contained in this document and otherwise disclosed to you by Greencap Limited (ABN 24 006 631 769), (“Greencap” or the “Company”) prior to any public announcement and must be kept strictly confidential for the following reasons:
In accordance with Section 1043A of the Corporations Act;
The information may have a material effect on the price or value of Greencap’s securities and, may therefore, constitute "insider information" for the purposes of the Corporations Act.
As an insider you must not (whether as principal or agent):
Apply for, acquire or dispose of Greencap Limited securities, or enter into an agreement to apply for, acquire or dispose of any such securities; or
Procure another person to apply for, acquire or dispose of, or to enter into an agreement to apply for acquire or dispose of, any such securities.
Once in possession of this information you will be subject to the insider trading restrictions imposed by the Corporations Act and will, as noted above, be prohibited from trading in Greencap Limited’s securities and /or communicating the information to any other person who would be likely to subscribe for, purchase or sell securities, or procure a third person to do the same until such date when this information has been made "public" in terms of the requirements of the Corporations Act. You must seek your own legal advice on your responsibilities under the Corporations Act. Greencap Limited does not purport to represent the above comments as either advice or as a comprehensive description of these complex provisions.
Disclaimer: Greencap Limited, its respective servants or agents, makes no opinion or recommendation as to whether you should buy or sell Greencap shares nor do they make any recommendation or warranty to you concerning the accuracy, reliability or completeness of the information provided or the performance of the Company. This presentation is intended to provide background information only and does not purport to make any recommendation upon which you may reasonably rely without taking further and more specific advice. Potential investors are advised to seek appropriate independent advice, if necessary, to determine the suitability of this investment.
This document contains "forward looking statements" including estimates of future revenues, capital and funding requirements. Such forward looking statements are made in good faith and are believed to have a reasonable basis. However, such forward looking statements are subject to risks, uncertainties and other factors which could cause the actual results to differ materially from the future results expressed, projected or implied by the forward looking statements.
This presentation will be lodged with ASX immediately prior to the Capconnect Forum.
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Strategy / Snapshot
Building a national Environmental and Risk Management Solutions Group
Operating in high demand risk sectors driven by legislation and corporate responsibility makes revenue streams very resilient in bearish times
Greencap offers a unique mix of services not offered by any one competitor
380 staff across all Australian mainland states
Sustainable revenue streams with sound growth prospects from existing capabilities to extend into emissions, greenhouse gas, energy and water
Attractive EBIT margins of circa 20% with minimal capex requirements aided by web based solutions and delivery channels
Organic growth of 8‐10% plus fragmented market provides attractive acquisition opportunities
Cash flow generation facilitates 60% payout ratio
Scope for continued growth in EPS and dividends
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Consolidated Financials
Greencap Limited FY08 FY09 FY09 annualised for
Actual $M Forecast $M Leeder & TRH*
Revenue 38.9 52.7 58.1
EBIT 6.0 10.6 11.7
Interest (HP) - (0.1) (0.1)
Interest Bank (0.5) (1.3) (1.5)
NPBT 5.5 9.2 10.1
Tax (1.6) (2.8) (3.0)
NPAT 3.9 6.4 7.1
Shares on issue 165,741,553 255,800,000 255,800,000
EPS- weighted cents per share 2.5 2.74 2.77
Price Earnings Multiple $0.20 8 7 7
DPS (60% of NPAT) cents per share 1.60 1.66
Div yield on 20c – fully franked % 8.0% 8.3%
EBIT margin % 15.4% 20% 20%
Interest Cover times 10.4 7.5 7.4
Gross Debt to Equity Ratio % 24% 34% 34%
Market capitalisation $0.20 $ 33M $51M $51M
* FY09 Annualised for Leeder & TRH
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Strategy / Snapshot
Company Noel Arnold & Associates Pty Ltd ENV Australia Pty Ltd ECC Pty Ltd Environmental & Licensing Professionals Pty Ld
Established Established 1984 Established 2000 Established 1999 Established 1986Head Office Melbourne Perth Melbourne Brisbanecontact CEO / GM Andrew Meerman Scott Bird Wayne Dettmann Bill Haylockcontact number 03 9896 8600 08 9289 8360 03 9820 1887 07 3239 9700contact email [email protected] [email protected],au [email protected] [email protected] offices Sydney, Brisbane & Canberra
Focus: Risk management disciplines Consulting on air, water, soil, flora and fauna management
Specialist Legionella, water and energy management consulting Environmental management services
Including: Asbestos risk management Earth Chemistry (contaminated land) Legionella Investigations Assessment and LicensingOccupational health and safety Water and Sustainability Water/Wastewater Management Plans Management Systems DevelopmentFire safety and engineering Environmental Management Cooling Tower Risk Management Environmental AuditingEnvironmental services Biological Sciences including: Hospital Warm Water System Reviews Environmental TrainingBusiness risk services Flora & fauna surveys and monitoring Corrosion Evaluations Title and Tenement ManagementWeb based compliance RM³ Indoor Air Quality Native Title and Cultural Heritage
Environmental Management Plans Greenhouse Gas Risk Management
Major clients Business (ANZ, Australia Post, Coles, Leighton, Telstra, Toyota, Wesfarmers) , Government (Commerce, Defence, Education) and Regulatory Authorities (Comcare, NSW & Victoria Workcover).
Land development, resources, infrastructure, government and industrial sectors
Commercial, Health and Industrial sectors, providing specialist consultancy services associated with commercial buildings, hospitals, shopping centres, industrial and manufacturing sites throughout Australia.
Industry Clients in Mining, Exploration and Quarrying, Petroleum and Pipeline, Civil Construction, Urban Development, Telecoms, Energy and Port Facilities.
Other: Includes 100% owned Trimevac (Staff of 25) - one of Australia's leading consulting companies specialising in Emergency Response training
Validus Group focuses on flora & fauna studies, environmental management.
Includes 100% owned Muddy Boots which reviews and provides Workforce Environmental Training programmes.
Staff: circa 225 staff 55 staff 6 staff 20 staff
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Greencap Limited
Company AEC Environmental Pty Ltd Leeder Consulting Pty Ltd Trevor R Howse & Associates Pty Ltd
Established Established 1993 Established 1998 Established 1989Head Office Adelaide Melbourne Sydney contact CEO / GM John Todd John Leeder Hayden Howsecontact number 08 8299 9955 03 9874 1988 02 9251 4500contact email [email protected] [email protected] [email protected] offices Darwin Adelaide, Brisbane Dubai to open in November 2008
Focus: Site contamination, Asbestos remediation, environmental audits
Laboratory - in high tech, non routine analytical services
Building regulations, fire safety engineering & management advice
Including: Site investigations, risk assessment air analysis services, hydro carbon analysis building regulation adviceSite remediation and auditing dioxins and furans, PCB's , toxity fire safety analysis, computer modellingAsbestos audits and removal. Explosive residues, pesticides by LC/MS annual fire safety statementsEnvironmental Management Health risk assessment fractionation industry representationStatutory Audits data consultingCompliance Audits numerous other capabilities
Major clients ANZ Bank, NAB, Commonwealth Bank, FRD Savills, Jones Lang LaSalle, Knight Frank, McMahon Services, Sims Metal, Department of Defence, Department of Transport, City of Burnside, City of Port Adelaide + various District Councils.
Alcoa, BHP, Bluescope Steel, BP, Coffey, ERM, GHD, Mobil Oil Australia, Parsons Brinkerhoff, SKM, URS and numerous other clients in resources and industrial areas plus government
numerous government departments, builders, architects, Allianz, Investa, ResMed etc
Other:
Staff: circa 30 staff 30 staff 12 staff
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Financial Objectives
Annual growth in EPS of at least 10%
NPAT of $10m by 30 June 2010
Drive synergies from larger group dynamics
Greater market liquidity in GCG stock
Dividend payout ratio of 60%
Conservative gearing in the range of 30‐40%
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Noel Arnold & Associates P/L and Trimevac P/L
Noel Arnold & Associates commenced business in Melbourne in August 1984, and has grown to current
revenues of $27 million+ / 250 staff. Offices in Sydney, Melbourne, Brisbane and Canberra.Includes Trimevac an emergency evacuation service company –
100% subsidiary.Demand for services driven by ongoing legislative compliance and
governance demands. Key service delivery areas include:Asbestos risk management Occupational health and safetyEmergency management Web based compliance Rm3 & Cm3Fire safety and engineering Environmental servicesBusiness risk services
Risk management systems / software solutions
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ENV Australia Pty Ltd
ENVPerth based environmental management consultancy established in April 2000, by Scott Bird. Gross revenues of $9 million and 55 staff.Growth driven by continuing legislative requirements, governance
pressures, property market in WA.Revenue growth achieved through increased number of clients, increased revenue per client, and repeat
work from client base.
ENV services both public and private sectors, across a range of sectors; (63% private sector / 37% public
sector)
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ECC Pty Ltd
ECC ECC was established in 1999 by Wayne Dettmann, particular interest in managing Legionella risks,
cooling towers. Revenue forecast FY09 $2M 8 staff
The business covers 4 main areas‐
Risk management ‐Water management‐
Asset management ‐ Energy management
Excellent growth opportunities offered by ECC’s specialist product capability leveraged off the
infrastructure of Greencap group.
Areas of opportunity and near term growth include‐
Legislative requirements‐
Geographic expansion‐
Range of services to be extended
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ELP
ELPEnvironmental & Licensing Professionals Pty Ltd incorporating Muddy Boots
was founded by Mr Bill
Haylock in 1986 as a specialist licensing and environmental consultancy servicing the resource
sectors in the areas of licensing approvals, mining and exploration titles management, and
environmental management.
ELP provides services in the following specialised areas: •
Environmental Licensing and Approvals •
Mining and Exploration Title and Tenement Management Services•
Environmental Management Systems Development•
Environmental Training (Muddy Boots)•
Environmental Auditing•
Native Title and Cultural Heritage•
Emissions Reporting
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AEC Environmental Pty Ltd
AEC Environmental Pty Ltd
is a leading consultancy in the evaluation of land and asbestos contamination, with a current annual turnover of approx $3 million.
The company was founded in 1993. Over the past 15 years AEC has grown significantly to become a mid‐
level company employing more than 30 people now with a regional office in Darwin.
The company is located at 12 Greenhill Road, in the inner Adelaide suburb of Wayville.
AEC provides a hands‐on approach to managing environmental risks, and has an uncompromising
commitment to the highest standards of professionalism in all facets of the services it delivers
Its audit, engineering, environmental, manufacturing and property skills base have enabled AEC to
provide a unique combination of services throughout South Australia and its expanding services in
the Northern Territory with work also coming from Victoria and Western Australia.
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Leeder Consulting www.leederconsulting.com
Laboratory in Mitcham, Victoria performing non routine, specialist analysis and testing.Offices also in Brisbane and Adelaide
Fig 1 - Leeder Consulting Current Customer Base
25.5%
19.2%
18.8%
8.9%
6.8%
5.8%
5.3%
5.0%
2.8%
0.2%
1.7%
Environmental Consultants
Air Emision Consultants
Industry
Mining and Metal Industry
Regulators & Govt
Oil & Gas
Food and Beverage
Service Laboratories
OH&S Consultants
Water
Other
Customers –Mining & metalsOil & gasIndustry Consultants that work for themAuthorities that regulate them
Competitive AdvantageUnique technologyDedicated hi‐tech equipmentHigh reputationExtensive NATA certification Niche market, high marginsFacility can handle growth to $10 Mil
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Trevor R Howse & Associates Pty Ltd www.trh.com.au
Established in 1989 in Sydney to deliver consultancy services in ‐
–
building regulations
–
fire safety engineering, and
–
management services
TRH is a Principal Certification Authority (“PCA”) hence able to assist clients with the complexity of the Building Code
TRH growth prospects driven by
–
existing built inventory
–
legislation
–
geographic expansion into WA and UAE
–
preferred supplier status with government
–
expanded fire safety work
–
environmental impact and energy efficiency within the building and construction
industry
Howse Revenue by Client Sector
Private15%
Other24%
UAE9%
Architects12% Construction
15%
Gov't25%
1515
Outlook for Greencap Group given global markets
Group companies have strong pipelines of work
Long term relationships underpin repeat business going forward
Low staff turnover continues to be a hallmark of our companies – “employer of choice”
Innovation drives existing and new areas of growth e.g. emissions / carbon footprint advisory / sustainability, rm3, cm3
Strategic acquisitions constantly being evaluated at realistic prices
Greencap model continues to attract leading SME’s in the RM field – pricing of acquisitions recalibrated along with mix of cash / equity
Focus is on quality service delivery, high end reputation and strong margins to weather the current economic storms
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M&A Strategy is underpinned by:
•
Ten blue chip institutions aligned with the board re M&A strategy –
Greencap is not a
retail register and hence is somewhat insulated against current market volatility;
•
Risk Management (RM) sector – the RM envelope is wide – recent research indicates a
$1.6 billion market in Australia and Greencap can manage and coordinate this
federation style group of RM businesses
•
Continued strong earnings growth – brand identity and passion to keep driving
business growth –
acquired businesses continue to be separately identified re brand
and are more accountable as such to achieve their targets
•
Proven management team ‐
professional service capabilities, with a quality client /
revenue base and strong EBIT margins ‐
group’s average EBIT margin of 20% and rising •
Complementary cross selling
‐
geographic reach extended for all group companies
within an expanded pool of technical expertise, greater staff mobility and joint
initiatives
•
Resilience of revenue streams
– all our service streams are underpinned by legislative
requirements, corporate governance or must be done category work
•
Continuity of key fee earners
/ business managers – all key executives are 100%
committed to growing the business and delivering consistent quality outcomes
•
Acquisitions EPS accretive
–
prospective acquisitions would elevate GCG’s EPS to 3+
cps
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Why is Greencap a must have in an institutional portfolio?
•
Strong earnings growth
‐
operating in positive screen areas of people, property and environmental risks
•
Fertile acquisition territory
‐
M&A focus is on specialised RM consultancies in the SME heartland who are finding growth
aspirations truncated by the global turmoil –
Greencap can provide an IPO incubator platform for aspiring 2010 IPO’s
•
Geographic and sector diversification
– Australia and o/seas
•
Strong management teams
with clear accountability
•
Lean head office
–
maximising dividend return
•
Conservative debt levels
•
Acquisition parameters
– innovation re pricing and structuring
•
All leads to building long term value
for our institutions
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GCG holds its value in turbulent times
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For more information please contact
Jeffrey Broun, Managing Director
Greencap Limited
0419 934 623