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Platzer Fastigheter2021 Results Annual Results for the year ending 31st December 2021 AGENDA 1 2 3 WHAT HAPPENED? Financial Review WHAT NOW? Business Review WHAT NEXT? Outlook and Plans 1 WHAT HAPPENED? Financial Review PROFIT & LOSS (£’M) 2021 BILLINGS REVENUE 153.3 72.5 2020 121.9 61.5 % change £ 31.4 11.0 18% OPERATING EXPENSES (64.5) (59.6) (4.9) HEADLINE OPERATING PROFIT OPERATING PROFIT MARGIN INTEREST/JV SHARE HEADLINE PBT ADJUSTMENTS PBT TAX EARNINGS DILUTED HEADLINE EPS (p) PROPOSED DIVIDEND (p) 8.0 11.1% (0.6) 7.5 (0.7) 6.8 (1.4) 5.3 6.5 2.4 1.9 3.1% (0.7) 1.2 (3.2) (2.1) (0.2) (2.2) 1.0 nil 6.1 315% 8.0% 0.1 6.3 539% 2.5 8.9 (1.2) 7.6 5.5 550% 2.4 • Revenue up 18% on 2020 • Profit up 5% on market expectations • Client retention statistics remain excellent: 47%+ from Clients of 5 yrs or more 31% from 10+ yrs, 14% from 20+ yrs • • • Strong margin improvement: • • • • YOY revenue growth (£11m) delivered off only £4.9m extra OPEX: incremental margin of 55% Steady infrastructure base Firm cost control by Agency CEOs Efficiency offered by CJRS • Headline adjustments (£M) 2021 COVID19 - Board Start ups (0.5) (0.4) Acquisitions 0.2 Total (0.7) 2020 (1.0) - (0.3) (1.9) (3.2) • Movement in fair value of consideration: 2021 £0.8m; 2020 (£1.3m) 2020: increased forecast 2021 AC payment 2021: crystallised c£1m lower on negotiation BALANCE SHEET STRENGTH ACQUISTION OBLIGATIONS AT LOWEST LEVEL SINCE 2013 Acquisition Obligations £m LEVERAGE RATIOS WELL WITHIN COVENANTS 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 Timing of current acquisition obligations: 2022: £0.7m / 2023: £0.4m / 2024: £0.3m / 2025: £1.9m Bank facilities renewed Q1 2021: £20m facility agreed with 3+1 term & £5m accordion option. BALANCE SHEET (£’M) INTANGIBLES FIXED ASSETS/INVESTMENTS WORKING CAPITAL NET BANK DEBT EARN-OUT OBLIGATIONS TOTAL NET DEBT RIGHT OF USE ASSETS LEASE LIABILITIES ALL OTHERS (MAINLY TAX) NET ASSETS BANK DEBT LEVERAGE TOTAL DEBT LEVERAGE 2021 99.0 2.6 6.9 (10.3) (3.3) (13.6) 9.1 (9.7) (0.8) 93.5 x1.2 x1.5 2020 96.2 2.7 2.2 (1.2) (8.5) (9.7) 10.7 (11.3) (0.6) 90.2 x0.6 x4.3 Working capital increase driven by • catch-up of 2020 HMRC deferral schemes (£3.1m) • supporting growth in H2 (£1.6m) NET BANK DEBT MOVEMENT (£’M) 12.0 10.0 8.0 m £ 6.0 4.0 2.0 0.0 1.2 2021 0.1 10.3 2.0 1.4 1.2 3.1 6.7 5.5 1.8 0.2 0.7 Deferred HMRC pmnts Delayed Acq pmnts Deferred 2019 div Normal Operating CF Prior Acq'ns New Acq'ns 2021 Interim div Capex Lease payments Other 2022 • All COVID-19 deferrals etc now caught up (£5.7m) • Major earn out obligations settled • Capex: investment in Pathfindr EFFICIENT CASH CONVERSION 110% average conversion ratio over the three years to 2021 Cash flow from operations / operating profit % 3 year MAT 140% 120% 100% 80% 60% 40% 20% 0% 2016 2017 2018 2019 2020 2021 PROGRESSIVE DIVIDEND STRATEGY • 2021: Final dividend of 1.60p proposed • Total dividend 2.40p, up 4% on 2019 2.7x cover on Headline Diluted EPS IN SUMMARY • 18% Revenue growth • Effective conversion of Revenue to Profit • Low level of Acquisition Obligations • Excellent record of Cash conversion • Progressive Dividend strategy 2 WHAT NOW? Business Review MISSION IS WORKING • Improved Agency performance across the board • Successfully added complementary businesses and services • Repositioned some existing businesses to better reflect Client demand • Group perfectly placed to capitalise on Client drive for ‘Collective Specialism’ • Continued to invest in our people and infrastructure (MSS) • Board streamlining and restructuring complete • Making progress against our ESG manifesto ‘Making Positive Change’ • Harnessed our MarTech capabilities to develop ownable IP and products i.e. Pathfindr • Despite a very challenging new business landscape over £2m of revenue was referred within the Group or won as a Group (more than one Agency). Excludes £6m pitched in 2021 but yet to be awarded AGENCY PERFORMANCE VS 2020 COVID-19 RESILIENT SECTORS AND PERFORMERS CONTINUED TO PERFORM 15% revenue 31% revenue 26% revenue COVID-19 IMPACTED SECTORS STARTING TO BOUNCE BACK 34% revenue 40% revenue 33% revenue TOP 5 CLIENTS AND SECTORS CLIENT YOY REVENUE CHANGE TENURE SECTOR % OF TOTAL GROUP REVENUE 1. 2. 3. 4. 5. 31% 37% 43% 124% 87% 35 yrs 1. PROPERTY 4 yrs 7 yrs 2 yrs 2. TECHNOLOGY 3. HEALTHCARE 4. PUBLIC SECTOR 12 yrs 5. AUTOMOTIVE 18% 14% 8% 7% 7% OUTPERFORMING OUR PEERS WPP Publicis IPG Dentsu MISSION M&C Revenue growth (2021vs 2020) 6.5%** 8.8%* 13.0%* 15.6%* 18% 8.8%* Shore Capital: * Factset consensus ** Revenue less pass through costs MISSION NEW BUSINESS IS WORKING FUELING THE ‘AGENCY FIRST’ AGENDA BUT PROVIDING A SOLUTION FOR THE ‘MULTI-SPECIALIST’ BRIEFS AGENCY ü Specialists, tight and agile team X A narrow, specific skill set and category experience Investment in Agency (Local) Marketing AGENCIES ü Multifaceted category experience Investment in Central resource and external professional support MISSION ü Big, broad capability ü Wide and varied skill set GROUPING OUR AGENCIES HOW WE SHOW OURSELVES TO OUR CLIENTS PURPOSE PERSUASION PROVISION Livity is a creative business that works hand in hand with brands and the next generation to build the future better Youth inspire and co-create everything we make, through our youth network, and beyond. That network is made up of a diverse group of young people in the truest sense of the word. What unifies them all is a creative mindset, with a desire to positively impact the world in their own way. Creators // designers // makers // activists // entrepreneurs // Illustrators // designers // artists // product developers // videographers // editors // writers // strategists // Fashion designers // musicians // architects // doctors // podcasters // models // presenters // athletes // And more. We help our clients to change the behaviour of their target audience (be it employees or consumers) We do this by first understanding the motivations of the audience and then creating engaging campaigns to impact their behaviour Our clients range across multiple sectors (FMCG, Telecomms, Financial etc) as agencies looking for specialist support. We specialise in… Sales Promotion Partnership Marketing Reward & Recognition Gifting & Benefits B2B Representation / Sales Management We ensure your audience are moved in the right direction. Our difference: CX insight and tools fuel our creativity, and creativity elevates our CX approach. We call it Creative CX. The output: Ever-evolving, intelligently joined up communication with your audience – and powerful results for you. 3 WHAT NEXT? Outlook and Plans IN APRIL Story Edinburgh, Story Newcastle and Chapter Birmingham are coming together to form Story Group. Already sister agencies in culture, heart and spirit, together they unite to give scale, geographic reach, broad sector experience and a strong creative reputation. PATHFINDR: READY TO GROW • IIoT is thriving • Pandemic restrictions on visiting Clients nearly completely over • Core team in place – technology, procurement, sales, marketing and technical support • Product suite constantly evolving ahead of curve • Gen 3 GPS development utilizing new IOT networks (5G) • Ultra-wideband technology roll-out • Proximity detection to Trilateration for even greater accuracy • Blockchain integration for greater data integrity • ‘Uniqueness’ of the Pathfindr offer communicated and resonating with global businesses, initiating trials around the world PATHFINDR: READY TO GROW Some examples of trials currently underway in Q1 Ford Europe Ford ASPAC Ford China Global engine parts location & condition monitoring (Mexico/Spain) Parts logistics tracking (S.Africa/China) Electric vehicle parts logistics tracking and monitoring in-country Ford Supply Chain Ford rolling out Pathfindr offer to their key suppliers e.g. Nemak manufacturing plant location and monitoring (Mexico) Petronas European bulk IBC container tracking (UK/Europe) Rolls Royce Aero US Govt asset tracking (UK) Outukumpu Thyssenkrupp Stainless steel bulk logistics monitoring (Mexico) Parts tracking and monitoring (Germany/Spain) And many more………….. PATHFINDR: CONSTANTLY INNOVATING • Potential partnership with; QTS Group, one of the UK's leading Rail Contractors, providing specialist services in Rail Engineering, Infrastructure, Electrification, Design & Training • 10 workers are killed every year resulting in £xxm potential fines and criminal prosecutions PEOPLE THAT COUNT • There is no point ignoring it - The Great Resignation has made this an incredibly tough market in which to recruit, coupled with Industry wide wage inflation (offset by pricing realignment) • That’s why we constantly invest and innovate in securing the best and brightest talent, first • 300 people were recruited by the central team in 2021 and because of our unique approach £851,000 was saved in Recruitment Agency fees • Cost per hire last year was £1,284 vs external estimates of c£3,000 (CIPD and Glassdoor) • Group People Board created (November 2021) as a forum for change and the shaping and delivery of an ambitious People Proposition • Understand how we can recruit, develop and retain the best, whilst providing an exceptional employee experience • Provide awareness of both the internal and external people factors that influence how we operate • Deliver a consensus re Group priorities to improve consistency and collaboration • Build on strong transformational leadership • Mobilise Leaders and the People Team on issues that matter to the whole Group PEOPLE THAT COUNT ALSO EACH AGENCY IS INNOVATING TO SUPPORT THEIR EMPLOYER BRAND FOR EXAMPLE: ThinkAcademy • A prestigious learning environment delivering bespoke content on a range of courses for new recruits and continuing professional development for our teams • Gold Standard core modules written to fit ThinkBDW’s business needs, ethos and professional standards • Apprentices recruited to ThinkAcademy will learn from the best in the business and benefit from invaluable work placements to be undertaken alongside their studies • ThinkAcademy courses, to be delivered by in-house and external trainers, will include: • CGI/UX • Design/Artwork • Account Handling core skills • Presentation skills for Account Managers • Managing people • Copywriting • Proofreading MAKING POSITIVE CHANGE • It’s our ambition to become the UK’s leading, most respected Agency Group • We believe the impact MISSION makes on the world should be positive, always • We have mapped the carbon impact of the entire MISSION Group, allowing us to identify key hotspots and areas where we can improve our behaviours and practices to make a fundamental difference • We have joined the Business Ambition for 1.5°C campaign - the world’s largest and fastest- growing group of companies that are aligning with 1.5°C by helping to halve global emissions by 2030 • A target reduction in total emissions by 21% for 2024 and 42% for 2029 in line with Science Based Targets • 17 environmental champions from across our Agencies appointed • These environmental champions have been working hard to develop robust Environmental Management Systems and action plans and we hope to see all Agencies this year receive ISO 14001 certification as a result MISSION GROUP DEVELOPMENT MAINTAINING OUR GROWTH TRAJECTORY ALREADY IN DEVELOPMENT • eCommerce via Mission Made • Enhanced SEO capability via Mission Made • Shaping an evolved Healthcare proposition • Developing a central ‘Data that Counts’ proposition IN SCOPE (2022) • Assessing and enhancing the Group’s Media Planning & Buying needs • MISSION HUBS ‘Build it and they will come’ • The creation of multi-Agency International hubs to facilitate Global expansion and growth – organic and M+A • Building in additional Verticals • Leveraging our financial strength to take advantage of in-market M&A opportunities IN SUMMARY 18% REVENUE GROWTH IN 2021 WITH EFFECTIVE CONVERSION INTO PROFIT AND CASH NEW ADDITIONS OF SOUL AND LIVITY BEDDING IN WELL AND ONGOING AGENCY PORTFOLIO DEVELOPMENT PLAN TO USE FINANCIAL STRENGTH FOR FURTHER GROWTH AND PATHFINDR RESTRICTIONS TO TRADE NOW REMOVED 2022 HAS STARTED WELL AND WE ARE ANTICIPATING ANOTHER YEAR OF DOUBLE DIGIT GROWTH
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