Results in line with expectations
o Revenue of £4.2bn up 26%; like-for-like revenue up 8%
o Underlying profit from operations of £150m, up 44%; including a full year's contribution from Mouchel, an increased share of post-tax results of joint ventures in the Property division and margin recovery supported by cost efficiencies
o Underlying earnings per share of 106.7p up 11%.
Integration of Mouchel completed and portfolio simplification well advanced
o Reported statutory profit from operations of £12m (2015: £61m) including £116m non-underlying costs primarily relating to the portfolio simplification including;
▪ £50m relating to the Mouchel integration and restructuring
▪ £35m relating to the impact of commodity prices on two waste collection contracts
▪ £23m provision for winding down of the Caribbean operations
o The Mouchel Consulting review - well progressed with the total impact of the Mouchel Consulting review and portfolio simplification expected to be cash positive in FY17.
Significantly improved net debt position
o Net debt at £99m (2015: £141m) after £31m investment in the Property and Residential divisions and IT systems
o Strong operating cash conversion of 121%, and
o Net debt to EBITDA ratio of <1, a year ahead of Vision 2020 target.
Reduction in net pension scheme (post tax) deficit to £72m (2015: £123m)
Dividend
o Proposed full year dividend per share increased 17% to 64.5p (2015: 55.2p); dividend increased to £61m (2015: £47m), reflecting the Board's confidence in the Group.
Outlook
o Group performing well in growing market sectors with solid long-term fundamentals
o Order book of £8.7bn providing long-term visibility
o 50% of Group profit from operations arising from Services division
o Confident of achieving our strategic goal of double-digit profit growth on average each year to 2020.
Commenting on the results, Haydn Mursell, chief executive, said:
"I am pleased to report a good set of results reflecting the evolution of the Group during the year following the completion of the integration of Mouchel.
This year, we have successfully focused on our commercial and capital disciplines and are pleased to report a significant improvement in our net debt, further strengthening our balance sheet and the delivery of a key Vision 2020 target: net debt: EBITDA of less than 1x, a year ahead of our expectations.
The Group continues to perform well in growing market sectors including infrastructure, housing and regional building, providing a breadth of capabilities to our clients. For the first time, 50% of Group profit now comes from our Services division where essential day-to-day services are provided to clients and we have long-term visibility of our future pipeline of work.
