Interim Results 10 December 2003 Interim Results 2003
Interim Results 10 December 2003 Interim Results 2003
Robert Speirs Chairman 2 Interim Results 2003
Highlights § Delivery of strategic objectives in 6 months to 31 October 2003 - New South West Trains and Island Line franchises agreed - Coach USA restructuring largely completed - Innovative growth ideas in UK Bus introduced § Strong trading performance across the Group § Disposal of Citybus § Net debt down from £ 560. 0 m to £ 210. 9 m § Interim dividend up 12. 5% to 0. 9 p per share 3 Interim Results 2003
Martin Griffiths Finance Director 4 Interim Results 2003
Financial Performance § § § Strong financial results - Operating profit growth in all four retained divisions - Operating margin improvement Actively managing cost pressures - Revenue growth initiatives to offset cost increases - Reduction in central overhead - Risk sharing with Strategic Rail Authority - Asset utilisation Targeting investment in growth areas 5 Interim Results 2003
Financial Highlights October 2003 £m October 2002 £m 963. 8 1, 067. 7 Total operating profit/(loss)* 67. 3 (512. 4) - pre exceptionals & goodwill*(after restructuring costs) 76. 9 86. 9 Profit/(loss) before tax 44. 8 (524. 1) - pre exceptionals & goodwill 60. 3 75. 2 100. 3 100. 2 Turnover Free cash flow ** Adjusted EPS 3. 2 p 4. 4 p Dividend per share 0. 9 p 0. 8 p * After restructuring costs of £ 4. 1 m (2002 - £ 2. 9 m) ** Free cash flow comprises net cash inflow from operating activities, dividends from associates, net cash inflow/(outflow) from returns on investments and servicing of finance, and taxation 6 Interim Results 2003
Profit Reconciliation 2002 PBT Operating profit of retained businesses - UK Bus - New Zealand - Coach USA - Rail – underlying Overheads Reduction in underlying finance charges Exceptionals & goodwill Citybus disposal Rail – non-recurring liquidated damages Restructuring JVs & associates Gain on repurchase of bonds in 2002 2003 PBT 7 Pre goodwill & exceptionals £m Exceptionals & Goodwill £m 75. 2 (599. 3) (524. 1) 3. 2 0. 5 0. 1 9. 8 0. 3 10. 1 99. 2 (11. 6) (7. 2) (1. 2) (3. 9) (15. 0) 60. 3 575. 0 8. 8 (15. 5) 3. 2 0. 5 575. 1 9. 8 0. 3 10. 1 8. 8 83. 7 (11. 6) (7. 2) (1. 2) (3. 9) (15. 0) 44. 8 Reported £m Interim Results 2003
Margin Improvement Retained Divisions 1. 4% 9. 6% 8. 2% 2002 2003 Operating margin excl goodwill & exceptionals Six months to 31 Oct 2002 UK Bus New Zealand Coach USA Rail Turnover £m 293. 8 21. 5 334. 2 206. 0 855. 5 2003 Op profit £m 31. 1 4. 4 15. 8 18. 9 70. 2 8. 2% UK Bus New Zealand Coach USA Rail 8 Turnover £m 317. 9 26. 4 234. 0 216. 7 795. 0 Op profit £m 34. 3 4. 9 15. 9 21. 5 76. 6 9. 6% Interim Results 2003
EBITDA UK Bus (£ 2. 2 m lower due to impact of operating leases) Coach USA Overseas Bus - New Zealand - Discontinued Rail VRG thetrainline Road King Others Overheads & restructuring EBITDA before exceptionals 9 2003 £m 2002 £m 54. 0 25. 3 6. 8 3. 5 22. 5 5. 0 (1. 7) 5. 0 (0. 7) 119. 7 (8. 3) 111. 4 50. 4 37. 1 5. 9 20. 6 20. 2 7. 7 (1. 4) 5. 8 (0. 6) 145. 7 (7. 2) 138. 5 Interim Results 2003
Exceptionals and Restructuring Costs Exceptional Items - Loss on sale of Coach USA divisions Loss on sale of Chongqing investment Gain on sale of Citybus Coach USA exceptional items 2003 £m (5. 1) (1. 1) 0. 3 Nil (5. 9) 2002 £m Nil Nil (575. 0) Redundancy/restructuring costs* § £ 4. 1 m (2002 - £ 2. 9 m) * Charged against operating profits 10 Interim Results 2003
Movement in Net Debt £m Opening net debt (560. 0) Cash flows from operations 111. 4 Net interest received 1. 0 Dividends paid (23. 8) Net capital expenditure and new hire purchase/finance leases (35. 5) Acquisition of businesses and net debt assumed Sale of businesses and net debt eliminated Foreign exchange, tax and other movements Closing net debt (6. 5) 305. 7 (3. 2) (210. 9) 11 Interim Results 2003
UK Bus Trading Results § Turnover growth 8. 2% to £ 317. 9 m § Underlying passenger growth outwith London 1. 3% § Strong contribution from London companies - 19. 8% revenue growth § Improved operating margin - 10. 8% versus 10. 6% in 2002 - 11. 3% versus 10. 7% excluding operating lease impact 12 Interim Results 2003
UK Bus Profit Analysis October 2003 October 2002 £m £m Turnover Operating profit Add back increased operating lease costs Deduct saving in depreciation arising from operating leases Add back Megabus & Taxibus R&D Exclude Devon Adjusted margin *after £ 3. 5 m increase in pensions/NI costs and £ 3. 3 m increase in insurance costs 13 317. 9 34. 3* 10. 8% 2. 6 293. 8 31. 1 10. 6% 0. 4 (0. 9) 36. 0 11. 3% 0. 3 (0. 4) 35. 9 (0. 2) 31. 3 10. 7% (1. 6) 29. 7 11. 3% 10. 1% Interim Results 2003
Coach USA Trading Results § Turnover £ 234. 0 m (2002 - £ 334. 2 m) § 3. 1% like for like revenue decline* § Operating profit** £ 15. 9 m (2002 - £ 15. 8 m) - strong cost control - profit levels maintained on reduced revenue § Operating margin up from 4. 7% to 6. 8% * Like for like revenue decline is measured as the change in revenue excluding the impact of acquisitions, disposals and foreign exchange ** Pre exceptional items and goodwill amortisation throughout presentation 14 Interim Results 2003
Coach USA Turnover Breakdown Residual businesses - North East - North Central - Canada Discontinued Remaining taxi operations (to be sold) 15 October 2003 October 2002 Turnover $m 113. 7 57. 5 22. 5 193. 7 156. 0 32. 3 382. 0 115. 7 59. 7 23. 1 198. 5 276. 4 34. 9 509. 8 Interim Results 2003
New Zealand Trading Results § Turnover £ 26. 4 m (2002 - £ 21. 5 m) § Underlying 6. 1% revenue growth (excluding currency movements) § Operating profit £ 4. 9 m (2002 - £ 4. 4 m) § Operating margin 18. 6% (2002 – 20. 5%) § Passenger volumes up 5. 5% 16 Interim Results 2003
Rail Trading Results Rail Subsidiaries § Turnover £ 216. 7 m (2002 - £ 206. 0 m) § Operating profit £ 21. 5 m (2002 - £ 18. 9 m*) § Operating margin 9. 9% (2002 – 9. 2%) § Passenger volumes up 3. 1% at SWT § Sustained improvement in SWT-caused delay minutes * Included £ 7. 2 m of non-recurring liquidated damages 17 Interim Results 2003
Rail Profit Analysis October 2003 £m Operating Profit per Bid 12. 7 Passenger income 8. 8 Net Sch 7/Sch 8 1. 7 EC 4 T 5. 2 Other Costs 5. 3 Revenue/Profit share to the SRA (11. 7) Actual SWT operating profit 22. 0 Other (0. 5) Total Rail operating profit 21. 5 18 Interim Results 2003
Joint Ventures & Associates Virgin Rail Group § Share of revenue £ 149. 5 m (2002 - £ 140. 6 m) § Share of operating profit £ 5. 0 m (2002 – £ 7. 7 m) thetrainline § Share of revenue £ 5. 4 m (2002 - £ 5. 1 m) § Share of operating loss £ 1. 7 m (2002 - £ 1. 4 m) Road King § Share of operating profit £ 5. 0 m (2002 - £ 5. 8 m) 19 Interim Results 2003
Disposals Completed in six months to 31 Oct 2003: - Coach USA - Citybus - Chongqing associates Reduction in net debt £m Net cash proceeds £m 133. 0 171. 8 0. 9 305. 7 133. 0 128. 7 0. 9 262. 6 (Loss)/gain before tax £m (5. 1) 0. 3 (1. 1) (5. 9) Non-core: - Road King - Remaining US taxi businesses 20 Interim Results 2003
Balance Sheet & Financing § Net debt down to £ 210. 9 m (April 2003 - £ 560. 0 m) § EBITDA*/Interest cover 6. 7 times § Progressive dividend policy § Evaluate optimum balance sheet structure in conjunction with 2004 re-financing of Eurobond and bank facilities * pre exceptionals 21 Interim Results 2003
Current Trading & Outlook § Maintaining Coach USA profit on lower revenue base - H 1 is seasonally stronger § Sustainable SWT profits at upper end of original expectations § Operating profit growth in UK Bus and New Zealand § H 2 to date in line with expectations 22 Interim Results 2003
Brian Souter Chief Executive 23 Interim Results 2003
Group Strategy (1) • Objectives in the last 12 months – Seek new SWT franchise – Restructure Coach USA – Seek substantial improvement in SWT’s own train performance – Get the basics right at UK Bus • • STATUS Done Largely complete Ongoing Fares Driver recruitment Engineering Core networks 24 Interim Results 2003
Group Strategy (2) Where next for Stagecoach? • UK Bus – Continue to get the basics right – Research and development – Challenge is the delivery of organic growth • Rail – Priority to renegotiate XC and WC franchises – Other franchise opportunities • Integrated Kent • Manchester Metrolink • UK Intercity • North America – Deliver profitable growth – Small bolt on acquisitions – Fleet improvement • New Zealand – Sustain revenue and profit growth 25 Interim Results 2003
Summary § § § Delivery of strategic objectives Strong trading performance across the Group Focused management Strengthened balance sheet Increased dividend Current trading in line with expectations 26 Interim Results 2003
Interim Results 10 December 2003 Interim Results 2003
Appendices 28 Interim Results 2003
UK Bus Revenue Development 2002 Turnover Passenger volumes outside London contract changes Fares/tender prices 2003 Turnover 29 London £m Provincial £m Total UK Bus £m 69. 2 11. 7 2. 0 82. 9 224. 6 2. 9 7. 5 235. 0 293. 8 2. 9 11. 7 9. 5 317. 9 Interim Results 2003
UK Bus - London/Other October 2003 Turnover £m London Other Operating Profit £m October 2002 Operating Margin % 9. 0% Turnover £m Operating Profit £m Operating Margin % 69. 2 6. 8 9. 8% 82. 9 7. 5 235. 0 26. 8 11. 4% 224. 6 24. 3 10. 8% 317. 9 34. 3 10. 8% 293. 8 31. 1 10. 6% 30 Interim Results 2003
Rail Revenue Development £m 2002 Turnover % 206. 0 SWT Passenger volumes 6. 3 3. 1% SWT Fares 4. 1 2. 0% Other 0. 3 0. 1% 216. 7 5. 2% 2003 Turnover 31 Interim Results 2003
Overseas Bus Revenue Development Citybus £m New Zealand £m 70. 3 (45. 5) (4. 5) (2. 5) 17. 8 21. 5 3. 4 1. 3 0. 2 26. 4 2002 Turnover Disposal of Citybus and Australia Currency movements Volumes Fares 2003 Turnover 32 Other £m 0. 5 (0. 5) - Total £m 92. 3 (46. 0) (1. 1) (1. 2) 0. 2 44. 2 Interim Results 2003
Overseas Bus Segmental results October 2003 Turnover £m October 2002 Operating Profit Margin £m % Turnover £m Operating Profit £m Operating Margin % Citybus* 17. 8 1. 0 5. 6% 70. 3 12. 6 17. 9% New Zealand 26. 4 4. 9 18. 6% 21. 5 4. 4 20. 5% 0. 0% 0. 5 - 0. 0% 13. 3% 92. 3 17. 0 18. 4% Other - Total 44. 2 5. 9 * Disposal completed June 2003 33 Interim Results 2003
Coach USA Revenue Development £m % 2002 Turnover 334. 2 Disposals (76. 2) (22. 8)% Currency movement (16. 4) (4. 9)% (7. 6) (2. 3)% Underlying decline 2003 Turnover 234. 0 34 (30. 0)% Interim Results 2003
Finance Charges Gross debt & related derivatives Cash Average balance* £m Finance charges £m Annual Effective rate % 607. 0 (237. 0) 370. 0 16. 9 (3. 0) 13. 9 (0. 6) 0. 3 0. 4 0. 8 1. 5 0. 3 16. 6 5. 6% 2. 5% 7. 5% Joint ventures & associates Non-utilisation/commitment fees Amortisation of bond issue costs/bank charges Insurance letters of credit Discount on insurance provisions Other *Average of month end debt/cash balances 35 Interim Results 2003
Interest/Debt Ratios 2002 £m 11. 7* 2003 £m 16. 6 Finance charges* (net) EBITDA pre-exceptionals 111. 4 EBITDA pre-exceptionals/Finance charges 138. 5 6. 7 times 11. 8 times * 2002 includes £ 15. 0 m gain on repurchase of bonds 36 Interim Results 2003
Taxation 2003 Pre-tax £m 60. 3 (5. 9) (9. 6) 44. 8 Pre-goodwill and exceptionals Exceptional items Goodwill amortisation 37 Tax £m (17. 9) 2. 0 0. 8 (15. 1) % 29. 7% 33. 9% 8. 3% 33. 7% Interim Results 2003
Capital Expenditure UK Bus Coach USA Overseas Bus Rail Cash spent on capex £m Capex on new hire purchase £m Impact of capex on net debt £m 11. 0 9. 3 5. 9 1. 1 10. 9 - 21. 9 9. 3 5. 9 1. 1 (1. 8) (0. 1) - 20. 1 8. 5 5. 8 1. 1 27. 3 10. 9 38. 2 (2. 7) 35. 5 38 Disposal proceeds £m Net £m Interim Results 2003
Fuel Hedging % of group fuel usage hedged FY 2004 100% FY 2003 63% FY 2002 90%** Average hedge price $/barrel* $24 $24 Average floating price $/barrel* $30 $23 c. £ 40 m c. £ 53 m Variable fuel costs * Based on blended comparable crude oil price for the year ** 6 months to April 2002 39 Interim Results 2003
Exchange Rates October 2003 US$ HK$ NZ$ October 2002 Closing rate Average rate 1. 6970 13. 1780 2. 7617 1. 6324 12. 7120 2. 7875 1. 5645 12. 2017 3. 2177 1. 5252 11. 8957 3. 2177 40 Interim Results 2003
- Slides: 40