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CIMIC Group Limited Annual Report 2016 |
Operating and Financial Review
FINANCIAL HIGHLIGHTS
NPAT PERFORMANCE AND MARGINS
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NPAT of $580.3 million up 11.5% on FY15, at the top end of the guidance range of $520 million to $580 million.
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NPAT margin 5.3%, up 140 basis points on FY15.
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$9.0 million net negative impact of one-offs on NPAT
1
.
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EBIT and PBT margins of 7.0% and 6.8% respectively, increases of 70 and 130 basis points on FY15.
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EPS (basic) was 176.6 cents, up 14.9% on FY15 (compared to an 11.5% increase in NPAT), as well as being boosted by the benefits of
the share buy-back.
CASH FLOWS
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Strong cash flows from operating activities of $1.2 billion in FY16, an EBITDA conversion rate of 110%.
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Net cash from operating activities up 4.3% in 4Q16 year on year to $556.6 million.
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Free operating cash flow generation of $846.8 million in FY16.
FINANCIAL POSITION
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Net cash of $409.3 million after net investments of $1.0 billion, including the share buy-back program, the acquisition of shares in
UGL, Sedgman and Devine, and the divestment of Nextgen. Net cash would have been approximately $1.4 billion, if adjusted for
these items.
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Net finance costs reduced by $85.9 million in FY16 to $18.0 million.
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Net contract debtors of $1.4 billion, down 7.6% on FY15. The $675.0 million contract debtors portfolio provision remains unchanged.
REVENUE
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Revenue of $10.9 billion in FY16.
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A positive revenue trend, up 17.8% (10.3% excluding UGL) in 4Q16 versus 3Q16.
WORK IN HAND
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Solid work in hand of $34.0 billion, boosted by the acquisition of UGL (UGL contributed $4.9 billion to work in hand, of which over
75% is recurring).
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Robust project pipeline, around $100 billion of tenders, relevant to CIMIC, have been identified for 2017 (of which 69% is in Australia
and New Zealand), $55 billion is in construction, $25 billion is in mining and $20 billion is in services.
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In the order of $250 billion of projects, relevant to CIMIC, have been identified as coming to the market in 2018 and beyond (of
which 60% Australia and New Zealand), $165 billion is in construction, $45 billion is in mining and $40 billion is in services.
STRATEGIC ACQUISITIONS
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Strengthened balance sheet supports investments in strategic growth opportunities such as UGL and Sedgman.
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The strategic acquisition of leading diversified services company UGL, expanding CIMIC’s capabilities and providing an additional
platform for growth.
SHAREHOLDER RETURNS
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Share price of $34.94, up 43.8% in FY16,
compared to an increase in the ASX 200 index of 7.0%.
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The Board has determined a 100% franked final dividend of 62 cents per share, to be paid on 4 July 2017. The total dividend payable
of $201.0 million is an estimate only, based on the number of shares on issue as at the date of the Financial Report. Due to the
further share buy-back announced by CIMIC on 12 December 2016, which commenced on 29 December 2016, there may be fewer
shares on issue on the record date for the dividend than the number of shares on issue as at the date of the Financial Report.
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Combining the share price appreciation and dividends in respect of the 2016 Financial Year, CIMIC delivered a total shareholder
return of 48%.
GUIDANCE
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2017 NPAT in the range of $640 million to $700 million, subject to market conditions, an increase of 10% to 21% on FY16.
1
$9.0m net negative impact of one-offs post tax, includes Nextgen of $52.5 million; Sedgman gain $32.6 million; onerous leases (incl. 177
Pacific Highway) $(46.8) million; Devine and other $(47.3) million.
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