Signalling ‘a strong new beginning for the company’, Spotless Group Limited today (25 August) announced it had exceeded prospectus forecasts for the full year ended 30 June 2014 (FY2014). Spotless listed on the ASX on 23 May 2014. Spotless’ total statutory revenue of $2.62 billion and pro forma sales revenue of $2.51 billion exceeded prospectus forecasts by 2.3% and 1.4% respectively.
Statutory earnings before interest, tax, depreciation and amortisation (EBITDA) of $185.9 million was 3.6% ahead of prospectus forecast, while pro forma EBITDA3 was $252.2 million, 1.4% ahead of prospectus forecast.
Pro forma reporting is calculated on a basis consistent with the prospectus lodged with ASIC on 28 April 2014.
Spotless chairman Margaret Jackson said the results were a reflection of the solid and stable nature of the Spotless business under the stewardship of good management.
“The Board has great confidence in the performance of Spotless as it continues to win competitive tenders and partner with long-term clients on facilities management opportunities and critical service needs,” Jackson said.
“The management team has done an outstanding job of refocusing the business on customer needs over the past two years, positioning Spotless as the leading service provider to many important local enterprises, agencies, organisations and projects.
“On behalf of the Board, I would like to thank management and the 33,000 team-members who contributed to today’s pleasing result. The Board looks forward to the continued success of Spotless and reaffirms prospectus forecasts as we head into the 2015 financial year.”
Spotless chief executive Bruce Dixon said Spotless’ maiden result signalled a strong new beginning for the company.
“We’re pleased to deliver results for our shareholders that are in line with prospectus forecasts and on track to deliver our broader long term growth strategy for the company,” Dixon stated.
“Our national presence across Australia and New Zealand along with our scale, integrated offering and established brand reputation places us in a strong competitive position as we move into the new financial year.”
Positioned for growth
Earlier this month, Spotless announced that it had been awarded a significant contract to manage Department of Defence facilities in Queensland and Southern New South Wales. The initial contract term is for six years, with options to renew for up to four years. The annualised revenue from this contract is $200m and the contract will commence from 1 November 2014.
“Our successful tender for Defence was very pleasing and a great example of the momentum in the Spotless business. We have a pipeline of identified potential new contract opportunities and we’re pleased to be converting these opportunities and underpinning future revenue streams,” Dixon noted.
Strong financial position
Spotless maintains a strong financial position. Pro forma net cash flow (before financing and tax) was 14.4% ahead of prospectus forecast. Spotless reported net debt of $526.8 million, with net debt to FY14 pro forma EBITDA is 2.09 times, compared to the company’s prospectus target of 2.48 times.
Spotless reaffirms its prospectus forecasts and is expecting to deliver: EBITDA of $301.4 million; NPAT of $134.5 million; and adjusted NPAT of $141.8 million for the full year ending 30 June 2015 (FY2015). Spotless
directors intend to commence paying a dividend in FY2015 and are targeting a payout ratio of between 65% and 75% of adjusted NPAT.
Note on Pro forma Information: The pro forma information and EBITDA are non-IFRS information and have not been audited or reviewed in accordance with Australian Auditing Standards.
1: Pro Forma NPAT represents the statutory NPAT adjusted for transaction and restructuring costs, listed public company costs and directors’ fees, the new share based payment plan, write-off of borrowing costs and the full year impact on interest expense of the post IPO debt structure.
2: Pro Forma Sales Revenue represents statutory sales revenue excluding legacy pass through revenue and other income.
3: Pro Forma EBITDA represents statutory EBITDA adjusted for transaction and restructuring costs, listed public company costs and directors’ fees and the new share based payment plan totalling $66.3 million.