SPOTLESS GROUP LIMITED 
By This document includes references to a number of non-IFRS items, the definitions of which appear at the end of this document.
Group metric Amount 1H12 growth / (decline)
Revenue $1,419.4 million +5.1% EBITDA $78.4 million +4.8% EBIT $38.6 million +1.6% NPAT $16.5 million -5.2% EPS 6.3 cents per share -6.0%
Spotless Group Limited (ASX/NZX: SPT) today announced Net
Profit After Tax (NPAT) of $16.5 million for the half year, a
decline of 5.2 per cent on the prior period. The Directors
declared an interim dividend of 5 cents per share, franked to
100 per cent.
Group EBIT increased 1.6 per cent on the prior period to
$38.6 million. Excluding $1.9 million in transaction costs,
Group EBIT was $40.5 million, up 5.2 per cent on the prior
period. Group revenue prior to pass-through revenue of $73.2
million, rose 4.9 per cent to $1,346.2 million.
Australia and New Zealand Facility Services EBIT rose 7.3 per
cent to $48.7 million.
Managing Director and CEO, Josef Farnik, said: "Spotless is
experiencing sustained demand for outsourcing in key sectors
and the Facility Services business delivered a strong
financial result. There were lower mobilisation and start up
costs incurred during the period and the demand for the
integrated services offering grew. Lower earnings were
generated from the existing contract base reflecting lost
contracts and as clients continue to operate in an uncertain
economic environment. The Company is well positioned for
growth and has a strong pipeline of new business.
"In 1H12 Spotless' Resources business performed strongly,
with revenue growth of 93 per cent. The Resources sector now
accounts for 10 per cent of Facility Services revenue, prior
to pass-through revenue, up from 5 per cent in the prior
period.
"Spotless mobilised a new integrated facility services
contract at ERA's Northern Territory uranium mine during the
half, and recently secured a $45 million support contract for
the major Queensland based Curtis LNG project for QGC Pty
Limited. Other highlights included the extension of several
large Government contracts and support to the Rugby World Cup
and Presidents Cup Golf events.
"Braiform continues to be impacted by difficult market
conditions, particularly in Europe. Despite this, Braiform
maintained contracts, re-signed its largest client for a
further three years and secured extensions to existing supply
contracts with several major European retailers. Braiform
continued to cut costs and anticipates a profitable full year
result, in line with previous guidance, despite sustained
high input costs.
Spotless re-confirms its FY12 outlook provided at the 2011
Annual General Meeting and in its Management Presentation of
21 December 2011. The Company continues to expect FY12 EBIT
(prior to transaction costs primarily relating to private
equity engagement costs) to be in the range of $90-94
million1, subject to no further major
deterioration in trading conditions.
1 Refer to the Spotless Management Presentation (including page 37 and Appendix A)
1
ASX / NZX Media Release 17 February 2012 Australia and New Zealand ("ANZ") Facility Services
ANZ Facility Services revenue, prior to pass-through revenue,
rose 6.9 per cent to $1,218.4 million, reflecting the impact
of new contracts secured during the last twelve months, net
of contract losses and major event activity during the half.
Since the end of FY11, ANZ Facility Services has secured a
number of new contracts with clients including NZ Defence,
Olympic Dam, QGC Pty Limited and ERA.
Earnings growth was dampened by higher transitional IT costs
as part of the Business and IT Platform project as well as
soft demand for discretionary cleaning, maintenance and
laundry services within the Group's portfolio of existing
contracts. Lower demand included reduced scope of activity
within a number of existing contracts and several contract
losses directly attributed to challenging economic
conditions.
These impacts are offset by lower costs during the half ($1.2
million during the period, compared with $3.7 million in the
pcp). Start-up costs incurred in the prior comparative period
in Laundry Services were not
repeated.
With one exception, contracts secured and mobilised in the
prior corresponding period performed well and continue to
mature in profitability. Early in the second half of FY12
Spotless exited one underperforming Managed Services contract
by mutual agreement with the client.
By sector, strong performances were achieved (against revenue
prior to the comparative period) in the Leisure, Sports &
Entertainment (+13%), Health (+11%), Commerce & Industry
(+10%) and Public Housing sectors (+8%).
Resources sector revenue rose by 93%, reflecting the
maturation and full period impact of contracts won in the
prior period as well as contracts secured during the half.
The Resources sector now accounts for 10% of revenue prior to
pass-through revenue, up from 5% in the prior comparative
period.
At 31 December 2011 the Managed Services forward revenue
order book stood at $11.2 billion, in line with
30 June 2011. Public Private Partnerships (PPPs) represent
approximately two thirds of the order book.
ANZ Facility Services EBIT, prior to corporate administration
costs, rose 7.3 per cent to $48.7 million.
International Services comprises Spotless' Facility Services
operations outside of Australia and New
Zealand.
Revenue of $34.7 million was 16.1% above the prior
comparative period. Revenue growth was largely due to:
