2002 results 17 march 2003. © 2003 management consulting group plc all rights reserved 2002 final...
TRANSCRIPT
2002 Results
17 March 2003
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt2
Agenda
• Introduction
• 2002 highlights
• Profit and loss account
• Balance sheet
• Issues
• Outlook
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt3
Project management
Peoplesolutions
Process improvement
The enhancement and design of processes to increase sales and reduce costs, overheads and capital expenditure
Behavioural analysis, training and communications to enhance skillsand embrace change
Tight, structured approach with measurable payback in predetermined timescales
“We are obsessed by measuring improvementsand your earnings enhancement”
Proudfoot Consulting—core service
Proudfoot installation
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt4
“Your annualised earnings enhancement will exceed our fee”
sustainability
“Can you afford not to discuss your issues with us?”
year 1
Proudfoot fees
Earnings enhancement
Proudfoot Consulting’s no net cash promise
Earnings enhancement
year 2
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt5
Clients
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Parson Group business
• Financial management practice: Engagements in finance and business support (back office)
departments
• Ensures management information has: Greater reliability (higher accuracy, reduced risk) Greater speed (ability to make informed decisions faster) Cost effective production processes
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt7
Parson Consulting – core services
Finance:
Management reporting
Financial reporting
Process improvement
Budgeting and forecasting
Treasury management
Capital project control
Expense reduction
Activity based costing
Solutions to audit letters and due diligence reports
Technology applications:
Design
Selection
Software upgrades
Software implementations
Optimisation
Technology infrastructure:
Maximise benefits from current systems
Process change
Organisational change
Org
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Finance and support services
Fin
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Pro
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© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt8
Parson Group - representative clients
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Group structure
MCG will become an umbrella organisation for different consulting offerings
B Consulting
Central services
C Consulting
D Consulting(complementary to B)
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt10
Agenda
• Introduction
• 2002 highlights
• Profit and loss account
• Balance sheet
• Issues
• Outlook
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt11
2002 highlights
• Turnover up 49% to £107.3 million (2001: £72.1 million) • Proudfoot Consulting turnover up 29% (2001 year: +34%):
Despite 10% depreciation of US dollar Compared with market growth of about 5% (2001: 10%)
• Parson Consulting, acquired on 28 May 2002, contributed turnover of £14.1 million and now stabilised
• Operating profit before goodwill amortisation of £7.6 million (2001: loss of £0.3 million excluding exceptional pension credit of £2.0 million)
• EBITDA of £9.2 million (2001: £0.9 million)• Cash of £21.9 million (2001: £18.9 million)• Return to dividend list – 0.5 pence per share (2001: nil)• Strong order input to date in 2003 will offset weak final quarter of 2002; most of
benefit will be seen in second half
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt12
Agenda
• Introduction
• 2002 highlights
• Profit and loss account
• Balance sheet
• Issues
• Outlook
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt13
Profit and loss account
2002 2001
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt14
Geographical analysis: turnover
2002 2001£m Change £m
Proudfoot: North America 52.1 40% 37.3 Europe 34.6 15% 30.0 Africa 2.2 -33% 3.3 Asia Pacific 4.3 187% 1.5
93.2 29% 72.1
Parson 14.1 -
Total 107.3 49% 72.1
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt15
Geographical analysis: operating profit
2002 2001
Operating Operatingprofit/(loss) Goodwill Depn EBITDA profit/(loss) EBITDA
£m £m £m £m £m £mProudfoot North America 12.4 - 0.8 13.2 4.8 3.3 Europe (3.5) 2.0 0.6 (0.9) (3.5) (1.4) Africa (0.9) - - (0.9) (0.1) - Asia Pacific 0.3 - - 0.3 (1.1) (1.0)
8.3 2.0 1.4 11.7 0.1 0.9 Parson (3.8) 1.1 0.2 (2.5) - -
4.5 3.1 1.6 9.2 0.1 0.9
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt16
Results commentary - Proudfoot
• Revenue growth of 29% (2001: 34%) compared to market c. 5% (2001: 10%)
• North American business mainly outside financial sector
• European market slower to react to economic conditions than North America
• Africa and Asia Pacific dependent upon individual contracts
• Slowdown in business won in Q4 2002
• No softening of prices
• Continued penetration of multi-national businesses—average size of project £1.3 million (2001: £1.2 million)
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt17
Results commentary - Parson
• Revenue decline continued until October timeframe
• Stabilised business levels late in year but at unprofitable level
• Management changes commenced in November
• New York/Stamford and Los Angeles/Orange County combined
• Marketing commenced for Sarbanes-Oxley
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt18
Agenda
• Introduction
• 2002 highlights
• Profit and loss account
• Balance sheet
• Issues
• Outlook
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt19
Balance sheet
2002 2001Fixed assets £m £m Intangible assets 73.6 35.7 Tangible assets 2.4 2.6 Investments 1.0 1.0
77.0 39.3 Current assets Debtors 8.3 10.2 Cash and cash equivalents 21.9 18.9
30.2 29.1 Creditors due within one year (25.2) (28.7)Net current assets 5.0 0.4
Creditors due after one year (5.0) (4.4)Provisions for liabilities & charges (2.7) (3.0)Retirement benefits liability (17.3) (12.2)Net assets 57.0 20.1
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt20
Commentary on balance sheet
• New equity issue raised £38.8 million in May 2002• Parson acquired for £38.5 million, related goodwill £40.3 million,
fully equity financed because loss making• Long term investments of £1.0 million comprise share scheme
associated with acquisition of IMR• Receivables 11 days (2001: 23 days)• Cash of £21.9 million (2001: £18.9 million)• Pension liability reflected on balance sheet £13.5 million (2001:
£7.3 million) together with post-retirement health care liability £3.8 million (2001: £4.9 million)
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt21
Agenda
• Introduction
• 2002 highlights
• Profit and loss account
• Balance sheet
• Issues
• Outlook
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt22
Issues addressed in second half 2002
• Continued to strengthen sales executives• Closely monitored market requirements• Mail shots to increase meeting counts• Increased focus on past clients
• Repositioned to capitalise on market opportunity
• Clearer marketing material• Emphasised performance management• New incentive plans• Recruited more sales executives• Increased prices• Managed sales pipeline closely• Commenced management changes
• Cross referral programme between Parson and Proudfoot is bearing fruit
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt23
Issues to be addressed in first half 2003
• Strengthening of sales management
• Continue to strengthen European management
• Close monitoring of market requirements
• Continue to strengthen management• Capitalise on Sarbanes-Oxley• Continue to increase prices• Continue to closely manage sales• Sales effectiveness installation by
Proudfoot• Establish training courses• Improve management information
systems
• Continue cross referral programme between Parson and Proudfoot
• Continue to build order book for H2 2003
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt24
Agenda
• Introduction
• 2002 highlights
• Profit and loss account
• Balance sheet
• Issues
• Outlook
© 2003 Management Consulting Group PLC All rights reserved2002 Final Results.ppt25
2003 outlook
• Proudfoot: Cost reduction remains a priority for clients in difficult economic
conditions Proudfoot order book started year lower than previous year following
weak 2002 final quarter. Input in 2003 has been strong• Parson:
Sarbanes-Oxley engagements and opportunities now coming through
Revenue stable, expect growth in second half• Group:
Directors expect turnover growth to continue to out-perform consulting market
Directors remain optimistic about future growth