SAI set for another year of solid growth
Sydney, Australia, 9 August 2007. SAI Global Limited (ASX: SAI) today announced a net profit after tax of $18.8 million, representing an increase of 34.1% over last year’s result of $14 million. Earnings per share were up 4.8% to 13.1 cents per share off the expanded capital base following the equity raising undertaken in June 2006.
Operating cash inflows were $27.3 million, up 25.1% over the $21.8 million achieved in the corresponding period.
HIGHLIGHTS
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Revenue (excl interest)
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$212.8 million
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Up 33.3% on 2006
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EBITDA
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$43.2 million
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Up 43.7% on 2006
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Net Profit After Tax
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$18.8 million
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Up 34.1% on 2006
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EPS
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13.1 cents per share
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Up 4.8% on 2006
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Underlying cash EPS
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17.6 cents per share
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Up 1.7% on 2006
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Final Dividend
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5.8 cents per share, 85% franked
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7.4% higher than 2006 final dividend of 5.4 cents
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Net Operating Cash Inflow
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$27.3 million
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Up 25.1% from $21.8 million last year
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The Chairman of SAI Global Limited, Mr George Edwards, said: “Over the past four years we have built a high growth and profitable global company. This year’s solid performance, during which we integrated our four years of acquisitions, is a credit to the skills of our growing international management team and the dedication of all our employees. With approximately 50% of our revenue generated in the Northern hemisphere we see ourselves as an emerging international player, with the ability to deliver profitable growth on the back of a solid and scalable operating platform.”
On the full year result the Chief Executive of SAI Global Limited, Mr Ross Wraight, said: “We have delivered another year of significant growth and have been successful again in consolidating the sectors in which we operate. Our ability to find and integrate high value assets has produced consistently good outcomes for our shareholders and customers.”
Overall Results
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Year ended 30 June 2007
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Year ended 30 June 2006
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Change
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|
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$M
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$M
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%
|
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Revenue (excl interest)
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212.8
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159.7
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33.3
|
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EBITDA
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43.2
|
30.1
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43.7
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EBIT
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30.4
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22
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38.2
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NPAT
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18.8
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14.0
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34.1
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EBITDA increased to $43.2 million, up 43.7% from $30.1 million a year ago and NPAT grew by 34.1% to 18.8 million. This uplift was accompanied by an increase in the EBITDA margin to 20.3%, up from 18.8%. The result was driven by a combination of acquisition and organic growth and was achieved despite a significant amount of corporate development activity being undertaken and the costs associated with this.
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12 months ended 30 June 2007
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12 months ended 30 June 2006
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Change (%)
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Revenue ($M)
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75.5
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53.0
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42.4
|
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EBITDA ($M)
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24.0
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15.7
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52.5
|
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EBITDA Margin (%)
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31.8
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29.7
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2.1
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A full twelve months contribution from Legal Publishing, Property Information and ILI, coupled with strong organic growth, resulted in an excellent financial outcome for the Publishing division. Revenue for the year grew by 42.4% to $75.5 million and EBITDA by 52.5% to $24.0 million. EBITDA margins expanded to 31.8%. These results were underpinned by strong organic growth in the Property Information and Standards Publishing businesses, solid outcomes from the other sectors, and effective cost control.
Operational focus over the last twelve months was on business integration, a strengthening of the management team while maintaining underlying business performance. The enhanced management team for the publishing division has been put in place, including a Global Head of the division. Work is well advanced on creating a single global web delivery platform and standards database for the division.
The outlook for 2007/8 remains solid. Focus remains on leveraging our acquired global publishing assets to yield revenue and cost synergies and further content acquisition.
Compliance Services Division
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12 months ended 30 June 2007
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12 months ended 30 June 2006
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Change1 (%)
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Revenue ($M)
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26.0
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16.8
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55.0
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EBITDA ($M)
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5.4
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3.5
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52.8
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EBITDA Margin (%)
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20.8
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21.1
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(0.3)
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1. Midi was acquired in January 2007 and therefore was only included in the results for 5.5 months in FY07
FY07 was an important year in the formation of our Compliance Services division. The year saw strong organic growth, the acquisition of Midi and an anti-money laundering database (ROOR) and significant restructuring, leading to the establishment of an integrated global division comprising the assets of Lawlex, Easy i and Midi.
Divisional integration and challenges in finding sufficient quality sales resources in the first half resulted in some loss in sales momentum in the second half. Despite these challenges, the division’s revenue and profit, driven both by a combination of organic growth and the inclusion of five and half months of Midi, grew strongly. Revenue for the year increased by 55.0% to $26.0 million and EBITDA by 52.8% to $5.4 million, with EBITDA margins finishing at 20.8%.
The operational focus was on divisional integration, which was characterised by a management restructure, development of a single delivery platform, courseware integration and the establishment of regional sales and marketing business units.
Following significant investment in business development resources and the acquisition of the ROOR AML database we expect strong revenue and profit growth in 2008.
Assurance Services Division
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12 months ended 30 June 2007
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12 months ended 30 June 2006
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Change (%)
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Revenue ($M)
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89.4
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67.7
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31.9
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EBITDA ($M)
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13.2
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10.4
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27.0
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EBITDA Margin (%)
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14.8
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15.4
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(0.6)
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Assurance Services revenues grew by 31.9% to $89.4 million and EBITDA by 27.0% to $13.2 million. Revenue and profit was driven by organic growth, the inclusion of nine and a half months of Certo and a full twelve months of EFSIS’s food safety assets (6 months in FY06). Both EFSIS and Certo have EBITDA margins lower – but expanding - than the pre acquisition Assurance division and this change of mix has resulted in EBITDA margins falling from 15.4% to 14.8%.
With the appointment of a Global Head of Assurance, the operational focus was on integrating the recently acquired assets and the business experienced significant gains in food, OHS and product certification.
The business continues to pursue its strategy of achieving global delivery capability and has recently invested in Japan, China and India.
The outlook for the division remains solid with revenue and profit growth expected, an increased focus on multi-national accounts and gaps in the geographic coverage that still needing to be filled.
Professional Services Division
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12 months ended 30 June 2007
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12 months ended 30 June 2006
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Change (%)
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Revenue ($M)
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21.8
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22.5
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(3.1)
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EBITDA ($M)
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1.7
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1.3
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28.5
|
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EBITDA Margin (%)
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7.8
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5.9
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1.9
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This division has undergone a significant restructuring over the last two years to improve its profitability. This has seen a progressive improvement in EBITDA margins with margins over the last twelve months increasing from 5.9% to 7.8%.
Notwithstanding a decline in revenue of 3.1% for the period, EBITDA grew by 28.5% to $1.7 million. The Australian training business grew strongly but this growth was offset by weaker conditions in the USA and some currency impact.
To reflect the close relationship and cross selling opportunities between the Assurance Division and the services provided by Professional Services, the management responsibility for the division has been moved to the Assurance division.
Modest revenue and profit growth is expected in 2007/8.
Acquisitions/Joint Ventures
· In August 2006 we acquired Certo, the Turin based certification company providing us with a substantial position in the continental European market.
· In November 2006 we opened a management technologies and training services joint venture in China following a deal with the country’s leading conformity assessment body, the China Quality Certification Centre (CQC).
· In January 2007 we acquired Midi in North America, a leading provider of enterprise-wide compliance and ethics solutions for global companies.
· In April 2007 we merged our New Zealand operations with the Telarc Limited, a wholly owned subsidiary of the Testing Laboratory Registration Council.
· In June 2007 we acquired the Reporting Officers On-line Resource [ROOR], a web-based resource that helps anti-money laundering and compliance professionals track and monitor the latest news and information.
Outlook for the Full Year 2007/08
We anticipate solid demand for SAI Global’s products and services, with revenue and profit growth to expected. More acquisitions are likely.
Growth in revenue of between 12.8% to 15.1%, and EBITDA of 15.8% to 20.4% is expected, after taking into account the impact of the strengthening Australian dollar. Continued EPS growth is expected.
Dividend Payment
The 85% franked final dividend will be paid on the 20 September 2007. The record date is 24 August 2007.
Media & Investor Inquiries
Tom Godfrey – SAI Global
SAI Global Limited applies information worldwide to help organizations manage risk, achieve compliance and drive business improvement. It provides access to Standards and other technical and regulatory information, compliance solutions, business improvement training and independent verification and certification services. http://www.saiglobal.com/