evevSpotless FY15 results exceed prospectus forecast

Spotless Group Holdings Limited (ASX: SPO) has announced its results for the twelve months ending 30 June 2015 (FY15), exceeding prospectus forecasts for sales revenue, EBITDA and NPAT. On a pro forma basis:

  • Sales revenue rose 12.3% to $2,823.1 million;
  • EBITDA rose 25.5% to $316.4 million; and
  • Net profit after tax (NPAT) rose 34.0% to $142.8 million.

Strong earnings growth during the year reflects the continued impact of cost savings and the sustainability of the company’s efficiency programs over the past three years.

Organic growth was also a feature of the result. During the year, Spotless was awarded a number of renewed and new contracts with annualised revenues of $1,300 million per annum. This was comprised of $950 million in renewed contracts and $350 million in new contract wins.

Earnings growth was achieved whilst maintaining a conservative financial position, reflecting the outstanding conversion of earnings into cash at a ratio of 82.8%, also ahead of prospectus forecasts. Net debt of $563.5 million at 30 June 2015 represents a net debt to EBITDA ratio of 1.8 times, well within financial covenants and below the prior corresponding period.

Directors declared a dividend of 5.5 cents at a payout ratio of 73%, underscoring the strength of the business and pipeline.

With total undrawn facilities of $275 million at 30 June 2015, Spotless continues to evaluate a growing number of opportunities to acquire quality businesses with the objective of enhancing our client value proposition and reinforcing our position as Australia’s leading integrated facility services provider.

Spotless Chairman, Ms Margaret Jackson, said that the full year result was a credit to the entire Spotless team (which is now 39,000 strong) and their consistent focus on customers, service and growth.

“Spotless continues to demonstrate its ability to grow revenues and capitalise on an impressive pipeline of tender opportunities in the market. Our unrelenting focus on costs, efficiencies and financial performance is delivering consistent and growing returns for shareholders and provides us with the flexibility to self-fund growth.”

Spotless Chief Executive Officer and Managing Director, Mr Bruce Dixon, said:

“Spotless remains uniquely placed to take advantage of consolidation opportunities in the services sector where we believe we can create value for our clients and deliver returns to our shareholders. This will continue to be a focus for the team in 2016.”

Outlook

Subject to economic conditions, Spotless expects the FY16 results to materially exceed the FY15 results.

More information can be found on our website:

ASX Announcement