Our Financial Highlights

Date Published: 14/11/2023

• The Group has continued to deliver a strong trading performance built on consistent operational delivery of repair, maintenance, and support services in the stable and highly regulated essential infrastructure markets across the Group’s four divisions of Energy, Telecoms, Transport and Water.
• The order book and bid pipeline continues to grow. On 30 Sep’23, the order book was £6.7 billion (30 Sep’22: £5.4 billion) with a further £400m awaiting signature. This provides direct visibility for 94% of FY24 budget revenues (30 Sep’22: 86%).
• Group turnover is over £2bn on a last twelve months (“LTM”) basis.
• Group turnover for H1FY24 was £1,060.2m, up 19.4% YOY reflecting double digit growth in all Divisions.
• Group EBITDA is £120m on an LTM basis.
• Group EBITDA before exceptional items was £55.0m, up 19.8% YOY.
• Operating profit, operating cashflow and liquidity remained strong and in line with forecasts, with gearing on an LTM basis at 3.03x (30 Sep’22: 3.47x).
• Cash on balance sheet was £104.1m, an increase of £15.8m compared to the prior year. The £90m Revolving Credit Facility remained undrawn throughout the period, resulting in total available liquidity of £165.3m on 30 Sep’23 (30 Sep’22: £144.6m)
• Acquisitions that enhance the scope and scale of the Group capabilities remain a fundamental part of the growth strategy, complimenting the proven organic growth. We have a strong pipeline of opportunities under review and the prior year acquisitions are performing well post-integration.
• Following a strategic review of the Group, we successfully completed the sale of IWJS jetting and tankering business to the Maybrook Group on 20 Sep’23. Maybrook Group has acquired the group of IWJS comprising IWJS Group Limited and its direct subsidiary. This is a significant and positive outcome for IWJS which will remain an important delivery partner for Morrison Water Services and M Group Services’ other operating businesses.

Commenting on the results, Chris Keen, Chief Financial Officer:

“We are pleased with the continued momentum in the business, which is evident from this strong set of half year results. We have also strengthened our cash position which allows us to explore more acquisition opportunities and to continue to develop the capabilities of the Group.”

Commenting on the results, Andrew Findlay, Chief Executive Officer:

“I would like to thank the team for delivering a strong performance, reflecting the exceptional quality of our people. We are proud of the way we partner with our customers, and we are in a good place to build on the first half of the year and focus on acquisitions, continuous improvement, efficiencies, and talent.”

ESG

• We have recently published our third Annual ESG report and one of the headline achievements is the improvement of our Group Risk Rating from 9.6 to 8.3 for which we have been awarded the accolade ‘Industry Top Rated’ for our commitment to the environment and sustainability, managing our impact on and support for local communities.
• Our carbon intensity has reduced year on year from an initial 50 tonnes of carbon dioxide equivalent per million pounds in turnover (tCO2e/£m) to 30 tCO2e/£m, which is a reduction of 16%. Since last year we have also saved 8,450 tonnes of CO2e from our Scope 1 emissions, and we have recorded 1,434,204 business miles undertaken by battery-powered electric vehicles.

Post half-year events.

• Subsequent to the half year, on 7 Nov'23, the Group secured an exciting long term debt arrangement (7 yrs.). This gives the group companies both the security for the foreseeable future and, additionally, it provides significant funds to continue our already successful M&A programme.
• The terms of the debt will be disclosed in the group’s financial statement for the year ended 31st March 2024.

• The Group has continued to deliver a strong trading performance built on consistent operational delivery of repair, maintenance, and support services in the stable and highly regulated essential infrastructure markets across the Group’s four divisions of Energy, Telecoms, Transport and Water.
• Group turnover for H1FY23 was £906 million, up 23% YOY reflecting continued organic and inorganic growth.
• Group EBITDA before exceptional items was £45.7 million, up by 38% YOY. This improvement is across all four divisions as they return to normal levels of trading activity post COVID-19.
• The order book and bid pipeline continues to remain strong. At 30^th September 2022, the order book was £5.4 billion and provides direct visibility on 86% of FY23 budget revenues, consistent with prior years.
• Operating profit, operating cashflow and liquidity remained strong and in line with forecasts, with gearing on an LTM basis at 3.47x
• Cash on balance sheet was £88.3m, an increase of £37.7m compared the prior half year. The £90 million Revolving Credit Facility remained undrawn (of which £33.7m is reserved for bonding). This provides an overall available liquidity of £144.6m.
• Acquisitions that enhance the scope and scale of the group capabilities remain a fundamental part of the growth strategy, complimenting the proven organic growth. In the period the business completed two acquisitions: Seeka, in April 2022, offering revenue protection service business including energy theft investigation, and Salient, in August 2022, a specialist provider of technology solutions to add further capabilities to the Group data management offering.

Commenting on the results, Jim Arnold, Chief Executive Officer:

“The business has delivered a strong performance in line with forecasts. Our results for the period demonstrate the resilience of the business and the reliable nature of our markets. We continue to grow organically and I am pleased to confirm that the recent acquisitions (Milestone, Z-Tech, Waldon and MES Transmission Networks) are all performing to plan and are being progressively integrated within the group. The acquisitions of both Seeka and Salient in the period have contributed to the expansion of our capability and skills within the Group and the acquisition pipeline remains strong. The skill and commitment of our people is exceptional, continuing to safely deliver essential infrastructure in a sustainable way for our clients.”

Performance review

Group turnover and EBITDA continued to grow demonstrating the strength, resilience and diversity of the group and the sectors that we operate in. The improvement in EBITDA in H1FY23 reflects a return to higher levels of activity post COVID-19 augmented by the recent acquisitions.

Operating cash flows remain robust and in line with management expectations. The group’s banking facilities on 30 September 2022 include an undrawn Revolving Credit Facility which provides the business with significant liquidity for working capital and further acquisitions.

Several contract extensions and new contract wins have ensured the order book remains strong. Major wins in the half-year include new contracts with National Grid for electrical transmission overhead works in Energy, new contracts with Openreach for Customer Connections and network maintenance in Telecoms, contract extensions with Hampshire Highways and Connect Plus Services (M25) in Transport, and contract extension with Welsh Water in the Water division. These awards and others will support our future organic trading growth.

ESG

The Group continues to make significant progress in our commitment to operating in a way that is sustainable, responsible, and respectful to the communities in which we work. In September we published our latest ESG Report outlining our commitments including to achieving a 50% reduction in carbon emissions by 2030 across the Group. The ESG report also headlines some of our wider in year achievements, and signposts where we are focusing looking forward.

Results for the six months to 30 September 2021

Highlights

• The Group has continued to deliver a strong trading performance, driven by ongoing demand for its essential infrastructure repair and maintenance services, and continued operational progress across its diversified end markets
• Group turnover for H1FY22 was £736 million, an increase of £143m on the prior half-year, up by 24% reflecting strong recovery from the coronavirus pandemic and continued organic and inorganic growth of the group
• Group EBITDA before exceptional items increased by 214% on the prior half-year to £33m, with the EBITDA margin increasing from 1.8% to 4.5%
• Operating profit, operating cashflow and liquidity remained strong and in line with forecasts, with gearing on an LTM basis falling to 3.8x
• The integration of IDS acquisition completed in FY21, trading is in line with management’s expectations
• Milestone Infrastructure (formerly Skanska Infrastructure Services) was acquired in April 2021, extending group’s scope of capability in the field of highways and rail infrastructure maintenance
• Waldon Telecom was acquired in July 2021, expanding the Telecom footprint into Mobile
• Cash on balance sheet of £50.6m with a fully undrawn revolving credit facility of £68m
• The total order book stands at a record level of c. £6.4 billion following significant contract awards, underpinned by long-term framework agreements

Commenting on the results, Jim Arnold, Chief Executive Officer:

“The business has delivered a strong performance in line with forecasts and in excess of pre COVID levels. Our results for the period demonstrate the diversification and resilience of the business and the reliable nature of our markets. The acquisitions of both Milestone and Waldon have contributed to the expansion of our capability and skills within the Group and the acquisition pipeline remains strong. The skill and commitment of our people during and following the pandemic has been exceptional, continuing to safely deliver essential infrastructure for our clients” 

Performance review

Group turnover and EBITDA continued to grow demonstrating the strength, resilience and diversity of the group and the sectors that we operate in. The improvement in EBITDA in H1FY22 reflects a return to higher levels of activity post COVID-19 within the Energy Division, increased work in both Water and Telecom and augmented by the acquisition of Milestone within Transport.

Operating cash flows remain robust and in line with management expectations. The group’s banking facilities at 30 September 2021 include an undrawn £75m Revolving Credit Facility which provides the business with significant liquidity for working capital and further acquisitions. 

A number of contract extensions and new contract wins have ensured the order book remains strong. Major wins in the half-year include a 3 year contract in the Energy Division in relation to underground network cabling for Scottish Power, a 6 year contract with Scottish Water in the Water Division to deliver MEICA services, various framework contracts with Network Rail in the Transport Division and contracts with Ogi (Truespeed), CTIL and 3UK in the Telecom Division. These awards will support organic trading growth in the second half of the year and into the future. 

The integration of the acquisitions completed in the last twelve months has progressed well and the businesses are trading in line with management expectations.

Results for the six months to 30 September 2020

24 March 2021

Highlights

• Group turnover was £593 million, a decrease of £32 million on the prior half year principally due to the impact of the coronavirus pandemic
• Operating cashflow and liquidity remained strong
• The total order book stands at a record level of c. £4.2 billion following significant contract awards
• FY20 acquisitions are integrated and trading in line with expectations.
• IDS was acquired in October 2020 providing the Group with capability in the MEICA markets

Commenting on the results, Jim Arnold, CEO, commented:

“The business has delivered a very good performance during the coronavirus pandemic. Our results for the period demonstrate the resilience of the business and the reliable nature of our markets.  The skill and commitment of our people during this challenging time has been exceptional, delivering essential infrastructure for our clients safely.” 

Performance review

In many areas of our business, the Group has remained unaffected by the pandemic and our operations have continued to deliver. It has been in client facing activities where there has been most impact, largely within our Energy Division, in areas such as meter reading, smart meter installation and gas mains replacement activities where access to homes is required. We have additionally experienced some reduction in turnover in our Transport and Water Divisions where our work airside within airports has been affected following the reduction in air travel.

The cash performance of the Group was very strong with a continued focus on cash collections during the pandemic. The group’s banking facilities include a £75m Revolving Credit Facility which provides the business with significant liquidity for working capital and further acquisitions. 

A number of contract extensions and new contract wins have ensured the order book remains strong. Major wins in the half-year include AMP7/8 framework contract for Thames Water, meter reading and data management contracts for British Gas, E.ON and OVO, a 10-year framework contract with Cadent to manage gas mains replacement, fibre cities programme work for Openreach, our first contract for private telecom network management for Scottish Power and a framework contract for Highways England. These awards will support organic trading growth in the second half of the year and into the future. 

The integration of the acquisitions completed in the last twelve months has progressed well and the businesses are trading in line with management expectations.

M Group Services

Results for the six months to 30 September 2019

20 December 2019

Continued growth in a competitive market

Highlights

• Group turnover increased by c. 10% to £624 million compared with prior half-year, with improvement in EBITDA margin
• Significant increase in secured order book following confirmation of contract extensions
• Previous acquisitions integrated and progressing well
• Three further acquisitions completed in the half year (Tomato Plant Company, Antagrade and KH Engineering Services) – integration progressing well and trading in line with expectations

Commenting on the results, Jim Arnold, CEO, commented:

“We continue to pursue our strategy of providing specialist services to owners and users of essential infrastructure in the UK and Ireland.Our results for the period continue to demonstrate the resilient and reliable nature of our markets and the skill and commitment of our people.We continue to grow organically and through acquisition and see plenty of opportunity to continue to do so.”

Performance review

The group has demonstrated good growth in the half year ended 30 September 2019.Turnover and EBITDA have both progressed in line with management’s expectations and the business is well positioned to deliver further growth in the remainder of the year.

A number of contract extensions and new contract wins have ensured the order book remains strong. These include extensions to both the Scottish Water and Southern Water capital delivery frameworks, and an extension to the Anglian Water Alliance framework. New awards include smart meter installation services for So Energy and Bulb; additional Openreach works covering new and existing areas under the superfast extension programme and full fibre programme; and new fibre installation framework contracts with Virgin Media.These awards will support organic trading growth in the second half of the year and into the future.

Operating cash flows remain robust.The group’s banking facilities include a £75m Revolving Credit Facility which provides the business with significant liquidity for working capital and further acquisitions.

The integration of the acquisitions completed in the last twelve months has progressed well and the businesses are trading in line with management expectations pre-acquisition.

2018 Financial Highlights

Results for the six months to 30 September 2018

21 December 2018

Continued growth in a competitive market

Highlights

• Group turnover increased by 13%
• Improvement in operating cash conversion
• FY18 acquisitions (Meter U, Magdalene and PMP Utilities) integrated and trading well

Commenting on the results, Jim Arnold, CEO, said:

“We continue to pursue our strategy of providing specialist services to owners and users of essential infrastructure in the UK.Our results for the period demonstrate the resilient and reliable nature of our markets and the skill and commitment of our people.We have been particularly pleased that clients, new and old, continue to place their trust in our business to deliver services to them.

During the period I was delighted to announce that, PAI, a major European private equity investor, acquired the business alongside the existing senior management. We look forward to working with PAI to continue to expand our service offering through both organic and acquisitive growth in line with our business strategy.”

Performance review

The Group has demonstrated good growth in the half year ended 30 September 2018.Turnover and EBITDA have both progressed in line with management’s expectations and the business is well positioned to deliver further growth in the remainder of the year.

A number of new contract wins have ensured the order book remains strong.New framework business with Welsh Water, Wales & West Utilities, Network Rail, Openreach and CityFibre have supported growth in the order book in the period, which in turn will support organic trading growth in the second half of the year and into the future.

Operating cash flows are satisfactory.The Group’s banking facilities include a £75m Revolving Credit Facility which provides the business with significant liquidity for working capital and further acquisitions.

The integration of the acquisitions completed in the last twelve months has progressed very well and the businesses are trading in line with or ahead of management expectations pre-acquisition.