Financial information

FY25 Half Year Announcement

Sale of M Group

On 23 October 2024 the company was sold to CVC Partners and Management for an undisclosed sum. The Group continues to deliver very strong trading performance, providing design, install, maintain and support services in the essential infrastructure markets across the four divisions of Energy, Water, Telecom, and Transport.

H1 Performance

• Group turnover for H1 FY25 was £1,187.6m, up 12% YoY. LFL growth was 7.1%.
• Group EBITDA before exceptional items up 26% YoY (LFL growth 18.4%) demonstrating the benefits of the cost initiatives put in place across the Group which are driving efficient growth.
• The order book and bid pipeline continues to remain strong. On 30 Sep’24, the order book was £7.4 billion (Sep’23: £6.7 billion) and provides direct visibility for 94% of FY25 budgeted revenues.
• Operating profit, operating cashflow and liquidity remained very strong and in line with forecasts, with LTM gearing on 30th September being 3.03x
• Cash on balance sheet was £95.3m. The RCF and CAR funding lines remain undrawn providing strong liquidity for further M&A activity. The Revolving Credit Facility has been increased to £139.5m Revolving Credit Facility (£28.8m of which is reserved for bonding). The Committed Acquisition Facility remains at £100m. The total available liquidity is £306m (30 Sep’23: £165.3m).
• We completed the integration of the Agility Eco acquisition in June. This has helped ensure that Agility Eco remains on budget.
• Acquisitions to strengthen the scope and scale of the Group’s capabilities remain a key part of the growth strategy. There continues to be a strong pipeline of opportunities under review and our current acquisitions continue to perform well.

Next steps

M Group is continuing to focus on efficient growth using its investment in its platform to integrate acquisitions faster and realise the improvement in margins.

The business continues to demonstrate momentum, which is evident from this strong set of half year results. We continue to strengthen our cash position allowing us to explore more acquisition opportunities and to continue to develop the capabilities of the Group. We are delighted that CVC has decided to support our clear and ambitious plan to continue to grow and deliver at pace, built on our solid market-leading foundations.

Chris Keen, Chief Financial Officer

I am delighted with the continued growth of the business, reflecting the quality of our people and of the work we deliver for our customers. We look forward to continuing to support our customers as we harness the expertise we have across our Group, as we are greater than the sum of our parts. We look forward to working in partnership with CVC to deliver our future plans and continuous commitment to safety, client-focused delivery, sustainability, and innovation.

Andrew Findlay, CEO

ESG

• We have recently published our latest annual ESG report, in which we share the significant progress across our environmental, social, and governance initiatives.
• Our Sustainalytics ESG Risk Rating has improved from 8.3 to 8.0, maintaining our ‘Industry Top Rated’ status and reinforcing our ‘negligible risk’ profile.
• We have just received ‘validated’ status from the Science Based Targets initiative (SBTi) for our decarbonisation targets, and in so doing are, committing to reduce our Scope 1 and 2 emissions by 42% by 2030 demonstrating our commitment to addressing climate change.

FY24 Half Year Announcement

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, Telecom, 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.
   

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.

Chris Keen, Chief Financial 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.

Andrew Findlay, Chief Executive Officer

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.

FY23 Half Year Announcement

• 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, Telecom, 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 30th 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.
   

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.

Jim Arnold, Chief Executive Officer

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.