Results round-up: ITV, CRH, BBA Aviation, Carillion
ITV reported a sizeable slowdown in revenues in the second half of 2016 and warned that advertising revenues would fall in the early months of 2017.
With broadcast and online revenue down 1% over the year, total turnover rose 4% to £3.5bn thanks to 13% growth from the smaller ITV Studios television production arm, which was less than half the growth rate in the first half of the year.
Underlying profit before tax was just above flat at £847m and adjusted earnings per share up 3% to 17p.
Due to restructuring and earnout costs, statutory EPS fell 10% to 11.2p as statutory PBT dropped 14% to £553m.
Free cash flow was up 13% to £636m and the FTSE 100 grop ended the year with net debt of £637m.
As he continues with the strategy of rebalancing the broadcaster away from a reliance on advertising revenues, chief executive Adam Crozier hailed the "good performance" despite a 3% decline in spot advertising revenues that he said resulted from "wider political and economic uncertainty".
But he said ITV's share of UK television advertising revenues (NAR) would be down "around 6% over the first four months against the backdrop of current economic uncertainty" but added that "over the full year we expect to again outperform our estimate of the television advertising market".
But while he suggested political and economic uncertainty was not impacting advertising revenues as much as it had originally expected, analysts were less optimistic the market will bounce back in the spring.
To try and keep investors onside, the board not only proposed a final dividend of 4.8p, meaning the full year dividend will be up 20% on the previous year at 7.2p, but also a special dividend of 5.0p per share, "reflecting ITV's strong cash generation and the board's confidence in the business". This was half the level of last year's special divi.
Looking forward, Crozier said ITV Studios was seen returning to "good organic revenue growth" in the current year, helped by increased investment in US scripted content including Somewhere Between, The Good Witch, Sun Records and Snowpiercer.
CRH
CRH posted its full-year results for the 2016 calendar year on Wednesday, with continued profit growth, and margins and returns ahead in all divisions.
The FTSE 100 firm reported “strong” cash generation, with its de-leveraging target exceeded and the balance sheet restored while the dividend was increased.
Sales revenue stood at €27.1bn, 15% ahead of 2015 and up 4% on a proforma basis.
EBITDA improved 41% to €3.1bn, which was ahead of November guidance, while proforma EBITDA was up 10%.
The company’s EBITDA margin of 11.5% was up from 9.4% in 2015.
CRH reported cash inflow of €2.3bn from operating activities, while its return on net assets was up to 9.7% from 7.6% in 2015.
Year-end net debt reduced by €1.3bn to €5.3bn, with the board reporting a net debt-to-EBITDA ratio of 1.7x.
The board confirmed the full year dividend per share had increased by 4% to 65.0c, covered 2.3 times.
“2016 was a year of significant profit growth for CRH, with margins and returns ahead of last year in every division,” said chief executive Albert Manifold.
“We benefited from positive momentum in the Americas, and also in Europe, particularly in the Northern and Eastern regions where we operate.”
BBA Aviation
Private aircraft services provider BBA Aviation on Wednesday posted a full year pre-tax loss of $82.2m after taking in $316m in exceptional items.
The statutory pre-tax loss compares with a profit of $77.4m in 2015. Underlying profit before tax increased to $238.7m from $149.7m.
The exceptional items include an accounting impairment of $184.4m and a writedown of $109m relating to the sale of its ASIG refuelling business.
Group revenue increased by 25% to $2.1bn, including a $558.7m contribution from acquisitions.
BBA lifted its the dividend to 12.75 cents a share, up from 12.15 cents a year earlier.
Chief executive Simon Pryce said 2016 was a “transformational” after completing the “significant” acquisition of US-based rival Landmark Aviation for $2bn.
“The group is now focused on higher value-added, better IP protected, high return on invested capital and strongly cash generative businesses with enhanced prospects and the board remains confident of good growth in 2017," he said.
Carillion
Facilities manager Carillion’s revenue in 2016 increased led by growth in support services, while the company aims to reduce its net borrowing in the medium-term.
Total revenue rose 14% in 2016 to £5.21m, compared to the previous year and group revenue increased 11% to £4.39m.
This was led by growth in the support services division, which contributed over two-thirds of total operating profit and offset expected reductions in profit from public private partnership projects for government buildings and infrastructure mainly in the defence, health, education, transport and secure accommodation sectors in the UK and Canada, and construction and civil engineering activities in the Middle East.
The underlying operating margin was lower as the company expected at 4.9% from 5.3% and underlying profit from operations fully cash-backed had a 117% cash conversion.
There was a 1% rise in both underlying pre-tax profit of £178m and underlying earnings per share of 35.3p.
However, pre-tax profit fell 5% to £146.7m and basic earnings per share was down 65 to 28.9p.
The FTSE 250 company proposed a full year dividend of 18.45p, up 1%.
Carillion is starting to lay the foundations to cut its average net borrowing in the medium-term by ongoing cost reduction programmes and a focus on managing working capital.
At the end of December, net borrowing widened to £218.9m from £169.8m, while average net borrowing for 2016 increased to £586.5m from £538.9m, and the company said the increases mainly reflected adverse movements in foreign exchange rates.
Looking ahead, the company has revenue visibility of 74 per cent for 2017 and expects over £1.5bn of revenue from framework agreements not yet included in orders, probable orders or revenue visibility, as well as a pipeline of contract opportunities worth £41.6bn.