DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088...
Transcript of DWS Advanced Business Solutions Ltd ACN 085 656 … Advanced Business Solutions Ltd ACN 085 656 088...
DWS Advanced Business Solutions Ltd
ACN 085 656 088
Manager Companies
Company Announcements Office
Australian Stock Exchange Limited
Level 4
Stock Exchange centre
20 Bridge Street
SYDNEY NSW 2000
18 May 2011
Dear Sir
Pursuant to Listing Rule 3.1, attached is a presentation to be presented today by the Company’s Chief Financial Officer, Mr Lachlan Armstrong, at both the Deutsche Bank and Goldman Sachs Emerging Companies Conference’s.
Yours faithfully
Lachlan Armstrong
Company Secretary
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“Partnering for
Success”
Introduction to DWS Advanced Business Solutions Limited (ASX: DWS)
Management Team
DWS Clients
Business Model/Key Differentiators
Financial Results H1 FY2011
Key Client Risk Management Strategy
Four Year Plan – ‘Improve, Extend, Grow’
Outlook
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DWS is a professional services business providing consultancy solutions across the systems development life cycle (SDLC)
Delivery focussed
New specialist practice lines
Established in 1991
ASX listed (ASX:DWS) – IPO June 2006
Offices in Melbourne, Sydney, Brisbane, Adelaide, Canberra and Geelong (April ‘11)
Approx 530 full time consulting staff nationally
Client focus is predominantly ASX listed companies and both federal and state government agencies
Unique business model which has been key to our continued financial strength
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Danny Wallis (CEO/MD)
Danny founded DWS in 1991 on the key principals of Honesty,
Ethics and Transparency. Committed to providing the highest
quality consultants and delivering the best, total solution to all
DWS clients, Danny has been the catalyst in building DWS to
the premium position it holds today within the market. Danny
has 20 years of experience in the information technology sector
which has given him the knowledge and understanding to
position DWS as the IT solutions provider of choice for some of
Australia’s most successful blue chip organisations and Federal
and State Government departments.
Lachlan Armstrong (CFO/Company Secretary)
Since joining DWS in 2005 as National Commercial Manager,
Lachlan has played a crucial role in the expansion and success
of DWS. Lachlan acts as an operational conduit between the
state offices, and ensures each branch retains the flexibility and
autonomy to fully maximise opportunities available in their
markets while maintaining the philosophy and direction of the
overall corporate vision. Lachlan is also responsible for DWS’
financial governance and Company Secretarial function.
Dougall McBurnie (Director Strategic Operations)
Dougall joined DWS in January 2011 having been a client of
DWS’ for over ten years. Dougall has held several senior
management positions within large corporate clients including
Healthscope (where he was Chief Information Officer), Coles
Myer (where he was Chief Technology Officer) and Crown
Casino (where he was GM of E-Business). Dougall’s role at
DWS is to focus on the implementation of the Company’s
Improve, Extend, Grow strategy, and also give operational
guidance to the Company’s regional management team.
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Key Drivers
1. Recruitment
DWS employs full time consulting staff
Dedicated internal recruitment department
Stringent three stage recruitment process which
uses both objective and subjective measures
2. People & Culture
Dedicated team of HR experts & career mgers
Focussed on training and staff development
Fostering a strong culture to increase retention
3. Client Engagement Model
Transparent two tier pricing structure
Eliminates opportunistic pricing & discounting
Dramatically reduces administrative burdenFor
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There were some headwinds which detracted from performance:
Projection completions
Fed / State elections
Major client Xmas close down
Revenue generation assisted by rate increase in Victorian operations
Weighted average revenue per billable FTE to Dec 2010 $97K (Dec 2009: $99K)
Average consultant utilisation to Dec 2010 was 76% (Dec 2009: 78%)
New Business Analytics & Information Management practice required investment of $275K in Q2
Margins were adversely affected by lower utilisation and increased employment costs
DEC 2010($’000)
DEC 2009($’000)
% Movement
Revenue from continuing operations
48,454 48,122 1%
EBITDA 12,769 13,403 (5%)
Margin 26% 28%
NPAT 8,969 9,254 (3%)
EPS 6.78 cents 7.00 cents (3%)For
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DEC 2010($’000)
JUNE 2010($’000)
Cash 15,536 13,656
Debtors 17,656 17,742
WIP 2,428 5,156
Total Assets 65,654 66,664
Borrowings NIL NIL
Total Liabilities 8,747 10,453
Net Assets 56,907 56,211
Cash reserves continue to improve on the back of strong net flows from operations
WIP reduced as several large projects concluded during H1
Debtor management program continues to operate effectively
Zero debt position maintained
Continued improvement in our working capital position
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DEC 2010
$’000
DEC 2009
$’000
Opening cash balance 13,656 12,155
Cash flow from operations
14,792 12,929
Tax Paid (4,828) (5,377)
Capital Asset Purchases (76) (137)
Acquisition Costs N/A (800)
Dividends Paid (8,273) (7,929)
Interest Income & Other
265 147
Closing Cash balance 15,536 10,988
Strong cash flows from operations were assisted by receipt of project completion payments previously held back for project KPI retention agreement
No significant capex plans for H2 other than a minor investment in HR systems upgrade
We will continue to examine acquisition opportunities as they emerge to complement our organic expansion strategy
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Revenue by Sector Analysis
Dec 2010
Information &
Communications
Technology
27%Utilities
19%
Government
22%
Banking &
Finance
15%
Other
17%
June 2010
Information &
Communications
Technology
33%Utilities
20%
Government
17%
Banking &
Finance
13%Other
17%
Program in place to reduce large client specific risk in ICT sector which is expected to decrease ICT further as a percentageof total revenue, and no one client over 20% of total revenue
Although the Federal and Vic Government elections were disruptive in H1, we continue to win market share in this sector
Banking & Finance and Utilities sectors expected to contribute to revenue growth in H2
Further investment in our sales team will occur in H2
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Large Client Risk Management
The Melbourne operations largest client had a contract labour layoff over the Christmas
While DWS received a high proportion of exemptions, it did disrupt operations
We also were able to successfully place some staff into other engagements at lower margins
Estimated loss in EBITDA in H1 at $200K
Why
We have implemented a key client risk management program which will control our future exposure to large client specific risk
We expect DWS’ Melbourne business to further reduce its exposure to the ICT sector in favour of increased penetration into Banking & Finance and Utilities sectors
Current projection is to have no one client over 20% of revenue by June 2011.
What
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IMP
RO
VE
Paul Gardner AM has been appointed to
undertake an internal and external branding
refresh
Appointment of Dougall McBurnie as Director
Strategic Operations (Jan 2011)
Review of our current operations including
HR processes, staff training and incentives
Investment in the development of internal
SMEs
Lower consultant attrition rates by
development of a clearer career path for
consultants
Attraction of industry recognised technical and
solution specialists to underpin our delivery
capability
Help raise the profile of DWS at Executive
and Board levels of existing and potential
clients
EX
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We intend to extend our service lines via the
introduction of 4-5 new specialist practice
areas
We anticipate acquiring to develop/grow
one or more of these special practices
Business Analytics and Information
Management Practice was commenced in
September 2010 and is expected to
contribute to earnings in Q4
These specialist practices will complement
our strong underlying delivery capability (core
business). They will operate Nationally and
will facilitate a ‘Trusted Advisor’ relationship
with key clients
The extension of our service lines will also
see the development of strategic relationships
with key partners such as IBM, Oracle and
Microsoft
GR
OW
Gary Ebeyan (Nov 2010) has been appointed
to assist in the implementation of various
strategic initiatives
We have rolled out an internal initiative
named “1,one,14 – Excellence Together” to
drive staff buy-in
Increased scope to take on larger projects
and consult in specialist areas previously
outside our reach
Quantifiable bench marks for all stakeholders
to assess our success
EXCECUTION PLAN ANTICIPATED RESULTSAREA OF FOCUS
Improve our employee
value proposition in a
competitive market for
high quality staff
Better articulate our
source of competitive
advantage and ‘value add’
to new and existing clients
Broaden our service lines
to become an end-to-end
service provider in our
chosen disciplines
Create a career path
beyond our traditional
business lines for
consultants seeking
specialist focus
Develop an aggressive
growth strategy which
addresses requirements
of our key stakeholders
DWS’ 4 Year “Improve, Extend, Grow” Strategy
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Outlook
We have experienced softer than expected trading conditions in H2 resulting from the QLD floods, the residual impact of the Telstra Christmas close-down, and the timing of Easter in 2011
We expect FY2011 EBITDA to be between $24.0M - $25.0M
We anticipate a strong FY12 on the back of improving market and economic conditions
We are continuing to add billable staff in Victoria, Queensland, South Australia and in our Business Analytics practice
We have commenced the roll-out of our “Improve, Extend, Grow” program and are seeing positive results
The market for highly skilled consulting staff remains competitive. We have commenced our 457 Visa program and expect that this will assist us in meeting our staffing requirements FY12 and beyond
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