Investor Presentation August 2019 · Guildprime’sfocus is luxury retail fit-outs and...

Investor Presentation August 2019

MBH at a Glance

Acquisition Strategy & Portfolio Overview

Market Position & Industry Trends

Financials (pro-forma)

Investment Highlights and Outlook

IR Services

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Agenda

Callum LaingChief Executive Officer

Victor TanChief Finance Officer

David HallamNon – Exec Director

Toby StreetNon – Exec Director

• Joined MBH in 2017

• More than two decades of experience in starting, building, buying, and selling businesses

• Partner at Unity Group and pioneer of the Agglomeration model

• Published two business bestsellers and more than 800 business interviews

• Commissioner World Business Angel Investor Forum, Singapore

• Joined MBH as CFO and Executive Director in 2017

• Member of the Institute of Chartered Accountants since 2004

• Over 17 years finance experience at Big 4 chartered accounting firms, start-ups, SMEs, Top 25 ASX MNC

• Joined MBH as as Non-Exec Director in 2018

• Business executive, entrepreneur and investor with over 30 years of experience

• Extensive M&A and Investor Relations experience

• Development of small and medium size businesses into large plc organisations

• Consultant for venture capital investments

• Joined MBH as as Non-Exec Director in 2018

• Extensive experience in leading businesses to grow sustainably, structuring joint ventures and strategic collaboration, as well as investing for private equity

• Owner of digital marketing agency in London

• Worked at renowned real estate & private equity company Mayfair, London

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Highly committed Management Board with broad M&A and relevant sector experience

MBH BOARD MBH at a Glance

• Joined MBH in 2018

• Founder of ParentaGroup, UK’s largest provider of vocational training and software systems to the Early Year’s education sector

• Active member of the Vistage CEO Private advisory.

• Published Amazon bestseller “Improving the business of Childcare”

Allan PreslandNon-Executive Chairman

Victoria SylvesterExec Director

• Joined MBH as asExec Director in 2019

• Extensive experience in leading businesses and is a Principal of her own company in the Group Acacia Training Limited.

• Owner of vocational training company in UK

• Principals representative on the Board.

INVESTMENT CASE

With our accretive acquisition growth strategy, we are building a diversified portfolio of excellent companies and talented entrepreneurs, giving investors unprecedented access to profitable businesses in the $1m-$5m EBITDA range.

For investors, we provide the opportunity to participate in the sustainable success of these attractive SMEs with promising growth prospects.

Implementing Agglomeration™

'buy and hold' strategy gives

MBH access to deals below

market rate driving significant

value and accretive growth.

1. Buy and Hold

Encouraging, but not forcing synergies between each company and each

vertical through synergistic growth

3. Synergistic Growth

Enabling business owners to flourish and

grow their business organically in a plc

environment

2. Organic Growth

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MBH at a GlanceINVESTMENT CASE

MBH builds up a value-enhancing SME portfolio of profitable businesses with excellent growth prospects

Company Industry Description

Construction Services



Education

Education

Engineering Services

Provides multiple award-winning vocational training services across the UK, specialising in the healthcare sector

Based in the UK with a strong reputation for delivering quality fit-outs in the Commercial sector

Leading design and implementation company in the commercial interior industry in New Zealand

U.K.'s leading provider of business software and vocational training for early years settings

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Strengthened Construction and Education vertical with profitable SMEs from UK, New Zealand and Singapore, and opening a new vertical, Engineering Services

MBH will add 15-20 acquisitions per year.

MBH at a GlanceACQUISITION HIGHLIGHTS 2018/ Q1 2019

Guildprime’s focus is luxury retail fit-outs and refurbishments, high end commercial office spaces and residential across the UK and also overseas

Engineering group focused on four core business divisions: Energy & Electrical, Fire & Hydraulics, Building & Construction Services and Power Generation.

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Strong revenue growth through organic growth & portfolio expansion in 2018 and 2019

GROUP PRO FORMA KPI’S 2018 MBH at a Glance

3EPS ACCRETIVE ACQUISITIONS

£24.78 millionIN REVENUE

£3.10 millionIN EBITDA

£30.30 millionIN REVENUE

£3.30 millionIN EBITDA

2017

2018

Du Boulay Contracts was acquired in Dec 18.

APEV was acquired in June 2019.

Guildprime Specialist Contracts Ltd was acquired in April 2019.

£6.4 millionIN REVENUE AS OF 31

March 2018 for 12 months

Note: 2018 and 2017 figures only represent the financial results for Cape, Parenta and Acacia

£5.4 millionIN REVENUE for financial

year ending 30th

September 2018

£54 millionIN REVENUE expected

financial year ending 31st

July 2019

Acquisition Strategy & Portfolio

Platform for growth with long-term incentivation of key personnel

Profitable SME‘s with in depth industry experience

MBH owns 100% of the acquired businesses predominately using stock to complete transaction

Acquisitions are EPS accretive, offering long-term value creation for shareholders

Vertical approach across multiple geographies and sectors that are well established, profitable, debt free and looking to scale

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Acquisition strategy allowing EPS enhancing, accretive acquisitions

AGGLOMERATION™ MODEL


EDUCATION SERVICES

CONSTRUCTION SERVICES

5.99

4.21

20.09

6.4*

52 United Kingdom

30 United Kingdom

33 New Zealand

13 United Kingdom

100%

100%

100%

100%

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Excellent companies with talented entrepreneurs

(mill/GBP)

LIKE FOR LIKE PORTFOLIO OVERVIEW

Company Revenue 2018 Staff Location MBH ShareholdingAcquired in

22nd Aug 2018

22nd Aug 2018

3rd Sep 2018

8th Dec 2018

*du Boulay numbers represents 12 months to 31st March 2018** APEV expected numbers for financial year ending 31st July 2019

18th April 2019 5.4

ENGINEERING SERVICES

27 United Kingdom 100%

17th June 2019 54** 210 Singapore 100%


APEV was formed in 2014 and has a headcount of 210 under its two main brands – Twenty20 and Pacific Energy Consulting. The engineering group has four core business divisions: Energy & Electrical, Fire & Hydraulics, Building & Construction Services and Power Generation.

In line with MBH’s Agglomeration strategy the acquisition will be Earnings Per Share accretive. APEV’s management estimates that the earnings before interest and income tax (EBIT) for the year ending 31 July 2019 amounts to approximately SGD 10.3 million (GBP 5.8 million).

Agglomeration allows APEV to target multiple industry sectors, diversify revenue streams and reduce risk, while achieving economies of scale and a consistent customer experience through shared operations and support functions.

APEV are focused on providing government, corporate and industrial clients with improved energy efficiency and cost savings, greater energy generation capacity and system reliability, and improvements in transmission efficiency and network management capabilities.

Business

Investment case

Development

£54.00m*

Revenue 2019

210 Full time

Employees

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Project Case Study

CASE STUDIES –ENGINEERING SERVICES

Asia Pacific Energy Ventures Pte Ltd

* APEV expected numbers for financial year ending 31 July 2019


Based in Auckland, New Zealand, Cape has quickly become one of the top three profitable independent property services firms in New Zealand, providing a full suite of services including project management, resource procurement and administration.

Revenue expansion plans for Cape are driven through reputation and brand value within the property development industry.

Cape’s competitive advantage lies in its efficiency born from its competence in the training and development of its project engagement teams.

Recently Cape has engineered organic growth and market share in the New Zealand market and seeks to expand its operations beyond its home market into Australia.

One of Cape’s projects showed off their skills in the film and television sector for their Client Maori TV. Maori TV is a New Zealand television station, that broadcasts programmes making a significant contribution to the revitalisation of the Māori language and culture.

Business

Investment case

Development

£20.09m

Revenue 2018

33 Full time

Employees

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Project Case Study

CASE STUDIES –CONSTRUCTION SERVICES

Cape Ltd

Project Case Study


Acacia Training is an Ofsted rated Good specialist training provider primarily as a health and social care training provider offering training in health and social care for apprenticeships, higher apprenticeships, mandatory training and work-based learning.

Acacia is an approved supplier nationally with the NHS and a number of local authorities, holding contracts to deliver in specific areas of the UK under the government’s apprenticeship levy scheme. Being a prime provider, this opens many pipeline opportunities for The Education Group.

Acacia is an Ofsted Grade 2 (Good) provider, Skills for Care Endorsed Provider and holds Investors in People and Matrix standards. Acacia is also one of only 103 nationally approved Disability Confident Leaders and the only one in its local area. A number of Acacia’s trainers are also approved to deliver programmes approved by Mental Health England.

Business

Investment case

Development

£5.99m

Revenue 2018

30

Full timeEmployees

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Acacia Training Ltd

CASE STUDIES – EDUCATION SERVICES

Acacia delivers qualifications across England, in the health and social sector, the management sector and in dental nursing. Acacia is a prime provider with the Employment & Skills Funding Agency (“ESFA”) and is registered on both RoATP& ROTO as an approved provider.


EU

RO

PE

SMEs make up 99.8% of total enterprises and 67% of jobs

*European Commission, 2014/2015, Annual Report on European SMEs

SMEs make up 97% of total enterprises and 30% of jobs

*Ministry of business, innovation and employment, 2014, The Small

Business Sector Reported

NE

W Z

EA

LA

ND

• Estimated SME market volume of US$35 trillion dollar

• SMEs make-up 99% of companies in most major economies;

• employ 2 out of every 3 people;

• but attract only 10% of business investment

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CURRENT INDUSTRIESSMEs

SME market with strong growth prospects


APEV relationship with ADBThe Asian Development Bank (“ADB”) has been working with PNG since 1971 and is the country’s largest multilateral development partner.

PNG as an emerging marketPapua New Guinea is an emerging economy driven by two key sectors; the agricultural, forestry, and fishing sector, where most of the country’s labor force is engaged, and the mining, oil and gas sector, where the majority of export earnings are generated.

Increase in government projects and demandThe ADB is expected to increase total financing for development projects in PNG from USD$743.7 million (2016–2018) to approximately USD$1.67 billion (2017–2019) contributing to construction projects across all Government priority areas of development such as roads, schools and hospitals, rehabilitation projects for fire and police departments, airport upgrades and subsidized housing projects in major centers to provide affordable accommodation.

Engineering Strategy

MBH’s strategy is to acquire and develop companies across the Engineering industry. Papua New Guinea (“PNG”) is currently the sole market for the group, with Pacific Energy Consulting establishing PNG operations in early 2014, and remains central to the Company’s development plans, but this will expand as the Vertical is built.

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CURRENT INDUSTRIES

Engineering


Silo nature of current ecosystemEducation providers tend to deliver their services to a single silo

Financial Pressures on Growing populationBy 2025, the UN estimates that the world population will increase by 1 billion people.

The internet is opening new marketsLearning techniques and technology have developed in line with an ever increasing knowledge economy.

Significant growth in middle classBy the end of this century, the number of people with secondary or tertiary education will have increased 10 fold.

Education Strategy

MBH’s strategy is to acquire and develop companies within all the silos of education, within the fields of technology, people and the environment, and across the globe.

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CURRENT INDUSTRIES

Education


Real Estate EconomyCritical to the economy, the total value of all developed real estate globally is estimated at $217 trillion in 2015

New Zealand Construction MarketsConstruction sector contributed $18.9 billion to New Zealand’s GDP

Construction Strategy

The strategy for the property services sector of MBH is to vertically integrate companies in the construction, project management, real estate investments and development sectors. Whilst the UK and Australasia are the first two focus regions, the aim is to become a global property services provider which would include expansion out of the UK, Australia and New Zealand.

New Zealand Construction MarketsThe value of construction work in Great Britain continued to rise in 2016, reaching its highest level on record at £99,266 million; driven by continued growth in the private sector

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cCURRENT INDUSTRIES


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PROFIT AND LOSS – STATUTORY

EducationConstruction

Services OtherConsolidated

MBH

Revenue 4,815 7,695 - 12,511

Cost of sales (2,263) (6,408) - (8,672)

Gross profit 2,552 1,287 - 3,839

Gross profit margin 53.0% 16.7% 30.7%

Total Expenses (833) (759) (585) (2,178)

EBITDA 1,718 528 (585) 1,660

Depreciation and Amortisation (213) (10) - (223)

Net finance (expense)/income (13) (1) (6) (20)

Profit before tax 1,491 517 (591) 1,417

Tax (expense)/income (43) (128) - (171)

Profit after tax 1,448 389 (591) 1,245

(GBP ‘000)

Proforma EPS based on 2017 earnings*:

GBP 0.07 per share

EPS based on 2018 statutory earnings:

GBP 0.11 per share (Growth 58% from 2017)

PE Ratio based on 2018 earnings and share price at 30 April 2018:

11.2

*EPS 2017 is pro forma numbers

EPS and PE Ratio

Financials

Non Current AssetsFixed assets 3.044 -

Goodwill 29,700 224

Total Non Current Assets Assets 32,744 224

Current Assets

Trade Debtors, other debtors and assets 8,269 -

Cash 1,523 0.002

Total Current Assets 9,793 0.002

Current liabilities

Loans and overdrafts (1,218) -

Trade creditors and other creditors (5,646) (0.017)

Contingent consideration (2,988) -

Total Current Liabilities (9,852) (0.017)

Non Current Liabilities

Contingent consideration (3,838) -

Loans and overdrafts > 1 (484) -

Deferred tax provision (9) -

Total Non Current Liabilities (4,331) -

Net Assets 28,354 224

Equity

Share Capital 27,039 250

Retained Earnings 1,245 (0.017)

Translation 6 -

Total Equity 28,354 224

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CASH FLOW & BALANCE SHEET – STATUTORY

This is a cashflow statement which only includes the companies from September 2018 onwards

Cashflow Figures2018

(£‘000) Balance Sheet Figures2018

(£‘000)

2017

(£‘000)

Financials

Cash flows from operating activities

Net profit 1,246

Adjustments for non cash items 875

Change in working capital, net of effects from acquisitions (1,291)

Income tax paid (53)

Net cash provided by operating activities 777

Cash flows from investing activities

Acquisition of subsidiary corporation, net of cash acquired (2)

Additions to intangible assets (384)

Additions to property, plant and equipment (51)

Net cash used in investing activities (437)

Cash flows from financing activities

Interest paid (21)

Repayments of bank borrowings (44)

Proceeds from issue of convertible notes 976

Commission (89)

Net cash provided by financing activities 822

Net (decrease)/increase in cash and cash equivalents 1,162

Beginning of financial year -

Effects of currency translation on cash and cash equivalents 13

Cash Balance at the End of the Financial Year (including overdraft) 1,175

11,923,970

2,527,643

2,454,742

2,948,695

5,298,411

5,710,874

Allan Presland 39% Unity Group 8%David Howes 8% Grandose Ltd 10%SME Principals 17% Other shareholders 19%

Name

ISIN

Incorporated

Number of shares

Additional Shares to be issued for signed acquisitions

Stock Exchanges

Designated Sponsors

Listing Date & Place

Lock up period

MBH Corporation plc

GB00BF1GH114

20 June 2016

30,864,335

In the range of 22-30 million shares.

XETRA, FRA, DUS

Renell Bank, First Berlin Equity Research, Public eye Consulting

15th November 2018 uplisted to the Frankfurt Quotation Board

360 day lock ups for SME principals joining the group.

SHARE HOLDINGS (%) AS OF 12 JULY 2019 SHARE DATA AS OF AUGUST 2019

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MBH Share Capital

Stable shareholder base with 360 day lock-ups for joining SME principals

Investment Highlights & Outlook


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GROUP 2018 (Proforma) 2019 (Forecast)

Revenue

EBITDA

Acquisitions

£30.3m

£3.3m

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2019 Forecasts are based on the groups current portfolio projections.

MBH Outlook 2019

Organic Growth

Accretive Growth

Based on both accretive growth through acquisitions, and organic growth through the existing subsidiaries.

By 7%

Up by 3%

Driven by a positive market outlook in geographies subsidiaries are operating in

15-20


ACCESS TO SMEs

Unique investment solution providing an innovative answer to investing in scale up businesses around the world, previously unavailable to the sophisticated investor.

CORPORATE GOVERNANCE

Independent board committed to a high standard of corporate governance.

DIVERSIFIED RISK

Diverse portfolio approach across industry verticals and different geographies.

LIQUIDITY

Comprehensive liquidity strategy utilizing frequent material news flow.

ACCRETIVE STRATEGY

Steady accretive growth through Agglomeration™, targeting

15-20 EPS accretive acquisitions per annum.

FRANKFURT AND XETRA

The Frankfurt Stock Exchange is one of the top 10 largest stock exchanges by market capitalization globally, with more than 90 per cent of all trading in shares at all German exchanges are transacted

through Xetra.

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MBH Corporation plc provides a unique investment solution for sophisticated investors and provides an innovative answer to investing in SME’s

Why Invest?

IR Services

May 3rd 2019

May 7th 2019

May 29th 2019

June 4th 2019

September 2nd 2019

September 30th 2019

Annual Report 2018

Munich Capital Markets Conference

Annual General Meeting

Prior Capital Market Conference (Dreieich)

German Fall Conference (Frankfurt am Main)

Half-year Report 2018

2019

Charlotte [email protected]

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Event Calendar

For more Information about any of our events, please use the contact details below.

mailto:[email protected]

Investor Presentation August 2019 · Guildprime’sfocus is luxury retail fit-outs and...

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