Intertrust Realises Sound Performance in HY 2016 and expects Full Year 2016 Adjusted net income per share of at least ?1.30
(Thomson Reuters ONE) -
Intertrust Realises Sound Performance in HY 2016
and expects Full Year 2016 Adjusted net income per share of at least ?1.30
Intertrust N.V. HY 2016 results
Amsterdam, August 25, 2016, Intertrust N.V. ("Intertrust" or "Company") [ticker
symbol INTER] a leading global provider of high-value trust and corporate
services, today announces its results for the half year ended June 30, 2016.
Presentation of financial and other information
Financials are presented on adjusted basis before specific items and one-off
revenues/expenses. This press release includes unaudited financial information.
The condensed consolidated interim financial statements for the half year ended
2016 and have been prepared in accordance with IAS 34 and a review report has
been issued by the company's auditors KPMG Accountants N.V.
In ? millions HY 2016 HY 2015
----------------------------------------------------------
Adjusted revenue 176.7 166.1
Adjusted EBITA 71.1 67.8
Adjusted EBITA Margin 40.2% 40.8%
Adjusted net income* 51.9
Adjusted net income per share (?)** 0.61
* Adjusted revenue of ?176.7 million grew by 6.4%. At constant currency and on
a proforma*** basis, Adjusted revenue grew by 3.5%.
* Adjusted EBITA of ?71.1 million grew by 4.8%. At constant currency and on a
proforma*** basis, Adjusted EBITA grew by 3.5%.
* Adjusted EBITA margin of 40.2%. This is in line with HY 2015 on a
proforma*** and constant currency basis.
* Strong operating cash flow conversion of 96.7 % versus 97.6% HY 2015, the
difference being attributable to timing.
* Adjusted net income is defined as Adjusted EBITA less net interest costs and
less tax costs
** Adjusted net income per share is defined as Adjusted net income divided by
the number of shares outstanding before additional issuance for the acquisition
of Elian (85,221,614)
*** Proforma including the CorpNordic contribution for the period January-June
2015. CC is defined as constant currency
Note: Rounding differences may occur as calculations are based on half year
figures not rounded to millions.
David de Buck, Chief Executive Officer of Intertrust, commented:
"I am pleased with our sound results for the first half of this year. We
continue to see a solid pipeline of business and reiterate our guidance for
2016 that the full year Adjusted net income per share will be at least ?1.30. An
important development in the second quarter is the successful acquisition of
Elian. Preparations for integration are well underway and we expect to close the
transaction in September. We are excited about the prospects for cross-selling
and synergies from the integration of Elian and Intertrust. Elian will
significantly strengthen our capital markets and funds capabilities, reinforcing
our global leadership."
Highlights HY 2016
* On June 6, Intertrust announced its agreement to acquire Jersey-based
regional trust and corporate services provider Elian for £435 million (?557
million). The transaction is on-track to close before the end of September,
pending regulatory approvals. An integration project is fully operational
with several functional workstreams preparing for closing. Financing of the
transaction was successful and included:
* ?122 million in a share offering on June 13, 2016;
* syndication of 2 new debt acquisition facilities, one for £94 million
and the other for ?147.5 million to a group of nine banks.
* Intertrust opened a sales office in Chicago in January, and is gaining a
foothold in the region with Mid-western multinationals.
* CorpNordic integration was completed in Q1 - annualised synergies of ?0.9
million have been achieved and the activities show growth in line with
expectations.
* Completed rollout of the Business Application Roadmap (BAR) IT project.
* Irish AIFMD ManCo services were successfully launched in HY 2016 and the
onboarding of funds is ongoing.
Key Financials Q2 and HY 2016
Q2 Q2 % Change % Change | HY HY % Change % Change
(reported) (Proforma| (reported) (Proforma
2016 2015 and | 2016 2015 and
CC(10)) | CC(12))
----------------------------------+-------------------------------------
|
|
Adjusted |
revenue(1) |
(?m) 88.8 84.5 5.1% 3.1%| 176.7 166.1 6.4% 3.5%
|
|
|
Adjusted |
EBITA(1) |
(?m) 35.1 34.2 2.9% 2.5%| 71.1 67.8 4.8% 3.5%
|
|
|
Adjusted |
EBITA(1) |
margin 39.6% 40.4% -85.2bps -24bps| 40.2% 40.8% -59.5bps -0.9bps
|
|
|
Operating |
free cash |
flow(2) |
(?m) 36.1 34.9 3.4% | 72.6 69.6 4.4%
|
|
|
Cash |
conversion |
ratio |
including |
strategic |
capital |
expenditure |
(%)(3) 94.9% 93.6% 123.9bps | 94.8% 93.5% 125.3bps
|
|
|
Cash |
conversion |
ratio |
excluding |
strategic |
capital |
expenditure |
(%)(4) 97.1% 97.1% -5bps | 96.7% 97.6% -91.7bps
|
|
|
Adjusted |
Net Income |
(?m) 26.4 na | 51.9 na
|
|
|
Adjusted |
Net Income |
per share |
(?)(5) 0.31 na | 0.61 na
|
|
|
Basic |
Earnings |
per share |
(?)(6) 0.08 na | 0.27 na
|
|
|
Profit |
(loss) |
after |
income tax |
(?m) 7.1 4.6 56.2% | 23.0 7.6 203.1%
|
|
|
No. of |
entities(7) |
(000's) | 38.6 41.4 -7.0%
|
|
|
Average |
Adjusted |
revenue per |
entity |
(ARPE)(8) |
(?k) | 9.2 8.0 14.4%
|
|
|
No. of |
full-time |
equivalents |
(FTE's)(7) | 1705.1 1608.5 6.0%
|
|
|
Adjusted |
revenue per |
FTE (?) | 207.2 206.5 0.3%
|
|
|
Total |
reported |
net debt(9) | 278.1 na
|
|
|
Total net |
debt(10 |
)excl. net |
proceeds of |
the issue |
of shares | 398.9 na
|
|
|
Net |
leverage |
ratio(11 |
) excl. net |
proceeds of |
the issue |
of shares | 2.63 na
1. Adjusted financial information before specific items and one-off
revenues/expenses. 2016 figures include CorpNordic acquisition
2. Defined as Adjusted EBITDA - Maintenance capex
3. Defined as Adjusted EBITDA less capital expenditure, including strategic
capital expenditures/ Adjusted EBITDA
4. Defined as (Adjusted EBITDA less capital expenditure, excluding strategic
capital expenditures) / Adjusted EBITDA
5. Adjusted Net Income per share is calculated as Quarterly or Half Year
Adjusted EBITA less net interest costs and less tax costs divided by the
number of shares outstanding (85,221,614) before the additional issuance of
shares for the acquisition of Elian. When using the weighted average number
of shares outstanding as per June 30 (85,854,703), the Quarterly and Half
Year Adjusted Net Income per share would be ?0.30 and ?0.60 respectively.
6. Basic Earnings per share are calculated as Profit/(Loss) for the period
divided by the weighted average number of shares outstanding during the
period which was 85,854,703 for HY and 86,487,792 for Q2. The Group had
91,999,392 shares outstanding as of June 30, 2016.
7. As of June 30, 2016 and June 30, 2015 respectively.
8. Annualised numbers based on Adjusted revenue before specific items and one-
off revenue/expenses.
9. Reported net debt includes cash raised through the issuance of shares for
the Elian acquisition.
10. Net debt at the end of June 2016 at closing rate excluding the cash raised
through the issuance of shares for the Elian acquisition on June
13(th) 2016 as part of the Elian acquisition.
11. Net debt leverage ratio is defined as Total net debt excluding cash raised
through the issuance of shares for the Elian acquisition divided by the
last twelve months Adjusted Proforma EBITDA (Adjusted EBITDA and full year
run rate of CorpNordic synergies.
12. Proforma including CorpNordic contribution for the period January to June
2015, CC defined as constant currency.
Financial highlights HY 2016 versus HY 2015
- Adjusted revenue in HY 2016 increased by 6.4% to ?176.7 million (HY 2015:
?166.1 million). On a constant currency basis, Adjusted revenues grew by 7.2%.
Revenue growth was particularly driven by strong performance of the Netherlands
and Guernsey, growth in Luxembourg and the acquisition of CorpNordic. The growth
was negatively impacted by a slightly higher loss in Cayman of certain low ARPE
registered office business. Including the contribution of CorpNordic for the
first six months in 2015, Adjusted revenues grew on a like-for-like proforma
basis by 3.5%. The growth in revenues was impacted by approximately ?3 million
as a result of less capital markets-related services in the Netherlands due to
market circumstances and lower billable hours in Luxembourg due to fewer FTE's
than budget stemming from a tight recruiting market.
- Adjusted EBITA in HY 2016 increased by 4.8% to ?71.1 million (HY 2015: ?67.8
million). On a constant currency basis, Adjusted EBITA increased by 5.5%.
Including the proforma contribution of CorpNordic for the first half year in
2015, Adjusted EBITA grew by 3.5%.
- Adjusted EBITA margin was 40.2% versus 40.8% for HY 2015, a reduction of
59.5 bps partially driven by the consolidation of the lower margin CorpNordic
acquisition. Including the proforma contribution of CorpNordic for the first six
months in 2015, the EBITA margin was in line with HY 2015 (-0.9bps).
- Total capital expenditure for HY 2016 was ?3.9 million (HY 2015: ?4.6
million), ?1.4 million (HY 2015 ?2.9 million) of which represented one-off
strategic capital expenditure resulting from the implementation of the Business
Application Roadmap, a company-wide standard software application platform.
Increase in maintenance capex in HY 2016 versus HY 2015 was driven by timing of
hardware replacement, the implementation to outsource the datacentres of
Intertrust and leasehold improvements.
- HY 2016 cash conversion ratio excluding strategic capital expenditures
remains strong at 96.7% (HY 2015: 97.6%)
- YTD annualised Average Revenue Per Entity (ARPE) increased by 14.4% to ?9.2
k (HY 2015: ?8.0 k). Intertrust continues to see additional hours per entity due
to more complex structures, regulatory reporting requirements and focus on
higher value-added entities. In addition, increased ARPE was partially driven by
the outflow of lower valued registered office entities in Cayman.
- As of HY 2016, Intertrust had 38,553 entities, a net outflow of 2,895
entities over the last twelve months mainly due to the re-entry of a competitor
in Cayman (2,775 entities lost of which 1,431 in 2016), partially compensated by
the increase of 796 entities due to the CorpNordic acquisition.
- A net increase of 97 FTE's over the last twelve month period ended in June
2016 was mainly due to the increase in billable FTE's (92 FTE's, of which 57
FTE's from the CorpNordic acquisition) mainly in the Netherlands and Luxembourg
to support business growth. Intertrust maintained a billable versus total FTE
ratio of 75%.
- YTD annualised Adjusted revenue per FTE increased by 0.3% to ?207.2 k (HY
2015: ?206.5 k).
- Reported Profit after tax for the HY 2016 was ?23.0 million compared to ?7.6
million in HY 2015. The increase in HY 2016 was primarily driven by increased
EBITA and by significant reduction of net finance costs partially offset by an
increase of specific costs for the equity share based payment programs and
transaction costs related to the acquisition of Elian.
Financial highlights Q2 2016 versus Q2 2015
- Adjusted revenue for the quarter increased by 5.1% to ?88.8 million (Q2
2015: ?84.5 million). On a constant currency basis, Adjusted revenues grew by
6.8%. Revenue growth continues to be driven by the ARPE growth whilst the number
of entities declined. The number of entities decreased mainly due to low ARPE
structures exiting in Cayman. Including the contribution of CorpNordic for the
second quarter of 2015, Adjusted revenues grew on a like-for-like proforma basis
by 3.1%. The growth in revenues was impacted by approximately ?1.7 million due
to less capital markets-related services in the Netherlands due to market
circumstances, lower billable hours in Luxembourg due to fewer FTE's than budget
stemming from a tight recruiting market and slightly higher loss of registered
office business in Cayman.
- Adjusted EBITA for the quarter increased by 2.9% to ?35.1 million (Q2 2015:
?34.2 million). On a constant currency basis, Adjusted EBITA increased by 4.5%.
Including the proforma contribution of CorpNordic for second quarter in 2015,
Adjusted EBITA grew by 2.5%.
- Adjusted EBITA margin was 39.6% versus 40.4% for Q2 2015, a decrease of
85.2 bps mainly driven by the consolidation of the lower margin CorpNordic
acquisition. Including the proforma contribution of CorpNordic for the second
quarter in 2015, the margin reduced by 24 bps from 39.8% in Q2 2015 to 39.6% in
Q2 2016.
- Total capital expenditure for the quarter was ?1.9 million (Q2 2015: ?2.3
million).
- Q2 2016 cash conversion ratio excluding strategic capital expenditures
remains strong at 97.1% (Q2 2015: 97.1%).
- Reported Profit after tax for the quarter was ?7.1 million compared to ?4.6
million in Q2 2015. The increase in Q2 2016 was primarily driven by increased
EBITA and by significant reduction of net finance costs partially offset by an
increase of transaction costs for the equity share based payment programs and
costs related to acquisition of Elian.
- Net debt as reported on June 30, 2016, was at ?278.1 million. Excluding the
cash raised through equity as part of the Elian transaction, net debt would be
at ?398.9 million with a corresponding net leverage ratio of 2.63.
Adjusted net income and Adjusted net income per share
* Adjusted net income for HY 2016 was ?51.9 million. Adjusted net income is
defined as
Adjusted EBITA less net interest costs and less tax costs.
* Adjusted net income per share for HY 2016 was ?0.61 per share based on the
number of shares outstanding excluding the Elian-related share issue.
Elian Acquisition
On June 6, Intertrust announced its agreement to acquire Jersey-based regional
trust and corporate services provider Elian for £435 million (?557 million at
1.28 GBP/EUR), financed through ?100 million in cash, ?122 million of cash
raised through the issuance of new shares to public investors, with ?33 million
of the purchase price to be paid to key Elian management shareholders in
Intertrust shares. Debt facilities will include ?265 million through new
syndicated bank facilities and ?50 million from an existing revolver facility.
Transaction costs related to the Elian acquisition are ?13 million. Elian
expects to generate revenue of £96 million and an EBITA of £34 million for year
ending 1/17. Annualised synergies are expected of £10.4 million, 75% of which
should be realised by the end of 2017. Intertrust shareholders approved the
transaction at an EGM held on July 26, 2016. Elian has 615 employees in 15
jurisdictions, and is particularly strong in services for capital markets, and
private equity & real estate fund administration as well as being market leader
in the important jurisdiction of Jersey.
Closing is expected before the end of September, pending regulatory approval,
after which integration can begin. Plans for the integration were kicked-off in
early summer, and a management structure for the combined company has been
defined. Intertrust will incorporate a service line management structure for
Funds, Capital Markets and Private Wealth, alongside the existing jurisdictional
structure. Paul Willing, currently CEO of Elian, will join Intertrust's
Executive Committee. Plans to combine offices in the 10 jurisdictions in which
the two companies overlap have been defined and will be implemented as soon as
possible after closing. Elian will be rebranded as Intertrust approximately 3
months after closing.
Market developments
Panama Papers, a set of leaked documents from a Panamanian trust provider,
caused concerns about potential reputation damage throughout the sector. In
response to media inquiries made at the time, Intertrust disclosed that it did
not have any commercial relationship with this trust provider and had a small
number of clients who had some connection with the provider. In response to the
Panama Papers media reports, Intertrust conducted extra compliance portfolio
reviews and revisited IT security arrangements, neither of which resulted in
changes to existing policies. Intertrust has put high compliance standards and
strong client acceptance procedures at the core of its strategy. Intertrust sees
the main effect of the Panama Papers on the T&CS industry as being an increasing
demand from prospective clients for strict compliance and careful client
acceptance procedures. Intertrust's position within the sector has potentially
been strengthened by this development.
On June 23, the UK voted to leave the EU (Brexit). Intertrust views this
development as potentially increasing the fragmentation of the European tax
landscape. The Company does not anticipate a negative effect on its business as
a result of Brexit. The decline in the GBP to the Euro in the wake of the Brexit
vote has had a limited effect on the YTD EBITA. Management estimates that
approximately 23% of the post-closing EBITA is in GBP, whereas EBITA generated
in USD will be approximately 20% over CY 2016 after the closing of Elian.
Regulatory changes in the first half of 2016 included the adoption of the EU
Anti-Tax Avoidance Package (ATAP) by the EU member states. The ATAP is the
legislative package derived from the OECD Base Erosion Profit Shifting (BEPS)
Recommendations originally introduced in 2014. The version of the ATAP
legislation ultimately adopted by the European Council in July 2016 was
substantially less extensive than the version originally proposed in January
2016. The legislation leaves setting of tax rates to the discretion of the
individual member states and encompasses certain additional reporting elements
for multinational corporations. Intertrust does not expect this legislation to
negatively affect its business, and the new reporting requirements could be a
source of additional revenue over the medium term.
Outlook
* Guidance reiterated of an Adjusted net income per share of minimum ?1.30 for
Intertrust standalone in CY 2016E before the impact of the acquisition.
* For the medium term, objective reiterated of organic revenue growth slightly
above market growth of 5% (estimated market CAGR for CY 2015 - 2018E).
* Adjusted EBITA margin improvement objective including Elian increased by
100bps to 300-350bps by CY 2018E over the Intertrust stand-alone CY 2015
proforma Adjusted EBITA margin of 40.4%.
* On a stand-alone basis, Interest costs for full year 2016 are expected to be
?18.7 million of which ?3.7 million is related to the amortisation of
financing fees (non-cash). Upon completion of the Elian acquisition, the
group will issue new debt of approximately ?265 million with interest rates
of 275bps plus Libor with a 0% floor and an RCF drawdown of approximately
?50 million with interest rates of 250bps plus Libor with a 0% floor. Until
completion, ticking fees for the new debt will be payable (approximately
?0.1 million per month).
* Cash conversion to continue to be in line with historical rates.
* Maintenance / normalised capex excluding the Elian acquisition will be
marginally below historical levels.
* Effective tax rates will be lowered to approximately 16% after completion of
the Elian acquisition (approximately 18% on a stand-alone basis).
* The Elian acquisition is expected to yield approximately 10% accretion on a
proforma basis excluding synergies to CY 2016E Adjusted net income per share
guidance of a minimum of ?1.30 and approximately 20% accretion to Adjusted
net income per share by CY 2018E including synergies and a double digit ROIC
by CY 2018E including synergies.
* Unchanged target steady-state net debt to EBITDA ratios are at 2 - 2.5
times, with a temporary increase in the event of an acquisition.
* Dividend policy is a target dividend of 40-50% of Adjusted net income. First
interim dividend will be paid on November 30, 2016 over the year ending
December 31, 2016.
Intertrust NV Press release - HY 2016 Results:
http://hugin.info/171118/R/2036969/758972.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Intertrust Group via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 25.08.2016 - 07:15 Uhr
Sprache: Deutsch
News-ID 491023
Anzahl Zeichen: 28721
contact information:
Town:
Amsterdam
Kategorie:
Business News
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