SAI Global Limited (ASX:SAI) Delivers Another Record Result With Net Profit Up 29.2%
SAI Global Limited (ASX:SAI) Delivers Another Record Result With Net Profit Up 29.2%
Sydney, Aug 17, 2010 AEST (ABN Newswire) - SAI Global Limited (ASX:SAI) (PINK:SGLOF) today announced a record net profit after tax of A$33.7M, an increase of 29.2% on last year's result.

Continued organic growth plus contributions from recent acquisitions combined to produce revenue growth of 21.1% to A$392.2 million despite the impact of the stronger Australian dollar relative to the prior period.

EBITDA increased to A$76.1M, up 18.4% on FY09. Operating cash inflows were strong, up 34.3% to A$51.5M.

Chief Executive Officer, Mr Tony Scotton said: "We have delivered another record result which is very pleasing given the economic headwinds faced by many of the economies and industries in which we operate. We have seen operating margins expand and have grown earnings per share by 21.5%". He added "we have also taken some very important steps to enhance the growth outlook for the company, not least the recently announced acquisition of Integrity Interactive(1). This is an important step for the company, bringing together two of the foremost players in the compliance and ethics training and awareness space."

The directors have declared a fully franked final dividend of 7.0 cents per share, bringing the total dividend for the year to 12.8 cents. The dividend will be paid on 22 September 2010. The record date is 27 August 2010.
Revenue                      A$392.2M     Up 21.1%
EBITDA                       A$76.1M      Up 18.4%
Net profit after tax         A$33.7M      Up 29.2%
EPS                          21.5 cents   Up 21.5%
Final dividend               7.0  cents   Up 14.8%
Net operating cash inflow    A$51.5M      Up 34.3%
Information Services

This business met our expectations and achieved a solid financial outcome despite the fact that the general environment has been hampered by the overhang of the global financial crisis as clients sought to reduce costs in all areas. The standout performer during the period was the property services business which benefitted from the positive impact of economic stimulus measures.

Revenue grew by 55.5% over the corresponding period, to A$197.9M. EBITDA was up 20.2% to A$50.1M. The contraction in the EBITDA margin is a direct result of the dilutionary impact of consolidating Espreon for a full twelve months in FY10 compared with just over four months in FY09. As a result of the property related acquisitions the "EBITDA Margin on net revenue" is a more appropriate measure of this division's profitability. The margin on net revenue measures EBITDA relative to service revenue, which excludes the distorting impact of billings relating to the recovery of the costs of procuring property certificates from third parties.
                                   FY10     FY09    Change
Revenue A$M)                      197.9    127.3    55.5%
Net revenue(A$M)                  106.5     84.0    26.8%
EBITDA(A$M)                        50.1     41.7    20.2%
EBITDA Margin(%)                  25.3%    32.8%    (7.5%)
EBITDA Margin on net revenue(%)   47.1%    49.7%    (2.6%)

Compliance Services Division

This business experienced a moderation in revenue growth, particularly in the first half, due to budget pressures on its customers attributable to the global economic downturn. However tangible signs that the worst of the downturn is behind emerged during the period and the business ended the year with a strong order book and pipeline of potential new business.

Revenue grew by 12.1% over the corresponding period, to A$46.6M. EBITDA grew by 26.0% to A$11.4M. EBITDA margins expanded to 24.5% compared with 21.8% in FY09.

The regulatory compliance industry continues to experience strong growth drivers which reflect the increased volume, complexity and interdependency of global, regional and country-specific regulations. These regulations pose governance, compliance and risk management challenges for all corporations. This robust growth outlook underpinned by strong demand drivers and annuity style revenue streams continue to make the compliance services sector very attractive for SAI.
                   FY10   FY09   Change
Revenue(A$M)       46.6   41.6    12.1%
EBITDA(A$M)        11.4    9.1    26.0%
EBITDA Margin(%)   24.5   21.8     2.7%
Assurance Services Division

Improved trading conditions over the second half saw revenue grow by 2.7% on a constant currency basis over the whole year. This subdued growth is a direct result of weaker performances in training and the European automotive sector compared with FY09. Excluding the impact of these businesses, the other core operations in the division achieved 4.3% growth in constant currency terms. Revenue was down 4.8% compared to FY09 to A$149.4 million after taking into account the adverse impact of the stronger Australian dollar.

The division delivered EBITDA growth of 12.2% on a constant currency basis despite the contraction in the automotive and standards training market segments. EBITDA was up 0.6% to A$23.5 million after taking into account the adverse impact of the stronger Australian dollar. The divisional EBITDA margin increased from 14.9% to 15.7%.
                   FY10    FY09   Change
Revenue(A$M)      149.4   156.9   (4.8%)
EBITDA(A$M)        23.5    23.4    0.6%
EBITDA Margin(%)   15.7    14.9    0.8%

- During the period the Information Services division benefitted from the Company securing 100% ownership of Espreon Limited. Moving to full control will enable SAI to extract the extra synergy benefits outlined in the original Bidder's Statement. Extra cost synergies are expected to be realised over the next eighteen months or so through management integration of API and Espreon and the integration of technology platforms across the property services business.

- In October 2009 Cintellate Pty Limited was added to the Compliance Services division's assets. Cintellate is a leading provider of compliance and risk management tools that allow companies to manage their compliance obligations and risk mitigation in the areas of safety, health and the environment (SH&E). Cintellate focuses predominantly on the utilities, oil, gas, refining, mining, engineering, construction, manufacturing and chemical sectors.

- The product certification business within the Assurance Services division was enhanced through the acquisitions of Enertech Australia Pty Limited and the assets of the Imtest group of companies. Enertech undertakes product performance testing in the areas of gas and electrical appliances and Imtest focuses on the testing of personal protection equipment.

- In April 2010 the Assurance Services division's food related assets were expanded through the acquisition of FoodCheck Limited, a leading UK provider of assurance services in the food sector. Foodcheck has a team of highly qualified professionals across the United Kingdom focussing predominantly on the retail, hospitality and public service sectors. FoodCheck employs an advanced audit management technology that provides value adding services to many organisations, particularly the large UK food retailers.

- On 22 July 2010, the Company announced that it has entered into an agreement to acquire 100% of Integrity Interactive ("Integrity"), a leading US based compliance and ethics solutions provider. Completion of the agreement is subject to US anti-trust clearance

Outlook for FY11

The Company remains committed to growing the value of the three divisions. It is envisaged that this growth will continue to come from a combination of organic growth, strategic acquisitions and partnering.

Demand for the Company's products and services has continued to build steadily from the lows of the global financial crisis and SAI expects to continue to grow revenue, profit and EPS in FY11. Organic revenue growth is expected to trend upwards in the Information Services (excluding Property Services), Compliance Services and Assurance businesses. The Property Services business is expected to grow revenue but is not forecasting a repeat of the excellent revenue growth achieved in FY10 when it benefitted from economic stimulus measures.

The Australian dollar remains relatively strong against the major currencies but is closely linked to the level of commodity prices. A stronger Australian dollar is detrimental to the Company's revenue whereas a weaker dollar increases the value of the Company's foreign currency revenues. The Company's capital structure is designed to limit the impact of large fluctuations in exchange rates on net profit through the use of natural hedges.

The Board expects dividends to grow in FY11 and anticipates that they will be fully franked.

(1) Subject to US anti-trust approval.
(2) Refer Appendix 1 for statutory income statement

For the consolidated statements of comprehensive income for the year ended 30 June 2010, please refer to the following link:

About SAI Global Limited

SAI Global (ASX:SAI) is a professional services company providing value-adding, cost effective business solutions in the technical information services, GRC and assurance markets. SAI Global provides: Standards, regulatory and technical information, databases and workflow solutions; Governance, risk and compliance products and services; and Assurance services, specifically in the area of standardization and conformity assessment. For further information please visit



Tony Scotton
Chief Executive Officer
SAI Global Limited
Tel: +61-2-8206-6182
Mob: +61-419-527-592

Geoff Richardson
Chief Financial Officer
SAI Global Limited
Tel: +61-2-8206-6805
Mob: +61-429-314-698

Related Companies

SAI Global Limited        

ABN Newswire This Page Viewed:  (Last 7 Days: 10) (Last 30 Days: 45) (Since Published: 7822)