Global player in compliance guidance builds incomes strongly

SAI Global measures its revenues under three divisions - Information Services, Compliance Services and Assurance Services. Each of these has been growing steadily, and at times rapidly, under its continuing organic and acquisitive growth.

SAI has now become one of the few major global players in this field, whose growth is driven by demand to meet the relentless expansion of standards, specifications, regulations and guidelines for all manner of activity, product and service.

Corporations, governments, statutory bodies and associations all strive to meet best global practice and the bar is being raised. Demand occurs across the board, in architecture, financial services, foodstuffs, legal, medical, training, you name it.

The widening global conformity assessment and training market is both a defensive and fast growing field in which SAI has a well proven track record.

SAI’s growth has now become predictable as a significant global player in an expanding niche with plenty of organic and acquisition opportunity remaining.

Half-year Performance & Estimates - SAI

Year-end June	1H12A	FY12A	1H13A	FY13A	1H14A	FY14E	FY15E
Sales, $m	222.6	447.1	237.9	473.8	264.0	526.0	553.0
EBITDA, $m	49.5	99.2	47.5	103.9	52.1	107.0	115.6
EBIT, $m	37.2	72.9	31.8	71.6	34.6	70.9	79.0
Report NPAT, $m	22.2	46.0	18.6	46.9	20.7
Adj. NPAT, $m					20.7	43.6	55.0
Reported EPS, ¢	11.00	22.00	9.00	23.00	10.00
Adjusted EPS, ¢					10.00	20.90	25.00
EPS %FY/Growth	50%		39%	5%	11%	-9%	20%
Dividend, ¢	6.8	15.0	6.8	15.0	7.0	15.00	17.00
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	0	22%	20%	22%	20%	20.3%	20.9%
NPAT Margin	0	10%	8%	10%	8%	8.3%	9.9%
ROE, %	0	13%	5%	14%	6%
EBIT/Interest	0.0	5.4	4.5	5.2	5.57
Net Debt / Equity	0	0.57	0.56	0.61	0.58
CashFlow/Sh, ¢	12.9	28.8	14.3	35.0	17.3	37.6	40.0
Y/E Shares, m	202.2	204.3	206.8	209.4	210.5

Notes

Data sourced from IRESS Market Technology Limited. EPS Growth compared with the pcp is shown in most columns except the first half years which show their percentage of full year EPS. In a handful of cases, unadjusted share splits, or changes between positive and negative values, may give strange changes in ratios.

Recent News Highlights

As at 31/12/2012 : see details at www.sai-global.com   (new window? Shift+Click)

07/12/2012     Completes Food Assurance Acquisition in South Africa

21/11/2012     Acquires Quality & Safety Risk Professional Services International P/L for ~A$5.9m, Gaining Critical Mass in South Africa

30/10/2012     AGM 2012, & Presentation

14/02/2012     Results 1H12: satisfactory, in line with expectations; despite H2 costs, FY12 in line, FY13 positive guidance

01/02/2012     Completed acquisition of Compliance 360; to become a leader in US 'GRC': Governance, Risk & Compliance

12/01/2012     SAI agrees to acquire Compliance 360 in USA for US$42.3m

28/10/2011     SAI and ANZ sign national settlement services agreement

Company Overview

SAI Global is an applied information services company that helps organisations manage risk, achieve compliance and drive business improvement through business publishing, compliance, training and assurance.

Close to 70% of S&P/ASX 200 companies are customers of SAI (and many more overseas).

From a license to publish and distribute Australian Standards to at least 2018, SAI has acquired and built businesses across 25 countries to become a global leader in certification and training.

At the AGM on 30 October 2012, SAI's MD Tony Scotton made the following remarks on SAI's guidance for FY13:

"Volatility in financial markets remains and global economic growth is slow and patchy.

However, with the investment in people, product and infrastructure we made in FY12 we expect revenue and profit growth across all divisions in FY13.

While we are continuing to grow revenue, the cost base to meet our higher expected service levels is in place; accordingly EBITDA in the first half is expected to be slightly down on the prior corresponding period. Due to higher depreciation, amortisation and interest costs NPAT will be down approximately 15% in the first half compared to the same period last year.

In reviewing our projections through to the end of the year, we expect a stronger than normal second half bias to the result, as revenue increases and costs remain relatively stable. We are therefore still targeting to achieve full year double digit EBITDA and NPAT growth, driven by:

• An uplift in the Property Services business as the new mortgage processing business ramps up

• A full period contribution from Compliance 360

• A return to more profitable growth in the Compliance Services business

• Organic growth in the Assurance business at or above the top end of the trend range of 5-7%."