Chief Finance
Officer’s report
The company’s consolidated trading results for FY 2023–24 show strong performance against a backdrop of challenging economic conditions. Across our seven global regions, our revenue continued to grow, as together we partnered with our clients on some of the most impactful projects and programmes around the world.
Richard Peers Chief Finance Officer
Basis of preparation
Results published in this review are extracted from financial statements prepared under International Financial Reporting Standards. Prudent accounting policies continue to be applied on a basis consistent with previous years.
Using assumptions in relation to future trading, the Board has prepared a working capital forecast. This forecast is the best estimate of future trading. Given potential variations within forecasts, sensitivity analyses have been applied to assess various potential impacts on future trading performance. These analyses show Turner & Townsend continues to have a positive cash balance and meets the performance covenants within the borrowing facility. Based upon these projections and cash balances, the directors have concluded that the Group has adequate working capital and therefore, it is appropriate to use the going concern basis of preparation.
Revenue and profit
In 2023–24, our primary measure of revenue, net revenue, was £1,295.9m (2023: £1,066.9m), representing a 21.5 percent increase over the year before. Turnover (which includes subcontract revenue) was £1,531.5m (2023: £1,225.2m). At the regional level, growth was achieved in all seven regions, with particularly strong growth in the Americas and Europe. During the year, we further expanded our offerings in the Americas with a business transfer from our ultimate parent and an acquisition.
EBITA of £192.2m compares with £158.5m for the prior year, the margin being 14.8 percent (2023: 14.9 percent).
Taxation
The taxation charge for FY 2023–24 was £50.0m (2023: £30.7m), representing an effective rate of 25.0 percent (2023: 22.3 percent). The effective rate reflects the global nature of our business and the impact of varying tax rates across different jurisdictions.
Cash flow and working capital
Strong cash generation has continued throughout the financial year, reflecting effective cash management principles adopted across our business. This resulted in a free cash flow of £113.6m (2023: £120.4m), and cash generation – defined as operating cash flow as a percentage of EBITDA – of 81 percent (2023: 112 percent). Debtor days at the year-end were 50 (2023: 50), and our average debtor days across the financial year was 52 (2023: 59). Working capital management continues to be a key discipline across our business and is key to maintaining our strong cash flow performance.
Funding
Cash, net of overdrafts, was £128.4m at 30 April 2024 (2023: £136.8m). Funds, net of bank loans, excluding IFRS 16 lease liabilities, were £108.4m at the year-end date (2023: £118.8m). Bank facilities provide Turner & Townsend with committed facilities of £120.0m until March 2027 (2023: £120.0m until March 2027) to finance future operational cash requirements and selective acquisitions in line with our strategic aims. Turner & Townsend had £20.0m borrowings against this facility as at 30 April 2024, which was fully repaid by 29 May 2024.
Pensions
Turner & Townsend operates a number of pension schemes across its global business. The company maintains one defined benefit scheme arising from its UK business which was closed to new members in 1992, and to future accrual in 2006. At 30 April 2024 the IAS19 deficit was £1.2m (2023: £0.5m). Treasury Treasury risks faced by Turner & Townsend include interest-rate risk, foreign exchange risk, credit risk and liquidity risk. Instruments such as interest rate swaps have not been entered into to mitigate risk, as such risk is considered low. Contracts are mostly undertaken in the currency of local subsidiaries, and therefore foreign currency revenue streams are matched by the currency of the relevant cost base.
Financial
highlights
