Growth And Performance

During the financial year ended 30 June 2020, Group sales reached €1.081 billion, this is 29% ahead of June 2019.

Paragon Growth and Performance
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During the financial year ended 30 June 2020, Group sales reached €1.081 billion, this is 29% ahead of June 2019.

Thanks to recent acquisitions performed post year-end, the Group’s sales will now reach €1.368 billion, a 27% increase compared to June 2020.

Continuing our growth trajectory

Paragon Group continued to deliver on Group strategy by again achieving significant growth during the year. Sales have increased by €243 million, a 29% increase from 2019, resulting in consolidated sales of €1.081 billion (2019: €838 million).

Our Underlying EBITDA² has reached €77 million, a 54% increase compared to the underlying EBITDA² reported in June 2019 (2019: €50 million). The underlying EBITDA² growth achieved in 2020 is €21 million above the Proforma EBITDA² reported in our 2019 financial statements (2019: €56 million).

The Group recorded a strong operating profit of €16 million (2019: €19 million). This was achieved despite COVID-19 and a €28 million increase (+92%) in depreciation and amortisation charges. Depreciation and amortisation charges have increased to €59 million in 2020 (2019: €31 million), demonstrating the Group’s continuing strategy to invest in the best and newest technologies. Net Profit after tax for the year was €4 million (2019: €11 million).

Strong performance delivered through strict financial and operational discipline

We continue to manage the Group with robust operational and financial discipline and apply this approach as we acquire and integrate companies. We prepare and execute detailed post-acquisition plans to extract operational and procurement synergies identified during comprehensive due diligence processes. Continuous improvement programmes (CIPs) are operated across Paragon and are introduced in acquired companies to ensure that they adhere to the Group’s relentless push towards greater operating efficiency. All Group companies operate with the discipline of monthly management reporting and reviews to discuss performance and outlook, with specific focus on sales development and pipeline, cost control management, cash flow forecasting and working capital management. Our capital expenditure planning is based on strict ROI parameters.

Favourable debt and financing position

With €147 million of cash available on our Consolidated statement of financial position (2019: €100 million), the Group’s prospects for acquisitions remain excellent, especially in light of an economic climate that is favourable to consolidation. The Group issued €141 million of Euro Private Placement Bonds on the Luxembourg MTF market between 2016 and 2018. These bonds, repayable after 7 years (€52 million in December 2023 and €89 million in April 2025), currently carry a 4% interest rate. Bond raising was undertaken to maintain and facilitate Paragon Group’s acquisition strategy. Despite our recent year-end acquisitions, the Group net debt for covenant purposes remains low at a multiple of only 1.6 times our Underlying EBITDA (the covenant being statutorily calculated per the old pre-IFR16 accounting standards), leaving significant headroom for further market consolidation. Our net debt position at the end of June 2020 consequently remained low at €168 million (€99m pre-IFRS 16).