Unaudited results for Interim & Q2 ended 31/10/24
10/12/2024 07:00
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RNS Number : 4099P Ashtead Group PLC 10 December 2024
10 December 2024
Unaudited results for the half year and
second quarter ended 31 October 2024
Performance(1) Second quarter First half
2024 2023 Growth(2) 2024 2023 Growth(2)
$m $m % $m $m %
Revenue 2,941 2,877 2% 5,695 5,573 2%
Rental revenue 2,725 2,585 5% 5,265 4,960 6%
EBITDA 1,410 1,354 4% 2,698 2,583 4%
Operating profit 796 799 - % 1,484 1,502 -1%
Adjusted(3) profit before taxation 682 697 -2% 1,255 1,312 -4%
Profit before taxation 653 666 -2% 1,197 1,250 -4%
Adjusted(3) earnings per share 116.2¢ 118.3¢ -2% 213.6¢ 225.8¢ -5%
Earnings per share 111.3¢ 113.0¢ -2% 203.7¢ 215.3¢ -5%
Half year highlights
· Group rental revenue up 6%(2); revenue up 2%(2); US rental
revenue up 5%; revenue up 1%
· Operating profit of $1,484m (2023: $1,502m), with $77m lower
gains on disposal
· Adjusted(3) profit before taxation of $1,255m (2023: $1,312m)
· Adjusted(3) earnings per share of 213.6¢ (2023: 225.8¢)
· $1.7bn of capital invested in the business (2023: $2.5bn)
· Free cash inflow(1) of $420m (2023: outflow of $355m)
· Net debt to EBITDA leverage(2) of 1.7 times (2023: 1.8 times)
· Interim dividend of 36¢ per share (2023: 15.75¢); rebalanced
interim/final split
· Commencing a share buyback programme of up to $1.5bn over the
next 18 months
· Proposed move to a US primary listing
· Full-year guidance revised to reflect latest expectations
· Our outlook is positive and we look to Sunbelt 4.0 and the
future with confidence
(1) Throughout this announcement we refer to a number of alternative performance
measures which provide additional useful information. The directors have
adopted these to provide additional information on the underlying trends,
performance and position of the Group. The alternative performance measures
are not defined by IFRS and therefore may not be directly comparable with
other companies' alternative performance measures but are defined and
reconciled in the Glossary of Terms on page 35.
(2) Calculated at constant exchange rates applying current period exchange rates.
(3) Adjusted results are stated before amortisation.
Ashtead's chief executive, Brendan Horgan, commented:
We launched our Sunbelt 4.0 strategic growth plan in April and the business is
focused on executing against our five actionable components: Customer, Growth,
Performance, Sustainability and Investment. I want to thank all our team
members for the hard work and professionalism they exhibit every day as we
deliver on this strategy and our commitment to provide exceptional service to
our customers, safely.
Group rental revenue increased 6% and revenue was up 2% in the half year. In
North America, the strength of mega projects and hurricane response efforts
have more than offset the lower activity levels in local commercial
construction markets. These local construction markets have been affected by
the prolonged higher interest rate environment. However, underlying demand
continues to be strong and we expect this segment to recover as interest rates
stabilise. As expected, lower used equipment sales and a higher increase in
depreciation and interest costs, resulted in adjusted profit before taxation
of $1,255m (2023: $1,312m).
The investments in and expansion of the business over Sunbelt 3.0 and into
Sunbelt 4.0 are enabling us to take advantage of the diverse opportunities
that we see while maintaining discipline and balance sheet strength that
affords us considerable flexibility and optionality. In the period we
invested $1.7bn in capital across existing locations and greenfields and $53m
on two bolt-ons, adding a total of 47 new locations in North America. We now
expect capital expenditure for the year to be $550m lower than our previous
guidance at the mid-point, as we flex our plans to reflect market conditions.
Illustrating the cash generative nature of our model, this lower level of
capital expenditure means our guidance for free cash flow increases to
c.$1.4bn. Accordingly, with this strong free cash flow and leverage towards
the middle of our target range of 1.0 to 2.0 times net debt to EBITDA, we are
commencing a share buyback programme of up to $1.5bn over the next 18 months.
Principally as a result of local commercial construction market dynamics in
the US, we now guide to Group rental revenue growth for the full year in the
range of 3-5% and hence, full year profit lower than our previous
expectations. We remain in a position of strength, with the operational
flexibility and financial capacity to capitalise on the ongoing structural
growth opportunities we see for the business and enhance returns to
shareholders as we follow our Sunbelt 4.0 plan and the Board looks to the
future with confidence.
Contacts:
Will Shaw Director of Investor Relations +44 (0)20 7726 9700
Sam Cartwright H/Advisors Maitland +44 (0)20 7379 5151
Brendan Horgan and Michael Pratt will hold a conference call for equity
analysts to discuss the results and outlook at 10am on Tuesday, 10 December
2024. The call will be webcast live via the Company's website at
www.ashtead-group.com (http://www.ashtead-group.com) and a replay will be
available via the website shortly after the call concludes. A copy of this
announcement and the slide presentation used for the call are available for
download on the Company's website. The usual conference call for bondholders
will begin at 3pm (10am EST).
Analysts and bondholders have already been invited to participate in the
analyst and bondholder calls but any eligible person not having received
details should contact the Company's PR advisers, H/Advisors Maitland (Audrey
Da Costa) at +44 (0)20 7379 5151.
Forward-looking statements
This announcement contains forward-looking statements. These have been made
by the directors in good faith using information available up to the date on
which they approved this report. The directors can give no assurance that
these expectations will prove to be correct. Due to the inherent
uncertainties, including both business and economic risk factors underlying
such forward-looking statements, actual results may differ materially from
those expressed or implied by these forward-looking statements. Except as
required by law or regulation, the directors undertake no obligation to update
any forward-looking statements whether as a result of new information, future
events or otherwise.
First half trading results
Revenue EBITDA Profit(1)
2024 2023 2024 2023 2024 2023
Canada in C$m 508.0 446.2 235.3 190.5 111.3 80.4
UK in £m 371.1 358.7 109.4 102.2 36.5 32.7
US 4,844.2 4,792.1 2,402.1 2,331.4 1,431.8 1,481.1
Canada in $m 371.5 331.5 172.1 141.5 81.4 59.7
UK in $m 478.8 449.8 141.1 128.1 47.1 41.0
Group central costs - - (17.4) (17.7) (17.9) (18.3)
5,694.5 5,573.4 2,697.9 2,583.3 1,542.4 1,563.5
Financing costs (287.5) (251.7)
Adjusted profit before tax 1,254.9 1,311.8
Amortisation (57.9) (61.3)
Profit before taxation 1,197.0 1,250.5
Taxation charge (307.5) (309.1)
Profit attributable to equity holders of the Company 889.5 941.4
Margins
US 49.6% 48.7% 29.6% 30.9%
Canada 46.3% 42.7% 21.9% 18.0%
UK 29.5% 28.5% 9.8% 9.1%
Group 47.4% 46.3% 27.1% 28.1%
(1) Segment result presented is adjusted operating profit.
Group revenue for the first half increased 2% to $5,695m (2023: $5,573m).
This revenue growth resulted in EBITDA increasing 4% to $2,698m (2023:
$2,583m), but with lower used equipment sales and after higher depreciation
and interest costs, adjusted operating profit decreased 1% to $1,542m (2023:
$1,563m) and adjusted profit before tax was $1,255m (2023: $1,312m). The
higher increase in the depreciation charge relative to revenue growth reflects
lower utilisation of a larger fleet and the ongoing impact of life cycle fleet
inflation, contributing to the decline in operating profit. In addition,
increased financing costs due to higher average debt levels resulted in
adjusted profit before tax being 4% lower than the comparative period.
In the US, rental only revenue of $3,570m (2023: $3,380m) was 6% higher than
the prior year, driven by both volume and rate improvement. Organic growth
(same-store and greenfields) was 4%, while bolt-ons since 1 May 2023
contributed 2% of rental only revenue growth. In the first half, our General
Tool business grew 2%, while our Specialty businesses grew 15%, demonstrating
the benefits of our strategy of growing our Specialty businesses and
broadening our end markets. Rental revenue increased 5% to $4,518m
(2023: $4,299m). We estimate that hurricane response efforts contributed
$55 - 60m to rental revenue in the period. This hurricane impact, in part,
mitigated further weakening in the local commercial construction market. US
total revenue, including new and used equipment, merchandise and consumable
sales, increased 1% to $4,844m (2023: $4,792m). As expected, this reflects
a lower level of used equipment sales than last year when we took advantage of
improving fleet deliveries and strong second-hand markets to catch up on
deferred disposals.
Canada's rental only revenue increased 21% to C$374m (2023: C$310m). Markets
relating to the major part of the Canadian business are performing in a manner
similar to the US with volume growth and rate improvement. In addition,
following settlement of the Writers Guild of America and Screen Actors Guild
strikes, activity in the Specialty Film & TV business has recovered,
although it is below pre-strike levels, which is likely to be the new normal.
Rental revenue increased 20% to C$459m (2023: C$382m), while total revenue
was C$508m
(2023: C$446m).
The UK business generated rental only revenue of £248m, up 3% on the prior
year (2023: £239m). Rental only revenue growth has been driven by both
rate and volume improvement. Rental revenue increased 6% to £319m
(2023: £301m), while total revenue increased 3% to £371m (2023: £359m).
We invested in the infrastructure of the business during Sunbelt 3.0 to
support the growth of the business now and into the future. Our intention is
to leverage this infrastructure during Sunbelt 4.0 as we look to improve
operating performance. This, combined with our focus on the cost base and
lower scaffold erection and dismantling revenue, contributed to US rental
revenue drop through to EBITDA of 64% for the period. This resulted in an
EBITDA margin of 49.6% (2023: 48.7%). Lower used equipment sales and weaker
second-hand values resulted in lower gains on sale of $23m (2023: $91m). This,
combined with higher depreciation on a larger fleet, contributed to segment
profit decreasing by 3% to $1,432m (2023: $1,481m) with a margin of 29.6%
(2023: 30.9%).
Our Canadian business continues to develop and invest to expand its network
and broaden its markets. This, combined with the recovery in the Film &
TV business, contributed to an EBITDA margin of 46.3% (2023: 42.7%) and a
segment profit of C$111m (2023: C$80m) at a margin of 21.9% (2023: 18.0%).
In the UK, the focus remains on delivering operational efficiency and
long-term, sustainable returns in the business. While we continue to improve
rental rates, this remains an area of focus. The UK generated an EBITDA
margin of 29.5% (2023: 28.5%) and a segment profit of £36m (2023: £33m) at
a margin of 9.8%
(2023: 9.1%).
Overall, Group adjusted operating profit decreased to $1,542m (2023:
$1,563m). After increased financing costs of $287m (2023: $252m),
reflecting higher average debt levels, Group adjusted profit before tax was
$1,255m (2023: $1,312m). After a tax charge of 26% (2023: 25%) of the
adjusted pre-tax profit, adjusted earnings per share were 213.6ȼ (2023:
225.8ȼ).
Statutory profit before tax was $1,197m (2023: $1,250m). This is after
amortisation of $58m
(2023: $61m). Included within the total tax charge is a tax credit of $14m
(2023: $15m) which relates to the amortisation of intangibles. As a result,
basic earnings per share were 203.7¢ (2023: 215.3¢).
Capital expenditure and acquisitions
Capital expenditure for the first half was $1,679m gross and $1,402m net of
disposal proceeds (2023: $2,526m gross and $2,093m net). As a result, the
Group's rental fleet at 31 October 2024 at cost was $18bn and our average
fleet age was 46 months (2023: 47 months) on an original cost basis.
We invested $53m (2023: $705m) in two bolt-on acquisitions during the half
year, as we continue to both expand our footprint and diversify our end
markets. Further details are provided in Note 16.
For the full year, we now expect gross capital expenditure lower than our
previous guidance at $2.5 - 2.7bn as we flex our plans to reflect market
conditions.
Return on Investment
The Group return on investment was 15% (2023: 18%). In the US, return on
investment (excluding goodwill and intangible assets) for the 12 months to 31
October 2024 was 21% (2023: 26%), while in Canada it was 12% (2023: 14%).
The reduction in US and Canada return on investment reflects principally the
impact of lower utilisation of a larger fleet. In the UK, return on
investment (excluding goodwill and intangible assets) was 7% (2023: 7%).
Return on investment excludes the impact of IFRS 16.
Cash flow and net debt
The Group generated free cash flow of $420m (2023: outflow of $355m) during
the period, which is after capital expenditure payments of $1,824m (2023:
$2,506m).
Net debt at 31 October 2024 was $10,945m (2023: $10,644m). Excluding the
effect of IFRS 16, net debt at 31 October 2024 was $8,203m (2023: $8,149m),
while the ratio of net debt to EBITDA was 1.7 times (2023: 1.8 times) on a
constant currency basis. The Group's target range for net debt to EBITDA is
1.0 to 2.0 times, excluding the impact of IFRS 16. Including the effect of
IFRS 16, the ratio of net debt to EBITDA was 2.2 times (2023: 2.2 times) on a
constant currency basis.
At 31 October 2024, availability under the senior secured debt facility was
$2,571m with an additional $6,907m of suppressed availability - substantially
above the $450m level at which the Group's entire debt package is covenant
free.
In November 2024, the Group amended and extended its asset-based senior bank
facility, with $4.75bn now committed until November 2029. Pricing has been
amended and is based on the applicable interest rate plus 125bps to 137.5bps
(125bps to 150bps previously), depending on availability. The applicable
interest rate is based on SOFR for US dollar loans, CORRA for Canadian dollar
loans and SONIA for Sterling loans. Other principal terms and conditions
remain unchanged. This ensures the Group's debt package continues to be well
structured and flexible, enabling us to optimise the opportunity presented by
end market conditions. The Group's debt facilities are now committed for an
average of six years at a weighted average cost of 5%.
Dividend
Our policy is to provide a progressive dividend, which considers both
profitability and cash generation, and results in a dividend that is
sustainable across the cycle. This, combined with the Board's decision to
rebalance the split between the interim and final dividend, to broadly one
third interim, two thirds final, has resulted in the Board increasing the
interim dividend to 36¢ per share (2023: 15.75¢ per share). This will be
paid on 7 February 2025 to shareholders on the register on 10 January 2025.
The dividend is declared in US dollars but will be paid in sterling unless
shareholders elect to receive their dividend in US dollars. Those shareholders
who wish to receive their dividend in US dollars and have not yet made an
election may do so by contacting Equiniti on +44 (0) 371 384 2085. The last
day for election for the proposed interim dividend is 24 January 2025.
Capital allocation
The Group remains disciplined in its approach to allocation of capital with
the overriding objective being to enhance shareholder value.
Our capital allocation framework remains unchanged and prioritises:
· organic fleet growth;
- same-stores;
- greenfields;
· bolt-on acquisitions; and
· a progressive dividend with consideration to both profitability and
cash generation that is sustainable through the cycle.
Additionally, we consider further returns to shareholders. In this regard,
we assess continuously our medium-term plans which take account of investment
in the business, growth prospects, cash generation, net debt and leverage.
As we execute on Sunbelt 4.0, we expect a number of years of strong earnings
and free cash flow generation. Given this outlook, we have the opportunity to
enhance returns to shareholders, while maintaining leverage towards the middle
of our target range of 1.0 to 2.0 times net debt to EBITDA (excluding the IFRS
16). We are therefore commencing a new share buyback programme of up to $1.5bn
over the next 18 months.
Proposed move to a US primary listing
Today, the Group has announced separately a proposal to move the Group's
primary listing to the US over the next 12-18 months.
Further details are available at
www.ashtead-group.com/investors/regulatory-news
(http://www.ashtead-group.com/investors/regulatory-news) .
Current trading and outlook
Principally as a result of local commercial construction market dynamics in
the US, we now guide to Group rental revenue growth for the full year in the
range of 3-5% and hence, full year profit lower than our previous
expectations. We remain in a position of strength, with the operational
flexibility and financial capacity to capitalise on the ongoing structural
growth opportunities we see for the business and enhance returns to
shareholders as we follow our Sunbelt 4.0 plan and the Board looks to the
future with confidence.
Previous Current
guidance guidance
Rental revenue(1)
- US 4 to 7% 2 to 4%
- Canada 15 to 19% 15 to 19%
- UK 3 to 6% 3 to 6%
- Group 5 to 8% 3 to 5%
Capital expenditure (gross)(2) $3.0 - 3.3bn $2.5 - 2.7bn
Free cash flow(2) c. $1.2bn c. $1.4bn
( )
(1) Represents change in year-over-year rental revenue at constant exchange
rates
(2) Stated at C$1=$0.75 and £1=$1.27
Directors' responsibility statement
We confirm that to the best of our knowledge:
a) the condensed consolidated interim financial statements have been
prepared in accordance with IAS 34 'Interim Financial Reporting'; and
b) the interim management report includes a fair review of the information
required by Disclosure and Transparency Rule 4.2.7R (indication of important
events during the first six months and description of principal risks and
uncertainties for the remaining six months of the year) and Disclosure and
Transparency Rules 4.2.8R (disclosure of related parties' transactions and
changes therein).
By order of the Board
Alan Porter
Company secretary
9 December 2024
CONSOLIDATED INCOME STATEMENT FOR THE THREE MONTHS ENDED 31 October 2024
2024 2023
Before Before
amortisation Amortisation Total amortisation Amortisation Total
$m $m $m $m $m $m
Second quarter - unaudited
Revenue
Rental revenue 2,724.8 - 2,724.8 2,584.5 - 2,584.5
Sale of new equipment,
merchandise and consumables 90.1 - 90.1 100.4 - 100.4
Sale of used rental equipment 125.9 - 125.9 192.4 - 192.4
2,940.8 - 2,940.8 2,877.3 - 2,877.3
Operating costs
Staff costs (634.7) - (634.7) (635.1) - (635.1)
Other operating costs (784.7) - (784.7) (743.1) - (743.1)
Used rental equipment sold (111.2) - (111.2) (145.0) - (145.0)
(1,530.6) - (1,530.6) (1,523.2) - (1,523.2)
EBITDA(*) 1,410.2 - 1,410.2 1,354.1 - 1,354.1
Depreciation (584.8) - (584.8) (523.7) - (523.7)
Amortisation of intangibles - (29.2) (29.2) - (31.0) (31.0)
Operating profit 825.4 (29.2) 796.2 830.4 (31.0) 799.4
Interest income - - - 0.5 - 0.5
Interest expense (143.6) - (143.6) (134.0) - (134.0)
Profit on ordinary activities
before taxation 681.8 (29.2) 652.6 696.9 (31.0) 665.9
Taxation (173.8) 7.2 (166.6) (179.7) 7.8 (171.9)
Profit attributable to equity
holders of the Company 508.0 (22.0) 486.0 517.2 (23.2) 494.0
Basic earnings per share 116.2¢ (4.9¢) 111.3¢ 118.3¢ (5.3¢) 113.0¢
Diluted earnings per share 116.0¢ (5.0¢) 111.0¢ 117.8¢ (5.3¢) 112.5¢
(*) EBITDA is presented here as an alternative performance measure as it is
commonly used by investors and lenders.
All revenue and profit is generated from continuing operations.
CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 31 October 2024
2024 2023
Before Before
amortisation Amortisation Total amortisation Amortisation Total
$m $m $m $m $m $m
First half - unaudited
Revenue
Rental revenue 5,265.3 - 5,265.3 4,960.4 - 4,960.4
Sale of new equipment,
merchandise and consumables 181.7 - 181.7 196.8 - 196.8
Sale of used rental equipment 247.5 - 247.5 416.2 - 416.2
5,694.5 - 5,694.5 5,573.4 - 5,573.4
Operating costs
Staff costs (1,268.0) - (1,268.0) (1,253.3) - (1,253.3)
Other operating costs (1,516.5) - (1,516.5) (1,433.3) - (1,433.3)
Used rental equipment sold (212.1) - (212.1) (303.5) - (303.5)
(2,996.6) - (2,996.6) (2,990.1) - (2,990.1)
EBITDA(*) 2,697.9 - 2,697.9 2,583.3 - 2,583.3
Depreciation (1,155.5) - (1,155.5) (1,019.8) - (1,019.8)
Amortisation of intangibles - (57.9) (57.9) - (61.3) (61.3)
Operating profit 1,542.4 (57.9) 1,484.5 1,563.5 (61.3) 1,502.2
Interest income - - - 1.0 - 1.0
Interest expense (287.5) - (287.5) (252.7) - (252.7)
Profit on ordinary activities
before taxation 1,254.9 (57.9) 1,197.0 1,311.8 (61.3) 1,250.5
Taxation (321.9) 14.4 (307.5) (324.5) 15.4 (309.1)
Profit attributable to equity
holders of the Company 933.0 (43.5) 889.5 987.3 (45.9) 941.4
Basic earnings per share 213.6¢ (9.9¢) 203.7¢ 225.8¢ (10.5¢) 215.3¢
Diluted earnings per share 212.9¢ (10.0¢) 202.9¢ 224.6¢ (10.4¢) 214.2¢
(*) EBITDA is presented here as an alternative performance measure as it is
commonly used by investors and lenders.
All revenue and profit is generated from continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 OCTOBER 2024
Unaudited
Three months to Six months to
31 October 31 October
2024 2023 2024 2023
$m $m $m $m
Profit attributable to equity holders of the Company for the period 486.0 494.0 889.5 941.4
Items that will not be reclassified subsequently to profit or loss:
Movement on equity instrument held at fair value - - (25.5) -
Tax on movement on equity instruments held at fair value 2.7 - 2.7 -
2.7 - (22.8) -
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences (4.1) (80.5) 9.7 (40.2)
Loss on cash flow hedge 0.1 0.1 0.1 0.1
(4.0) (80.4) 9.8 (40.1)
Total other comprehensive loss for the period (1.3) (80.4) (13.0) (40.1)
Total comprehensive income for the period 484.7 413.6 876.5 901.3
CONSOLIDATED BALANCE SHEET AT 31 OCTOBER 2024
Unaudited Audited
31 October 30 April
2024 2023 2024
$m $m $m
Current assets
Inventories 159.9 180.4 162.0
Trade and other receivables 2,052.9 2,007.4 1,850.2
Current tax asset 53.2 28.4 13.0
Cash and cash equivalents 23.7 25.7 20.8
2,289.7 2,241.9 2,046.0
Non-current assets
Property, plant and equipment
- rental equipment 11,764.8 11,000.5 11,450.8
- other assets 1,927.1 1,602.2 1,797.7
13,691.9 12,602.7 13,248.5
Right-of-use assets 2,493.7 2,310.0 2,425.6
Goodwill 3,234.7 3,144.1 3,211.5
Other intangible assets 427.3 550.8 485.9
Other non-current assets 171.9 162.5 189.3
Current tax asset - 43.2 44.5
Net defined benefit pension plan asset - 18.2 -
20,019.5 18,831.5 19,605.3
Total assets 22,309.2 21,073.4 21,651.3
Current liabilities
Trade and other payables 1,385.2 1,601.6 1,482.9
Current tax liability 25.7 8.0 10.1
Lease liabilities 286.6 254.9 273.8
Provisions 45.6 41.6 42.5
1,743.1 1,906.1 1,809.3
Non-current liabilities
Lease liabilities 2,496.4 2,272.6 2,406.8
Long-term borrowings 8,186.0 8,141.7 7,995.1
Provisions 79.7 71.9 75.4
Deferred tax liabilities 2,242.7 2,129.6 2,224.2
Other non-current liabilities 63.1 56.4 55.5
Net defined benefit pension plan liability 0.4 - 0.4
13,068.3 12,672.2 12,757.4
Total liabilities 14,811.4 14,578.3 14,566.7
Equity
Share capital 81.8 81.8 81.8
Share premium account 6.5 6.5 6.5
Capital redemption reserve 20.0 20.0 20.0
Own shares held by the Company (818.7) (783.4) (818.7)
Own shares held by the ESOT (35.2) (43.5) (43.5)
Cumulative foreign exchange translation differences (253.8) (286.1) (263.5)
Retained reserves 8,497.2 7,499.8 8,102.0
Equity attributable to equity holders of the Company 7,497.8 6,495.1 7,084.6
Total liabilities and equity 22,309.2 21,073.4 21,651.3
Contingent consideration liabilities have been re-classified from current and
non-current provisions to trade and other payables and other non-current
liabilities in comparative periods.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31
OCTOBER 2024
Own Cumulative
Own shares foreign
Share Capital shares held exchange
Share premium redemption held by the by translation Retained
the ESOT
capital account reserve Company differences reserves Total
$m $m $m $m $m $m $m $m
Unaudited
At 1 May 2023 81.8 6.5 20.0 (740.9) (38.8) (245.9) 6,925.3 6,008.0
Profit for the period - - - - - - 941.4 941.4
Other comprehensive income:
Foreign currency - - - - - (40.2) - (40.2)
translation differences
Loss on cash flow hedge - - - - - - 0.1 0.1
Total comprehensive income - - - - - (40.2) 941.5 901.3
for the period
Dividends paid - - - - - - (368.3) (368.3)
Own shares purchased - - - - (29.8) - - (29.8)
by the ESOT
Own shares purchased - - - (42.5) - - - (42.5)
by the Company
Share-based payments - - - - 25.1 - (0.5) 24.6
Tax on share-based payments - - - - - - 1.8 1.8
At 31 October 2023 81.8 6.5 20.0 (783.4) (43.5) (286.1) 7,499.8 6,495.1
Profit for the period - - - - - - 657.0 657.0
Other comprehensive income:
Foreign currency translation differences - - - - - 22.6 - 22.6
Loss on cash flow hedge - - - - - - 0.1 0.1
Remeasurement of the defined benefit pension plan - - - - - - (22.6) (22.6)
Tax on defined benefit
pension scheme - - - - - - 5.6 5.6
Total comprehensive income
for the period - - - - - 22.6 640.1 662.7
Dividends paid - - - - - - (68.3) (68.3)
Own shares purchased
by the ESOT - - - - (0.1) - - (0.1)
Own shares purchased by
the Company - - - (35.3) - - - (35.3)
Share-based payments - - - - 0.1 - 22.8 22.9
Tax on share-based payments - - - - - - 7.6 7.6
At 30 April 2024 81.8 6.5 20.0 (818.7) (43.5) (263.5) 8,102.0 7,084.6
Profit for the period - - - - - - 889.5 889.5
Other comprehensive income:
Foreign currency translation
differences - - - - - 9.7 - 9.7
Loss on cash flow hedge - - - - - - 0.1 0.1
Movement on equity instruments held at fair value - - - - - - (25.5) (25.5)
Tax on movement on equity instruments held at fair value - - - - - - 2.7
2.7
Total comprehensive income
for the period - - - - - 9.7 866.8 876.5
Dividends paid - - - - - - (389.8) (389.8)
Own shares purchased
by the ESOT - - - - (84.9) - - (84.9)
Share-based payments - - - - 93.2 - (79.9) 13.3
Tax on share-based payments - - - - - - (1.9) (1.9)
At 31 October 2024 81.8 6.5 20.0 (818.7) (35.2) (253.8) 8,497.2 7,497.8
CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 OCTOBER 2024
Unaudited
2024 2023
$m $m
Cash flows from operating activities
Cash generated from operations before
changes in rental equipment 2,543.2 2,227.5
Payments for rental property, plant and equipment (1,518.2) (2,163.0)
Proceeds from disposal of rental property,
plant and equipment 214.8 327.5
Cash generated from operations 1,239.8 392.0
Financing costs paid (287.9) (234.0)
Tax paid (256.0) (187.6)
Net cash generated from/(used in) operating activities 695.9 (29.6)
Cash flows from investing activities
Acquisition of businesses (58.8) (676.1)
Financial asset investments - (5.0)
Payments for non-rental property, plant and equipment (305.8) (342.7)
Proceeds from disposal of non-rental
property, plant and equipment 29.9 17.4
Net cash used in investing activities (334.7) (1,006.4)
Cash flows from financing activities
Drawdown of loans 840.4 2,475.5
Redemption of loans (657.1) (942.4)
Repayment of principal under lease liabilities (69.3) (60.8)
Dividends paid (387.4) (367.7)
Purchase of own shares by the ESOT (84.9) (29.8)
Purchase of own shares by the Company - (42.6)
Net cash (used in)/generated from financing activities (358.3) 1,032.2
Increase/(decrease) in cash and cash equivalents 2.9 (3.8)
Opening cash and cash equivalents 20.8 29.9
Effect of exchange rate differences - (0.4)
Closing cash and cash equivalents 23.7 25.7
Reconciliation of net cash flows to net debt
(Increase)/decrease in cash and
cash equivalents in the period (2.9) 3.8
Increase in debt through cash flow 114.0 1,472.3
Change in net debt from cash flows 111.1 1,476.1
Exchange differences 2.3 (44.4)
Debt acquired 18.6 96.7
Deferred costs of debt raising 4.8 3.8
New lease liabilities 153.6 151.8
Increase in net debt in the period 290.4 1,684.0
Net debt at 1 May 10,654.9 8,959.5
Net debt at 31 October 10,945.3 10,643.5
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. General information
Ashtead Group plc ('the Company') is a company incorporated and domiciled in
England and Wales and listed on the London Stock Exchange. The condensed
consolidated interim financial statements as at, and for the six months ended
31 October 2024, comprise the Company and its subsidiaries ('the Group') and
are presented in US dollars.
The condensed consolidated interim financial statements for the six months
ended 31 October 2024 were approved by the directors on 9 December 2024.
The condensed consolidated interim financial statements do not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
statutory accounts for the year ended 30 April 2024 were approved by the
directors on 17 June 2024 and have been mailed to shareholders and filed with
the Registrar of Companies. The auditor's report on those accounts was
unqualified, did not include a reference to any matter by way of emphasis and
did not contain a statement under Section 498(2) or (3) of the Companies Act
2006.
The condensed consolidated interim financial statements for the six months
ended 31 October 2024 are unaudited but have been reviewed by the Group's
auditors. Their report is on page 33.
Details of principal risks and uncertainties are given in the Review of Second
Quarter, Balance Sheet and Cash Flow accompanying these condensed consolidated
interim financial statements.
2. Basis of preparation
The condensed consolidated interim financial statements for the six months
ended 31 October 2024 have been prepared in accordance with relevant
UK-adopted International Accounting Standards ('IFRS'), including IAS 34,
Interim Financial Reporting, the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority and the
accounting policies set out in the Group's Annual Report & Accounts for
the year ended 30 April 2024.
In preparing the financial statements, the exchange rates used in respect of
the pound sterling (£) and Canadian dollar (C$) are:
Pound sterling Canadian dollar
2024 2023 2024 2023
Average for the three months ended 31 October 1.31 1.24 0.73 0.74
Average for the six months ended 31 October 1.29 1.25 0.73 0.74
At 30 April 1.25 1.26 0.73 0.74
At 31 October 1.29 1.21 0.72 0.72
The directors have adopted various alternative performance measures to provide
additional useful information on the underlying trends, performance and
position of the Group. The alternative performance measures are not defined
by IFRS and therefore may not be directly comparable with other companies'
alternative performance measures but are defined within the Glossary of Terms
on page 35.
The condensed consolidated interim financial statements have been prepared on
the going concern basis. The Group's internal budgets and forecasts of
future performance, available financing facilities and facility headroom (see
Note 13), provide a reasonable expectation that the Group has adequate
resources to continue in operation for the foreseeable future and consequently
the going concern basis continues to be appropriate in preparing the financial
statements.
3. Segmental analysis
Three months to 31 October 2024 (unaudited)
Corporate
US Canada UK items Group
$m $m $m $m $m
Revenue
Rental revenue 2,343.6 173.9 207.3 - 2,724.8
Sale of new equipment, merchandise
and consumables 61.0 9.2 19.9 - 90.1
Sale of used rental equipment 104.6 7.0 14.3 - 125.9
2,509.2 190.1 241.5 - 2,940.8
Segment profit 762.4 47.5 24.7 (9.2) 825.4
Amortisation (29.2)
Net financing costs (143.6)
Profit before taxation 652.6
Taxation (166.6)
Profit attributable to equity shareholders 486.0
Three months to 31 October 2023 (unaudited)
Corporate
US Canada UK items Group
$m $m $m $m $m
Revenue
Rental revenue 2,251.0 146.3 187.2 - 2,584.5
Sale of new equipment, merchandise
and consumables 69.1 12.3 19.0 - 100.4
Sale of used rental equipment 160.6 13.2 18.6 - 192.4
2,480.7 171.8 224.8 - 2,877.3
Segment profit 789.2 29.6 21.0 (9.4) 830.4
Amortisation (31.0)
Net financing costs (133.5)
Profit before taxation 665.9
Taxation (171.9)
Profit attributable to equity shareholders 494.0
Six months to 31 October 2024 (unaudited)
Corporate
US Canada UK items Group
$m $m $m $m $m
Revenue
Rental revenue 4,518.0 336.0 411.3 - 5,265.3
Sale of new equipment, merchandise
and consumables 121.6 18.7 41.4 - 181.7
Sale of used rental equipment 204.6 16.8 26.1 - 247.5
4,844.2 371.5 478.8 - 5,694.5
Segment profit 1,431.8 81.4 47.1 (17.9) 1,542.4
Amortisation (57.9)
Net financing costs (287.5)
Profit before taxation 1,197.0
Taxation (307.5)
Profit attributable to equity shareholders 889.5
Six months to 31 October 2023 (unaudited)
Corporate
US Canada UK items Group
$m $m $m $m $m
Revenue
Rental revenue 4,299.2 283.6 377.6 - 4,960.4
Sale of new equipment, merchandise
and consumables 132.0 25.8 39.0 - 196.8
Sale of used rental equipment 360.9 22.1 33.2 - 416.2
4,792.1 331.5 449.8 - 5,573.4
Segment profit 1,481.1 59.7 41.0 (18.3) 1,563.5
Amortisation (61.3)
Net financing costs (251.7)
Profit before taxation 1,250.5
Taxation (309.1)
Profit attributable to equity shareholders 941.4
Corporate
US Canada UK items Group
$m $m $m $m $m
At 31 October 2024 (unaudited)
Segment assets 18,697.1 1,942.4 1,587.4 5.4 22,232.3
Cash 23.7
Taxation assets 53.2
Total assets 22,309.2
At 30 April 2024 (audited)
Segment assets 18,148.4 1,901.0 1,517.1 6.5 21,573.0
Cash 20.8
Taxation assets 57.5
Total assets 21,651.3
4. Operating costs and other income
2024 2023
Before Before
amortisation
amortisation Amortisation Total Amortisation Total
$m $m $m $m $m $m
Three months to 31 October (unaudited)
Staff costs:
Salaries 579.7 - 579.7 582.1 - 582.1
Social security costs 42.8 - 42.8 41.7 - 41.7
Other pension costs 12.2 - 12.2 11.3 - 11.3
634.7 - 634.7 635.1 - 635.1
Other operating costs:
Vehicle costs 200.9 - 200.9 182.6 - 182.6
Spares, consumables & external repairs 156.4 - 156.4 140.4 - 140.4
Facility costs 28.4 - 28.4 28.0 - 28.0
Other external charges 399.0 - 399.0 392.1 - 392.1
784.7 - 784.7 743.1 - 743.1
Used rental equipment sold 111.2 - 111.2 145.0 - 145.0
Depreciation and amortisation:
Depreciation of tangible assets 532.7 - 532.7 474.7 - 474.7
Depreciation of right-of-use assets 52.1 - 52.1 49.0 - 49.0
Amortisation of intangibles - 29.2 29.2 - 31.0 31.0
584.8 29.2 614.0 523.7 31.0 554.7
2,115.4 29.2 2,144.6 2,046.9 31.0 2,077.9
2024 2023
Before Before amortisation
amortisation Amortisation Total Amortisation Total
$m $m $m $m $m $m
Six months to 31 October
(unaudited)
Staff costs:
Salaries 1,158.1 - 1,158.1 1,147.2 - 1,147.2
Social security costs 85.8 - 85.8 83.0 - 83.0
Other pension costs 24.1 - 24.1 23.1 - 23.1
1,268.0 - 1,268.0 1,253.3 - 1,253.3
Other operating costs:
Vehicle costs 381.4 - 381.4 344.6 - 344.6
Spares, consumables & external repairs 293.7 - 293.7 281.9 - 281.9
Facility costs 55.9 - 55.9 56.6 - 56.6
Other external charges 785.5 - 785.5 750.2 - 750.2
1,516.5 - 1,516.5 1,433.3 - 1,433.3
Used rental equipment sold 212.1 - 212.1 303.5 - 303.5
Depreciation and amortisation:
Depreciation of tangible assets 1,051.1 - 1,051.1 922.8 - 922.8
Depreciation of right-of-use assets 104.4 - 104.4 97.0 - 97.0
Amortisation of intangibles - 57.9 57.9 - 61.3 61.3
1,155.5 57.9 1,213.4 1,019.8 61.3 1,081.1
4,152.1 57.9 4,210.0 4,009.9 61.3 4,071.2
5. Amortisation
Amortisation relates to the write-off of intangible assets over their
estimated useful economic life. The Group believes this item should be
disclosed separately within the consolidated income statement to assist in the
understanding of the financial performance of the Group. Adjusted profit and
earnings per share are stated before amortisation of intangibles.
Unaudited
Three months to Six months to
31 October 31 October
2024 2023 2024 2023
$m $m $m $m
Amortisation of intangibles 29.2 31.0 57.9 61.3
Taxation (7.2) (7.8) (14.4) (15.4)
22.0 23.2 43.5 45.9
6. Net financing costs
Unaudited
Three months to Six months to
31 October 31 October
2024 2023 2024 2023
$m $m $m $m
Interest income:
Net income on the defined benefit pension plan asset - 0.2 - 0.4
Other interest - 0.3 - 0.6
- 0.5 - 1.0
Interest expense:
Bank interest payable 33.9 42.7 68.7 82.0
Interest payable on senior notes 69.8 57.5 139.7 104.5
Interest payable on lease liabilities 36.2 31.2 71.7 61.1
Non-cash unwind of discount on liabilities 1.3 0.5 2.6 1.0
Amortisation of deferred debt raising costs 2.4 2.1 4.8 4.1
143.6 134.0 287.5 252.7
7. Taxation
The tax charge for the period has been determined by applying the expected
effective tax rates in each jurisdiction for the year as a whole, based on the
tax rates in force as at 31 October 2024 of 25% in the US (2023: 25%), 26% in
Canada (2023: 26%) and 25% in the UK (2023: 25%). This results in a blended
effective rate for the Group as a whole of 26% (2023: 25%) for the period.
The tax charge of $322m (2023: $324m) on the adjusted profit before taxation
of $1,255m (2023: $1,312m) can be explained as follows:
Unaudited
Six months to 31 October
2024 2023
$m $m
Current tax
- current tax on income for the period 298.9 186.8
- adjustments to prior year 0.1 2.8
299.0 189.6
Deferred tax
- origination and reversal of temporary differences 23.0 151.7
- adjustments to prior year (0.1) (16.8)
22.9 134.9
Tax on adjusted profit 321.9 324.5
Comprising:
- US 303.6 315.0
- Canada 13.8 7.8
- UK 4.5 1.7
321.9 324.5
In addition, the tax credit of $14m (2023: $15m) on amortisation of $58m
(2023: $61m) consists of a current tax credit of $7m (2023: $6m) relating to
the US, $0.3m (2023: $0.1m) relating to Canada and $nil (2023: $nil) relating
to the UK and a deferred tax credit of $4m (2023: $5m) relating to the US,
$2m (2023: $3m) relating to Canada and $1m (2023: $1m) relating to the UK.
Following its state aid investigation, in April 2019 the European Commission
announced its decision that the Group Financing Exemption in the UK controlled
foreign company ('CFC') legislation constitutes state aid in some
circumstances. In common with the UK Government and other UK-based
international companies, the Group did not agree with the decision and lodged
a formal appeal with the General Court of the European Union. The Group's
appeal was stayed while the appeals put forward by the UK Government and ITV
plc proceeded.
On 8 June 2022 the General Court of the European Union dismissed the appeals
put forward by the UK Government and ITV plc. However, they appealed the
decision to the Court of Justice of the European Union. The Court of Justice
of the European Union held a hearing on the case in January 2024 and the
Advocate-General's opinion was published in April 2024, proposing that the
Court of Justice of the European Union set aside the judgement of the General
Court and annul the decision made by the European Commission. On 19 September
2024, the Court of Justice of the European Union followed the recommendation
of the Advocate-General's opinion and annulled the European Commission
decision.
Despite the UK Government appealing the European Commission's decision, His
Majesty's Revenue & Customs ('HMRC') was required to assess the tax
liability which would arise if the decision was not appealed successfully.
Accordingly, HMRC issued a charging notice stating that the tax liability due
was £36m, including interest payable. The Group appealed the charging
notice but had to settle the amount assessed on it, including interest, in
line with HMRC requirements. As a result of the Court of Justice of the
European Union decision to annul the European Commission decision, the Group
has no liability in relation to this matter and the entire amount paid is
recoverable from HMRC.
The £36m ($46m at October 2024 exchange rates) paid has been recognised as a
current asset on the balance sheet. It has been re-classified from non-current
assets based on an expectation that amounts will be repaid by HMRC during the
next 12 months.
8. Earnings per share
Basic and diluted earnings per share for the three and six months ended 31
October 2024 have been calculated based on the profit for the relevant period
and the weighted average number of ordinary shares in issue during that period
(excluding shares held by the Company and the ESOT over which dividends have
been waived). Diluted earnings per share is computed using the result for
the relevant period and the diluted number of shares (ignoring any potential
issue of ordinary shares which would be anti-dilutive). These are calculated
as follows:
Unaudited
Three months to Six months to
31 October 31 October
2024 2023 2024 2023
Profit for the financial period ($m) 486.0 494.0 889.5 941.4
Weighted average number of shares (m) - basic 436.9 437.2 436.7 437.3
- diluted 437.8 439.3 438.3 439.6
Basic earnings per share 111.3¢ 113.0¢ 203.7¢ 215.3¢
Diluted earnings per share 111.0¢ 112.5¢ 202.9¢ 214.2¢
Adjusted earnings per share (defined in any period as the earnings before
exceptional items and amortisation for that period divided by the weighted
average number of shares in issue in that period) may be reconciled to the
basic earnings per share as follows:
Unaudited
Three months to Six months to
31 October 31 October
2024 2023 2024 2023
Basic earnings per share 111.3¢ 113.0¢ 203.7¢ 215.3¢
Amortisation of intangibles 6.6¢ 7.1¢ 13.2¢ 14.0¢
Tax on amortisation (1.7¢) (1.8¢) (3.3¢) (3.5¢)
Adjusted earnings per share 116.2¢ 118.3¢ 213.6¢ 225.8¢
9. Dividends
During the period, a final dividend in respect of the year ended 30 April 2024
of 89.25¢ (2023: 85.0¢) per share was paid to shareholders resulting in a
cash outflow of $387m (2023: $368m). In addition, the directors have
declared an interim dividend in respect of the year ending 30 April 2025 of
36¢ (2023: 15.75¢) per share to be paid on 7 February 2025 to shareholders
who are on the register of members on 10 January 2025.
10. Property, plant and equipment
2024 2023
Rental Rental
equipment Total equipment Total
Net book value $m $m $m $m
At 1 May 11,450.8 13,248.5 9,649.1 11,041.1
Exchange differences 9.5 10.1 (43.7) (50.5)
Reclassifications 0.6 - (0.4) -
Additions 1,373.7 1,679.4 2,185.8 2,525.8
Acquisitions 26.0 28.5 291.8 309.2
Disposals (201.3) (223.5) (289.1) (300.1)
Depreciation (894.5) (1,051.1) (793.0) (922.8)
At 31 October 11,764.8 13,691.9 11,000.5 12,602.7
11. Right-of-use assets
2024 2023
Property Other Property Other
Net book value leases leases Total leases leases Total
$m $m $m $m $m $m
At 1 May 2,390.5 35.1 2,425.6 2,184.8 21.2 2,206.0
Exchange differences (1.1) 0.9 (0.2) (9.6) (0.7) (10.3)
Additions 113.1 3.9 117.0 154.1 11.0 165.1
Acquisitions 18.6 - 18.6 53.6 - 53.6
Remeasurement 44.1 - 44.1 39.6 - 39.6
Disposals (6.5) (0.5) (7.0) (46.6) (0.4) (47.0)
Depreciation (100.3) (4.1) (104.4) (94.0) (3.0) (97.0)
At 31 October 2,458.4 35.3 2,493.7 2,281.9 28.1 2,310.0
12. Lease liabilities
31 October 30 April
2024 2024
$m $m
Current 286.6 273.8
Non-current 2,496.4 2,406.8
2,783.0 2,680.6
13. Borrowings
31 October 30 April
2024 2024
$m $m
Non-current
First priority senior secured bank debt 2,035.3 1,848.0
1.500% senior notes, due August 2026 548.2 547.8
4.375% senior notes, due August 2027 597.1 596.6
4.000% senior notes, due May 2028 596.5 596.0
4.250% senior notes, due November 2029 595.7 595.3
2.450% senior notes, due August 2031 744.9 744.6
5.500% senior notes, due August 2032 739.4 738.8
5.550% senior notes, due May 2033 743.7 743.4
5.950% senior notes, due October 2033 744.3 744.1
5.800% senior notes, due April 2034 840.9 840.5
8,186.0 7,995.1
The senior secured bank debt is secured by way of fixed and floating charges
over substantially all the Group's property, plant and equipment, inventory
and trade receivables and is now committed until November 2029 (see Note
17). The senior notes are guaranteed by Ashtead Group plc and all its
principal subsidiary undertakings.
Our debt facilities are committed for the long term, with an average maturity
of five years and a weighted average interest cost (including non-cash
amortisation of deferred debt raising costs) of 5%.
There is one financial performance covenant under the first priority senior
credit facility. That is the fixed charge ratio (comprising EBITDA before
exceptional items less net capital expenditure paid in cash over the sum of
scheduled debt repayments plus cash interest, cash tax payments and dividends
paid in the last twelve months) which, must be equal to, or greater than, 1.0.
This covenant does not apply when availability exceeds $450m. At 31 October
2024, availability under the senior secured bank facility was $2,571m ($2,771m
at 30 April 2024), with an additional $6,907m of suppressed availability,
meaning that the covenant did not apply at 31 October 2024 and is unlikely to
apply in forthcoming quarters.
Fair value of financial instruments
Financial assets and liabilities are measured in accordance with the fair
value hierarchy and assessed as Level 1, 2 or 3 based on the following
criteria:
- Level 1: fair value measurement based on quoted prices (unadjusted)
in active markets for identical assets or liabilities;
- Level 2: fair value measurements derived from inputs other than
quoted prices that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
- Level 3: fair value measurements derived from valuation techniques
that include inputs for the asset or liability that are not based on
observable market data.
Fair value of derivative financial instruments
At 31 October 2024, the Group had no derivative financial instruments. The
embedded prepayment options included within the senior notes are either
closely related to the host debt contract or immaterial and hence, are not
accounted for separately. These loan notes are carried at amortised cost.
Fair value of non-derivative financial assets and liabilities
The table below provides a comparison, by category of the carrying amounts and
the fair values of the Group's non-derivative financial assets and
liabilities.
At 31 October 2024 At 30 April 2024
Book value Fair Book value Fair
value value
$m $m $m $m
Long-term borrowings
- first priority senior secured bank debt Level 1 2,035.3 2,035.3 1,848.0 1,848.0
- 1.500% senior notes Level 1 550.0 517.9 550.0 498.1
- 4.375% senior notes Level 1 600.0 590.7 600.0 571.5
- 4.000% senior notes Level 1 600.0 577.7 600.0 559.9
- 4.250% senior notes Level 1 600.0 571.1 600.0 549.9
- 2.450% senior notes Level 1 750.0 623.4 750.0 596.5
- 5.500% senior notes Level 1 750.0 748.6 750.0 719.9
- 5.550% senior notes Level 1 750.0 747.8 750.0 719.2
- 5.950% senior notes Level 1 750.0 768.1 750.0 739.7
- 5.800% senior notes Level 1 850.0 861.2 850.0 828.3
Total long-term borrowings 8,235.3 8,041.8 8,048.0 7,631.0
Discount on issue of debt (13.2) - (14.0) -
Deferred costs of raising finance (36.1) - (38.9) -
8,186.0 8,041.8 7,995.1 7,631.0
Other financial instruments(1)
Contingent consideration Level 3 24.7 24.7 31.4 31.4
Financial asset investments Level 3 31.5 31.5 57.0 57.0
Cash and cash equivalents Level 1 23.7 23.7 20.8 20.8
( )
(1) The Group's trade and other receivables and trade and other payables,
excluding contingent consideration, are not shown in the table above. The
carrying amounts of these financial assets and liabilities approximate their
fair values.
Contingent consideration is a Level 3 financial liability. Future
anticipated payments to vendors in respect of contingent consideration are
initially recorded at fair value which is the present value of the expected
cash outflows of the obligations. The obligations are dependent upon the
future financial performance of the businesses acquired. The fair value is
estimated based on internal financial projections prepared in relation to the
acquisition with the contingent consideration discounted to present value
using a discount rate in line with the Group's cost of debt. The movement
since 30 April 2024 can be attributed to $6m of payments (see Note 15) and $2m
released, offset by $1m of discount unwind and foreign exchange differences.
Financial asset investments are measured at fair value and are Level 3
financial assets. These assets are measured at fair value through other
comprehensive income. Their fair values are estimated based on the latest
transaction price and any subsequent investment-specific adjustments. During
the period, one of the Group's investments failed to secure additional funding
and commenced Chapter 7 bankruptcy proceedings in August 2024. As a result,
the Group has estimated the fair value of its investment as $nil and
consequently recognised a movement in the fair value of the equity investment
of $25m through other comprehensive income.
14. Share capital
Ordinary shares of 10p each:
31 October 30 April 31 October 30 April
2024 2024 2024 2024
Number Number $m $m
Issued and fully paid 451,354,833 451,354,833 81.8 81.8
At 31 October 2024, 14.1m (April 2024: 14.1m) shares were held by the Company
($819m; April 2024: $819m) and a further 0.5m (April 2024: 0.9m) shares were
held by the Company's Employee Share Ownership Trust ($35m; April 2024: $43m).
15. Notes to the cash flow statement
a) Cash flow from operating activities
Six months to 31 October
2024 2023
$m $m
Operating profit 1,484.5 1,502.2
Depreciation 1,155.5 1,019.8
Amortisation 57.9 61.3
EBITDA 2,697.9 2,583.3
Profit on disposal of rental equipment (35.4) (112.7)
Profit on disposal of other property, plant and equipment (8.6) (11.7)
Decrease in inventories 0.8 -
Increase in trade and other receivables (185.0) (258.6)
Increase in trade and other payables 59.4 3.9
Exchange differences 0.8 (1.3)
Other non-cash movement 13.3 24.6
Cash generated from operations before
changes in rental equipment 2,543.2 2,227.5
b) Analysis of net debt
Net debt consists of total borrowings and lease liabilities less cash and cash
equivalents. Borrowings exclude accrued interest. Non-US dollar
denominated balances are translated to US dollars at rates of exchange ruling
at the balance sheet date.
Non-cash movements
1 May Cash Exchange Debt New lease Other 31 October
2024 flow movement acquired liabilities movements 2024
$m $m $m $m $m $m $m
Long-term borrowings 7,995.1 183.3 2.8 - - 4.8 8,186.0
Lease liabilities 2,680.6 (69.3) (0.5) 18.6 153.6 - 2,783.0
Total liabilities from
financing activities 10,675.7 114.0 2.3 18.6 153.6 4.8 10,969.0
Cash and cash
equivalents (20.8) (2.9) - - - - (23.7)
Net debt 10,654.9 111.1 2.3 18.6 153.6 4.8 10,945.3
Non-cash movements
1 May Cash Exchange Debt New lease Other 31 October
2023 flow movement acquired liabilities movements 2023
$m $m $m $m $m $m $m
Long-term borrowings 6,595.1 1,533.1 (33.4) 43.1 - 3.8 8,141.7
Lease liabilities 2,394.3 (60.8) (11.4) 53.6 151.8 - 2,527.5
Total liabilities from
financing activities 8,989.4 1,472.3 (44.8) 96.7 151.8 3.8 10,669.2
Cash and cash
equivalents (29.9) 3.8 0.4 - - - (25.7)
Net debt 8,959.5 1,476.1 (44.4) 96.7 151.8 3.8 10,643.5
Details of the Group's cash and debt are given in Notes 12 and 13 and the
Review of Second Quarter, Balance Sheet and Cash Flow accompanying these
condensed consolidated interim financial statements.
c) Acquisitions
Six months to 31 October
2024 2023
$m $m
Cash consideration paid:
- acquisitions in the period 53.1 655.5
- contingent consideration 5.7 20.6
58.8 676.1
During the period, two businesses were acquired with cash paid of $53m (2023:
$656m), after taking account of net cash acquired of $nil (2023: $3m).
Further details are provided in Note 16.
Contingent consideration of $6m (2023: $21m) was paid relating to prior year
acquisitions.
16. Acquisitions
The Group undertakes bolt-on acquisitions to complement its organic growth
strategy. During the period, the following acquisitions were completed:
i) On 21 May 2024, Sunbelt US acquired the business and assets
of RentalMax, LLC ('RentalMax'). RentalMax is a general tool business
operating in Illinois.
ii) On 25 June 2024, Sunbelt Canada acquired the business and
assets of Wave Equipment Ltd. ('Wave'). Wave is a general tool business
operating in Ontario.
The following table sets out the fair value of the identifiable assets and
liabilities acquired by the Group. The fair values have been determined
provisionally at the balance sheet date.
Fair value
to the Group
$m
Net assets acquired
Trade and other receivables 1.9
Property, plant and equipment
- rental equipment 26.0
- other assets 2.5
Right-of-use assets 18.6
Deferred tax 0.1
Creditors (1.9)
Lease liabilities (18.6)
28.6
Consideration:
- cash paid and due to be paid (net of cash acquired) 52.6
Goodwill 24.0
The goodwill arising can be attributed to the key management personnel and
workforce of the acquired businesses, the benefits through advancing our
clusters and leveraging cross-selling opportunities, and to the synergies and
other benefits the Group expects to derive from the acquisitions. The
synergies and other benefits include elimination of duplicate costs, improving
utilisation of the acquired rental fleet, using the Group's financial strength
to invest in the acquired business and drive improved returns through a
semi-fixed cost base and the application of the Group's proprietary software
to optimise revenue opportunities. $24m of the goodwill is expected to be
deductible for income tax purposes.
The gross value and the fair value of trade receivables at acquisition was
$2m.
Due to the operational integration of acquired businesses post-acquisition, in
particular due to the merger of some stores, the movement of rental equipment
between stores and investment in the rental fleet, it is not practical to
report the revenue and profit of the acquired businesses post-acquisition.
The revenue and operating profit of these acquisitions from 1 May 2024 to
their date of acquisition was not material.
17. Events after the balance sheet date
In November 2024, the Group amended and extended its asset-based senior bank
facility, with $4.75bn now committed until November 2029. Pricing has been
amended and is based on the applicable interest rate plus 125bps to 137.5bps
(125bps to 150bps previously), depending on availability. The applicable
interest rate is based on SOFR for US dollar loans, CORRA for Canadian dollar
loans and SONIA for Sterling loans. Other principal terms and conditions
remain unchanged. The Group's debt facilities are now committed for an average
of six years at a weighted average cost of 5%.
On 3 December 2024, Sunbelt UK acquired the entire share capital of JLL Group
('JLL'). JLL is a specialty business.
The initial accounting for this acquisition is incomplete given the proximity
to the year end. Had this acquisition taken place on 1 May 2024, its
contribution to revenue and operating profit would not have been material.
REVIEW OF SECOND QUARTER, BALANCE SHEET AND CASH FLOW
Second quarter
Revenue EBITDA Profit(1)
2024 2023 2024 2023 2024 2023
Canada in C$m 259.6 233.2 127.9 97.3 64.8 40.2
UK in £m 184.8 181.0 55.9 52.2 18.9 16.9
US 2,509.2 2,480.7 1,252.5 1,226.7 762.4 789.2
Canada in $m 190.1 171.8 93.6 71.6 47.5 29.6
UK in $m 241.5 224.8 73.0 64.8 24.7 21.0
Group central costs - - (8.9) (9.0) (9.2) (9.4)
2,940.8 2,877.3 1,410.2 1,354.1 825.4 830.4
Financing costs (143.6) (133.5)
Adjusted profit before tax 681.8 696.9
Amortisation (29.2) (31.0)
Profit before taxation 652.6 665.9
Margins as reported
US 49.9% 49.5% 30.4% 31.8%
Canada 49.2% 41.7% 25.0% 17.3%
UK 30.2% 28.8% 10.2% 9.3%
Group 48.0% 47.1% 28.1% 28.9%
(1) Segment result presented is operating profit before amortisation.
Group revenue for the quarter increased 2% to $2,941m (2023: $2,877m).
Adjusted profit before tax for the quarter decreased to $682m (2023: $697m).
US rental only revenue in the quarter was 4% higher than a year ago. This
consisted of our General Tool business which was 1% higher than last year
while our Specialty businesses were 14% higher than a year ago.
Canada's rental only revenue increased 20% to C$194m (2023: C$162m), while
total revenue was C$260m (2023: C$233m). Following settlement of the Writers
Guild of America and Screen Actors Guild strikes, activity in the Specialty
Film & TV business has recovered, although it is below pre-strike levels,
which is likely to be the new normal.
The UK generated rental only revenue in the quarter of £124m (2023: £119m),
4% higher than the prior year. Total revenue increased 2% to £185m (2023:
£181m).
Group adjusted operating profit decreased 1% to $825m (2023: $830m). After
financing costs of $144m (2023: $134m), Group adjusted profit before tax was
$682m (2023: $697m). After amortisation of $29m (2023: $31m), statutory
profit before taxation was $653m (2023: $666m).
Balance sheet
Property, plant and equipment
Capital expenditure in the first half totalled $1,679m (2023: $2,526m) with
$1,374m invested in the rental fleet (2023: $2,186m). Expenditure on rental
equipment was 82% of total capital expenditure with the balance relating to
the delivery vehicle fleet, property improvements and IT equipment. Capital
expenditure by division was:
2024 2023
Replacement Growth Total Total
Canada in C$m 61.4 116.3 177.7 163.7
UK in £m 53.3 25.7 79.0 116.4
US 579.4 562.4 1,141.8 1,918.1
Canada in $m 44.9 85.1 130.0 121.7
UK in $m 68.8 33.1 101.9 146.0
Total rental equipment 693.1 680.6 1,373.7 2,185.8
Delivery vehicles, property improvements & IT equipment 305.7 340.0
Total additions 1,679.4 2,525.8
In the US, $562m of rental equipment capital expenditure was spent on growth
while $579m was invested in replacement of existing fleet. The growth
proportion is estimated based on the assumption that replacement capital
expenditure in any period is equal to the original cost of equipment sold.
In a period of inflation, this understates replacement capital expenditure
and overstates growth capital expenditure. Life cycle inflation is c. 20%.
The average age of the Group's serialised rental equipment, which constitutes
the substantial majority of our fleet, at 31 October 2024 was 46 months (2023:
47 months) on an original cost basis. The US fleet had an average age of 45
months (2023: 46 months), the Canadian fleet had an average age of 51 months
(2023: 53 months) and the UK fleet had an average age of 51 months (2023: 50
months).
Rental fleet at original cost LTM rental LTM dollar
revenue utilisation
31 October 2024 30 April 2024 LTM average
Canada in C$m 1,875 1,751 1,754 843 48%
UK in £m 1,155 1,130 1,141 608 53%
US 15,653 15,057 15,152 8,540 56%
Canada in $m 1,345 1,274 1,289 619 48%
UK in $m 1,484 1,414 1,456 776 53%
18,482 17,745 17,897 9,935
Dollar utilisation was 56% in the US (2023: 60%), 48% for Canada (2023: 50%)
and 53% for the UK (2023: 52%). The decrease in US dollar utilisation is due
to principally lower physical utilisation while Canadian dollar utilisation
reflects both lower physical utilisation and the remaining drag from the Film
& TV business.
Trade receivables
Receivable days at 31 October 2024 were 48 days (2023: 49 days). The bad
debt charge for the last twelve months ended 31 October 2024 as a percentage
of total turnover was 0.8% (2023: 0.4%). Trade receivables at 31 October
2024 of $1,710m (2023: $1,682m) are stated net of allowances for bad debts and
credit notes of $151m (2023: $119m), with the provision representing 8%
(2023: 7%) of gross receivables.
Trade and other payables
Group payable days were 47 days at 31 October 2024 (2023: 45 days) with
capital expenditure related payables totalling $374m (2023: $635m). Payment
periods for purchases other than rental equipment vary between seven and 60
days and for rental equipment between 30 and 120 days.
Cash flow and net debt
Six months to LTM to Year to
31 October 31 October 30 April
2024 2023 2024 2024
$m $m $m $m
EBITDA 2,697.9 2,583.3 5,007.2 4,892.6
Cash inflow from operations before
changes in rental equipment 2,543.2 2,227.5 4,856.7 4,541.0
Cash conversion ratio* 94.3% 86.2% 97.0% 92.8%
Replacement rental capital expenditure (930.6) (1,115.5) (1,936.1) (2,121.0)
Payments for non-rental capital expenditure (305.8) (342.7) (648.7) (685.6)
Rental equipment disposal proceeds 214.8 327.5 719.0 831.7
Other property, plant and equipment disposal proceeds 29.9 17.4 60.0 47.5
Tax paid (256.0) (187.6) (314.2) (245.8)
Financing costs (287.9) (234.0) (567.0) (513.1)
Cash inflow before growth capex 1,007.6 692.6 2,169.7 1,854.7
Growth rental capital expenditure (587.6) (1,047.5) (1,178.3) (1,638.2)
Free cash flow 420.0 (354.9) 991.4 216.5
Business acquisitions (58.8) (676.1) (258.3) (875.6)
Business disposals - - 1.9 1.9
Financial asset investments - (5.0) (10.0) (15.0)
Total cash generated/(absorbed) 361.2 (1,036.0) 725.0 (672.2)
Dividends (387.4) (367.7) (455.8) (436.1)
Purchase of own shares by the ESOT (84.9) (29.8) (85.0) (29.9)
Purchase of own shares by the Company - (42.6) (35.8) (78.4)
Increase in net debt due to cash flow (111.1) (1,476.1) 148.4 (1,216.6)
* Cash inflow from operations before changes in rental equipment as a
percentage of EBITDA.
Cash inflow from operations before the net investment in the rental fleet was
$2,543m
(2023: $2,228m). The conversion ratio for the period was 94% (2023: 86%).
Total payments for capital expenditure (rental equipment and other PPE) during
the first half were $1,824m (2023: $2,506m). Disposal proceeds received
totalled $245m (2023: $345m), giving net payments for capital expenditure of
$1,579m in the period (2023: $2,161m). Financing costs paid totalled $288m
(2023: $234m) while tax payments were $256m (2023: $188m). Financing costs
paid typically differ from the charge in the income statement due to the
timing of interest payments in the period and non-cash interest charges.
Accordingly, the period saw a free cash flow of $420m (2023: outflow of $355m)
and, after acquisition and investment related expenditure of $59m (2023:
$681m), a cash flow of $361m (2023: outflow of $1,036m), before returns to
shareholders.
Net debt
31 October 30 April
2024 2023 2024
$m $m $m
First priority senior secured bank debt 2,035.3 2,838.5 1,848.0
1.500% senior notes, due 2026 548.2 547.3 547.8
4.375% senior notes, due 2027 597.1 596.1 596.6
4.000% senior notes, due 2028 596.5 595.6 596.0
4.250% senior notes, due 2029 595.7 595.0 595.3
2.450% senior notes, due 2031 744.9 744.2 744.6
5.500% senior notes, due 2032 739.4 738.3 738.8
5.550% senior notes, due 2033 743.7 743.1 743.4
5.950% senior notes, due 2033 744.3 743.6 744.1
5.800% senior notes, due 2034 840.9 - 840.5
Total external borrowings 8,186.0 8,141.7 7,995.1
Lease liabilities 2,783.0 2,527.5 2,680.6
Total gross debt 10,969.0 10,669.2 10,675.7
Cash and cash equivalents (23.7) (25.7) (20.8)
Total net debt 10,945.3 10,643.5 10,654.9
Net debt at 31 October 2024 was $10,945m with the increase since 30 April 2024
reflecting the cash outflow set out above and additional lease commitments as
we continue our greenfield and bolt-on expansion. The Group's EBITDA for the
twelve months ended 31 October 2024 was $5,007m. Excluding the impact of
IFRS 16, the ratio of net debt to EBITDA was 1.7 times (2023: 1.8 times) on a
constant currency and a reported basis as at 31 October 2024. Including the
impact of IFRS 16, the ratio of net debt to EBITDA was 2.2 times (2023: 2.2
times) as at 31 October 2024.
Principal risks and uncertainties
Risks and uncertainties in achieving the Group's objectives for the remainder
of the financial year, together with assumptions, estimates, judgements and
critical accounting policies used in preparing financial information remain
broadly unchanged from those detailed in the 2024 Annual Report and Accounts
on pages 36 to 41.
The principal risks and uncertainties facing the Group are:
· economic conditions - in the longer term, there is a link between
levels of economic activity and demand for our services. The most
significant end market which affects our business is construction. The
construction industry is cyclical and typically lags the general economic
cycle by between 12 and 24 months.
The economic uncertainties resulting from the impact of pandemics is
considered as part of this risk.
· competition - the already competitive market could become even more
competitive and we could suffer increased competition from large national
competitors or smaller regional or local companies resulting in reduced market
share and lower revenue.
This could negatively affect rental rates and physical utilisation.
Continuing industry consolidation could also have a similar effect.
· cyber security - a cyber-attack or serious uncured failure in our
systems could result in us being unable to deliver service to our customers
and / or the loss of data. In particular, we are heavily dependent on
technology for the smooth running of our business given the large number of
both units of equipment we rent and our customers. As a result, we could
suffer reputational loss, revenue loss and financial penalties.
This is the most significant factor in our business continuity planning.
· health and safety - a failure to comply with laws and regulations
governing health and safety and ensure the highest standards of health and
safety across the Group could result in accidents which may result in injury
to or fatality of an individual, claims against the Group and/or damage to our
reputation.
· people and culture - retaining and attracting good people is key to
delivering superior performance and customer service and maintaining and
enhancing our culture.
Excessive staff turnover is likely to impact on our ability to maintain the
appropriate quality of service to our customers and would ultimately impact
our financial performance adversely.
At a leadership level, succession planning is required to ensure the Group can
continue to inspire the right culture, leadership and behaviours and meet its
strategic objectives. Furthermore, it is important that our remuneration
policies reflect the Group's North American focus and enable us to retain and
enhance our strong leadership team.
· environmental - as part of Sunbelt 4.0, the Group has made a
long-term commitment to reduce its Scope 1 and 2 carbon intensity by 50% by
2034, compared to a baseline of 2024, on a journey to Net Zero by 2050.
Failure to achieve these goals could adversely impact the Group and its
stakeholders.
In terms of the Group's assessment of the broader environmental impacts of our
activities, we also consider the upstream and downstream impacts of our
operations and note that a significant part of our Scope 3 emissions arises
from our rental fleet, which today is reliant on diesel engines. Over time,
'greener' alternatives will become available as technology advances. If we
do not remain at the forefront of technological advances, and invest in the
latest equipment, our rental fleet could become obsolete.
In addition, we need to comply with the numerous laws governing environmental
protection matters. These laws regulate such issues as wastewater, storm
water, solid and hazardous wastes and materials, and air quality. Breaches
potentially create hazards to our employees, damage to our reputation and
expose the Group to, amongst other things, the cost of investigating and
remediating contamination and also fines and penalties for non-compliance.
· laws and regulations - breaches of laws or regulations governing the
Group's activities could result in criminal prosecution, substantial claims
and loss of reputation.
Further details, including actions taken to mitigate these risks, are provided
within the 2024 Annual Report & Accounts.
Our business is subject to significant fluctuations in performance from
quarter to quarter as a result of seasonal effects. Commercial construction
activity tends to increase in the summer and during extended periods of mild
weather and to decrease in the winter and during extended periods of inclement
weather. Furthermore, due to the incidence of public holidays in the US,
Canada and the UK, there are more billing days in the first half of our
financial year than the second half leading to our revenue normally being
higher in the first half. On a quarterly basis, the second quarter is
typically our strongest quarter, followed by the first and then the third and
fourth quarters.
In addition, the current trading and outlook section of the interim statement
provides commentary on market and economic conditions for the remainder of the
year.
OPERATING STATISTICS
Number of rental stores Staff numbers
31 October 30 April 31 October 30 April
2024 2023 2024 2024 2023 2024
US 1,220 1,157 1,186 18,658 20,032 19,245
Canada 140 129 135 2,259 2,337 2,306
UK 188 192 190 4,427 4,358 4,384
Corporate office - - - 28 22 23
Group 1,548 1,478 1,511 25,372 26,749 25,958
INDEPENDENT REVIEW REPORT TO ASHTEAD GROUP PLC
REPORT ON THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Our conclusion
We have reviewed Ashtead Group plc's condensed consolidated interim financial
statements (the 'interim financial statements') in the unaudited results for
the half year of Ashtead Group plc for the six month period ended 31 October
2024 (the 'period').
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the consolidated income statement for the period ended 31 October
2024;
· the consolidated statement of comprehensive income for the period
then ended;
· the consolidated balance sheet as at 31 October 2024;
· the consolidated statement of changes in equity for the period then
ended;
· the consolidated cash flow statement for the period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the unaudited results for the
half year of Ashtead Group plc have been prepared in accordance with UK
adopted International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ('ISRE (UK) 2410'). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the unaudited results for the
half year and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the interim financial
statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The unaudited results for the half year, including the interim financial
statements, are the responsibility of, and have been approved by the
directors. The directors are responsible for preparing the unaudited results
for the half year in accordance with the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority. In
preparing the unaudited results for the half year, including the interim
financial statements, the directors are responsible for assessing the group's
ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the unaudited results for the half year based on our review. Our
conclusion, including our Conclusions relating to going concern, is based on
procedures that are less extensive than audit procedures, as described in the
Basis for conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
complying with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
9 December 2024
GLOSSARY OF TERMS
The glossary of terms below sets out definitions of terms used throughout this
announcement. Included are a number of alternative performance measures
('APMs') which the directors have adopted in order to provide additional
useful information on the underlying trends, performance and position of the
Group. The directors use these measures, which are common across the
industry, for planning and reporting purposes. These measures are also used
in discussions with the investment analyst community and credit rating
agencies. The APMs are not defined by IFRS and therefore may not be directly
comparable with other companies' APMs and should not be considered superior to
or a substitute for IFRS measures.
Term Closest equivalent statutory measure Definition and purpose
Drop through None Calculated as the change in rental revenue which converts into EBITDA
(excluding gains from sale of new equipment, merchandise and consumables and
used equipment).
2024 2023 Change
$m $m
US
Rental revenue 4,518 4,299 219
EBITDA 2,402 2,331
Gains (77) (146)
EBITDA excluding gains 2,325 2,185 140
Drop through 64%
This measure is utilised by the Group to demonstrate the change in
profitability generated by the Group as a result of the change in rental
revenue in the period.
Free cash flow Net cash generated from operating activities Net cash generated from operating activities less non-rental net property,
plant and equipment expenditure. Non-rental net property, plant and
equipment expenditure comprises payments for non-rental capital expenditure
less disposal proceeds received in relation to non-rental asset disposals.
2024 2023
$m $m
Net cash generated from operating activities 696 (30)
Payments for non-rental property, plant and equipment
(306) (343)
Proceeds from disposal of non-rental property,
plant and equipment 30 18
Free cash flow 420 (355)
This measure shows the cash retained by the Group prior to discretionary
expenditure on acquisitions and returns to shareholders.
Growth at constant exchange rates None Calculated by applying the current period exchange rate to the comparative
period result. The relevant foreign currency exchange rates are provided
within Note 2, Basis of preparation, to the financial statements. This
measure is used as a means of eliminating the effects of foreign exchange rate
movements on the period-on-period changes in reported results.
2024 2023 %
$m $m
Rental revenue
As reported 5,265 4,960 6%
Retranslation effect - 7
At constant currency 5,265 4,967 6%
Adjusted profit before tax
As reported 1,255 1,312 -4%
Retranslation effect - (1)
At constant currency 1,255 1,311 -4%
Leverage None Leverage calculated at constant exchange rates uses the period end exchange
rate for the relevant period and is determined as net debt divided by last
12-month ('LTM') EBITDA.
2024 2023
Excluding IFRS 16 Including IFRS 16 Excluding IFRS 16 Including IFRS 16
Net debt ($m)
As reported and 8,203 10,945 8,149 10,644
at constant currency
EBITDA ($m)
As reported 4,740 5,007 4,512 4,749
Retranslation effect (4) (5) (10) (11)
At constant currency 4,736 5,002 4,502 4,738
Leverage
As reported 1.7 2.2 1.8 2.2
At constant currency 1.7 2.2 1.8 2.2
This measure is used to provide an indication of the strength of the Group's
balance sheet and is widely used by investors and credit rating agencies. It
also forms part of the remuneration targets of the Group and has been
identified as one of the Group's key performance indicators.
Return on Investment ('RoI') None LTM adjusted operating profit divided by the LTM average of the sum of net
tangible and intangible fixed assets, plus net working capital but excluding
net debt and tax.
RoI is calculated excluding the impact of IFRS 16.
RoI is used by management to help inform capital allocation decisions within
the business and has been identified as one of the Group's key performance
indicators. It also forms part of the remuneration targets of the Group.
A reconciliation of Group RoI is provided below:
2024 2023
$m $m
Adjusted operating profit 2,754 2,807
IFRS 16 impact (64) (55)
Adjusted operating profit (excluding IFRS 16) 2,690 2,752
Average net assets 17,753 15,074
Return on investment 15% 18%
RoI for the businesses is calculated in the same way, but excludes goodwill
and intangible assets:
US Canada C$m UK
$m £m
Adjusted operating profit 2,584 169 62
IFRS 16 impact (52) (13) (2)
Adjusted operating profit (excluding IFRS 16) 2,532 156 60
Average net assets, excluding goodwill and intangibles 12,102 1,305 821
Return on investment 21% 12% 7%
This measure is utilised by the Group to demonstrate the change in
profitability generated by the Group as a result of the change in rental
revenue in the period.
Free cash flow
Net cash generated from operating activities
Net cash generated from operating activities less non-rental net property,
plant and equipment expenditure. Non-rental net property, plant and
equipment expenditure comprises payments for non-rental capital expenditure
less disposal proceeds received in relation to non-rental asset disposals.
2024 2023
$m $m
Net cash generated from operating activities 696 (30)
Payments for non-rental property, plant and equipment
(306) (343)
Proceeds from disposal of non-rental property,
plant and equipment 30 18
Free cash flow 420 (355)
This measure shows the cash retained by the Group prior to discretionary
expenditure on acquisitions and returns to shareholders.
Growth at constant exchange rates
None
Calculated by applying the current period exchange rate to the comparative
period result. The relevant foreign currency exchange rates are provided
within Note 2, Basis of preparation, to the financial statements. This
measure is used as a means of eliminating the effects of foreign exchange rate
movements on the period-on-period changes in reported results.
2024 2023 %
$m $m
Rental revenue
As reported 5,265 4,960 6%
Retranslation effect - 7
At constant currency 5,265 4,967 6%
Adjusted profit before tax
As reported 1,255 1,312 -4%
Retranslation effect - (1)
At constant currency 1,255 1,311 -4%
Leverage
None
Leverage calculated at constant exchange rates uses the period end exchange
rate for the relevant period and is determined as net debt divided by last
12-month ('LTM') EBITDA.
2024 2023
Excluding IFRS 16 Including IFRS 16 Excluding IFRS 16 Including IFRS 16
Net debt ($m)
As reported and 8,203 10,945 8,149 10,644
at constant currency
EBITDA ($m)
As reported 4,740 5,007 4,512 4,749
Retranslation effect (4) (5) (10) (11)
At constant currency 4,736 5,002 4,502 4,738
Leverage
As reported 1.7 2.2 1.8 2.2
At constant currency 1.7 2.2 1.8 2.2
This measure is used to provide an indication of the strength of the Group's
balance sheet and is widely used by investors and credit rating agencies. It
also forms part of the remuneration targets of the Group and has been
identified as one of the Group's key performance indicators.
Return on Investment ('RoI')
None
LTM adjusted operating profit divided by the LTM average of the sum of net
tangible and intangible fixed assets, plus net working capital but excluding
net debt and tax.
RoI is calculated excluding the impact of IFRS 16.
RoI is used by management to help inform capital allocation decisions within
the business and has been identified as one of the Group's key performance
indicators. It also forms part of the remuneration targets of the Group.
A reconciliation of Group RoI is provided below:
2024 2023
$m $m
Adjusted operating profit 2,754 2,807
IFRS 16 impact (64) (55)
Adjusted operating profit (excluding IFRS 16) 2,690 2,752
Average net assets 17,753 15,074
Return on investment 15% 18%
RoI for the businesses is calculated in the same way, but excludes goodwill
and intangible assets:
US Canada C$m UK
$m £m
Adjusted operating profit 2,584 169 62
IFRS 16 impact (52) (13) (2)
Adjusted operating profit (excluding IFRS 16) 2,532 156 60
Average net assets, excluding goodwill and intangibles 12,102 1,305 821
Return on investment 21% 12% 7%
Other terms used within this announcement include:
· Adjusted: adjusted results are results stated before exceptional
items and the amortisation of acquired intangibles. A reconciliation is
shown on the income statement.
· Availability: represents the headroom on a given date under the
terms of our $4.5bn asset-backed senior bank facility, taking account of
current borrowings.
· Capital expenditure: represents additions to rental equipment and
other property, plant and equipment (excluding assets acquired through a
business combination).
· Cash conversion ratio: represents cash flow from operations
before changes in rental equipment as a percentage of EBITDA. Details are
provided within the Review of Second Quarter, Balance Sheet and Cash Flow
section.
· Dollar utilisation: dollar utilisation is trailing 12-month
rental revenue divided by average fleet size at original (or 'first') cost
measured over a 12-month period. Dollar utilisation has been identified as
one of the Group's key performance indicators. Details are shown within the
Review of Second Quarter, Balance Sheet and Cash Flow section.
· EBITDA and EBITDA margin: EBITDA is earnings before interest,
tax, depreciation and amortisation. A reconciliation of EBITDA to profit
before tax is shown on the income statement. EBITDA margin is calculated as
EBITDA divided by revenue. Progression in EBITDA margin is an important
indicator of the Group's performance and this has been identified as one of
the Group's key performance indicators.
· Exceptional items: those items of income or expense which the
directors believe should be disclosed separately by virtue of their
significant size or nature and limited predictive value to enable a better
understanding of the Group's financial performance. Excluding these items
provides readers with helpful additional information on the performance of the
business across periods and against peer companies. It is also consistent
with how business performance is reported to the Board and the remuneration
targets set by the Company.
· Fleet age: original cost weighted age of serialised rental
assets. Serialised rental assets constitute the substantial majority of our
fleet.
· Fleet on rent: quantity measured at original cost of our rental
fleet on rent. Fleet on rent has been identified as one of the Group's key
performance indicators.
· Net debt: net debt is total borrowings (bank, bonds) and lease
liabilities less cash balances, as reported. This measure is used to provide
an indication of the Group's overall level of indebtedness and is widely used
by investors and credit rating agencies. An analysis of net debt is provided
in Note 15.
· Operating profit and operating profit margin: Operating profit is
earnings before interest and tax. A reconciliation of operating profit to
profit before tax is shown on the income statement. Operating profit margin
is calculated as operating profit divided by revenue. Progression in
operating profit margin is an important indicator of the Group's performance.
· Organic: organic measures comprise all locations, excluding
locations arising from a bolt-on acquisition completed after the start of the
comparative financial period.
· Rental only revenue: rental revenue excluding loss damage waiver,
environmental fees, erection and dismantling revenue and revenue from rental
equipment delivery and collection.
· Same-store: same-stores are those locations which were open at
the start of the comparative financial period.
· Segment profit: operating profit before amortisation and
exceptional items by segment.
· Suppressed availability: represents the amount on a given date
that the asset base exceeds the facility size under the terms of our $4.5bn
asset-backed senior bank facility.
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