REG - Ashtead Tech Hldgs - Full-year Results 2021
06/06/2022 07:00
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RNS Number : 7055N Ashtead Technology Holdings plc 06 June 2022
6 June 2022
Ashtead Technology Holdings plc
("the Company")
Full-year Results 2021
Ashtead Technology Holdings plc (AIM: AT.), a leading subsea equipment rental
and solutions provider for the global offshore energy sector, announces its
full-year results for the period ended 31 December 2021.
Highlights
Financial Results
· Group revenue up by 32% to £55.8m (2020: £42.4m), driven by
increased demand in both offshore renewables and offshore oil and gas markets
o Revenues from oil and gas of £37.3m, up 23% on the previous year (2020:
£30.3m), reflecting industry-wide recovery following pandemic-driven downturn
in global energy activity in 2020
o Strong growth in offshore renewables revenues up over 50% at £18.5m
(2020: £12.1m) now representing 33% of Group revenue (2020: 29%), with the
Group targeting revenue from the offshore renewables market of at least 50% in
the medium term
· Adjusted EBITDA margin of 40.2% (2020: 40.2%), resulting in
Adjusted EBITDA of £22.4m (2020: £17.0m), up 32% on the year prior
· Adjusted EBITA increased 118% to £13.7m (2020: £6.3m), with an
Adjusted EBITA margin of 24.6% (2020: 14.9%)
· Net debt reduced to £22.7m as at 31 December 2021, with net debt /
Adjusted EBITDA 1.0x, following £15m primary capital raise as part of
successful IPO in November 2021
· £50m RCF in place (£40m facility plus £10m accordion), of which
£25.0m has been drawn as at 31 December 2021
*Adjusted EBITDA is defined as operating profit adjusted to add back,
depreciation, amortisation, foreign exchange movements and non-trading items
as described in Note 27 to the accounts. Adjustments predominantly owing to
one off costs related to IPO
*Adjusted EBITA is defined as operating profit adjusted to add back,
amortisation, foreign exchange movements and non-trading items as described in
Note 27 to the accounts. Adjustments predominantly owing to one off costs
related to IPO
Operational Highlights
· Reinforced market leading position in subsea rental, investing £6.6m
in new subsea equipment and technology to further expand our extensive
equipment rental fleet, the largest independent fleet in the industry
· Continued focus on operational excellence ensuring the reliability
and availability of equipment, employee training and development,
digitalisation of internal processes and by focusing on the delivery of
integrated solutions and service agility
· Cost utilisation of 43%, up from 37% in 2020, reflecting increased
market activity across both renewables and oil and gas industries
· Increased proportion of total revenue derived from the Group's
services offering
· Leveraging significant product knowledge and domain expertise to
better serve a broad range of customers and increase market share
· Continuing to review M&A opportunities to complement organic
growth and consolidate a highly fragmented market
Outlook
· The twin themes of energy transition and energy security are
providing strong market growth drivers for the Group, across both renewables
and oil and gas markets, and are contributing to high levels of tendering
activity
· The Group's trading in the first four months of 2022 has been strong,
benefiting from positive utilisation and pricing trends, and as a result, the
Board has modestly raised its profit expectations for the full year 2022
· The fungibility of the Group's rental fleet leaves the business well
positioned to capitalise on favourable market dynamics following the renewed
focus on energy security
Allan Pirie, Chief Executive Officer, commented:
"2021 was a significant year for Ashtead Technology with the completion of our
IPO on AIM, providing a strong platform for future growth and enabling us to
support our customers more widely in the delivery of the energy transition.
We delivered a solid financial performance in 2021 which is testament to the
resilience of our business, the growing market opportunities available,
particularly in offshore wind, and the expertise and efforts of our people who
are central to our success.
One of the most significant challenges facing our industry is being able to
deliver sources of energy in a more sustainable, affordable and responsible
way. Based on the fungibility of our equipment and solutions across the
offshore wind and oil and gas end markets, we are well-positioned to support
this as investment increases across all forms of energy in order to secure
supply.
We have made a promising start to 2022 and look forward to an exciting
future."
For further information, please contact:
Ashtead Technology Via Vigo Consulting
Allan Pirie, Chief Executive Officer
Ingrid Stewart, Chief Financial Officer
Vigo Consulting (Financial PR) Tel: +44 (0)20 7390 0230
Patrick d'Ancona Ashteadtechnology@vigoconsulting.com
Finlay Thomson
Numis Securities Limited (Nomad and Broker) Tel: +44 (0)20 7260 1000
Julian Cater
George Price
Jonny Abbott
Kevin Cruickshank (QE)
Notes to editors:
Ashtead Technology is a leading subsea equipment rental and solutions provider
for the global offshore energy sector. Ashtead Technology's specialist
equipment, advanced-technologies and support services enable its customers to
understand the subsea environment and manage offshore energy production
infrastructure.
The Company's service offering is applicable across the lifecycle of offshore
wind farms and offshore oil and gas infrastructure. Headquartered in the UK,
the Company operates globally, servicing customers from its nine international
customer service hubs.
In the fast-growing offshore wind sector, Ashtead Technology's specialist
equipment and services are essential through the project development,
construction and installation phase. Once wind farms are operational, Ashtead
Technology supports customers with inspection, maintenance and repair ("IMR")
equipment and services. In the more mature oil and gas sector, Ashtead
Technology's focus is on IMR and decommissioning.
Chairman's Statement
I am delighted to introduce Ashtead Technology's maiden full-year results
following the Company's Initial Public Offering (IPO) on AIM in November 2021.
As a newly listed company, this is the start of an exciting new chapter for
Ashtead Technology, which will enable us to accelerate our growth plans and
support our customers more widely in the delivery of the energy transition.
Financial results
Total revenue for the year to 31 December 2021 increased by 32% to £55.8m
reflecting an improving market backdrop both in the offshore renewables and
oil and gas sectors. Our oil and gas business provides a strong underpin and
grew 23% in the year and we were particularly pleased to see the continued
rapid growth of our offshore renewables business which grew over 50% year on
year. Adjusted EBITA of £13.7m compares to £6.3m in 2020. Profit before
tax of £2.5m, after IPO and other adjusting costs of £4.4m, compares to a
loss before tax of £0.7m in 2020 delivering Adjusted earnings per share of
13.2p in 2021. This performance reflects a strong finish to the year and was
ahead of our expectations at the time of the IPO.
With the Board's support, management's focus is on long-term value creation
through continued organic growth and an increased focus on M&A
opportunities as we set out on our journey to fulfil the strategy as detailed
in our IPO investment case. We will continue to do this while maintaining
capital discipline. With net debt at £22.7m (2020: £36.2m), leverage at 31
December 2021 was 1.0x with the business having a stated leverage target of
1-2x in the medium term. The Board recognises the merits of establishing a
small, progressive dividend flow and will consider this from 2022 onwards
subject to the Company having sufficient distributable profits.
Employees
The Group would not have delivered this performance in 2021 without the
continued dedication of its employees. On behalf of the Board, I would like
to thank all of the Group's employees for their continued contribution to its
success. Particular thanks go to our offshore team who with continued
quarantine requirements have had to deal with challenging logistical issues
and extended periods away from their families.
Environment, Social and Governance
The Board recognises the importance of our role in environmental, social and
governance matters ("ESG") and the part we play to help deliver a lower carbon
future.
As a market leader in subsea technology rental and solutions, built over a
37-year history, Ashtead Technology's offering sits firmly at the heart of the
energy transition providing critical late life and decommissioning support to
the oil and gas industry and supporting the extensive growth in offshore wind
globally.
The Group is committed to trading responsibly and creating sustainable value
for all stakeholders and is focused on five key priorities aligned with the
United Nations Sustainable Development Goals.
Board and governance
I would like to thank my fellow Board members, and in particular Allan Pirie
(CEO) and Ingrid Stewart (CFO), for their contribution to the successful
IPO. The Board welcomed independent Non-Executive Directors Tony Durrant and
Thomas Thomsen to the Board shortly before the IPO, who bring significant
industry experience and expertise to the Board. Having been involved with
the business for six years, Joe Connolly continues to serve as a Non-Executive
Director in his capacity for Buckthorn Partners who remain a substantial
shareholder.
Summary and outlook
The Group displayed strong financial resilience during the COVID-19 pandemic
and, whilst challenges remain with restrictions in the movement of personnel
and quarantines in certain countries, the business has continued to
demonstrate this resilience through 2021.
As I write, the world has been rocked by Russia's invasion of Ukraine and our
thoughts are with those who are personally impacted by the tragic events that
are unfolding.
The impact on the energy markets, both renewables and oil and gas, is
significant and as the focus on energy security increases the outlook for the
business remains positive. Recent months have seen a high level of tendering
across both renewables and oil and gas projects and Ashtead Technology remains
well-positioned for long-term growth in demand for its services as the
industry delivers the infrastructure required to address the changing energy
landscape.
Bill Shannon
Chairman
Chief Executive Officer's Review
A resilient business with an exciting future
Overview
2021 was a milestone year for Ashtead Technology as we successfully listed the
business on AIM in November, providing a strong, long-term platform for future
growth.
The Group performed well throughout the year and ahead of the expectations set
out at IPO.
We delivered a resilient financial performance in 2021, reduced our leverage,
while also continuing to invest in our high-quality equipment rental fleet.
This was achieved despite the challenging operating backdrop, resulting from
the COVID-19 restrictions and is testament to the resilience of our business,
the tremendous efforts and commitment of our people, and our growing presence
in the offshore renewables market.
A solid performance
As a market leader in subsea equipment rental and solutions for the global
offshore energy sector, we benefitted from improving market conditions across
both wind, and oil and gas, end markets.
Group revenue for the year to 31 December 2021 grew by 32% to £55.8m (2020:
£42.4m), with Adjusted EBITA of £13.7m (2020: £6.3m) up 118% against the
prior year, resulting in a margin of 25% and showing a recovery towards
pre-COVID levels. Adjusted earnings per share was 13.2p.
Strategic and operational review
Through our three service lines - Survey & Robotics, Mechanical Solutions
and Asset Integrity - we support the installation, IMR (inspection,
maintenance & repair), and decommissioning of offshore energy
infrastructure through the provision of subsea equipment rental and solutions.
Our target is to achieve low double-digit organic revenue growth by executing
on our proven strategy of:
· Continuing to support the energy transition and capitalise on the
significant expected increase in expenditure in the global offshore wind
market
· Maintaining Ashtead Technology's position as the leading independent
subsea equipment rental business, growing and strengthening our business in
subsea technology rental and solutions, whilst continuing to capitalise on
customers' increasing propensity to rent
· Continuing to broaden the range of complementary equipment and
services and leveraging the Group's global footprint through the further
internationalisation of Ashtead Technology's products and services
During the year, we continued to deliver against these objectives. Revenue
from offshore renewables continued to increase, rising to 33% of Group revenue
(2020: 29%). The Group is targeting revenue from the offshore renewables
market of at least 50% in the medium term.
We also continued to cement our market leading position, investing £7.9m in
capital expenditure which includes investment in new subsea equipment and
technology to further expand our extensive equipment rental fleet, the largest
independent fleet in the industry. There was further evidence of customers'
increasing propensity to rent evidenced through increased outsourced asset
management interest, and we expect this trend to continue.
We remained focused on operational excellence, ensuring the reliability and
availability of equipment, the delivery of integrated solutions and service
agility, employee training and development, digitisation of internal processes
and utilising our significant domain expertise and product knowledge,
increasing operational benefits through continuous improvement to better serve
our customers.
The Group plans to complement its organic growth through a clear and focused
M&A strategy, building on its strong track record of value-enhancing
M&A. We are focused on strengthening geographic, equipment and service
capability to better support the Group's customers globally, and continue to
review opportunities to acquire businesses which complement our current
offering. The acquisition pipeline contains a number of opportunities across
each of the Group's service lines.
Sustainability
In 2021, we made good progress in our sustainability journey through
focusing on five priorities that are aligned with the principals of the UN
Global Compact - employee health, safety & wellbeing, labour practices
& human rights, energy transition, ecological impact and business ethics.
Throughout the year, we took action to reduce our environmental impact,
support the communities where we live and operate, improve and respect
diversity and inclusion in the Group, reinforce our health and safety culture,
and reaffirm our commitments to respecting human rights and to corporate
governance. Whilst we are pleased with what we have achieved so far, we
recognise that more needs to be done to support our ambitions and create value
for all our stakeholders. Led by a sustainability working group, we have
developed an enhanced sustainability strategy for 2022 and beyond to ensure
sustainability issues are firmly integrated into our day-to-day operations and
to help guide our efforts and improve our performance.
Market
In an ever-evolving energy industry, one of the most significant challenges we
face is the increased demand society places on being able to deliver sources
of energy in a sustainable, affordable and responsible way. The expansion of
offshore wind as a means of energy production, alongside the decommissioning
of existing oil and gas infrastructure, is critical to a successful energy
transition process.
Throughout 2021 we saw market forecasts for offshore renewable energy spend
increase, with analysts forecasting strong growth for wind energy, evidenced
in our own business by a step change in our offshore renewables pipeline.
The backdrop for the industry continues to strengthen with 25GW capacity
awarded in the ScotWind 1 auction in the UK, and several new lease awards in
the US alone. This has been further propelled by the UK Government's Energy
Strategy to accelerate the offshore wind industry and increase the pace of
deployment to deliver 50GW by 2030 as countries look to secure domestic energy
sources in light of rising global energy prices, provoked by surging demand
after the pandemic as well as Russia's invasion of Ukraine.
Oil and gas will also continue to be important constituents in meeting energy
demand as the industry continues its transition to cleaner energy production
and the need to focus on energy security. Significant expenditure will be
required to maintain oil and gas production from existing fields, as well as
investment in new oil and gas developments and associated infrastructure.
The fungibility of Ashtead Technology's equipment and solutions across the
offshore wind and oil and gas markets makes for a compelling and robust
proposition, enabling the Group to capture growth across both these adjacent
markets.
Our people
Our people are central to the success of our business, and I would like to
extend my thanks to all our employees for their contributions in the delivery
of the Group's solid operational performance during another year in which we
operated amid a global pandemic.
Our employee headcount increased from 172 to 204 during the year and we
continued to encourage personal development through training and progression.
Our senior leadership team was enhanced with the appointment of Ingrid Stewart
as CFO and we expanded our business development, marketing and QHSE teams
globally to meet the growing needs of our enlarged business, including the
recruitment of Caroline Merson as Marketing & Communications Director.
Current trading and outlook
We remain well placed to support the changing requirements of the global
offshore energy sector as the transition to more renewable sources of energy
continues apace and our large fleet of rental equipment allows us to support
the increased investment required to ensure energy security.
While we are mindful of uncertainty arising from the current geopolitical
environment, inflationary pressures have been mitigated by tightening market
conditions and increasing pricing. We remain confident of making further
progress in 2022, with a clear organic growth strategy and pipeline of
acquisition opportunities.
The Group has continued to perform strongly in the first four months of 2022,
supported by good ongoing customer demand across both offshore wind and oil
and gas end markets. Activity levels experienced are higher than the same
period in the prior year, with utilisation rates remaining strong supporting
increased pricing. Given the performance to date, the Board expects outturn
for the year to be modestly ahead of its previous expectations.
I am proud of all we have accomplished in our short period so far as a
publicly listed company and look forward to an exciting future.
Allan Pirie
Chief Executive Officer
Chief Financial Officer's Review
Strong progress and growth in our performance
Introduction
It has been an exciting year for Ashtead Technology as we returned to growth
following the downturn in 2020 caused by COVID-19 restrictions.
Our IPO in November 2021 is testament to the quality of our business and the
resilience shown through the latest downturn and was the culmination of a lot
of hard work from many people in the organisation. I would like to express my
sincere thanks to those involved in helping us reach this milestone in our
Group's history.
Revenue
Group revenue grew year-on-year by 32% from £42.4m to £55.8m driven by an
increase in demand from both the offshore renewables and offshore oil and gas
markets.
Region Revenue 2020 Revenue 2021 Revenue Growth 2020-2021
Europe £23.6m £33.2m 41%
Americas £10.0m £11.8m 18%
APAC £5.1m £7.9m 54%
Middle East £3.7m £2.7m (22%)
Renewables revenues represented 33% of Group revenue in 2021 (2020: 29%),
representing over 50% growth from this market, whilst revenues from oil and
gas also grew by 23%.
Gross profit
Gross profit increased to £40.5m (a gross margin of 73%) from £31.4m in 2020
(a gross margin of 74%) with the margin reduction due to a higher proportion
of revenue in the year coming from equipment sales versus rental. In our
rental business, we saw cost utilisation increase from 37% in 2020 to 43% in
2021.
Administration costs
Administration expenses of £33.9m in 2021 compared to £29.8m in 2020 with
the increase (£4.1m) coming from personnel costs (£3.1m) and legal and
professional fees (£2.6m) predominantly as a result of the IPO. Personnel
cost increases were the result of post-COVID salary increases following salary
reductions in 2020 as well as an increase in personnel from 172 at December
2020 to 204 at December 2021. This was offset by a decrease in depreciation
of £2m. Whilst the Group maintains a blue-chip customer base, the Group also
increased its provision for doubtful debts by £0.7m.
Profitability
Adjusted EBITA of £13.7m compares to £6.3m in 2020 and was ahead of our
expectations at the time of the IPO process following a strong finish to the
year. This represents an EBITA margin of 24.6% compared to 14.8% in the
prior year. As a result, ROIC (Return on Invested Capital) increased to 17%
(2020: 7%), a return to historical levels.
Where we have provided adjusted figures, they are after the add-back of
various one-off items which, in relation to 2021 predominantly related to
professional and other fees arising from the admission to AIM.
Profit before tax of £2.5m, after IPO and other adjusting costs of £4.4m,
compares to a loss before tax of £0.7m in 2020.
Net finance expense
Net finance costs were £4m in 2021, reflecting our pre-IPO debt structure. As
part of the IPO process the Company raised £15m of primary capital that was
utilised to repay existing debt facilities, including high interest loan notes
held under the previous private equity ownership structure. The business also
refinanced its external debt facilities and achieved more favourable pricing.
The 2021 costs are not representative of ongoing expectations.
Taxation
The total tax charge was £1.1m (2020: £0.3m), giving rise to an effective
tax rate of 29.5%. In future years we expect the Group's effective tax rate to
be closer to the UK corporation tax rate although this will be impacted by the
amount of profit the Group earns in its overseas jurisdictions where, in some
cases, corporation tax rates are higher than those in the UK.
EPS and dividend
Adjusted EPS is 13.2 pence with statutory EPS at 3.6 pence. The adjusted
figures exclude the impact of one-off costs as set out in note 27 of the
accounts as well as foreign exchange profit/loss and amortisation.
The Group paid dividends totalling £1,296,000 in 2021 which related to the
pre-IPO group restructure. As noted at the time of the IPO, the Group has
elected not to pay a further dividend in relation to the 2021 results. In
terms of capital allocation, the Group's current focus is on organic fleet
growth, complemented by bolt-on M&A. It is the Directors' intention to
implement a progressive dividend policy in the near future, subject to the
discretion of the Board and to the Company having distributable reserves.
Cash flow and net debt
Free cash flow in the year was impacted by one-off costs as a result of the
admission to AIM as well as an increase in working capital caused by the
uplift in trading and a general slowdown of debtor payments at the year end.
The Group increased investment in capital expenditure in the year to £7.9m,
investing predominantly in rental equipment as the market continued to
improve. Overall, net debt reduced from £36.2m to £22.7m from 31 December
2020 to 31 December 2021 due predominantly to the raising of £15m of primary
capital. As a result of the primary capital raise, borrowings reduced during
the year with drawn RCF of £25.0m at 31 December 2021 versus external bank
loans of £43.0m at 31 December 2020. Leverage at 31 December 2021 was 1x.
Going concern
The consolidated financial statements of the Group are prepared on a going
concern basis. The Directors of the Group assert that the preparation of the
consolidated financial statements on a going concern basis is appropriate,
which is based upon a review of the future forecast performance of the Group.
During 2021 the Group has continued to generate positive cash flow from
operating activities with a cash and cash equivalents balance of £4.9m (2020:
£11m). The Group has access to a multi currency RCF and additional
accordion facility. The RCF and accordion facility have total commitments of
£40m and £10m respectively, both of which expire in November 2024, with an
option to extend subject to credit approval. As at 31 December 2021 the RCF
had an undrawn balance of £15m and the £10m accordion facility was undrawn.
The Facility Agreement is subject to a leverage covenant of 2.5x and an
interest cover covenant of 4:1, which are both to be tested on a quarterly
basis. The Group has complied with all covenants from entering the Facility
Agreement until the date of these financial statements.
The Group monitors its funding and liquidity position throughout the year to
ensure it has sufficient funds to meet its ongoing cash requirements. Cash
forecasts are produced based on a number of inputs such as estimated revenues,
margins, overheads, collection and payment terms, capex requirements and the
payment of interest and capital on its existing debt facilities.
Consideration is also given to the availability of bank facilities. In
preparing these forecasts, the Directors have considered the principal risks
and uncertainties to which the business is exposed.
Taking account of reasonable changes in trading performance and bank
facilities available, the cash forecast prepared by management and reviewed by
the Directors indicates that the Group is cash generative, has adequate
financial resources to continue to trade for the foreseeable future, and to
meet its obligations as they fall due.
Reconciliation of adjusted and reported IFRS results
The Group uses certain measures that it believes assist a reader of the Report
and Accounts in understanding the business. The measures are not defined under
IFRS and, therefore, may not be directly comparable with adjusted measures
presented by other companies. The non-GAAP measures are not intended to be a
substitute for or superior to any IFRS measures of performance. However, they
are considered by management to be important measures used in the business for
assessing performance.
In establishing Adjusted EBITDA, Adjusted EBITA and Adjusted EPS, the Group
has added back various costs, deemed to be one-off in nature, which in 2021
predominantly relate to Admission costs and restructuring of the group entity
structure in preparation for Admission.
Ingrid Stewart
Chief Financial Officer
Note - Where we have provided adjusted figures, they are after the add-back of
various one-off items which, in relation to 2021, predominantly relate to
professional and other fees arising from the admission to AIM. Please see
Note 27.
Consolidated income statement
for the year ended 31 December 2021
2021 Unaudited
2020
Notes £000 £000
Revenue 4 55,805 42,401
Cost of sales 5 (15,262) (11,044)
Gross profit 40,543 31,357
Administrative expenses 5 (33,930) (29,796)
Other operating income 5 995 1,547
Operating profit 5 7,608 3,108
7 (4,019) (3,849)
Finance costs
Profit/(loss) before taxation 3,589 (741)
Taxation charge 8 (1,060) (257)
Profit/(loss) for the financial year 2,529 (998)
Profit/(loss) attributable to:
Owners of the Company 2,529 (998)
Earnings per share
Basic 9 3.6 (1.4)
Diluted 9 3.6 (1.4)
The below financial measures are non-GAAP metrics used by management and are
not an IFRS disclosure:
Adjusted EBITDA^ 27 22,437 17,037
Adjusted EBITA^^ 27 13,724 6,284
^ Adjusted EBITDA is calculated as earnings
before interest, tax, depreciation, amortisation and items not considered part
of underlying trading including share based payments and foreign exchange
gains and losses, is a non-GAAP metric used by management and is not an IFRS
disclosure. See Note 27 to the financial statements for calculations.
^^ Adjusted EBITA is calculated as earnings before
interest, tax, amortisation and items not considered part of underlying
trading including share based payments and foreign exchange gains and losses,
is a non-GAAP metric used by management and is not an IFRS disclosure. See
Note 27 to the financial statements for calculations.
All results derive from continuing operations.
The accompanying notes are an integral part of these consolidated financial
statements.
Consolidated statement of comprehensive income
for the year ended 31 December 2021
2021 Unaudited
2020
£000 £000
Profit/(loss) for the year 2,529 (998)
Other comprehensive income/(loss):
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations 163 (365)
Net gain/(loss) on cash flow hedges 351 (108)
Other comprehensive income/(loss) for the year, net of tax 514 (473)
Total comprehensive income/(loss) 3,043 (1,471)
Total comprehensive income/(loss) attributable to:
Equity shareholders of the Company 3,043 (1,471)
The accompanying notes are an integral part of these consolidated financial
statements.
Consolidated balance sheet
at 31 December 2021
Unaudited
2021 2020
Notes £000 £000
Non-current assets
Property, plant and equipment 10 20,832 21,830
Goodwill 11 48,651 48,585
Intangible assets 11 1,760 2,459
Right-of-use assets 19 2,923 2,816
Deferred tax asset 8 1,010 747
75,176 76,437
Current assets
Inventories 12 1,778 1,245
Trade and other receivables 13 17,224 11,256
Cash and cash equivalents 14 4,857 10,958
23,859 23,459
Total assets 99,035 99,896
Current liabilities
Loans and borrowings 17 − 8,007
Trade and other payables 15 9,415 7,243
Income tax payable 8 821 515
Lease liabilities 19 783 676
Derivative financial instruments 16 − 38
11,019 16,479
Non-current liabilities
Loans and borrowings 17 24,425 36,122
Lease liabilities 19 2,351 2,376
Provisions for liabilities 20 108 134
26,884 38,632
Total liabilities 37,903 55,111
Equity
Share capital 23 3,979 3,500
Share premium 23 14,115 −
Merger reserve 23 9,435 9,429
Hedging reserve 23 − (351)
Foreign currency translation reserve 23 (1,290) (1,453)
Retained earnings 23 34,893 33,660
Total equity 61,132 44,785
Total equity and liabilities 99,035 99,896
The accompanying notes are an integral part of these consolidated financial
statements.
The financial statements of Ashtead Technology Holdings plc (registered number
13424040) for the year ended 31 December 2021 were authorised by the Board of
Directors on 4 June 2022 and signed on its behalf by:
A W
Pirie
I Stewart
Chief Executive
Officer
Chief Financial Officer
4 June
2022
4 June 2022
Consolidated statement of changes in equity
for the year ended 31 December 2021
Share capital Share premium Merger reserve Hedging reserve Foreign currency translation reserve Retained earnings Total
£000 £000 £000 £000 £000 £000 £000
At 1 January 2020 3,500 − 9,429 (243) (1,088) 34,658 46,256
− − − − − (998) (998)
Loss for the year
− − − (108) (365) − (473)
Other comprehensive income/(loss)
Total comprehensive loss − − − (108) (365) (998) (1,471)
At 31 December 2020 (Unaudited) 3,500 − 9,429 (351) (1,453) 33,660 44,785
− − − − − 2,529 2,529
Profit for the year
− − − 351 163 − 514
Other comprehensive income
Total comprehensive income − − − 351 163 2,529 3,043
479 15,044 − − − − 15,523
Issue of shares from IPO
− (929) − − − − (929)
Transaction fees on issue of shares from IPO
− − 6 − − − 6
Issue of shares*
Dividends declared** − − − − − (1,296) (1,296)
At 31 December 2021 3,979 14,115 9,435 − (1,290) 34,893 61,132
*The movement in merger reserve represents the issue of shares in BP INV2
Pledgeco Limited and Ashtead US Pledgeco Inc pre IPO.
**The dividends declared relate to the pre-IPO group restructure.
The accompanying notes are an integral part of these consolidated financial
statements.
Consolidated cash flow statement
for the year ended 31 December 2021
2021 Unaudited
2020
Note £000 £000
Cash generated from operating activities
Profit/(loss) before taxation 3,589 (741)
Adjustments to reconcile profit/(loss) before taxation to net cash from
operating activities
Finance costs 4,019 3,849
Depreciation 8,713 10,753
Amortisation 11 1,516 1,567
Gain on sale of property, plant and equipment (995) (1,156)
Forgiveness of loan - US Paycheck Protection Program − (391)
Provision for liabilities (28) 5
Cash generated before changes in working capital 16,814 13,886
Increase in inventories (524) (154)
(Increase)/decrease in trade and other receivables (6,597) 4,788
Increase in trade and other payables 2,016 109
Cash inflow from operations 11,709 18,629
Interest paid (3,615) (2,884)
Tax paid (858) (763)
Net cash from operating activities 7,236 14,982
Cash flow used in investing activities
Purchase of property, plant and equipment (7,889) (5,073)
Disposal of property, plant and equipment 1,453 1,620
Net cash outflow on investing activities (6,436) (3,453)
Cash flow used in financing activities
Proceeds from IPO share issue 15,523 −
Transaction fees on share issue (929) −
Proceeds from share issue 50 −
Loans received 25,107 3,409
Transaction fees on loans received (914) −
Repayment of bank loans (44,121) (7,863)
Payment of lease liability (1,012) (721)
Repayment of loan notes (830) −
Net cash outflow from financing activities (7,126) (5,175)
Net (decrease)/increase in cash and cash equivalents (6,326) 6,354
Cash and cash equivalents at beginning of year 10,958 4,855
Net foreign exchange difference 225 (251)
Cash and cash equivalents at end of year 4,857 10,958
The accompanying notes are an integral part of these consolidated financial
statements.
Notes to the consolidated financial statements
for the year ended 31 December 2021
1. General information
1.1 Background
Ashtead Technology Holdings plc (the "Company") is a public limited company
incorporated in the United Kingdom under the Companies Act 2006, whose shares
are traded on AIM. The consolidated financial statements of the Company as
at and for the year ended 31 December 2021 comprise the Company and its
interest in subsidiaries (together referred to as the "Group"). The Company
is domiciled in the United Kingdom and its registered address is 1 Gateshead
Close, Sunderland Road, Sandy, Bedfordshire, SG19 1RS, United Kingdom.
1.2 Basis of preparation
The financial information set out in this statement has been prepared in
accordance with the recognition and measurement principles of International
Financial Reporting Standards ("IFRSs"), IFRIC interpretations and the
Companies Act 2006 applicable to companies reporting under IFRS. It does not
include all the information required for full annual accounts.
The financial information does not constitute the Company's statutory accounts
for the years ended 31 December 2021 or 31 December 2020 but is derived from
those accounts. Statutory accounts 2021 will be delivered to the Registrar of
Companies in due course. The Auditor has reported on the 2021 accounts; his
reports (i) were unqualified, (ii) did not include a reference to any matters
to which the Auditor drew attention by way of emphasis without qualifying his
report and (iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006. An other matter was noted as follows, "The
corresponding figures presented for the year ended 31 December 2020 are
unaudited". The corresponding figures presented for the year ended 31
December 2020 are unaudited as the Group was not in existence in its current
form. A full explanation of the accounting treatment to provide comparatives
can be found in Note 1.4.
1.3 Predecessor accounting
Ashtead Technology Holdings plc was incorporated on 27 May 2021 and became the
parent entity of the Group on 17 November 2021 when Ashtead Technology
Holdings plc acquired the entire shareholding of both BP INV2 Pledgeco Limited
and Ashtead US Pledgeco Inc by way of share for share exchange agreement.
This does not constitute a business combination under IFRS 3 'Business
Combinations' as it is effectively a combination among entities under common
control. There is currently no guidance in IFRS on the accounting treatment
for combinations among entities or businesses under common control. IAS 8
requires management, if there is no specifically applicable standard or
interpretation, to develop a policy that is relevant to the decision making
needs of users and that is reliable. The entity first considers requirements
and guidance in other international standards and interpretations dealing with
similar issues, and then the content of the IASB's Conceptual Framework for
Financial Reporting (Conceptual Framework). Management might consider the
pronouncements of other standard-setting bodies that use a similar conceptual
framework to the IASB's, provided that they do not conflict with the IASB's
sources of guidance.
Considering facts and circumstances management has decided to apply a method
broadly described as predecessor accounting. The principles of predecessor
accounting are:
· Assets and liabilities of the acquired entity are stated at
predecessor carrying values. Fair value measurement is not required.
· No new goodwill arises in predecessor accounting.
· Any difference between the consideration given and the aggregate
carrying value of the assets and liabilities of the acquired entity at the
date of the transaction is included in equity in retained earnings or in a
separate reserve.
Management has used merger accounting and taken merger relief at a Company
level. Under merger accounting principles, the assets and liabilities of the
subsidiaries are consolidated at book value in the Group financial statements
and the consolidated reserves of the Group have been adjusted to reflect the
statutory share capital of Ashtead Technology Holdings plc with the difference
presented as the merger reserve. The cost of investments in subsidiaries is
determined by the historical cost of investments in the subsidiaries of the
Group transferred from the previous owning entities, including transaction
costs. The value of total equity reflects the combination of the former BP
INV2 Pledgeco Limited and Ashtead US Pledgeco Inc Group.
These consolidated financial statements of the Group are the first set of
financial statements for the newly formed Group and the prior period has been
presented as a continuation of the former combined BP INV2 Pledgeco Limited
and Ashtead US Pledgeco Inc Group on a consistent basis as if the Group
reorganisation had taken place at the start of the earliest period
presented. The prior period comparatives are those of the former combined BP
INV2 Pledgeco Limited and Ashtead US Pledgeco Inc Group since no substantive
economic changes have occurred. BP INV2 Pledgeco Limited and Ashtead US
Pledgeco Inc and their respective subsidiaries did not form a legal group,
however, they were under common management and control throughout the period.
1.4 Prior period comparatives
The financial statements for the year ended 31 December 2020, forming the
comparative figures of the financial statements for the year ended 31 December
2021, are referenced as unaudited. Prior to the restructuring the Group was
not in existence in its current form, as described above. A statutory audit
within the meaning of section 434 of the Companies Act 2006 was not performed
and hence no audit opinion was issued in respect of the year ended 31 December
2020. However, as part of the process of Admission to listing and trading on
AIM, an accountant's report, undertaken by BDO LLP and Deloitte LLP, in
accordance with the Standards for Investment Reporting 2000 ("SIR 2000")
issued by the Auditing Practices Board in the United Kingdom, was issued on
the historical information included in the Prospectus. The accountant's
report, dated 18 November 2021, included an unqualified opinion on the
historical information presented.
1.5 Presentational currency
The consolidated financial statements unless otherwise stated are presented in
sterling, to the nearest thousand. The functional currency of the Group is
sterling.
1.6 Going concern
The consolidated financial statements of the Group are prepared on a going
concern basis. The Directors of the Group assert that the preparation of the
consolidated financial statements on a going concern basis is appropriate,
which is based upon a review of the future forecast performance of the Group
for a two year period ending 31 December 2023.
During 2021 the Group has continued to generate positive cash flow from
operating activities with a cash and cash equivalents balance of £4,857,000
(2020: £10,958,000). The Group has access to a multi currency RCF and
additional accordion facility. The RCF and accordion facility have total
commitments of £40,000,000 and £10,000,000 respectively, both of which
expire in November 2024, with an option to extend subject to credit
approval. As at 31 December 2021 the RCF had an undrawn balance of
£15,047,000 and the £10,000,000 accordion facility was undrawn.
The Facility Agreement is subject to a leverage covenant of 2.5x and an
interest cover covenant of 4:1, which are both to be tested on a quarterly
basis. The Group has complied with all covenants from entering the Facility
Agreement until the date of these financial statements.
The Group monitors its funding and liquidity position throughout the year to
ensure it has sufficient funds to meet its ongoing cash requirements. Cash
forecasts are produced based on a number of inputs such as estimated revenues,
margins, overheads, collection and payment terms, capex requirements and the
payment of interest and capital on its existing debt facilities.
Consideration is also given to the availability of bank facilities. In
preparing these forecasts, the Directors have considered the principal risks
and uncertainties to which the business is exposed.
Taking account of reasonable changes in trading performance and bank
facilities available, the application of severe but plausible downside
scenarios to the forecasts, the cash forecasts prepared by management and
reviewed by the Directors indicate that the Group is cash generative and has
adequate financial resources to continue to trade for the foreseeable future
and to meet its obligations as they fall due.
1.7 Basis of consolidation
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity. In assessing control, the Group takes
into consideration potential voting rights and rights to variable returns of
the subsidiaries. The acquisition date is the date on which control is
transferred to the acquirer. The financial information of subsidiaries is
included in the consolidated financial statements from the date that control
commences until the date that control ceases. Control is reassessed whenever
facts and circumstances indicate that there may be a change in any of these
elements of control.
The consolidated financial statements present the results of the Company and
its subsidiaries as if they formed a single entity. Intercompany
transactions and balances between Group companies are therefore eliminated in
full.
The consolidated financial statements incorporate the results of the business
combinations using the acquisition method. In the balance sheet, the
acquiree's identifiable assets, liabilities and contingent liabilities are
initially recognised at their fair values at the acquisition date.
1.8 Business combinations
All business combinations are accounted for by applying the acquisition method
as at the acquisition date, which is the date on which control is transferred
to the Group.
The Group measures goodwill at the acquisition date as:
· the fair value of the consideration transferred; plus
· the recognised amount of any non-controlling interests in the
acquiree; plus
· the fair value of the existing equity interest in the acquiree;
less
· the net recognised amount (generally fair value) of the identifiable
assets acquired and liabilities assumed.
Costs related to the acquisition, other than those associated with the issue
of debt or equity securities, are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent
consideration are recognised in the income statement.
1.9 New and amended standards adopted by the Group
There are no new IFRS or IFRIC Interpretations that are effective for the
first time this financial year which have a material impact on the Group.
1.10 Standards issued but not effective
A number of new standards are effective for annual periods beginning after 1
January 2022 and earlier application is permitted; however, the Group has not
early adopted the new or amended standards in preparing these consolidated
financial statements.
The following new and amended standards are not expected to have a significant
impact on the Group's consolidated financial statements:
· Property, Plant and Equipment: Proceeds before Intended Use
(Amendments to IAS 16).
· Reference to Conceptual Framework (Amendments to IFRS 3).
· Classification of Liabilities as Current or Non-current
(Amendments to IAS 1).
· IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance
Contracts.
· Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16).
· Onerous contracts - Cost of fulfilling a contract (Amendments to
IAS 37).
· Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS
Practice Statement 2).
· Definition of Accounting Estimates (Amendments to IAS 8).
· Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12).
1.11 Statement of compliance
The preparation of financial statements in compliance with adopted IFRS
requires the use of certain critical accounting estimates. It also requires
Group management to exercise judgment in applying the Group's accounting
policies. The areas where significant judgments and estimates have been made
in preparing the financial statements and their effect are disclosed in Note
2.
2. Summary of significant accounting policies
2.1 Foreign currencies
Transactions in foreign currencies are translated to the respective functional
currencies of Group entities at the foreign exchange rate ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are retranslated to the functional
currency at the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income statement.
Non-monetary assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated using the exchange rate at the date
of the transaction.
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on consolidation, are translated to the Group's
presentational currency, sterling, at foreign exchange rates ruling at the
balance sheet date. The revenues and expenses of foreign operations are
translated at an average rate for each month where this rate approximates to
the foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign operations are
reported as an item of other comprehensive income and accumulated in the
translation reserve, within equity. When a foreign operation is disposed of,
such that control, joint control or significant influence (as the case may be)
is lost, the entire accumulated amount in the foreign currency translation
reserve is recycled to the income statement as part of the gain or loss on
disposal.
2.2 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses. Depreciation is charged to the income statement on a
straight-line basis over the estimated useful lives of each part of an item of
property, plant and equipment. The estimated useful lives are as follows:
Leasehold
improvements
- remaining lease term
Freehold
property
- 25 years
Fixtures and fittings
- 5 years
Motor
vehicles
- 5 years
Assets held for
rental
- 5-7 years
Depreciation methods, useful lives and residual values are reviewed at each
balance sheet date.
Any gain or loss on disposal of an item of property, plant and equipment is
recognised in the income statement.
Subsequent expenditure is capitalised only if it is probable that the future
economic benefits associated with the expenditure will flow to the Group.
2.3 Intangible assets and goodwill
Goodwill
Goodwill is stated at cost less any accumulated impairment losses. Goodwill
is allocated to cash- generating units and is not amortised but is tested
annually for impairment.
Other intangible assets
Expenditure on internally generated goodwill and brands is recognised in the
income statement as an expense as incurred.
Other intangible assets that are acquired by the Group are stated at cost less
accumulated amortisation and accumulated impairment losses.
Amortisation
Amortisation is charged to the income statement on a straight-line basis over
the estimated useful lives of intangible assets unless such lives are
indefinite. Intangible assets with an indefinite useful life and goodwill
are systematically tested for impairment at each balance sheet date. Other
intangible assets are amortised from the date they are available for use. The
estimated useful lives are as follows:
Non-compete arrangements - 3 years
Customer relationships - 3
years
Computer
software - 5
years
Both the non-compete arrangements and customer relationships are intangible
assets arising from business combinations. The fair value of the non-compete
arrangements at the acquisition date has been determined using the 'with and
without method', an income approach which considers the difference between
discounted future cash flow models, with and without the non-compete clause.
The fair value of the customer relationships at the acquisition date has been
determined using the multi-period excess earnings method.
2.4 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
calculated using the FIFO (first in, first out) method.
2.5 Impairment of non-financial assets excluding inventories, deferred tax assets and contract assets
The carrying amounts of the Group's non-financial assets, other than
inventories, deferred tax assets and contract assets, are reviewed at each
reporting date to determine whether there is any indication of impairment.
If any such indication exists, then the asset's recoverable amount is
estimated. For goodwill, and intangible assets that have indefinite useful
lives or that are not yet available for use, the recoverable amount is
estimated each year at the reporting date.
The recoverable amount of an asset or cash-generating unit is the greater of
its value in use and its fair value less costs to sell. In assessing value
in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. For the purpose of
impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other
assets or groups of assets (the "cash-generating unit"). The goodwill
acquired in a business combination, for the purpose of impairment testing, is
allocated to groups of cash-generating units ("CGUs") that are expected to
benefit from the synergies of the combination. For the purposes of goodwill
impairment testing, CGUs to which goodwill has been allocated are aggregated
so that the level at which impairment is tested reflects the lowest level at
which goodwill is monitored for internal reporting purposes. This is subject
to an operating segment ceiling test.
An impairment loss is recognised if the carrying amount of an asset or its CGU
exceeds its estimated recoverable amount. Impairment losses are recognised
in the income statement. Impairment losses recognised in respect of CGUs are
allocated first to reduce the carrying amount of any goodwill allocated to the
units, and then to reduce the carrying amounts of the other assets in the unit
(group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other
assets, impairment losses recognised in prior periods are assessed at each
reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is
reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
2.6 Employee benefits
Defined contribution plans
The Group pays contributions to selected employees' defined contribution
pension plans. The amounts charged to the income statement in respect of
pension costs are the contributions payable in the period. Differences
between contributions payable in the period and contributions actually paid
are shown as either accruals or prepayments on the balance sheet.
2.7 Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, when appropriate,
the risks specific to the liability.
2.8 Revenue recognition
Revenue relates to the provision of services, rental of equipment and sale of
equipment. Revenues arising from the rental of equipment are recognised in
accordance with the requirements of IFRS 16: Leases. Revenues arising from
all other revenue streams are recognised in accordance with the requirements
of IFRS 15.
Revenue under IFRS 15
Revenues for the provision of services are recognised over time as the
services are provided. The services provided to customers meet the criterion
that the customer simultaneously receives and consumes the benefits
provided. Accordingly, these services qualify for over-time revenue
recognition.
Revenues for the provision of goods are recognised at a point in time, which
is the point at which the Group satisfies the performance obligation under the
terms of the contract. The performance obligation is the delivery of the
goods to the customer, which is the point at which the customer obtains
control.
Revenues for the provision of goods and services are measured at the
transaction price, stated net of VAT.
Revenue under IFRS 16
All contracts for leases of equipment entered into by the Group are classified
as operating leases. The contracts for equipment rentals do not transfer
substantially all of the risks and rewards incidental to ownership of the
underlying asset to the customer.
The Group recognises lease payments received under operating leases as revenue
on a straight-line basis over the lease term.
Where customers are billed in advance, deferred rental income is recognised,
which represents the portion of billed revenue to be deferred to future
periods. Where customers are billed in arrears for equipment rentals, accrued
rental income is recognised, which represents unbilled revenues recognised in
the period.
2.9 Operating segments
The Group operates in the following four geographic regions, which have been
determined as the Group's reportable segments. The operations of each
geographic region are similar.
· Europe
· Americas
· Asia-Pacific
· Middle East
The Chief Operating Decision Maker (CODM) is determined as the Group's Board
of Directors. The Group's Board of Directors reviews the internal management
reports of each geographic region monthly as part of the monthly management
reporting. The operations within each of the above regional segments display
similar economic characteristics. There are no reportable segments which
have been aggregated for the purpose of the disclosure of segment information.
2.10 Taxation
Tax on the profit or loss for the year comprises current and deferred tax.
Tax is recognised in the income statement except to the extent that it relates
to items recognised directly in equity, in which case it is recognised in
equity.
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax rates enacted or substantively enacted at the
balance sheet date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not
provided for: the initial recognition of goodwill; the initial recognition of
assets or liabilities that affect neither accounting nor taxable profit other
than in a business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the
balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the temporary
difference can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable
that the related tax benefit will be realised; such reductions are reversed
when the probability of future taxable profits improves. Unrecognised
deferred tax assets are reassessed at each reporting date and recognised to
the extent that it has become probable that future taxable profits will be
available against which they can be used.
Current tax assets and current tax liabilities are offset only when:
· the Group has a legally enforceable right to set off current tax
assets against current tax liabilities; and
· the Group intends either to settle on a net basis or to realise
the asset and settle the liability simultaneously.
Deferred tax assets and liabilities are offset only if:
· the Group has a legally enforceable right to set off current tax
liabilities and assets; and
· the deferred tax liabilities and assets relate to income taxes
levied by the same tax authority.
2.11 Leases
At the inception of a contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
As a lessee
At commencement or on modification of a contract that contains a lease
component, along with one or more other lease or non-lease components, the
Group accounts for each lease component separately from the non-lease
components. The Group allocates the consideration in the contract to each
lease component on the basis of its relative stand-alone price and the
aggregate stand-alone price of the non-lease components.
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost,
which comprises the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the end of the lease term, unless the
lease transfers ownership of the underlying asset to the Group by the end of
the lease term or the cost of the right-of-use asset reflects that the Group
will exercise a purchase option. In that case the right-of-use asset will be
depreciated over the useful life of the underlying asset, which is determined
on the same basis as those of property, plant and equipment. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise the
following:
· fixed payments, including in-substance fixed payments;
· variable lease payments that depend on an index or a rate, initially
measured using the index or rate as at the commencement date;
· amounts expected to be payable under a residual value guarantee;
· the exercise price under a purchase option that the Group is
reasonably certain to exercise;
· lease payments in an optional renewal period if the Group is
reasonably certain to exercise an extension option; and
· penalties for early termination of a lease unless the Group is
reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest
method. It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, there is a change in the Group's
estimate of the amount expected to be payable under a residual value
guarantee, if the Group changes its assessment of whether it will exercise a
purchase, extension or termination option or if there is a revised
in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment
is made to the carrying amount of the right-of-use asset, to the extent that
the right-of-use asset is reduced to nil, with any further adjustment required
from the remeasurement being recorded in the income statement.
The Group presents right-of-use assets and lease liabilities as separate line
items on the balance sheet.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease
liabilities for lease of low-value assets and short-term leases. The Group
recognises the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
As a lessor
Refer to the revenue accounting policy note for the Group's accounting policy
under IFRS 16, as a lessor.
2.12 Financial instruments
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the instrument.
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument
is any contract that evidences a residual interest in the assets of the Group
after deducting all of its liabilities.
Financial assets and liabilities
All financial assets and liabilities are initially measured at transaction
price (including transaction costs), except for those financial assets
classified as at fair value through profit or loss, which are initially
measured at fair value (which is normally the transaction price excluding
transaction costs).
Financial assets and liabilities are only offset in the balance sheet when,
and only when there exists a legally enforceable right to set off the
recognised amounts and the Group intends either to settle on a net basis, or
to realise the asset and settle the liability simultaneously.
Commitments to make and receive loans which meet the conditions mentioned
above are measured at cost (which may be nil) less impairment.
Financial assets are derecognised when and only when (a) the contractual
rights to the cash flows from the financial asset expire or are settled, (b)
the Group transfers to another party substantially all of the risks and
rewards of ownership of the financial asset, or (c) the Group, despite having
retained some, but not all, significant risks and rewards of ownership, has
transferred control of the asset to another party.
Financial liabilities are derecognised only when the obligation specified in
the contract is discharged, cancelled or expires.
Non-derivative financial assets are classified on initial recognition in
accordance with the Group's business model as trade and other receivables, or
cash and cash equivalents and accounted for as follows:
· Trade and other receivables: These are non-derivative financial
assets that are primarily held in order to collect contractual cash flows and
are measured at amortised cost, using the effective interest rate method, and
stated net of allowances for credit losses.
· Cash and cash equivalents: Cash and cash equivalents include cash
in hand and deposits held on call.
Non-derivative financial liabilities, including loans and borrowing, and trade
and other payables, are stated at amortised cost using the effective interest
method.
Derivative financial instruments
The Group uses derivative financial instruments from time to time to reduce
exposure to interest rate movements. The Group does not hold or issue
derivative financial instruments for speculative purposes.
Derivatives are initially recognised at fair value at the date a derivative
contract is entered into and are subsequently remeasured to their fair value
at each reporting date. The resulting gain or loss is recognised in the
income statement immediately unless the derivative is designated and effective
as a hedging instrument, in which event the timing of the recognition in the
income statement depends on the nature of the hedge relationship.
Fair value measurement
The best evidence of fair value is a quoted price for an identical asset in an
active market. When quoted prices are unavailable, the price of a recent
transaction for an identical asset provides evidence of fair value as long as
there has not been a significant change in economic circumstances or a
significant lapse of time since the transaction took place. If the market is
not active and recent transactions of an identical asset on their own are not
a good estimate of fair value, the fair value is estimated by using a
valuation technique.
Hedge accounting
The Group designates certain derivatives as hedging instruments in cash flow
hedges.
At the inception of the hedge relationship, the entity documents the economic
relationship between the hedging instrument and the hedged item, along with
its risk management objectives and clear identification of the risk in the
hedged item that is being hedged by the hedging instrument. Furthermore, at
the inception of the hedge the Group determines and documents causes for hedge
ineffectiveness.
The effective portion of changes in the fair value of derivatives that are
designated and qualify as cash flow hedges is recognised in other
comprehensive income. The gain or loss relating to the ineffective portion
is recognised immediately in the income statement. Amounts previously
recognised in other comprehensive income and accumulated in equity are
reclassified to profit or loss in the periods in which the hedged item affects
profit or loss or when the hedging relationship ends.
Hedge accounting is discontinued when the hedging relationship, the hedging
instrument expires or is sold, terminated, or exercised, or no longer
qualifies for hedge accounting. Any gain or loss accumulated in equity at
that time is reclassified to profit or loss when the hedged item is recognised
in profit or loss. When a forecast transaction is no longer expected to
occur, any gain or loss that was recognised in other comprehensive income is
reclassified immediately to profit or loss.
Impairment of financial assets
The Group recognises loss allowances for expected credit losses (ECLs) on
financial assets measured at amortised cost.
Loss allowances for trade receivables and accrued lease receivables are
measured at an amount equal to the lifetime ECL. Trade receivables do not
contain a significant financing component and typically have a short duration
of less than 12 months. The Group prepares a provision matrix when measuring
its ECLs. Trade receivables and contract assets are segmented on the basis
of historic credit loss experience, based on geographic region. Historical
loss experience is applied to trade receivables and contract assets, after
being adjusted for:
· information about current economic conditions; and
· reasonable and supportable forecasts of future economic
conditions.
Write-offs
The gross carrying amount of a financial asset is written off (either
partially or in full) to the extent that there is no realistic prospect of
recovery.
2.13 Government grants
Grants that compensate the Group for expenses incurred are recognised in the
income statement as other income on a systematic basis in the periods in which
the expenses are recognised, unless the conditions for receiving the grant are
met after the related expenses have been recognised. In this case, the grant
is recognised at the point when there is reasonable assurance that the terms
for the forgiveness of a government loan will be met. Refer to Note 5 for
further disclosure related to government grants received.
2.14 Borrowing costs
Borrowing costs are capitalised and amortised over the term of the related
debt. The amortisation of borrowing costs is recognised as finance
expenditure in the income statement.
2.15 Critical estimates and judgements
In the application of the Group's accounting policies the Directors are
required to make judgements that have a significant impact on the amounts
recognised and to make estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
The Directors have not identified any critical judgements that have a
significant effect on the amounts recognised in the consolidated financial
statements, apart from those involving estimations (which are explained
separately below).
2.16 Key Sources of Estimation Uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the balance sheet date, that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below.
Provision for bad debts
The Group applies IFRS 9 to measure the lifetime expected credit loss of trade
receivables. The lifetime expected credit loss is based upon historic loss
experience, which is then adjusted for information about current economic
conditions and reasonable and supportable forecasts of future economic
conditions. The expected credit loss on trade receivables at the reporting
date is estimated on the basis of these underlying assumptions. Refer to
Note 24(a) for the carrying value of trade receivables to which the expected
credit loss model is applied.
Impairment of goodwill
The Group determines whether goodwill is impaired on an annual basis. For
each group of CGUs to which goodwill has been allocated a goodwill impairment
review is performed. The carrying value of each group of CGUs to which
goodwill is allocated is compared to the recoverable amount, which is
determined through a value in use calculation. The value in use at each
reporting date is based on certain assumptions, including future forecast cash
flows, discount rates and growth rates. Refer to Note 11 for further
information in respect of the key assumptions applied in determining the value
in use for each group of CGUs.
Carrying value and useful lives of property, plant and equipment
The Group reviews the estimated useful lives of property, plant and equipment
at the end of each reporting period based on condition and usage of those
assets. Based on management's assessment as at the end of the reporting
period, the useful lives of property, plant and equipment remain
appropriate. The Group reviews at the end of each reporting period, the
carrying amounts of its property, plant and equipment to determine whether
there is any indication that these assets have suffered an impairment loss.
No impairment loss was recognised during the period.
2.17 Adjusting items
Adjusting items are significant items of income or expense in revenue, profit
from operations, net finance costs and/or taxation which individually or, if
of a similar type, in aggregate, are relevant to an understanding of the
Group's underlying financial performance because of their size, nature or
incidence. In identifying and quantifying adjusting items, the Group
consistently applies a policy that defines criteria that are required to be
met for an item to be classified as an adjusting item. These items are
separately disclosed in the segmental analysis or in the notes to the accounts
as appropriate.
The Group believes that these items are useful to users of the consolidated
financial statements in helping them to understand the underlying business
performance and are used to derive the Group's principal non-GAAP measure of
Adjusted EBITDA, which is before the impact of adjusting items and which is
reconciled from profit from operations.
3. Segmental analysis
For the year ended 31 December 2021
Asia Middle Head Office
Europe Americas Pacific East Total
£000 £000 £000 £000 £000 £000
Total revenue 33,241 11,779 7,911 2,874 - 55,805
Cost of sales (7,723) (4,599) (1,817) (1,123) - (15,262)
-------- -------- -------- -------- -------- --------
Gross profit 25,518 7,180 6,094 1,751 - 40,543
Administrative expenses (9,143) (3,799) (2,169) (1,064) (7,311) (23,486)
Other operating income 351 313 77 254 - 995
-------- -------- -------- -------- -------- --------
Operating profit before depreciation, amortisation and foreign exchange 16,726 3,694 4,002 941 (7,311) 18,052
gain/(loss)
Foreign exchange loss (215)
Depreciation (8,713)
Amortisation (1,516)
--------
Operating profit Finance costs 7,608
(4,019)
--------
Profit before taxation 3,589
Taxation charge (1,060)
--------
Profit for the financial year 2,529
--------
62,402 15,912 9,669 5,102 5,950 99,035
Total assets
Total liabilities 8,343 3,014 1,080 644 24,822 37,903
For the year ended 31 December 2020 (Unaudited)
Asia Middle Head Office
Europe Americas Pacific East Total
£000 £000 £000 £000 £000 £000
Total revenue 23,609 9,990 5,125 3,677 - 42,401
Cost of Sales (5,117) (2,718) (1,308) (1,901) - (11,044)
-------- -------- -------- -------- -------- --------
Gross profit 18,492 7,272 3,817 1,776 - 31,357
Administrative expenses (9,629) (3,873) (862) (1,122) (1,678) (17,164)
Other operating income 231 869 298 149 - 1,547
-------- -------- -------- -------- -------- --------
Operating profit before depreciation, amortisation and foreign exchange 9,094 4,268 3,253 803 (1,678) 15,740
(loss)/gain
Foreign exchange loss (312)
Depreciation (10,753)
Amortisation (1,567)
--------
Operating profit 3,108
Finance costs (3,849)
--------
Loss before taxation (741)
Taxation charge (257)
--------
Loss for the financial year (998)
--------
56,047 16,721 9,443 4,415 13,270 99,896
Total assets
Total liabilities 5,976 2,457 710 351 45,617 55,111
Central administrative expenses represent expenditures which are not directly
attributable to any single operating segment. The expenditure has not been
allocated to individual operating segments.
The revenues generated by each geographic segment almost entirely comprise
revenues generated in a single country. Revenues in the Europe, Americas, Asia
Pacific and Middle East segments are almost entirely generated in the UK, USA,
Singapore and UAE respectively. Revenues generated outside of these
jurisdictions are not material to the Group. The basis for the allocation of
revenues to individual countries is dependent upon the depot from which the
equipment is provided.
The carrying value of non-current assets, other than deferred tax assets,
split by the country in which the assets are held is as follows:
Unaudited
As at 31 Dec As at 31 Dec
2021 2020
£000 £000
UK 51,411 49,663
USA 11,394 13,868
Singapore 7,799 8,376
UAE 3,562 3,783
4. Revenue
(a) Revenue streams:
The Group's key revenue generating activity comprises equipment rental, sale
of equipment and provision of related services (non-rental revenue). The
revenue is attributable to the continuing activities of renting equipment,
selling equipment or providing a service.
2021 Unaudited
2020
£000 £000
Rental income (Note 19) 43,913 34,183
Non-rental revenue 11,892 8,218
Total revenue 55,805 42,401
(b) Disaggregation of revenue from contracts with customers:
Revenue from contracts with customers from sale of equipment and provision of
related services is disaggregated by primary geographical market, major
products and services and timing of revenue recognition.
2021 Unaudited
2020
Primary geographical markets £000 £000
Europe 7,579 5,222
Americas 3,052 1,409
Asia Pacific 550 171
Middle East 711 1,416
Non-rental revenue 11,892 8,218
Major products and services and timing of revenue recognition of non-rental
revenue:
2021 Unaudited
2020
£000 £000
Sale of equipment, transferred at a point in time 6,147 3,661
Provision of related services, transferred over time 5,745 4,557
Non-rental revenue 11,892 8,218
5. Operating profit
This is stated after charging/(crediting):
2021 Unaudited
2020
£000 £000
Spares, consumables and external repairs 2,838 2,651
Facilities costs 329 332
Depreciation on property, plant and equipment (Note 10) 7,878 9,924
Depreciation on right-of-use assets (Note 19) 835 829
Amortisation of intangible assets (Note 11) 1,516 1,567
Staff costs (Note 6) 13,851 10,696
Transaction costs 3,332 865
Other external charges 18,398 13,664
Foreign exchange losses 215 312
Total cost of sales and administrative expenses 49,192 40,840
The above includes:
Operating lease rentals 165 289
Impairment loss on trade receivables 788 401
Other operating income
Gain on sale of property, plant and equipment 995 1,156
Loan forgiveness - US Paycheck Protection Program* − 391
995 1,547
*During the year ended 31 December 2020 Ashtead Technology Offshore Inc had
taken a government loan of £391,000 under the US 'Paycheck Protection
Program'. The loan was forgiven on meeting the required criteria of the
program.
Fees payable to the auditor for the audit of the financial statements:
Total audit fees 167 116
Fees payable to the auditor and its associates for other services to the Group
Tax compliance services − 97
Corporate finance services** − 322
Reporting accountant services*** 152 −
Total non-audit fees 152 419
**These fees were capitalised in 2020 as part of the acquisition accounting
and not charged through the income statement.
***These fees were incurred as reporting accountant services provided by BDO
LLP in relation to the listing. Included in the total fee is £18,000 that
was deducted from share premium.
6. Staff costs
2021 Unaudited
2020
£000 £000
Wages and salaries 12,520 9,597
Social security costs 908 736
Other pension costs (Note 22) 423 363
13,851 10,696
The average number of employees during the year was as follows:
No. No.
Operations 122 100
Sales and administrative 77 76
199 176
Full details of the Directors' remuneration and interests are set out in the
Directors' Remuneration Report on pages 37 to 38 of the Group's Annual Report.
7. Finance costs
2021 Unaudited
2020
£000 £000
Interest on bank loans (held at amortised cost) 2,261 2,919
Amortisation of deferred finance costs 1,222 674
Loan note interest 71 76
Interest expense on lease liability (Note 19) 151 168
Hedge reserve movement 313 −
Other interest and charges 1 12
4,019 3,849
8. Tax
(a) Tax on profit/(loss) on ordinary activities
The tax charge is made up as follows:
2021 Unaudited
2020
£000 £000
Current tax:
UK corporation tax on profit/loss for the year 1,397 392
Adjustment in respect of previous periods (78) (23)
Foreign tax 1 203
Foreign tax adjustment in respect of previous periods − (21)
Exchange rate differences 4 (4)
Total current income tax 1,324 547
Deferred tax:
Origination and reversal of temporary differences (227) (220)
Origination and reversal of temporary differences - prior periods 292 38
Effect of changes in tax rates (326) (99)
Exchange rate differences (3) (9)
Total deferred tax (264) (290)
Tax charge in the profit and loss account (Note 8(b)) 1,060 257
(b) Factors affecting the current tax charge for the year
The tax assessed for the year differs from the standard rate of corporation
tax in the UK of 19% (2020: 19%). The differences are explained below:
2021 Unaudited
2020
£000 £000
Profit/(loss) on ordinary activities before taxation 3,589 (741)
Profit/(loss) on ordinary activities multiplied by standard rate of 682 (141)
corporation tax in the UK of 19% (2020: 19%)
Effects of:
Expenses not deductible for tax purposes 500 316
Income not taxable (43) (107)
RDEC expenditure credit − (6)
Gains/rollover relief 11 27
Effects of overseas tax rates 213 85
Adjustments in respect of previous periods 213 (7)
Tax rate changes (326) (61)
Unrecognised temporary differences − 35
Recognition of previously unrecognised tax losses (176) (118)
Current year losses for which no deferred tax asset is recognised − 251
Exchange rate difference 7 (17)
Adjustment in relation to IFRS 16 (21) −
Tax charge 1,060 257
(c) Income tax due
2021 Unaudited
2020
£000 £000
Income tax due 821 515
(d) Unrecognised tax losses:
The Group has tax losses which arose in the UK, Canada and USA of £10,255,000
(2020: £15,767,000) that are available indefinitely for offset against future
taxable profits of the Group companies in which the losses arose.
Deferred tax assets have not been recognised in respect of these losses as
they may not be used to offset taxable profits elsewhere in the Group and they
have arisen in subsidiaries that are loss making.
(e) Deferred tax:
Deferred tax included in the Group balance sheet is as follows:
2021 Unaudited
2020
£000 £000
Fixed asset timing differences 838 258
Short-term timing differences 76 17
Tax losses 242 472
Intangible asset timing differences (146) −
Deferred tax asset 1,010 747
The recoverability of the deferred tax asset is as follows:
2021 Unaudited
2020
£000 £000
Current 17 42
Non-current 993 705
1,010 747
9. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of Ordinary Shares in
issue during the year.
Diluted earnings per share
For diluted earnings per share, the weighted average number of Ordinary Shares
in issue is adjusted to assume conversion of all potentially dilutive Ordinary
Shares. During the year ended 31 December 2021, the Group had no potentially
dilutive Ordinary Shares.
Adjusted earnings per share
Earnings attributable to ordinary shareholders of the Group for the year,
adjusted to remove the impact of adjusting items and the tax impact of these,
divided by the weighted average number of Ordinary Shares outstanding during
the period.
Adjusted Statutory Adjusted Statutory
2021 2021 2020 2020
Earnings attributable to equity shareholders of the Group:
Profit/(loss) for the year (£000) 9,385* 2,529 2,022* (998)
Number of shares:
Weighted average number of Ordinary Shares - Basic 70,995,578 70,995,578 69,998,000 69,998,000
Weighted average number of Ordinary Shares - Diluted 70,995,578 70,995,578 69,998,000 69,998,000
Earnings per share attributable to equity holders of the Group - continuing
operations:
Basic earnings per share (pence) 13.2 3.6 2.9 (1.4)
Diluted earnings per share (pence) 13.2 3.6 2.9 (1.4)
* Refer to Note 27 for the reconciliation of Non-IFRS Profit Metrics.
10. Property, plant and equipment
Assets held for rental Leasehold improvements Freehold property Fixture and fittings Motor vehicles Total
£000 £000 £000 £000 £000 £000
Cost:
At 1 January 2020 106,402 1,439 197 3,344 148 111,530
Additions 4,197 113 − 283 121 4,714
Disposals (4,479) (1) − (282) (20) (4,782)
Foreign exchange movements (1,214) (14) − (23) (4) (1,255)
At 31 December 2020 104,906 1,537 197 3,322 245 110,207
(Unaudited)
Accumulated depreciation:
At 1 January 2020 (80,335) (839) (52) (2,585) (143) (83,954)
Charge for the year (9,523) (145) (8) (209) (36) (9,921)
Disposals 4,059 1 − 183 17 4,260
Foreign exchange movements 1,206 9 − 18 5 1,238
At 31 December 2020 (84,593) (974) (60) (2,593) (157) (88,377)
(Unaudited)
Net book value:
At 31 December 2020 20,313 563 137 729 88 21,830
(Unaudited)
Assets held for rental Leasehold improvements Freehold property Fixture and fittings Motor vehicles Total
£000 £000 £000 £000 £000 £000
Cost:
At 1 January 2021 104,906 1,537 197 3,322 245 110,207
Additions 6,625 201 − 421 56 7,303
Disposals (6,666) − − (29) − (6,695)
Foreign exchange movements 2 1 − (31) 4 (24)
At 31 December 2021 104,867 1,739 197 3,683 305 110,791
Accumulated depreciation:
At 1 January 2021 (84,593) (974) (60) (2,593) (157) (88,377)
Charge for the year (7,158) (244) (8) (296) (24) (7,730)
Disposals 6,252 − − 12 − 6,264
Foreign exchange movements (122) (1) − 10 (3) (116)
At 31 December 2021 (85,621) (1,219) (68) (2,867) (184) (89,959)
Net book value:
At 31 December 2021 19,246 520 129 816 121 20,832
11. Goodwill and intangible assets
Goodwill Customer relationships Non-compete arrangements Computer software Total
£000 £000 £000 £000 £000
Cost:
At 1 January 2020 48,722 4,448 208 2,647 56,025
Additions − − − 156 156
Disposals − − − (1) (1)
Foreign exchange movements (137) (1) − (1) (139)
At 31 December 2020 (Unaudited) 48,585 4,447 208 2,801 56,041
Amortisation:
At 1 January 2020 − (764) (39) (2,626) (3,429)
Charge for the year − (1,497) (70) (3) (1,570)
Disposals − − − 1 1
Foreign exchange movements − − − 1 1
At 31 December 2020 (Unaudited) − (2,261) (109) (2,627) (4,997)
Net book value:
At 31 December 2020 (Unaudited) 48,585 2,186 99 174 51,044
Goodwill Customer relationships Non-compete arrangements Computer software Total
£000 £000 £000 £000 £000
Cost:
At 1 January 2021 48,585 4,447 208 2,801 56,041
Additions − − − 966 966
Foreign exchange movements 66 − − 2 68
At 31 December 2021 48,651 4,447 208 3,769 57,075
Amortisation:
At 1 January 2021 − (2,261) (109) (2,627) (4,997)
Charge for the year − (1,449) (67) (148) (1,664)
Foreign exchange movements − − − (3) (3)
At 31 December 2021 − (3,710) (176) (2,778) (6,664)
Net book value:
At 31 December 2021 48,651 737 32 991 50,411
Goodwill has arisen on the acquisition of the following subsidiaries: Amazon
Group Limited (the parent company of the existing Ashtead Technology Group at
the time of acquisition, in April 2016), TES Survey Equipment Services LLC,
Welaptega Marine Limited, Aqua-Tech Solutions LLC and its subsidiary Alpha
Subsea LLC, and Underwater Cutting Solutions Limited, as well as the
acquisition of the trade and assets of Forum Subsea Rentals, a division of
Forum Energy Technologies (UK) Limited, Forum Energy Asia Pacific PTE Ltd and
Forum US, Inc.
There has been a reclassification of computer software from property, plant
and equipment to intangible assets. The impact on 2020 is immaterial.
Impairment testing for CGUs containing goodwill
For the purpose of impairment testing, goodwill has been allocated to the
Group's CGUs as follows. The group of CGUs to which goodwill has been
allocated are consistent with the Group's operating segments.
2021 Unaudited
2020
£000 £000
Europe 34,916 34,916
Americas 6,569 6,503
Asia Pacific 5,336 5,336
Middle East 1,830 1,830
An impairment test has been performed in respect of each of the groups of CGUs
to which goodwill has been allocated on each reporting date.
For each of the operating segments to which goodwill has been allocated, the
recoverable amount has been determined on the basis of a value in use
calculation. In each case, the value in use was found to be greater than the
carrying amount of the group of CGUs to which the goodwill has been
allocated. Accordingly, no impairment to goodwill has been recognised. The
value in use has been determined by discounting future cash flows forecast to
be generated by the relevant regional segment.
A summary of the key assumptions on which management has based its cash flow
projections at each reporting date is as follows:
2021 Unaudited
2020
£000 £000
Europe: 11.6% 11.8%
Pre-tax discount rate
Terminal value growth rate 2% 2%
Forecast period 2 years 3 years
Americas: 11.6% 12.3%
Pre-tax discount rate
Terminal value growth rate 2% 2%
Forecast period 2 years 3 years
Asia Pacific: 11.6% 11.6%
Pre-tax discount rate
Terminal value growth rate 2% 2%
Forecast period 2 years 3 years
Middle East: 11.6% 10%
Pre-tax discount rate
Terminal value growth rate 2% 2%
Forecast period 2 years 3 years
In determining the above key assumptions, management has considered past
experience together with external sources of information where available
(e.g., industry-wide growth forecasts). The discount rate applied to each
CGU represents a pre-tax rate that reflects the market assessment of the time
value of money as at 31 December 2021 and the risks specific to the CGU.
Beyond the two year Group forecast period these projections are extrapolated
using a terminal value growth rate. Sensitivity analysis has been performed
in respect of the key assumptions above with no impairment identified from the
sensitivities performed.
12. Inventories
2021 Unaudited
2020
£000 £000
Raw materials and consumables 1,778 1,245
The cost of inventories recognised as an expense and included in cost of sales
during the year is disclosed in Note 5.
13. Trade and other receivables
2021 Unaudited
2020
£000 £000
Trade receivables (Note 24(a)) 14,212 7,723
Prepayments and accrued income 3,012 2,241
Amounts due from related parties (Note 25) − 1,292
17,224 11,256
The Directors consider that the carrying amount of trade and other receivables
approximates to fair value. The amounts owed by related parties bear no
interest and are due on demand.
Information about the Group's exposure to credit and market risks, and
impairment losses for trade receivables is included in Note 24.
14. Cash and cash equivalents
2021 Unaudited
2020
£000 £000
Cash at bank 4,842 10,953
Cash in hand 15 5
Cash and cash equivalents 4,857 10,958
Cash at bank earns interest at floating rates based on daily bank overnight
deposit rates. The Directors consider that the carrying amount of cash and
cash equivalents equates to fair value.
Foreign currency denominated balances within Group cash and cash equivalents
amount to:
2021 Unaudited
2020
£000 £000
US dollar denominated balances 1,581 3,124
Singapore dollar denominated balances 864 2,612
Canadian dollar denominated balances 150 200
AED denominated balances 133 154
2,728 6,090
All other balances are denominated in sterling.
15. Trade and other payables
2021 Unaudited
2020
£000 £000
Trade payables 3,349 2,487
Accruals 5,682 4,701
Amounts due to related parties (Note 25) 384 55
9,415 7,243
The Directors consider that the carrying amount of trade and other payables
equates to fair value. The amounts due to related parties bear no interest
and are due on demand.
The Group's exposure to currency and liquidity risks is included in Note 24.
16. Derivative financial instruments
The Group held three interest rate swaps which are designated to hedge a
portion of the interest payments on each of the sterling and US dollar
denominated facilities arising until 30 June 2021. The fair value of
interest rate swaps has been valued by calculating the present value of future
cash flows, estimated using forward rates from third party market price
quotations.
The table below summarises the fair value of the interest rate swaps at each
reporting date:
2021 Unaudited
2020
£000 £000
Current liabilities
Interest rate swaps used for hedging − (38)
Average contract fixed interest rate (%) 0.6607% 0.6607%
Notional principal value − 13,661
The interest rate swaps settled on a quarterly basis. The floating rate on
the interest rate swaps was three months LIBOR. The Group settled the
difference between the fixed and floating interest rate on a net basis. All
interest rate swap contracts exchanging floating rate interest amounts for
fixed rate interest amounts are designated as cash flow hedges to reduce the
Group's cash flow exposure resulting from variable interest rates on
borrowings. The hedged cash flows were expected to occur and to affect
profit or loss over the period to maturity of the interest rate swaps.
Amount recognised in profit or loss:
The Group has recognised derivatives initially at fair value at the date a
derivative contract is entered into and subsequently remeasured to their fair
value at each reporting date. The amount recognised in the consolidated income
statement in relation to derivatives for the year ended 31 December 2021 is
£313,000.
Amount recognised in other comprehensive income:
The Group has applied hedge accounting for the interest rate swaps. The
table below details the changes in fair value of derivative assets recorded in
the consolidated other comprehensive income:
Interest rate swaps Total hedging
reserves
£000 £000
At 1 January 2020 (243) (243)
Changes in fair value of hedging instruments recognised in other comprehensive (108) (108)
income
At 31 December 2020 (Unaudited) -------- --------
(351) (351)
Changes in fair value of hedging instruments recognised in other comprehensive 351 351
income
At 31 December 2021 -------- --------
− −
-------- --------
(a) Sterling interest rate swap
The fair value of the sterling interest rate swap at the balance sheet date
was £nil (2020: liability £24,000). This swap is designated as a hedge on
approximately 36% (2020: 34%) of the expected floating rate payments expected
to arise in the period to 30 June 2021 on £26,841,000 (2020: £29,663,000)
senior sterling bank loans. The terms of this contract is that the Group
paid a fixed rate of 0.5355% and 0.525% and received 3 month floating LIBOR
rate from HSBC (net settled quarterly) on a £9,564,000 (2020: £9,948,000)
notional sum subject to a repayment schedule in line with the bank loan.
(b) US dollar interest rate swap
The fair value of the US dollar interest rate swap at the balance sheet date
was £nil (2020: liability £14,000). This swap is designated as a hedge on
approximately 35% (2020: 33%) of the expected floating rate payments expected
to arise in the period to 30 June 2021 on $13,236,000 (2020: $15,314,000) US
dollar bank loan. The terms of this contract are that the Group paid a fixed
rate of 1.003% and received three month floating LIBOR rate from HSBC (net
settled quarterly) on a $4,693,000 (2020: $5,087,000) notional sum subject to
a repayment schedule in line with the bank loan.
Information about the Group's exposure to interest rate, credit and market
risks is included in Note 24.
17. Loan and borrowings
2021 Unaudited
2020
£000 £000
Current
Bank loans (held at amortised cost) − 8,007
− 8,007
Non-current
Bank loans (held at amortised cost) 24,425 35,001
Related party loan notes (Note 25) − 1,121
24,425 36,122
At 31 December 2021 the bank loans comprise a revolving credit facility of
£24,953,000 which carried interest at SONIA plus 2.2%. The lenders are HSBC
Bank plc and Clydesdale Bank plc. The Facility Agreement is subject to a
leverage covenant of 2.5 and an interest cover covenant of 4:1. The total
commitments are £40,000,000 for the RCF and an additional £10,000,000
accordion facility. As at 31 December 2021 the RCF had an undrawn balance of
£15,047,000 and the £10,000,000 accordion facility was undrawn. A
non-utilisation fee of 0.88% is charged on the non-utilised element of the RCF
facility. The revolving credit facility is fully repayable by November 2024.
At 31 December 2020 the bank loans comprised senior bank debt of £43,841,000
and the senior A, B and revolving credit facility debt carried interest at
LIBOR plus 3.5%, 4.0% and 5.0% respectively. The senior A, B and revolving
credit facility were repaid in full in November 2021.
Certain companies within the Group joined in cross guarantees with respect to
bank loans totalling £24,953,000 (2020: £43,841,000) advanced to Ashtead
Technology Limited and Ashtead Technology Offshore Inc. The lenders have a
floating charge over certain assets of the Group.
Bank loans are repayable as follows:
2021 Unaudited
2020
£000 £000
Within one year − 8,674
Within one to two years − 35,167
Within two to three years 24,953 −
24,953 43,841
Deferred finance costs (528) (833)
24,425 43,008
The related party loan notes carried interest at 7% which capitalised
quarterly and was repaid in full in November 2021.
The weighted average interest rates on floating rate instruments during the
year was as follows:
2021 Unaudited
2020
Weighted average interest rates 5.54% 5.84%
The Group's exposure to interest rate, foreign currency and liquidity risks is
included in Note 24.
18. Financing liabilities reconciliation
1 January 2020 Cash flows Forgiveness of US PPP loan Interest paid Other Changes in exchange rates Unaudited
non-cash changes 31 December 2020
£000 £000 £000 £000 £000 £000 £000
Cash at bank and in hand 4,855 6,354 − − − (251) 10,958
(47,490) 4,454 391 − (674) 311 (43,008)
Bank loans
Related party loan notes (1,045) − − − (76) − (1,121)
Lease liabilities (3,483) 721 − 168 (510) 52 (3,052)
Net debt (47,163) 11,529 391 168 (1,260) 112 (36,223)
The non-cash movement relates to amortisation of deferred finance costs,
accrual of finance costs on related party loan notes and lease liability, and
addition of new leases during the year.
1 January 2021 Cash flows Interest paid Other Changes in exchange rates 31 December 2021
non-cash changes
£000 £000 £000 £000 £000 £000
Cash at bank and in hand 10,958 (6,326) − − 225 4,857
(43,008) 19,928 − (1,222) (123) (24,425)
Bank loans
Related party loan notes (1,121) 830 − 291 − −
Lease liabilities (3,052) 1,012 151 (919) (326) (3,134)
Net debt (36,223) 15,444 151 (1,850) (224) (22,702)
The non-cash movement relates to the amortisation of deferred finance costs,
accrual of finance costs on related party loan notes and lease liability, and
the addition of new leases during the year.
19. Leases
Leases as lessee
The Group leases warehouses, offices, and other facilities in different
locations (UK, UAE, Singapore, Canada, USA). The lease term ranges from 2 to
15 years with an option to renew available for some of the leases. Lease
payments are renegotiated every 3-5 years to reflect market terms. The Group
has elected not to recognise right-of-use assets and lease liabilities for
leases that are short-term and/or of low-value items. The Group recognises
the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
Further information about leases is presented below:
a) Amounts recognised in consolidated balance sheet
Right-of-use assets £000
Balance at 1 January 2020 3,349
Additions to right-of-use assets 342
Depreciation charge for the year (829)
Effects of movements in exchange rates (46)
--------
Balance at 31 December 2020 (Unaudited) 2,816
--------
Additions to right-of-use assets 940
Depreciation charge for the year (835)
Effects of movements in exchange rates 2
--------
Balance at 31 December 2021 2,923
--------
2021 Unaudited
2020
Lease liabilities: £000 £000
Current 783 676
Non-current 2,351 2,376
Total lease liabilities 3,134 3,052
Refer to Note 24(b) for more information on maturity analysis of lease
liabilities.
b) Amounts recognised in the income statement
2021 Unaudited
2020
£000 £000
Depreciation charge 835 829
Interest expense on lease liability 151 168
Expenses relating to short-term leases 165 289
Total amount recognised in the income statement 1,151 1,286
c) Amounts recognised in the cash flow statement
2021 Unaudited
2020
£000 £000
Total cash payments for leases 1,163 890
Leases as a lessor
The Group leases out equipment to its customers. The lease period is short
term which ranges from weeks to a few months. All leases are classified as
operating leases from a lessor perspective, because they do not transfer
substantially all of the risks and rewards incidental to the ownership of the
equipment.
The Group as a lessor recognises lease payments received from operating leases
as income on a straight-line basis. Increases (or decreases) in rental
payments over a period of time, other than variable lease payments, are
reflected in the determination of the lease income, which is recognised on a
straight-line basis (refer to Note 4).
20. Provisions for liabilities
Other
£000
At 1 January 2020 112
Charge for the year 34
Paid during the year (6)
Movement in foreign exchange (6)
At 31 December 2020 (Unaudited) 134
Charge for the year 28
Paid during the year (56)
Movement in foreign exchange 2
At 31 December 2021 108
Other
Other provisions relate to end of service benefits for certain employees.
The actual amount payable is dependent on the length of service of the
impacted employees when their employment ceases and their salary at that
time. The provision is calculated on the impacted employees' length of
service and salary at the balance sheet date.
21. Capital commitments
2021 Unaudited
2020
£000 £000
Capital expenditure contracted for but not provided 2,825 297
22. Employee benefits
Defined contribution scheme
The Group operates defined contribution retirement benefit schemes for all
qualifying employees. The total expense charged to the income statement in
the year ended 31 December 2021 was £423,000 (2020: £363,000). There was
a balance outstanding of £59,000 in relation to pension liabilities at
31 December 2021 (2020: £44,000).
23. Share capital and reserves
The Group considers its capital to comprise its invested capital, called up
share capital, merger reserve, retained earnings and foreign exchange
translation reserve. Quantitative detail is shown in the consolidated
statement of changes in equity. The Directors' objective when managing
capital is to safeguard the Group's ability to continue as a going concern in
order to provide returns for the shareholders and benefits for other
stakeholders.
Called up share capital 31 December 2021 Unaudited
31 December 2020
Allotted, called up and fully paid No. £000 No. £000
Ordinary shares of £0.05 each 79,580,000 3,979 69,998,000 3,500
3,979 3,500
Ordinary share capital represents the number of shares in issue at their
nominal value. In the current year, the share capital of the former Group
has been replaced with the newly issued listed shares following the IPO.
Ordinary Shares of 9,582,000 with a nominal value of £479,000 were issued on
IPO. The holders of Ordinary Shares are entitled to receive dividends as
declared from time to time and are entitled to one vote per share at meetings
of the Company.
Share premium
Share premium represents the amount over the par value which was received by
the Group upon the sale of the Ordinary Shares. Upon the date of listing the
par value of the shares was £0.05 but the initial offering price was
£1.62. Share premium is stated net of direct costs of £929,000 relating to
the issue of the shares.
Merger reserve
The merger reserve was created as a result of the share for share exchange
under which Ashtead Technology Holdings plc became the parent undertaking
prior to the IPO. Under merger accounting principles, the assets and
liabilities of the subsidiaries were consolidated at book value in the Group
financial statements and the consolidated reserves of the Group were adjusted
to reflect the statutory share capital, share premium and other reserves of
the Company as if it had always existed, with the difference presented as the
merger reserve.
Hedging reserve
The hedging reserve records the portion of the gains and losses from changes
in fair value on hedging instruments that are deemed to be effective.
Foreign currency translation reserve
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on consolidation, are translated to the Group's
presentational currency, sterling, at foreign exchange rates ruling at the
balance sheet date. The revenues and expenses of foreign operations are
translated at an average rate for each month where this rate approximates to
the foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign operations are
reported as an item of other comprehensive income and accumulated in the
translation reserve, within invested capital. When a foreign operation is
disposed of, such that control, joint control or significant influence (as the
case may be) is lost, the entire accumulated amount in the foreign currency
translation reserve is recycled to the income statement as part of the gain or
loss on disposal.
Retained earnings
The movement in retained earnings is as set out in the Consolidated Statement
of Changes in Equity. Retained earnings represent cumulative profits or
losses, net of dividends and other adjustments.
24. Financial instruments
Financial risk management
Risk management framework:
The Group's risk management policies are established to identify and analyse
the risks faced by the Group, to set appropriate risk limits and controls and
to monitor risks and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the
Group's activities.
The Group has exposure to the following risks arising from financial
instruments:
· Credit risk
· Liquidity risk
· Market risk
a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group's receivables from
customers. The Group has no significant concentration of credit risk, with
exposure spread over a large number of customers.
The credit risk on liquid funds held with HSBC and Bank of Montreal is
considered to be low. The long-term credit rating for HSBC is AA-/A+ per
Fitch/Standard & Poor's. The long-term credit rating for Bank of
Montreal is AA/A+ per Fitch/Standard & Poor's.
The Group has established a credit policy under which each new customer is
analysed individually for creditworthiness before the Group's standard payment
and delivery terms and conditions are offered. The Group's review includes
external ratings, if they are available, financial statements, credit agency
information, industry information and in some cases bank references. Sale
limits are established for each customer and reviewed quarterly. Any sales
exceeding those limits require approval from management.
Trade receivables
The Group has used a practical expedient by computing the expected credit loss
allowance for trade receivables based on a provision matrix. The provision
percentage is determined for each subsidiary independently.
2021 Unaudited
2020
£000 £000
Current (not past due) 4,698 2,447
Past due 0-90 days 8,934 5,181
Past due 91-180 days 1,459 756
Past due 181-270 days 484 376
Past due 271-365 days 51 60
More than 365 days 410 182
-------- --------
16,036 9,002
-------- --------
Movements in the allowance for impairment in respect of trade receivables
The movement in the allowance for impairment in respect of trade receivables
during the year was as follows:
Movement in provision for doubtful debts £000
Balance at 1 January 2020 (1,250)
Movement during the year (29)
At 31 December 2020 (Unaudited) --------
(1,279)
Movement during the year (545)
At 31 December 2021 --------
(1,824)
--------
Cash and cash equivalents
The Group held cash and cash equivalents and other bank balances of
£4,857,000 at 31 December 2021 (2020: £10,958,000). The cash and cash
equivalents are held with the HSBC Bank plc and Bank of Montreal.
Derivative financial instruments
The derivatives were entered into with HSBC Bank plc.
b) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. The Group's objective when
managing liquidity is to ensure that it will have sufficient liquidity to meet
its liabilities when they are due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group's
reputation. The Group utilises both long and short-term borrowing
facilities.
Cash flow forecasting is performed centrally with rolling forecasts of the
Group's liquidity requirements regularly monitored to ensure it has sufficient
cash to meet operational needs. The Group's revenue model results in a
strong level of cash conversion allowing it to service working capital
requirements.
The Group has access to multicurrency RCF and accordion facility which have
total commitments of £40,000,000 and £10,000,000 respectively. As at 31
December 2021 the RCF had an undrawn balance of £15,047,000 and the
£10,000,000 accordion facility was undrawn.
Maturities of financial liabilities
The table below analyses the Group's financial liabilities into relevant
maturity groupings based on their contractual maturities:
As at 31 December 2020 (Unaudited) Contractual cash flows
Carrying total Total Within one year Between one to two years Between two to five years More than five years
Non-derivative financial liabilities £000 £000 £000 £000 £000 £000
Bank loans 43,008 43,841 8,674 35,167 − −
Related party loan notes 1,121 1,121 − 1,121 − −
Trade and other payables 7,243 7,243 7,243 − − −
Lease liabilities 3,052 3,480 810 721 1,330 619
54,424 55,685 16,727 37,009 1,330 619
Derivative financial liabilities
Interest rate swaps 38 38 38 − − −
38 38 38 − − −
As at 31 December 2021 Contractual cash flows
Carrying total Total Within one year Between one to two years Between two to five years More than five years
Non-derivative financial liabilities £000 £000 £000 £000 £000 £000
Bank loans 24,425 24,953 − − 24,953 −
Trade and other payables 9,415 9,415 9,415 − − −
Lease liabilities 3,134 3,672 966 767 1,577 362
36,974 38,040 10,381 767 26,530 362
c) Market risk
Market risk is the risk that changes in market prices - such as foreign
exchange rates, interest rates and equity prices - will affect the Group's
income or the value of its holdings of financial instruments. The Group's
exposure to market risk is primarily related to currency risk and interest
rate risk.
Currency risk
Currency risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in foreign exchange
rates. The Group's activities expose it primarily to the financial risks of
movements in foreign currency exchange rates. The Group monitors net
currency exposures and hedges as necessary.
The Company has no monetary assets and liabilities denominated in currencies
that are different to the functional currency of the Company.
Interest risk
Interest rate risk can be either fair value interest rate risk or cash flow
interest rate risk. Fair value interest rate risk is the risk of changes in
fair values of fixed interest-bearing investments and loans. Cash flow
interest rate risk is the risk that the future cash flows of floating
interest-bearing investments and loans will fluctuate because of fluctuations
in the interest rates.
The Group is exposed to interest rate movements on its external bank
borrowing. Based on average loans and borrowings an increase/(decrease) of
0.25% in effective interest rates would increase/(decrease) the interest
charged to the income statement by £62,000 (2020: £68,000).
d) Capital risk management
The Group's objectives when managing capital (defined as net debt plus equity)
are to safeguard the Group's ability to continue as a going concern in order
to provide returns to shareholders and benefits for other stakeholders, while
optimising returns to shareholders through an appropriate balance of debt and
equity funding. The Group manages its capital structure and makes adjustments
to it with respect to changes in economic conditions and strategic objectives.
As at 31 December 2021, the Group had gross borrowings of £24,953,000 through
its RCF and a cash and cash equivalents balance of £4,857,000. Currently
interest is payable on the RCF at a rate of SONIA plus 2.2%. The Group
remains in compliance with its banking covenants.
25. Related parties
Note 26 provides information about the entities included in the consolidated
financial statements as well as the Group's structure, including details of
the subsidiaries and the holding company.
Key managerial personnel:
Allan Pirie
Ingrid Stewart
Bill Shannon
Joe Connolly
Tony Durrant
Thomas Thomsen
Directors' interests in the Ordinary Shares of the Group are included in the
Directors Report on page 38 of the Group's Annual Report.
Entity with significant influence over the Group:
BP INV2 Holdco Limited
BP INV2 Newco Limited
BP INV2B Bidco Limited
A. Transactions during the period with related parties: 2021 Unaudited
2020
£000 £000
Dividend expense* 476 -
BP INV2 Newco Limited 820 -
BP INV2B Bidco Limited
Interest expense 71 75
BP INV2B Bidco Limited
Compensation to key management personnel 838 282
Emoluments
* The dividend expense related to the pre-IPO group restructure.
Full details of the Directors' remuneration and interests are set out in the
Directors' Remuneration Report on pages 37 to 38 of the Group's Annual Report.
B. Outstanding balances with related parties as at Unaudited
year end:
2021 2020
£000 £000
Receivables from:
BP INV2B Bidco Limited - 820
BP INV2 Holdco Limited - 421
BP INV2 Newco Limited - 51
- 1,292
Payables to:
BP INV2B Bidco Limited (362) -
BP INV2 Holdco Limited (20) (46)
BP INV2 Newco Limited (2) (9)
(384) (55)
Related party loan notes payable to:
BP INV2B Bidco Limited - (1,121)
26. Group structure
A full list of subsidiary undertakings of Ashtead Technology Holdings plc as
defined by IFRS as at 31 December 2021 is disclosed below.
Equity interest at
Country of incorporation Unaudited
Name of the Group company 2021 2020
BP INV2 Pledgeco Limited (1) England & Wales 100% 100%
Ashtead US Pledgeco Inc USA 100% 100%
Amazon Acquisitions Limited^ (1) England & Wales 100% 100%
Ashtead Technology (South East Asia) Singapore 100% 100%
PTE Limited^ (2)
Ashtead Technology Limited^ (3) Scotland 100% 100%
TES Survey Equipment Services LLC^ (5) UAE 100% 100%
Ashtead Technology Offshore Inc^ (4) USA 100% 100%
Welaptega Marine Limited^ (6) Canada 100% 100%
Aqua-Tech Solutions LLC^ (4) USA 100% 100%
Alpha Subsea LLC^ (4) USA 100% 100%
Underwater Cutting Solutions Ltd^ (1) England & Wales 100% 100%
^ Shares held by a subsidiary undertaking.
(1) The registered address of the subsidiary is 1 Gateshead Close, Sunderland
Road, Sandy, Bedfordshire, SG19 1RS, United Kingdom.
(2) The registered address of the subsidiary is 80 Raffles Place, #32-01 UOB
Plaza 1, Singapore, 048624.
(3) The registered address of the subsidiary is Ashtead House, Discovery
Drive, Arnhall Business Park, Westhill, AB32 6FG, United Kingdom.
(4) The registered address of the subsidiary is 2711 Centerville Road, Suite
400, Wilmington, Delaware, 19808, USA.
(5) The registered address of the subsidiary is Warehouse B301, Plot M29, ICAD
III, Musaffah, Abu Dhabi, UAE.
(6) The registered address of the subsidiary is 238 Brownlow Avenue, Unit 103,
Dartmouth, Nova Scotia, B3B 1Y2, Canada.
27. Reconciliation of Non-IFRS Profit Metrics
Reconciliation of Adjusted EBITDA Unaudited
For the year ended 31 December 2021 2020
£000 £000
Adjusted EBITDA 22,437 17,037
Cost associated with IPO (3,332) -
Cost associated with M&A - (865)
Restructuring costs (1,314) (374)
One-off upgrade of IT system - (113)
One-off bad debts & debt collection costs (39) (319)
One-off inventory adjustment 205 -
One-off asset disposal 130 -
US PPP loan forgiveness - 391
Other exceptional costs (35) (17)
-------- --------
Operating profit before depreciation, amortisation and foreign exchange
gain/(loss)
18,052 15,740
Depreciation on property, plant and equipment 10 (7,878) (9,924)
Depreciation on right-of-use asset 19 (835) (829)
-------- --------
Operating profit before amortisation and foreign exchange gain/(loss)
9,339 4,987
Amortisation of intangible assets 11 (1,516) (1,567)
Foreign exchange gain/(loss) (215) (312)
-------- --------
Operating profit 7,608 3,108
Reconciliation of Adjusted EBITA Unaudited
For the year ended 31 December 2021 2020
£000 £000
Adjusted EBITA 13,724 6,284
Cost associated with IPO (3,332) -
Cost associated with M&A - (865)
Restructuring costs (1,314) (374)
One-off upgrade of IT system - (113)
One-off bad debts & debt collection costs (39) (319)
One-off inventory adjustment 205 -
One-off asset disposal 130 -
US PPP loan forgiveness - 391
Other exceptional costs (35) (17)
Amortisation of intangible assets 11 (1,516) (1,567)
Foreign exchange gain/(loss) (215) (312)
-------- --------
Operating profit 7,608 3,108
Reconciliation of Adjusted Profit After Tax Unaudited
For the year ended 31 December 2021 2020
£000 £000
Adjusted Profit After Tax 9,385 2,022
Cost associated with IPO (3,332) -
Cost associated with M&A - (865)
Restructuring costs (1,314) (374)
One-off upgrade of IT system - (113)
One-off bad debts & debt collection costs (39) (319)
One-off inventory adjustment 205 -
One-off asset disposal 130 -
US PPP loan forgiveness - 391
One-off hedge reserve movement (313) -
Loan repayment fees (100) -
Deferred finance cost write off (704) -
Other exceptional costs (35) (17)
Foreign exchange gain/(loss) (215) (312)
Amortisation of intangible assets 11 (1,516) (1,567)
Tax impact of the adjustments above 377 156
-------- --------
Profit/(loss) for the financial year 2,529 (998)
Adjusted Profit After Tax is used to calculate the Adjusted basic earnings per
share in Note 9. A reconciliation of adjusted profit before tax is included
in the CFO report on page 19 of the Group's Annual Report.
Company Information
Directors
W M F C Shannon (appointed 23 November 2021)
A W Pirie (appointed 4 November 2021)
I Stewart (appointed 4 November 2021)
J A Connolly (appointed 4 November 2021)
A R C Durrant (appointed 23 November 2021)
T Hamborg-Thomsen (appointed 23 November 2021)
P Blackburn (appointed 27 May 2021, resigned 4 November 2021)
M A Caveley (appointed 27 May 2021, resigned 4 November 2021)
Company Secretary
I Stewart
Auditor
BDO LLP
Statutory Auditor
4 Atlantic Quay
70 York Street
Glasgow G2 8JX
Bankers
HSBC Bank plc
95-99 Union Street
Aberdeen AB11 6BD
Clydesdale Bank plc
1 Queen's Cross
Aberdeen AB15 4XU
Solicitors
White & Case LLP
5 Old Broad Street
London EC2N 1DW
Corporate broker
Numis Securities Ltd
45 Gresham Street
London EC2V 7BF
Registrar
Computershare Limited
The Pavilions
Bridgwater Road
Bristol BS13 8AE
Registered Office
1 Gateshead Close
Sunderland Road
Sandy
Bedfordshire SG19 1RS
Registered number: 13424040
Website
www.ashtead-technology.com (http://www.ashtead-technology.com)
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