REG - Ashtead Tech Hldgs - Unaudited Half Year Results 2022
05/09/2022 07:00
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RNS Number : 1924Y Ashtead Technology Holdings plc 05 September 2022
5 September 2022
Ashtead Technology Holdings plc
("Ashtead Technology" or the "Group")
Unaudited Half Year Results for the Six-Months Ended 30 June 2022
Strong start to the year with positive outlook
Ashtead Technology Holdings plc (AIM: AT.), a leading subsea equipment rental
and solutions provider for the global offshore energy sector, announces its
unaudited results for the six months ended 30 June 2022 ("HY22" or "the
period").
Financial Performance
£'m HY22 HY21 % Movement
Revenue 31.7 24.7 28.5%
Gross profit 23.3 17.8 30.9%
Gross profit % 73.4% 72.0% 140bps
Adjusted EBITDA(1) 12.3 10.1 21.1%
Adjusted EBITDA % 38.6% 41.0% (240bps)
Adjusted EBITA(2) 8.2 5.5 47.7%
Adjusted EBITA % 25.8% 22.4% 340bps
Adjusted profit before tax(3) 7.6 3.9 95.3%
Adjusted earnings per share 8.3p 4.1p 102.0%
Return on Invested Capital(4) 19.1% 10.9% 820bps
Leverage(5) 0.9 1.8
Additional Statutory Accounting Measures
£'m HY22 HY21 % Movement
Operating profit 7.5 4.0 85.5%
Profit before tax 6.9 2.1 233.1%
Basic earnings per share 7.4p 1.9p 289.5%
(1)Adjusted EBITDA is defined as operating profit adjusted to add back,
depreciation, amortisation, foreign exchange movements and non-trading items
as shown in Note 17 of the HY22 accounts
(2)Adjusted EBITA is defined as operating profit adjusted to add back,
amortisation, foreign exchange movements and non-trading items as shown in
Note 17 of the HY22 accounts
(3)Adjusted profit before tax is defined as profit before tax adjusted to add
back amortisation, foreign exchange movements and non-trading items as shown
in Note 17 of the HY22 accounts
(4)Return on Invested Capital is defined as LTM(6) Adjusted EBITA divided by
Invested Capital. Invested capital is defined as average net debt plus
average equity
(5)Leverage is defined as LTM Adjusted EBITDA divided by net debt
(6)LTM is defined as latest twelve months to 30 June 2022
· Strong year-on-year revenue increase (28.5%) delivered through
growth across all geographic markets, enabled by higher demand in both
offshore renewables and offshore oil and gas
o Offshore renewables revenue increased by 25.6% to £9.4m (HY21: £7.5m)
o Offshore oil and gas revenue increased by 29.8% to £22.4m (HY21: £17.2m)
· Gross Profit margin increased to 73.4% (HY21: 72.0%)
reflecting higher cost utilisation and improved pricing
· Adjusted EBITDA rose 21.1% to £12.3m (HY21: £10.1m), with
EBITDA margin in line with expectations
· Adjusted EBITA increased by 47.7% to £8.2m (HY21: £5.5m) with an
adjusted EBITA margin of 25.8% (HY2021: 22.4%) driven by top line growth
· Net debt of £21.2m with leverage reducing to 0.9x from 1.0x at
year end due to cash generation and growth in LTM EBITDA
Operational Highlights and Outlook
· LTM average cost utilisation of 44% (H1 2021: 39%),
reflecting an increase in offshore activity across both oil and gas, and
renewables end markets
· Year to date investment of £7.6m in capital expenditure
supporting rental fleet expansion (HY21: £2.5m), positioning the business for
continued growth. Spend accelerated in HY22 to capture market opportunity
and minimise delays due to extended lead times
· Quoting activity increased with value of quotes in HY22 up
29% compared to HY21
· Employee headcount at 30 June 2022 of 219, 7% higher than last
year end, positioning the business for continued growth
· Further strengthening of senior team through appointment of
Phil Middleton as Survey & Robotics Director, Bob Gillespie as Commercial
Director and Ross MacLeod as Integrated Projects Director
· Continuing to review M&A opportunities to complement organic
growth and consolidate a highly fragmented market. Separate announcement
made today regarding signing of sale and purchase agreement to acquire
WeSubsea, transaction expected to complete Q4 2022
· The Board is very encouraged by the Group's performance in
HY22 and expects FY22 to be at least in line with market expectations
Allan Pirie, Chief Executive Officer, said:
"We are pleased with our half year performance which demonstrates continued
positive momentum in the business against a supportive backdrop. As
governments set out their plans to ensure energy security, investment in both
oil and gas and renewables offshore infrastructure is expected to continue.
We are well placed to benefit from this, and the market fundamentals remain
strong for Ashtead Technology. Our HY22 results and end market outlook give
us increased confidence in the outlook for our business."
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
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.
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.
Headquartered in the UK, the Company operates globally, servicing customers
from its nine facilities located in key offshore energy hubs.
Cautionary Statement
This announcement contains certain forward-looking statements, including with
respect to the Group's current targets, expectations and projections about
future performance, anticipated events or trends and other matters that are
not historical facts. These forward-looking statements, which sometimes use
words such as "aim", "anticipate", "believe", "intend", "plan", "estimate",
"expect" and words of similar meaning, include all matters that are not
historical facts and reflect the directors' beliefs and expectations, made in
good faith and based on the information available to them at the time of the
announcement. Such statements involve a number of risks, uncertainties and
assumptions that could cause actual results and performance to differ
materially from any expected future results or performance expressed or
implied by the forward-looking statement and should be treated with caution.
Any forward-looking statements made in this announcement by or on behalf of
Ashtead Technology speak only as of the date they are made. Except as
required by applicable law or regulation, Ashtead Technology expressly
disclaims any obligation or undertaking to publish any updates or revisions to
any forward-looking statements contained in this announcement to reflect any
changes in its expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is based.
Upon publication of this announcement, this information is now considered in
the public domain.
CEO STATEMENT
I am pleased to present our first half year results statement following our
IPO in November 2021. The focus during HY22 has been on continued investment
in both equipment and people to capitalise on the positive momentum within the
markets in which we operate and position the business for further growth. We
have been delighted with the progress the business has made in its short
period since listing and believe we are well‑placed to take advantage of the
current market dynamics.
The strong market demand has enabled us to improve cost utilisation and
pricing and deliver a strong financial performance in HY22. We saw a 29%
increase in quoting in the first half of this year from HY21 levels giving us
confidence through the remainder of the year. Our revenues in HY22 were 28.5%
higher than the comparable period, supported by the strong market backdrop and
continued recovery following the COVID pandemic. Of this increase, 3.6% came
from positive FX movements in comparison to HY21 and we expect this trend to
continue through H2 2022 given the strengthening of the US dollar against
sterling. Operating profit increased by 85.5% to £7.5m in HY22 compared to
£4.0m in the comparable period, and our ROIC has increased to 19.1% from
10.9% in HY21.
In an ever-evolving energy market, the events of early 2022 have created a
focus on the urgent need for governments globally to secure energy supply in a
sustainable, affordable and responsible way. This has both heightened the
need to accelerate investment in offshore renewable energy and rejuvenated
activity in offshore oil and gas. The fungibility of Ashtead Technology's
equipment rental fleet and the expertise that has built across both end
markets positions our business well to capture growth across both adjacent
markets.
Our People
Our people are at the heart of Ashtead Technology's success. Hiring new
talent, providing valuable training and development, and a rewarding place to
work, has been, and always will be, a priority for the business.
Through the course of the period we have made three senior appointments to
further strengthen our market-leading position, enhance our capabilities and
expand our technology offering. Phil Middleton joined the business in May as
Survey & Robotics Director to lead the Survey & Robotics service line
globally and we have recently announced the appointment of Bob Gillespie as
Commercial Director. Both Phil and Bob are well known figures within the
subsea industry and bring a wealth of experience within the global oil and
gas, and renewables, markets. We are also delighted to have promoted Ross
MacLeod into the newly created role of Integrated Projects Director, focussing
on providing unique solutions by combining the capabilities of each of our
three business lines, with a particular focus on the offshore renewables
market.
Our Equipment
£7.6m of capital expenditure was invested during the first half of the
year. Ashtead Technology is focussed on maintaining its market position as
the leading independent provider of subsea rental equipment whilst broadening
the range of complementary equipment and services we offer to our customers.
With c.85% of our fleet fungible across both our oil and gas and renewables
markets we are well-placed to service the needs of our customers across both
growth markets.
During the course of the period lead times for new equipment and spares have
continued to increase but our proactive approach to supply chain management
has ensured we have industry-leading levels of product availability. Tight
market conditions are increasing customer propensity to rent, which has
enabled us to increase cost utilisation from 39% to 44% during the period and
through our pricing increases have offset inflationary pressures in the
business.
Our Strategy
Through our three service lines - Survey & Robotics, Mechanical Solutions
and Asset Integrity - we support the installation, IMR, 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
We remain 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
transactions. 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 target listing contains a number of
opportunities across each of the Group's service lines.
Sustainability
We continue to make progress on our sustainability journey and have recently
obtained ISO 14001 (Environmental) certification. Our five priorities are
aligned with the ten principles of the UN Global Compact - employee health,
safety and wellbeing, labour practices & human rights, energy transition,
ecological impact and business ethics - and initiatives such as the Ashtead
Technology Star Awards are designed to help achieve our goals and support our
sustainability efforts.
Our revenues from the renewables market continued to grow, increasing by 25.6%
on HY21 and representing 29.5% of our revenues in the period. Our target
remains 50% in the medium term despite the recent resurgence of activity from
the oil and gas market.
Safety is core to our business and we are delighted to have maintained our
zero TRIR (Total Recordable Incident Rate) score during the period, ensuring
our employees are safe whilst at work.
Outlook
The Board is very encouraged by the Group's performance in HY22 which provides
increased confidence in the outlook for the business and expects FY22 to be at
least in line with market expectations.
Allan Pirie
Chief Executive Officer
CFO STATEMENT
The business has maintained its positive momentum from the FY21 results and
continued on its growth trajectory into HY22 with a 28.5% increase in revenue
compared to the comparable prior period. Increased activity levels in both
the offshore oil and gas and renewables markets strengthened demand for
Ashtead Technology's services through HY22 and contributed to underlying
revenue growth of 24.9%. Additionally, positive FX movements contributed a
further 3.6% increase in revenue.
Renewables revenues accounted for 29.5% of Group revenue HY22, representing
25.6% growth from this market compared to prior year. An increased focus on
energy security and affordability has resulted in a resurgence in the oil and
gas market with revenues from this market increasing by 29.8%. Despite this
resurgence, it is our strong view that renewable energy will grow at a
significant rate and we maintain our target of 50% activity from this market
in the medium term.
Gross profit
The Group achieved gross profit of £23.3m (HY21: £17.8m) representing a
gross profit margin of 73.4%, up from 72.0% in HY21. The gross margin
improvement predominantly resulted from higher activity levels and improved
pricing. Our average annualised cost utilisation increased by 5% from 39% to
44% from June 2021 to June 2022, which supported improved pricing.
Administration costs
Administration costs (excluding depreciation, amortisation and exchange
gain/loss) for HY22 were £11.7m, a £2.9m increase on the prior year.
Personnel costs increased to 28.1% of revenue (from 26.1%) due to the
re‑introduction of the annual bonus scheme for FY22. Excluding the bonus
accrual, personnel cost reduced as a percentage of revenue to 24.2%. The
Group has continued to invest in its employees through HY22, increasing
headcount from 204 in Dec 2021 to 219 in June 2022. No cost has been booked
for the LTIP in HY22 as the awards have not yet been formalised.
Profitability
Adjusted EBITA of £8.2m compares to £5.5m in HY21 representing an EBITA
margin of 25.8% compared to 22.4% in HY21 and continued margin growth on our
full year FY21 numbers. The increase in profitability was the principal
driver for an increase in ROIC (Return on Invested Capital) to 19.1% (HY21:
10.9%).
There was an exchange rate benefit year on year of £0.3m at EBITA level,
caused predominantly by the strengthening of the US dollar against our GBP
reporting currency. At HY21 FX rates the EBITA margin was 25.1%.
Where we have provided adjusted figures, they are after the add-back of
various one-off items. The adjustments to determine Adjusted EBITA total
£0.7m (HY21: £1.5m) and are set out in note 17 of the accounts.
Profit Before Tax of £6.9m compares to £2.1m in HY21.
Net finance expense
In addition to reducing leverage through the raising of £15m of primary
capital, the Group refinanced its debt as part of the IPO process in November
2021 significantly reducing its interest cost. HY22 interest costs were
£0.6m (HY21: £2.0m) with HY21 representing higher interest loans held under
the previous private equity ownership structure.
Taxation
The tax provision for the period was £1.0m (HY21: £0.7m) representing an
effective tax rate of 14.4% (HY21: 34.2%). The estimate has been based on
the effective tax rates of each entity in FY21 after removing any adjusting
items. The high effective tax rate in HY21 reflects the non-deductibility of
costs relating to the IPO and higher standard income tax rates in overseas
territories. The low effective tax rate in HY22 reflects the utilisation of
brought forward overseas losses. Going forward, the directors expect the
effective tax rate to be closer to UK statutory tax rates.
EPS and dividend
We are pleased with our performance during the first half year trading as a
PLC having delivered positive results against our forecast at the time of our
listing. Our adjusted basic earnings per share was 8.3p in HY22, up from
4.1p in the comparable period in 2021, supported by improved market
conditions.
The company's capital allocation policy encompasses organic fleet investment,
bolt-on M&A and shareholder returns by way of dividends. Mindful of both
the current organic growth and M&A opportunities, it is the Board's
intention to declare its first dividend in conjunction with the Company's
final results for FY22.
Cash flow and net debt
The Group generated positive cash inflow before financing activities of £2.8m
(HY21: £1.5m) in the period.
Working capital at 30 June 2022 represented 16% of the last 12 months revenues
compared to 18% at 30 June 2021. The working capital increase from trade
debtors represents the ramp up of activity as we reach our peak summer
trading, offset by a slight decrease to debtor days since year end and an
increase in creditors predominantly due to increased capex spend.
Our net debt has reduced to £21.2m from £22.7m at 31 December 2021 and our
leverage has reduced from 1.0x to 0.9x during the period.
Ingrid Stewart
Chief Financial Officer
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF-YEARLY
FINANCIAL REPORT
The Directors of Ashtead Technology Holdings plc (set out on page 28 and 29 of
the latest Annual Report and Accounts) confirm that to the best of their
knowledge:
• the condensed consolidated set of financial statements
have been prepared in accordance with IAS 34 Interim Financial Reporting as
adopted for use in the UK;
• the interim management report includes a fair review of
the information required by:
(i) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
consolidated set of financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the year; and
(ii) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
By order of the Board of Directors
Allan Pirie
Ingrid Stewart
Chief Executive Officer
Chief Financial Officer
2 September 2022
2 September 2022
Consolidated income statement
for the six-month period ended 30 June 2022
Unaudited Unaudited Audited
six months to 30 June 2022 six months to 30 June 2021 year ended 31 December 2021
Notes £000 £000 £000
Revenue 2 31,730 24,691 55,805
Cost of sales 2 (8,450) (6,904) (15,262)
Gross profit 2 23,280 17,787 40,543
Administrative expenses 2 (16,369) (14,340) (33,930)
Other operating income 2 569 585 995
Operating profit 2 7,480 4,032 7,608
Finance costs 3 (579) (1,960) (4,019)
Profit before taxation 6,901 2,072 3,589
Taxation charge 4 (997) (708) (1,060)
Profit for the financial period 5,904 1,364 2,529
Profit attributable to:
Equity shareholders of the Company 5,904 1,364 2,529
Earnings per share
Basic 5 7.4 1.9 3.6
Diluted 5 7.4 1.9 3.6
The below financial measures are non-GAAP metrics used by management and
are not an IFRS disclosure:
Adjusted EBITDA^ 17 12,252 10,121 22,437
Adjusted EBITA^^ 17 8,174 5,536 13,724
^ 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
17 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 17 to the financial statements for calculations.
All results derive from continuing operations.
Consolidated statement of comprehensive income
for the six-month period ended 30 June 2022
Unaudited Unaudited Audited
six months to 30 June 2022 Six months to 30 June 2021 year ended
31 December 2021
£000 £000 £000
Profit for the period 5,904 1,364 2,529
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations 1,036 (45) 163
Net gain on cash flow hedges − 351 351
Other comprehensive income for the period, net of tax 1,036 306 514
Total comprehensive income 6,940 1,670 3,043
Total comprehensive income attributable to:
Equity shareholders of the Company 6,940 1,670 3,043
Consolidated balance sheet
at 30 June 2022
Unaudited Unaudited Audited
as at as at as at
30 31
30 June 2022 June 2021 December 2021
Notes £000 £000 £000
Non-current assets
Property, plant and equipment 6 25,782 20,300 20,832
Goodwill 7 49,185 48,549 48,651
Intangible assets 7 1,259 2,083 1,760
Right-of-use assets 13 2,746 3,042 2,923
Deferred tax asset 1,059 764 1,010
80,031 74,738 75,176
Current assets
Inventories 8 2,351 1,782 1,778
Trade and other receivables 9 21,748 16,235 17,224
Cash and cash equivalents 4,425 7,702 4,857
28,524 25,719 23,859
100,457 99,035
Total assets 108,555
Current liabilities
Loans and borrowings 11 − 38,901 −
Trade and other payables 10 14,196 9,327 9,415
Income tax payable 551 1,042 821
Lease liabilities 13 791 763 783
15,538 50,033 11,019
Non-current liabilities
Loans and borrowings 11 22,678 1,160 24,425
Lease liabilities 13 2,164 2,493 2,351
Provisions for liabilities 103 310 108
24,945 3,963 26,884
Total liabilities 40,483 53,996 37,903
Equity
Share capital 15 3,979 3,500 3,979
Share premium 15 14,115 − 14,115
Merger reserve 15 9,435 9,435 9,435
Foreign currency translation reserve 15 (254) (1,498) (1,290)
Retained earnings 15 40,797 35,024 34,893
Total equity 68,072 46,461 61,132
100,457 99,035
Total equity and liabilities 108,555
Consolidated statement of changes in equity
for the six-month period ended 30 June 2022
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 2021 unaudited 3,500 − 9,429 (351) (1,453) 33,660 44,785
− − − − − 1,364 1,364
Profit for the period
− − − 351 (45) − 306
Other comprehensive income
Total comprehensive income − − − 351 (45) 1,364 1,670
− − 6 − − − 6
Issue of shares*
At 30 June 2021 unaudited 3,500 − 9,435 − (1,498) 35,024 46,461
Profit for the period − − − − − 1,165
1,165
− − − − 208 − 208
Other comprehensive income
Total comprehensive income − − − − 208 1 1,165 1,373
479 15,044 − − − − 15,523
Issue of shares from IPO
− (929) − − − − (929)
Transaction fees on issue of shares from IPO
Dividends declared** − − − − − (1,296) (1,296)
At 31 December 2021 audited 3,979 14,115 9,435 − (1,290) 34,893 61,132
− − − − − 5,904 5,904
Profit for the period
− − − − 1,036 − 1,036
Other comprehensive income
Total comprehensive income − − − − 1,036 5,904 6,940
At 30 June 2022 unaudited 3,979 14,115 9,435 − (254) 40,797 68,072
*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.
Consolidated cash flow statement
for the six-month period ended 30 June 2022
Unaudited Unaudited Audited
six months to 30 June 2022 six months to 30 June 2021 year ended
31 December 2021
Notes £000 £000 £000
Cash generated from operating activities
Profit before taxation 6,901 2,072 3,589
Adjustments to reconcile profit before taxation to net cash from operating
activities
Finance costs 3 579 1,960 4,019
Depreciation 6 4,078 4,586 8,713
Amortisation 7 758 760 1,516
Gain on sale of property, plant and equipment (569) (585) (995)
Provision for liabilities (17) 157 (28)
Cash generated before changes in working capital 11,730 8,950 16,814
Increase in inventories (484) (542) (524)
Increase in trade and other receivables (4,635) (5,507) (6,597)
Increase in trade and other payables 4,716 2,053 2,016
Cash inflow from operations 11,327 4,954 11,709
Interest paid (426) (1,188) (3,615)
Tax paid (1,112) (115) (858)
Net cash from operating activities 9,789 3,651 7,236
Cash flow used in investing activities
Purchase of property, plant and equipment (7,571) (2,498) (6,923)
Purchase of intangible assets (255) (457) (966)
Disposal of property, plant and equipment 823 779 1,453
Net cash outflow on investing activities (7,003) (2,176) (6,436)
Cash flow used in financing activities
Proceeds from IPO share issue − − 15,523
Transaction fees on share issue − (49) (929)
Proceeds from share issue − 6 50
Loans received − − 25,107
Transaction fees on loans received (5) − (914)
Repayment of bank loans (3,017) (4,326) (44,121)
Payment of lease liability (520) (453) (1,012)
Repayment of loan notes − − (830)
Net cash outflow from financing activities (3,542) (7,126)
(4,822)
Net decrease in cash and cash equivalents (756) (3,347) (6,326)
Cash and cash equivalents at beginning of the period 4,857 10,958 10,958
Net foreign exchange difference 324 91 225
Cash and cash equivalents at end of the period 4,425 7,702 4,857
Notes to the consolidated interim financial statements
1. General information
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 condensed consolidated interim financial statements
of the Company for the six-month period ended 30 June 2022 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. The Company registration number is 13424040.
Basis of preparation
The annual consolidated financial statements of Ashtead Technology Holdings
plc will be prepared in accordance with UK-adopted International Accounting
Standards. These condensed consolidated interim financial statements for the
six-month period ended 30 June 2022 have been prepared in accordance with UK
adopted International Accounting Standard ("IAS") 34, 'Interim Financial
Reporting' and the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
The financial information for the six-month period ended 30 June 2022 is
unaudited. It does not constitute statutory financial statements within the
meaning of Section 434 of the Companies Act 2006. This report should be read
in conjunction with the Group's Annual Report and Accounts as at and for the
year ended 31 December 2021 ("last Annual Report and Accounts"), which were
prepared in accordance with UK-adopted International Accounting Standards.
The last Annual Report and Accounts have been filed with the Registrar of
Companies and are available from the Group's website
(www.ashtead-technology.com (http://www.ashtead-technology.com) ). The
auditors' report on those accounts was unqualified, did not draw attention to
any matters by way of emphasis, and did not contain a statement under 498(2)
or 498(3) of the Companies Act 2006.
The condensed consolidated interim financial statements unless otherwise
stated are presented in sterling, to the nearest thousand. The functional
currency of the Group is sterling.
The condensed consolidated interim financial statements were approved by the
Board of Directors on 2nd September 2022.
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 did 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 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 used merger accounting and applied merger relief at a Company
level. 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 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 reflected the combination of the former BP
INV2 Pledgeco Limited and Ashtead US Pledgeco Inc Group.
These last Annual Report and Accounts are the first set of financial
statements for the Group and were 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. 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.
Accounting policies
The condensed consolidated interim financial statements have been prepared in
accordance with the accounting policies set out on pages 57-62 of the last
Annual Report and Accounts.
Taxation
Tax on income in the interim periods are accrued using management's best
estimate of the weighted average annual tax rate that would be applicable to
expected total annual earnings.
Critical accounting judgements and estimates
In preparing these condensed consolidated interim financial statements,
management has made judgements, estimates and assumptions that affect the
application of the accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to estimates are recognised prospectively.
The areas of judgement and estimate which have the greatest potential effect
on the amounts recognised in these financial statements are the provision for
bad debts, impairment of goodwill and carrying value and useful lives of
property, plant and equipment. These are consistent with matters disclosed
on page 62 in the last Annual Report and Accounts.
Standards, amendments, and interpretations not yet effective
A number of amendments and interpretations have been issued which are not
expected to have any significant impact on the accounting policies and
reporting.
Standards and amendments effective for the period
There are no new or amended standards or interpretations from 1 January 2022
onwards that have a significant impact on the accounting policies and
reporting.
Going concern
These condensed consolidated financial statements of the Group are prepared on
a going concern basis. The Directors of the Group assert that the preparation
of the condensed 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 an eighteen-month period ending 31 December 2023.
During the six months ended 30 June 2022 the Group has continued to generate
positive cash flow from operating activities, repaying £3,017,000 of the RCF
during the period, with a cash and cash equivalents balance of £4,425,000 at
30 June 2022 (31 December 2021: £4,857,000). 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 30 June 2022 the RCF had an undrawn balance of
£16,879,000 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 period 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.
2. Segmental analysis
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 regional segments display
similar economic characteristics. There are no reportable segments which
have been aggregated for the purpose of the disclosure of segment information.
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
Unaudited for the six-month period ended 30 June 2022
Asia Middle Head Office
Europe Americas Pacific East Total
£000 £000 £000 £000 £000 £000
Total revenue 17,178 6,265 5,681 2,606 - 31,730
Cost of sales (4,163) (2,129) (1,172) (986) - (8,450)
-------- -------- -------- -------- -------- --------
Gross profit 13,015 4,136 4,509 1,620 - 23,280
Administrative expenses (5,384) (2,095) (967) (550) (2,693) (11,689)
Other operating income 223 83 267 (4) - 569
-------- -------- -------- -------- -------- --------
Operating profit before depreciation, amortisation and foreign exchange 7,854 2,124 3,809 1,066 (2,693) 12,160
gain/(loss)
Foreign exchange gain 156
Depreciation (4,078)
Amortisation (758)
--------
Operating profit Finance costs 7,480
(579)
--------
Profit before taxation 6,901
Taxation charge (997)
--------
Profit for the financial period 5,904
--------
Total assets 68,545 16,175 12,381 5,873 5,581 108,555
Total liabilities 11,718 3,909 1,339 681 22,836 40,483
Unaudited for the six-month period ended 30 June 2021
Asia Middle Head Office
Europe Americas Pacific East Total
£000 £000 £000 £000 £000 £000
Total revenue 14,596 4,697 4,107 1,291 - 24,691
Cost of sales (3,669) (1,685) (853) (697) - (6,904)
-------- -------- -------- -------- -------- --------
Gross profit 10,927 3,012 3,254 594 - 17,787
Administrative expenses (5,457) (1,780) (447) (439) (640) (8,763)
Other operating income 283 227 35 40 - 585
-------- -------- -------- -------- -------- --------
Operating profit before depreciation, amortisation and foreign 5,753 1,459 2,842 195 (640) 9,609
exchange gain/(loss)
Foreign exchange loss (232)
Depreciation (4,585)
Amortisation (760)
--------
Operating profit Finance costs 4,032
(1,960)
--------
Profit before taxation 2,072
Taxation charge (708)
--------
Profit for the financial period 1,364
--------
Total assets 61,167 15,773 9,804 3,756 9,957 100,457
Total liabilities 8,302 2,742 859 553 41,540 53,996
Audited 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 16,726 3,694 4,002 941 (7,311) 18,052
exchange 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 period 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
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 Unaudited Audited
as at 30 June as at 30 June as at 31 December
2022 2021 2021
£000 £000 £000
UK 55,510 50,763 51,411
USA 10,998 12,206 11,394
Singapore 8,470 7,736 7,799
UAE 3,994 3,269 3,562
3. Finance costs
Unaudited Unaudited Audited
six months to 30 June 2022 six months to 30 June 2021 year ended 31 December 2021
£000 £000 £000
Interest on bank loans (held at amortised cost) 419 1,184 2,261
Amortisation of deferred finance costs 91 345 1,222
Loan note interest - 39 71
Interest expense on lease liability (Note 13) 69 78 151
Hedge reserve movement - 313 313
Other interest and charges - 1 1
579 1,960 4,019
4. Tax
The tax expense for the six-month period ended 30 June 2022 is based upon
management's best estimate of the weighted average annual tax rate expected
for each jurisdiction for the full year ending 31 December 2022 applied to the
profit before tax for the interim period. The effective tax rate for the
six-month period ended 30 June 2022 is 14.4% and the income tax expense is
lower than the standard UK rate of 19% due to overseas losses carried
forward. The effective tax rate for the year ended 31 December 2021 was
29.5% and the income tax expense was higher than the standard UK rate due to
non-deductible expenses and higher standard income tax rates in overseas
territories.
5. 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 period.
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. Up to and including 30 June 2022 the Group had no potentially
dilutive Ordinary Shares.
Adjusted earnings per share
Earnings attributable to ordinary shareholders of the Group for the period,
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.
Unaudited Unaudited Unaudited Unaudited Audited Audited
Adjusted Statutory Adjusted Statutory Adjusted Statutory
Six months Six months to 30 June 2022 Six months to 30 June 2021 Six months to 30 June 2021 Year ended 31 December 2021 Year ended
to 30 June 2022 31 December 2021
Earnings attributable to equity shareholders of the Group:
Profit for the period (£000) 6,581* 5,904 2,836* 1,364 9,385* 2,529
Number of shares:
Weighted average number of Ordinary Shares - Basic 79,580,000 79,580,000 69,998,000 69,998,000 70,995,578 70,995,578
Weighted average number of Ordinary Shares - Diluted 79,580,000 79,580,000 69,998,000 69,998,000 70,995,578 70,995,578
Earnings per share attributable to equity holders of the Group - continuing
operations:
Basic earnings per share (pence) 8.3 7.4 4.1 1.9 13.2 3.6
Diluted earnings per share (pence) 8.3 7.4 4.1 1.9 13.2 3.6
* Refer to Note 17 for the reconciliation of Non-IFRS Profit Metrics.
6. Property, plant and equipment
Assets held for rental Leasehold improvements Freehold property Fixtures and fittings Motor vehicles Total
£000 £000 £000 £000 £000 £000
Cost:
At 1 January 2021 unaudited 104,906 1,537 197 3,322 245 110,207
Additions 2,481 159 − 236 31 2,907
Disposals (2,781) − − (6) − (2,787)
Foreign exchange movements (832) (12) − (56) (2) (902)
At 30 June 2021 unaudited 103,774 1,684 197 3,496 274 109,425
Additions 4,144 42 − 185 25 4,396
Disposals (3,885) − − (23) − (3,908)
Foreign exchange movements 834 13 − 25 6 878
At 31 December 2021 audited 104,867 1,739 197 3,683 305 110,791
Additions 7,715 190 − 131 − 8,036
Disposals (2,802) − − (64) (30) (2,896)
Foreign exchange movements 5,197 71 − 180 35 5,483
At 30 June 2022 unaudited 114,977 2,000 197 3,930 310 121,414
Accumulated depreciation:
At 1 January 2021 unaudited (84,593) (974) (60) (2,593) (157) (88,377)
Charge for the period (3,763) (145) (4) (165) (11) (4,088)
Disposals 2,588 − − 6 − 2,594
Foreign exchange movements 711 7 − 27 1 746
At 30 June 2021 unaudited (85,057) (1,112) (64) (2,725) (167) (89,125)
Charge for the period (3,395) (99) (4) (131) (13) (3,642)
Disposals 3,664 − − 6 − 3,670
Foreign exchange movements (833) (8) − (17) (4) (862)
At 31 December 2021 audited (85,621) (1,219) (68) (2,867) (184) (89,959)
Charge for the period (3,349) (112) (4) (162) (19) (3,646)
Disposals 2,549 − − 63 29 2,641
Foreign exchange movements (4,452) (50) − (144) (22) (4,668)
At 30 June 2022 unaudited (90,873) (1,381) (72) (3,110) (196) (95,632)
Net book value:
At 31 December 2020 unaudited 20,313 563 137 729 88 21,830
At 30 June 2021 unaudited 18,717 572 133 771 107 20,300
At 31 December 2021 audited 19,246 520 129 816 121 20,832
At 30 June 2022 unaudited 24,104 619 125 820 114 25,782
7. Goodwill and intangible assets
Goodwill Customer relationships Non-compete arrangements Computer software Total
£000 £000 £000 £000 £000
48,585 4,447 208 2,801 56,041
Cost:
At 1 January 2021 unaudited
Additions − − − 457 457
Foreign exchange movements (36) (7) − 2 (41)
At 30 June 2021 unaudited 48,549 4,440 208 3,260 56,457
Additions − − − 509 509
Foreign exchange movements 102 7 − − 109
At 31 December 2021 audited 48,651 4,447 208 3,769 57,075
Additions − − − 255 255
Foreign exchange movements 534 2 − 9 545
At 30 June 2022 unaudited 49,185 4,449 208 4,033 57,875
Amortisation:
At 1 January 2021 unaudited − (2,261) (109) (2,627) (4,997)
Charge for the period − (726) (34) (66) (826)
Foreign exchange movements − − − (2) (2)
At 30 June 2021 unaudited − (2,987) (143) (2,695) (5,825)
Charge for the period − (723) (33) (82) (838)
Foreign exchange movements − − − (1) (1)
At 31 December 2021 audited − (3,710) (176) (2,778) (6,664)
Charge for the period − (594) (26) (138) (758)
Foreign exchange movements − 1 − (10) (9)
At 30 June 2022 unaudited − (4,303) (202) (2,926) (7,431)
Net book value:
At 31 December 2020 unaudited 48,585 2,186 99 174 51,044
At 30 June 2021 unaudited 48,549 1,453 65 565 50,632
At 31 December 2021 audited 48,651 737 32 991 50,411
At 30 June 2022 unaudited 49,185 146 6 1,107 50,444
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.
The Group tests annually for impairment, or more frequently if there are
indicators that goodwill might be impaired.
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. The key assumptions on which
management has based its cash flow projections are the same as those used in
the last Annual Report and Accounts.
8. Inventories
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
£000 £000 £000
Raw materials and consumables 2,351 1,782 1,778
The cost of inventories recognised as an expense and included in cost of sales
during the period was £1,690,000 (H1 2021: £1,422,000).
9. Trade and other receivables
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
£000 £000 £000
Trade receivables 18,295 11,564 14,212
Prepayments and accrued income 3,453 3,378 3,012
Amounts due to related parties (Note 16) − 1,293 −
21,748 16,235 17,224
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.
10. Trade and other payables
Unaudited Unaudited Audited
30 June 2022 \30 June 2021 31 December 2021
£000 £000 £000
Trade payables 5,775 3,424 3,349
Accruals 8,298 5,903 5,682
Amounts due to related parties (Note 16) 123 − 384
14,196 9,327 9,415
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.
11. Loan and borrowings
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
£000 £000 £000
Bank loans (held at amortised cost) − 38,901 −
− 38,901 −
Non-current
Bank loans (held at amortised cost) 22,678 − 24,425
Related party loan notes (Note 16) − 1,160 −
22,678 1,160 24,425
At 30 June 2022 the bank loans comprise a revolving credit facility of
£23,121,000 (of which £11,430,000 denominated in USD) 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 2.5x 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 30 June
2022 the RCF had an undrawn balance of £16,879,000 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, with an option to extend subject to
credit approval.
Certain companies within the Group are party to cross guarantees with respect
to bank loans totalling £23,121,000 (31 December 2021: £24,953,000)
advanced to Ashtead Technology Limited and Ashtead Technology Offshore Inc.
The lenders have a floating charge over certain assets of the Group.
At 30 June 2021 the bank loans comprised senior bank debt of £39,434,000 (of
which £9,593,000 denominated in USD) and the senior A, B and revolving credit
facility 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.
The related party loan notes carried interest at 7% which capitalised
quarterly and was repaid in full in November 2021.
Bank loans are repayable as follows:
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
£000 £000 £000
Within one year − 39,434 −
Within one to two years − − −
Within two to three years 23,121 − 24,953
23,121 39,434 24,953
Deferred finance costs (443) (533) (528)
22,678 38,901 24,425
12. Financing liabilities reconciliation
Unaudited Cash flows Interest paid Other Changes in exchange rates Unaudited
1 January 2021 non-cash changes 30 June 2021
£000 £000 £000 £000 £000 £000
Cash at bank and in hand 10,958 (3,347) − − 91 7,702
(43,008) 4,326 − (345) 126 (38,901)
Bank loans
Related party loan notes (1,121) − − (39) − (1,160)
Lease liabilities (3,052) 453 78 (647) (88) (3,256)
Net debt (36,223) 1,432 78 (1,031) 129 (35,615)
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 period.
Unaudited Cash flows Interest paid Other Changes in exchange rates Audited
30 June 2021 non-cash changes 31 December 2021
£000 £000 £000 £000 £000 £000
Cash at bank and in hand 7,702 (2,979) − − 134 4,857
(38,901) 15,602 − (877) (249) (24,425)
Bank loans
Related party loan notes (1,160) 830 − 330 − −
Lease liabilities (3,256) 559 73 (272) (238) (3,134)
Net debt (35,615) 14,012 73 (819) (353) (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 period.
Audited Cash flows Interest paid Other Changes in exchange rates Unaudited
31 December 2021 non-cash changes 30 June 2022
£000 £000 £000 £000 £000 £000
Cash at bank and in hand 4,857 (756) − − 324 4,425
(24,425) 3,022 − (91) (1,184) (22,678)
Bank loans
Lease liabilities (3,134) 520 69 (261) (149) (2,955)
Net debt (22,702) 2,786 69 (352) (1,009) (21,208)
The non-cash movement relates to the amortisation of deferred finance costs,
accrual of finance costs on lease liability and the addition of new leases
during the period.
13. 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 2021 unaudited 2,816
Additions to right-of-use assets 668
Depreciation charge for the period (418)
Effects of movements in exchange rates (24)
------
Balance at 30 June 2021 unaudited 3,042
------
Additions to right-of-use assets 272
Depreciation charge for the period (417)
Effects of movements in exchange rates 26
------
Balance at 31 December 2021 audited 2,923
------
Additions to right-of-use assets 180
Depreciation charge for the period (432)
Effects of movements in exchange rates 75
------
Balance at 30 June 2022 unaudited 2,746
------
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
Lease liabilities: £000 £000 £000
Current 791 763 783
Non-current 2,164 2,493 2,351
Total lease liabilities 2,955 3,256 3,134
Lease liabilities are repayable as follows:
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
£000 £000 £000
Within one year 910 932 966
Within one to two years 690 823 767
Within two to three years 683 620 675
Within three to four years 460 587 568
Within four to five years 335 367 334
Beyond five years 198 481 362
3,276 3,810 3,672
Effect of discounting (321) (554) (538)
Total lease liabilities 2,955 3,256 3,134
b) Amounts recognised in the income statement
Unaudited Unaudited Audited
six months to 30 June 2022 six months to 30 June 2021 year ended 31 December 2021
£000 £000 £000
Depreciation charge 432 418 835
Interest expense on lease liability 69 78 151
Expenses relating to short-term leases 100 83
165
Total amount recognised in the income statement 601 579 1,151
c) Amounts recognised in the cash flow statement
Unaudited Unaudited Audited
six months to 30 June 2022 six months to 30 June 2021 year ended 31 December 2021
£000 £000 £000
Total cash payments for leases 589 531 1,163
14. Capital commitments
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
£000 £000 £000
Capital expenditure contracted for but not provided 2,720 1,900 2,825
15. Share capital and reserves
The Group considers its capital to comprise its invested capital, called up
share capital, share premium, 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 Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
Allotted, called up and fully paid No. £000 No. £000 No. £000
Ordinary shares of £0.05 each 79,580,000 3,979 69,998,000 3,500 79,580,000 3,979
3,979 3,500 3,979
Ordinary share capital represents the number of shares in issue at their
nominal value. On 23 November 2021 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 listing on 23 November 2021 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.
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.
16. Related parties
In prior periods the Group transacted with entities which formerly had
significant influence over the Group which are presented below. There were
no transactions with these related parties in the six-month period ended 30
June 2022.
Transactions during the period with related parties: Unaudited Unaudited Audited
six months to 30 June 2022 six months year ended 31 December 2021
to 30 June 2021
£000 £000 £000
Dividend expense* − − 476
BP INV2 Newco Limited − − 820
BP INV2B Bidco Limited
Interest expense − 39 71
BP INV2B Bidco Limited
*The dividend expense related to the pre-IPO group restructure.
Outstanding balances with related parties as at period end: Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
£000 £000 £000
Receivables from:
BP INV2B Bidco Limited - 820 -
BP INV2 Holdco Limited - 422 -
BP INV2 Newco Limited - 51 -
- 1,293 -
Payables to:
BP INV2B Bidco Limited (101) - (362)
BP INV2 Holdco Limited (20) - (20)
BP INV2 Newco Limited (2) - (2)
(123) - (384)
Related party loan notes payable to:
BP INV2B Bidco Limited - 1,160 -
Compensation of key management personnel: Unaudited Unaudited Audited
six months to 30 June 2022 six months to 30 June 2021 year ended
31 December 2021
£000 £000 £000
Salaries and fees 407 238 503
Bonus((1)) 200 - -
Additional payments((2)) - 9 268
Other benefits 41 34 67
Total 648 281 838
((1))Bonus paid was a contractual obligation on the successful completion of
the IPO, which was accrued at 31 December 2021 and paid during February 2022.
((2))Additional payment paid to fund purchase of MIP shares pre-IPO.
Key management personnel are also entitled to long-term investment plan awards
which were due to be issued post IPO and have not as yet been awarded.
17. Reconciliation of Non-IFRS Profit Metrics
Reconciliation of Adjusted EBITDA Unaudited Unaudited Audited
six months to 30 June 2022 six months to 30 June 2021 year ended
31 December 2021
Notes £000 £000 £000
Adjusted EBITDA 12,252 10,121 22,437
Cost associated with IPO - (88) (3,332)
Restructuring costs - (329) (1,314)
One-off bad debts & debt collection costs - (27) (39)
One-off inventory adjustment - - 205
One-off asset disposal - - 130
Other exceptional costs (92) (68) (35)
-------- -------- --------
Operating profit before depreciation, amortisation and foreign exchange
gain/(loss)
12,160 9,609 18,052
Depreciation on property, plant and equipment 6 (3,646) (4,154) (7,878)
Depreciation on right-of-use asset 13 (432) (431) (835)
-------- -------- --------
Operating profit before amortisation and foreign exchange gain/(loss)
8,082 5,024 9,339
Amortisation of intangible assets 7 (758) (760) (1,516)
Foreign exchange gain/(loss) 156 (232) (215)
-------- -------- --------
Operating profit 7,480 4,032 7,608
Reconciliation of Adjusted EBITA Unaudited Unaudited Audited
six months to 30 June 2022 six months to 30 June 2021 year ended 31 December 2021
Notes £000 £000 £000
Adjusted EBITA 8,174 5,536 13,724
Cost associated with IPO - (88) (3,332)
Restructuring costs - (329) (1,314)
One-off bad debts & debt collection costs - (27) (39)
One-off inventory adjustment - - 205
One-off asset disposal - - 130
Other exceptional costs (92) (68) (35)
Amortisation of intangible assets 7 (758) (760) (1,516)
Foreign exchange gain/(loss) 156 (232) (215)
-------- -------- --------
Operating profit 7,480 4,032 7,608
Reconciliation of Adjusted Profit Before Tax Unaudited Unaudited Audited
six months to 30 June 2022 six months to 30 June 2021 year ended 31 December 2021
Notes £000 £000 £000
Adjusted Profit Before Tax 7,595 3,889 10,822
Cost associated with IPO - (88) (3,332)
Restructuring costs - (329) (1,314)
One-off bad debts & debt collection costs - (27) (39)
One-off inventory adjustment - - 205
One-off asset disposal - - 130
One-off hedge reserve movement - (313) (313)
Loan repayment fees - - (100)
Deferred finance cost write off - - (704)
Other exceptional costs (92) (68) (35)
Foreign exchange gain/(loss) 156 (232) (215)
Amortisation of intangible assets 7 (758) (760) (1,516)
-------- -------- --------
Profit before taxation 6,901 2,072 3,589
Reconciliation of Adjusted Profit After Tax Unaudited Unaudited Audited
six months to 30 June 2022 six months to 30 June 2021 year ended 31 December 2021
Notes £000 £000 £000
Adjusted Profit After Tax 6,581 2,836 9,385
Cost associated with IPO - (88) (3,332)
Restructuring costs - (329) (1,314)
One-off bad debts & debt collection costs - (27) (39)
One-off inventory adjustment - - 205
One-off asset disposal - - 130
One-off hedge reserve movement - (313) (313)
Loan repayment fees - - (100)
Deferred finance cost write off - - (704)
Other exceptional costs (92) (68) (35)
Foreign exchange gain/(loss) 156 (232) (215)
Amortisation of intangible assets 7 (758) (760) (1,516)
Tax impact of the adjustments above 17 345 377
-------- -------- --------
Profit for the financial period 5,904 1,364 2,529
Adjusted Profit After Tax is used to calculate the Adjusted basic earnings per
share in Note 5.
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