REG - Ashtead Tech Hldgs - Unaudited Half Year Results 2023
04/09/2023 07:00
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RNS Number : 2560L Ashtead Technology Holdings plc 04 September 2023
4 September 2023
Ashtead Technology Holdings plc
("Ashtead Technology" or the "Group")
Unaudited Half Year Results for the Six-Months Ended 30 June 2023
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 2023 ("HY23" or "the
period").
Financial Performance (£'m)
HY23 HY22 % Movement
Revenue 49.8 31.7 57.1%
Gross profit 39.3 23.3 68.7%
Gross profit % 78.8% 73.4% 540bps
Adjusted EBITDA(1) 21.3 12.3 73.7%
Adjusted EBITDA % 42.7% 38.6% 410bps
Adjusted EBITA(2) 15.7 8.2 91.5%
Adjusted EBITA % 31.4% 25.8% 560bps
Adjusted profit before tax(3) 14.3 7.6 87.9%
Adjusted basic earnings per share 14.2p 8.3p 71.1%
Return on Invested Capital (ROIC)(4) 25.5% 19.1% 640bps
Leverage(5) 0.7 0.9
Additional Statutory Accounting Measures (£'m)
HY23 HY22 % Movement
Operating profit 15.1 7.5 102.4%
Profit before tax 13.2 6.9 91.8%
Basic earnings per share 13.1p 7.4p 77.0%
· Strong year-on-year increase in revenue (57.1%) driven by continued
high demand across both offshore renewables and offshore oil and gas
o Offshore renewables revenue increased by 74.1% to £16.3m (HY22: £9.4m)
o Offshore oil and gas revenue increased by 50.0% to £33.5m (HY22: £22.3m)
· Organic growth of 40.5%, with M&A contributing 13.9%
and 2.7% from favourable FX
· Gross Profit margin increased to 78.8% (HY22: 73.4%)
reflecting a higher proportion of growth coming from equipment rental, higher
utilisation and increased pricing
· Adjusted EBITA increased by 91.5% to £15.7m (HY22: £8.2m)
with an adjusted EBITA margin of 31.4% (HY22: 25.8%) driven by top line growth
and operational leverage
· Adjusted basic earnings per share of 14.2p (HY22: 8.3p)
and basic earnings per share of 13.1p (HY22: 7.4p)
· ROIC of 25.5% increased from 19.1% in HY22
· Net debt of £26.4m (HY22: £21.2m) with leverage reducing
to 0.7x from 1.0x at year end due to cash generation and growth in LTM
EBITDA
Operational Highlights and Outlook
· WeSubsea and Hiretech acquisitions both integrated and
demonstrating strong momentum with growth in revenues and profits.
· Year to date investment of £8m in capital expenditure (HY22:
£7.8m) with full year forecast of £20m, having raised capex earlier in the
year. We remain focused on expanding our capabilities and international
reach and are investing in expanding our fleet to take advantage of structural
growth opportunities
· Breadth, depth and reliability of the Ashtead Technology fleet,
the largest independent fleet in the market, continuing to provide a
competitive advantage
· Continuing to see high levels of quoting activity with
value of quotes in HY23 up >50% compared to HY22
· Employee headcount at 30 June 2023 of 289, 11% higher than
December 2022, with recruitment focused on expanding on our sales and
technical capacity for continued growth
· Continuing to review M&A opportunities to complement
organic growth and consolidate a highly fragmented market
· The Board is very encouraged by the Group's performance in
HY23 and expects FY23 to be comfortably ahead of its previous expectations
Allan Pirie, Chief Executive Officer, said:
"I am extremely pleased to announce our strongest ever set of interim results.
We have continued to see positive momentum through the first half of 2023 with
the Group benefiting from our strategic investment in people and equipment,
together with further increases to both utilisation and pricing. Our recent
acquisitions of Hiretech and WeSubsea have performed ahead of our expectations
and we are benefitting from our increased breadth of capabilities.
Market fundamentals remain strong and we continue to expand our offering
whilst growing within our existing markets. Given the unseasonal strength of
the final quarter of FY22 we expect year-on-year growth to moderate in the
second half. Our HY23 results and positive end market dynamics give the
Board increased confidence in the outlook for the business and we expect FY23
outturn to be comfortably ahead of our previous expectations."
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
(mailto:ashteadtechnology@vigoconsulting.com)
Finlay Thomson
Kate Kilgallen
Numis Securities Limited (Nomad and Broker) Tel: +44 (0)20 7260 1000
Julian Cater
George Price
Kevin Cruickshank (QE)
(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 18 of the HY23 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 18 of the HY23 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 18 of the HY23 accounts
(4)Return on Invested Capital (ROIC) 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 net debt divided by LTM Adjusted EBITDA
(6)LTM is defined as latest twelve months to 30 June 2023
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 ten 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.
This announcement contains inside information as defined in Article 7 of the
retained EU law version of the Market Abuse Regulation No 596/2014 ("UK MAR")
and has been announced in accordance with the Company's obligations under
Article 17 of UK MAR. Upon publication of this announcement, this
information is now considered in the public domain.
CEO STATEMENT
We have seen continued positive momentum in the business through the first
half of 2023 and I am pleased to present our half year results which
demonstrate significant growth on HY22. As we near the second anniversary of
our IPO in November 2021, I am delighted with the progress the business has
made against its strategic goals, as we continue to grow and go from strength
to strength.
Strong market dynamics, investment in both organic and inorganic growth, and
increased cost utilisation and pricing have resulted in a strong financial
performance in HY23 with revenue growth of 57.1% on the prior year, delivering
EBITA margins of 31.4% (HY22: 25.8%) and ROIC of 25.5% (HY22: 19.1%). Market
dynamics remain strong with long term structural growth across our key end
markets. Rystad Energy predict a 22% increase in addressable market in 2023
with a CAGR of 12% 2022 through to 2025. We have seen an increase in quoting
activity of over 50% compared to HY22 and our customers continue to report
increases in backlog which gives us confidence through the remainder of the
year, into 2024 and beyond.
As the market continues to evolve and with increased need for energy security,
we delivered significant growth in revenues from the offshore renewables
market with a 74.1% growth on HY22, whilst our oil and gas activity grew at
50.0%. Renewables revenues made up 32.7% of our business with this activity
coming from our European, American and Asian operations. Whilst the offshore
wind sector currently faces increased cost pressures, the global inventory of
projects support a reported increase in offshore wind backlog amongst our
largest customers, with a record 70 GW of projects expected to be auctioned in
2023.
Our People
We were delighted to recruit Christine Cochrane as our first HR Director who
joined us in August. 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 and Christine's appointment underlines our focus on
these areas.
We increased our headcount to 289, an increase of 11% from year end and 32% on
the prior year with the growth predominantly coming from further expansion of
our technical and sales teams. We have continued with our Star Awards
programme where we reward our employees that have gone above and beyond in
demonstrating our company values, and increased our employee recruitment
referral bonus which has been a successful tool in supporting our recruitment
drive.
Our Equipment
£8m of capital expenditure (£7.7m in rental fleet) was invested during the
first half of the year with a forecast of £20m for the full year, having
increased capex earlier in the year. We continue to broaden our range of
complementary equipment and services, increasing our offering to our
customers, investing in equipment that is fungible across both sectors, or is
relevant to the offshore renewables market, and ensuring that we maintain our
market position as the leading independent provider of subsea rental
equipment. The strength of the underlying markets is contributing to
lengthening lead times on certain products. Our investment in rental fleet in
2H23 will help secure the equipment to meet anticipated demand both in coming
months and into 2024.
Sustainability
We continue to make progress on our sustainability journey and being a good
corporate citizen is at the heart of the way we do business at Ashtead
Technology. We have maintained our QHSE record and were delighted with the
positive feedback from our recent external ISO audits. Our revenues from the
renewables market continued to grow and we retain our focus on supporting the
energy transition.
Integration
Integration of both WeSubsea and Hiretech into the Ashtead Technology group
has progressed well, both businesses have performed ahead of expectations,
demonstrating a combined 38.6% growth in revenues year on year. Both
acquisitions are highly complementary to our mechanical solutions business and
we have witnessed an increase in both cross selling and international
opportunities and synergistic benefits of having the equipment as part of our
wider offering.
We have integrated both acquisitions into our ERP system with all employees
and assets transferred to Ashtead Technology entities. The WeSubsea brand
has been retained in relation to the equipment only and we are in the process
of fully phasing out the Hiretech brand name in support of our one route to
market approach.
These acquisitions are great case studies of the benefits of our M&A
strategy and approach to integration and we continue to build on the M&A
pipeline as one of our key growth strategies.
Outlook
Market fundamentals remain strong and we continue to expand our offering
whilst growing within our existing markets. Given the unseasonal strength of
the final quarter of FY22 we expect year-on-year growth to moderate in the
second half. Our HY23 results and positive end market dynamics give the
Board increased confidence in the outlook for the business and we expect
outturn for the year to be comfortably ahead of our previous expectations.
Allan Pirie
Chief Executive Officer
CFO STATEMENT
I am delighted to report another strong set of financial results for the first
half of 2023 as the positive momentum from FY22 continues into FY23. Our
revenues have grown by 57.1% predominantly due to organic growth (40.5%),
enhanced by M&A (13.9% growth) and positive FX movements (2.7%).
Renewables revenues accounted for 32.7% of Group HY23 revenue, representing
74.1% growth from this market compared to the prior year. An increased focus
on energy security has also resulted in continued growth from the oil and gas
market with revenues from this market increasing by 50.0%. Despite the
continued resurgence of oil and gas activity, we maintain our target of 50%
activity from the offshore renewables market in the medium term.
Our strongest growth in the period has come from our European operations which
saw a 90% increase in revenue year on year, in part supported by acquisition
as both Hiretech and WeSubsea operations were European based. This region
has seen a resurgence in activity across its multiple geographies and in both
renewables and oil and gas activity, with a positive outlook for remainder of
the year and into 2024 and beyond with Rystad predicting a 16% CAGR in the
European market from 2022 to 2025. Both Americas and Middle East businesses
continued to grow (40% and 18% respectively) with Asia revenues down 6% on
prior year due to a number of project delays in the region, but with Asia
expected to rebound in 2024 with Rystad predicting a 22% CAGR in addressable
market in this region from 2022 to 2025. We have taken advantage of the
global nature of our fleet and the different pricing dynamics across the
regions, with a focus on return on investment.
Gross profit
The Group achieved gross profit of £39.3m (HY22: £23.3m) representing a
gross profit margin of 78.8%, up from 73.4% in HY22. The gross margin
improvement predominantly resulted from improved pricing, higher activity
levels and an increase in the proportion of revenues from equipment rental.
Our average annualised cost utilisation increased to 45% (HY22: 44%). Our
target cost utilisation remains around 45%+.
Administration costs
Administration costs (excluding depreciation, amortisation and exchange
gain/loss) for HY23 were £18.5m (HY22: £11.6m), a £6.9m increase on HY22.
£2.6m of this increase is due to increased bonus provision (£1.3m) and LTIP
costs (£1.3m). The performance in HY23 compared to budget has resulted in
us increasing our bonus provision in HY23 and the increased LTIP cost is
predominantly due to the timing of awards. Personnel costs (excluding bonus
and LTIP) increased by £3.1m due to the increase in employees (32% increase
in personnel since June 2022) and a 7% pay increase adopted in January 2023.
Excluding the bonus accrual and LTIP cost, personnel cost reduced as a
percentage of revenue to 21.7% (from 24.3% in HY22). Other overhead
increases relate to travel, marketing, audit, legal and professional costs and
insurance which have increased by £1.1m due to increased scale and activity
in the business, and inflationary rises.
Profitability
Adjusted EBITA of £15.7m compares to £8.2m in HY22 representing an EBITA
margin of 31.4% compared to 25.8% in HY22 and delivering continued margin
growth on our full year FY22 numbers. The increase in EBITA was the
principal driver for an increase in ROIC to 25.5% (HY22: 19.1%).
Finance costs of £1.9m include a £0.5m write-off of deferred finance costs
due to the refinancing which completed in April 2023. Excluding this,
normalised finance costs were £1.4m, an increase of £0.8m due to an increase
in drawn debt (utilised for the WeSubsea and Hiretech acquisitions) and
increased banking base rates.
Profit Before Tax of £13.2m compares to £6.9m in HY22, an increase of 92%.
The tax provision for the period was £2.8m (HY22: £1.0m) representing an
effective tax rate of 21.1% (HY22: 14.4%). The estimate has been based on
the effective tax rates of each entity after removing any adjusting items.
The higher effective tax rate in HY23 reflects reduced availability of brought
forward overseas losses and the increased tax rate in the UK.
Adjusting for amortisation and exceptional costs results in an Adjusted basic
earnings per share of 14.2p which compares to 8.3p in HY22.
Cash flow and balance sheet
The Group generated positive cash inflow before financing activities of £4.3m
(HY22: £2.8m) in the period.
Continued investment in our equipment rental fleet has resulted in an
increased net book value of property, plant and equipment from £25.8m in HY22
to £34.2m, and contributed to the £1.6m increase in depreciation from £4.1m
in HY22 to £5.6m in HY23. We also increased our goodwill and intangible
assets compared to the prior year due to the acquisitions completed in H2
2022.
Working capital at 30 June 2023 represented 9% of the last 12 months revenues
compared to 16% at 30 June 2022 due to improvements in cash collection and
timing of capex creditors.
We were pleased to announce our first dividend payment as a listed company
following announcement of our annual results for FY22 which resulted in a
£0.8m payment in June. We continue to see attractive opportunities in our
M&A pipeline and in line with previous guidance, the Board has not
recommended an interim dividend for HY23 and intends to continue its small,
progressive dividend policy as part of its full year reporting.
Net debt has increased from £21.2m at HY22 to £26.4m but leverage has
reduced from 0.9x to 0.7x (1.0x at year end). Both acquisitions were funded
wholly through debt which contributed to the increase in net debt year on
year. We have debt capacity of £118.5m (including £50m accordion facility)
as at 30 June 2023 that can be utilised to fund further organic and inorganic
growth.
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 26 and 27 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
4 September
2023
4 September 2023
Consolidated income statement
for the six-month period ended 30 June 2023
Unaudited Unaudited Audited
six months to 30 June 2023 six months to 30 June 2022 year ended 31 December 2022
Notes £000 £000 £000
Revenue 2 49,846 31,730 73,120
Cost of sales 2 (10,573) (8,450) (18,829)
Gross profit 2 39,273 23,280 54,291
Administrative expenses 2 (24,323) (16,158) (36,217)
Impairment loss on trade receivables 2 (320) (211) (810)
Other operating income 2 508 569 804
Operating profit 2 15,138 7,480 18,068
Finance income 3 50 - 21
Finance costs 3 (1,949) (579) (1,459)
Profit before taxation 13,239 6,901 16,630
Taxation charge 4 (2,799) (997) (3,965)
Profit for the financial period 10,440 5,904 12,665
Profit attributable to:
Equity shareholders of the Company 10,440 5,904 12,665
Earnings per share
Basic 5 13.1 7.4 15.9
Diluted 5 12.9 7.4 15.7
The below financial measures are non-GAAP metrics used by management and
are not an IFRS disclosure:
Adjusted EBITDA^ 18 21,288 12,252 28,555
Adjusted EBITA^^ 18 15,651 8,174 20,124
^ 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
18 to the condensed consolidated interim 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
18 to the condensed consolidated interim financial statements for
calculations.
All results derive from continuing operations.
Consolidated statement of comprehensive income
for the six-month period ended 30 June 2023
Unaudited Unaudited Audited
six months to 30 June 2023 Six months to 30 June 2022 year ended
31 December 2022
£000 £000 £000
Profit for the period 10,440 5,904 12,665
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations (1,098) 1,036 1,179
Other comprehensive income for the period, net of tax (1,098) 1,036 1,179
Total comprehensive income 9,342 6,940 13,844
Total comprehensive income attributable to:
Equity shareholders of the Company 9,342 6,940 13,844
Consolidated balance sheet
at 30 June 2023
Unaudited Unaudited Audited
as at as at as
at
30 June 2023 30 June 2022 31 December 2022
Notes £000 £000 £000
Non-current assets
Property, plant and equipment 6 34,193 25,782 31,812
Goodwill 7 65,796 49,185 66,043
Intangible assets 7 5,387 1,259 5,978
Right-of-use assets 13 2,342 2,746 2,631
Deferred tax asset − 1,059 −
107,718 80,031 106,464
Current assets
Inventories 8 2,679 2,351 1,865
Trade and other receivables 9 24,298 21,748 19,456
Cash and cash equivalents 6,492 4,425 9,037
33,469 28,524 30,358
141,187 108,555 136,822
Total assets
Current liabilities
Trade and other payables 10 18,779 14,196 19,134
Income tax payable 1,863 551 1,820
Lease liabilities 13 797 791 865
21,439 15,538 21,819
Non-current liabilities
Loans and borrowings 11 30,347 22,678 34,865
Lease liabilities 13 1,723 2,164 1,991
Deferred tax liability 2,241 − 2,227
Provisions for liabilities 135 103 117
34,446 24,945 39,200
Total liabilities 55,885 40,483 61,019
Equity
Share capital 16 3,997 3,979 3,979
Share premium 16 14,115 14,115 14,115
Merger reserve 16 9,435 9,435 9,435
Share based payment reserve 16 1,780 − 827
Foreign currency translation reserve 16 (1,209) (254) (111)
Retained earnings 16 57,184 40,797 47,558
Total equity 85,302 68,072 75,803
141,187 108,555 136,822
Total equity and liabilities
Consolidated statement of changes in equity
for the six-month period ended 30 June 2023
Share capital Share premium Merger reserve Share based payment reserve Foreign currency translation reserve Retained earnings Total
£000 £000 £000 £000 £000 £000 £000
At 1 January 2022 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
Profit for the period − − − − − 6,761
6,761
− − − − 143 − 143
Other comprehensive income
Total comprehensive income − − − − 143 6,761 6,904
Share based payment charge − − − 827 − − 827
At 31 December 2022 audited 3,979 14,115 9,435 827 (111) 47,558 75,803
− − − − − 10,440 10,440
Profit for the period
− − − − (1,098) − (1,098)
Other comprehensive income
Total comprehensive loss − − − − (1,098) 10,440 9,342
Share based payment charge − − − 953 − − 953
Issue of shares 18 − − − − (18) −
Dividends paid − − − − − (796) (796)
At 30 June 2023 unaudited 3,997 14,115 9,435 1,780 (1,209) 57,184 85,302
Consolidated cash flow statement
Unaudited Unaudited Audited
six months to 30 June 2023 six months to 30 June 2022 year ended
31 December 2022
Notes £000 £000 £000
Cash generated from operating activities
Profit before taxation 13,239 6,901 16,630
Adjustments to reconcile profit before taxation to net cash from operating
activities
Finance income 3 (50) − (21)
Finance costs 3 1,949 579 1,459
Depreciation 6, 13 5,637 4,078 8,431
Amortisation 7 860 758 1,202
Gain on sale of property, plant and equipment (508) (569) (804)
Share based payment charges 1,281 − 825
Provision for liabilities 24 (17) (4)
Cash generated before changes in working capital 22,432 11,730 27,718
(Increase)/decrease in inventories (848) (484) 274
(Increase)/decrease in trade and other receivables (5,408) (4,635) 785
Increase in trade and other payables 818 4,716 7,207
Cash inflow from operations 16,994 11,327 35,984
Interest paid (1,257) (426) (1,132)
Tax paid (2,535) (1,112) (1,998)
Net cash generated from operating activities 13,202 9,789 32,854
Cash flow used in investing activities
Purchase of property, plant and equipment (7,780) (7,571) (13,728)
Proceeds from disposal of property, plant and equipment 818 823 1,518
Purchase of computer software (269) (255) (725)
Acquisition of subsidiary undertakings net of cash acquired (1,674) − (23,999)
Interest received 50 − 21
Net cash used in investing activities (8,855) (7,003) (36,913)
Cash flow (used in)/generated from financing activities
Loans received 2,014 − 31,000
Transaction fees on loans received (1,241) (5) (228)
Repayment of bank loans (5,628) (3,017) (21,727)
Payment of lease liability (628) (520) (1,064)
Dividends paid (796) − −
Net cash (used in)/generated from financing activities (6,279) (3,542) 7,981
Net (decrease)/increase in cash and cash equivalents (1,932) (756) 3,922
Cash and cash equivalents at beginning of the period 9,037 4,857 4,857
Net foreign exchange difference (613) 324 258
Cash and cash equivalents at end of the period 6,492 4,425 9,037
for the six-month period ended 30 June 2023
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 2023 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 2023 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 2023 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 2022 ("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 4 September 2023.
Accounting policies
The condensed consolidated interim financial statements have been prepared in
accordance with the accounting policies set out on pages 53-59 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, carrying value and useful lives of
property, plant and equipment and business combinations. These are
consistent with matters disclosed on pages 58-59 of 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 2023
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 2024.
During the six months ended 30 June 2023 the Group has continued to generate
positive cash flow from operating activities, repaying £5,628,000 of its
drawn RCF during the period, with a cash and cash equivalents balance of
£6,492,000 at 30 June 2023 (31 December 2022: £9,037,000). The Group has
access to a multi currency RCF with total commitments of £100,000,000. In
addition, the Group has the ability to call upon an additional accordion
facility of £50,000,000 subject to credit approval. The RCF and accordion
facility expire in April 2027, with an option to extend by 1 year subject to
credit approval. As at 30 June 2023 the RCF had an undrawn balance of
£68,488,000 and the £50,000,000 accordion facility was undrawn.
The Facility Agreement is subject to a leverage covenant of 3.0x 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 2023
Asia Middle Head Office
Europe Americas Pacific East Total
£000 £000 £000 £000 £000 £000
Total revenue 32,675 8,775 5,314 3,082 - 49,846
Cost of sales (6,191) (2,846) (945) (591) - (10,573)
-------- -------- -------- -------- -------- --------
Gross profit 26,484 5,929 4,369 2,491 - 39,273
Administrative expenses (8,624) (2,781) (1,805) (751) (4,552) (18,513)
Other operating income 313 51 126 18 - 508
-------- -------- -------- -------- -------- --------
Operating profit before depreciation, amortisation and foreign exchange 18,173 3,199 2,690 1,758 (4,552) 21,268
gain/(loss)
Foreign exchange gain 367
Depreciation (5,637)
Amortisation (860)
--------
Operating profit 15,138
Finance income 50
Finance costs (1,949)
--------
Profit before taxation 13,239
Taxation charge (2,799)
--------
Profit for the financial period 10,440
--------
Total assets 100,084 16,392 10,233 5,601 8,877 141,187
Total liabilities 17,678 4,662 2,038 837 30,670 55,885
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
Audited for the year ended 31 December 2022
Europe Americas Asia Pacific Middle East Head Office Total
£000 £000 £000 £000 £000 £000
Total revenue 42,827 13,912 10,874 5,507 - 73,120
Cost of sales (9,663) (4,867) (2,368) (1,931) - (18,829)
-------- -------- -------- -------- -------- --------
Gross profit 33,164 9,045 8,506 3,576 - 54,291
Administrative expenses (12,735) (5,274) (3,014) (1,563) (4,805) (27,391)
Other operating income 264 156 362 22 - 804
-------- -------- -------- -------- -------- --------
Operating profit before depreciation, amortisation and foreign exchange 20,693 3,927 5,854 2,035 (4,805) 27,704
gain/(loss)
Foreign exchange loss (3)
Depreciation (8,431)
Amortisation (1,202)
--------
Operating profit 18,068
Finance income 21
Finance costs (1,459)
--------
Profit before taxation 16,630
Taxation charge (3,965)
--------
Profit for the financial period 12,665
--------
93,522 15,335 11,025 5,429 11,511 136,822
Total assets
Total liabilities 17,500 2,755 2,310 723 37,731 61,019
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
2023 2022 2022
£000 £000 £000
UK 84,257 55,510 82,337
USA 11,456 10,998 11,163
Singapore 7,932 8,470 8,885
UAE 4,073 3,994 4,079
3. Finance income and costs
Unaudited Unaudited Audited
six months to 30 June 2023 six months to 30 June 2022 year ended 31 December 2022
Finance income £000 £000 £000
Bank interest receivable 50 - 21
Unaudited Unaudited Audited
six months to 30 June 2023 six months to 30 June 2022 year ended 31 December 2022
Finance costs £000 £000 £000
Interest on bank loans (held at amortised cost) 1,236 419 1,139
Amortisation of deferred finance costs 650 91 182
Interest expense on lease liability (Note 13) 63 69 138
1,949 579 1,459
4. Tax
The tax expense for the six-month period ended 30 June 2023 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 2023 applied to the
profit before tax for the interim period. The effective tax rate for the
six-month period ended 30 June 2023 is 21.1% and the income tax expense is
lower than the standard UK rate of 22% for the period (19% to 31 March 2023
increasing to 25% from 1 April 2023) due to lower tax rates in overseas
jurisdictions. The effective tax rate for the year ended 31 December 2022
was 23.8% and the income tax expense was higher than the standard UK rate of
19% during 2022 due to a deferred tax liability recognised arising from
temporary timing differences on intangible assets.
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. The Group has potentially dilutive Ordinary Shares arising from
share options granted to employees under the share schemes as detailed in Note
15 of these condensed consolidated interim financial statements. During the
period ended 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 2023 Six months Six months to 30 June 2022 Year ended 31 December 2022 Year ended
to 30 June 2023 to 30 June 2022 31 December 2022
Earnings attributable to equity shareholders of the Group:
Profit for the period (£000) 11,355* 10,440 6,581* 5,904 15,619* 12,665
Number of shares:
Weighted average number of Ordinary Shares - Basic 79,798,317 79,798,317 79,582,000 79,582,000 79,582,000 79,852,000
Weighted average number of Ordinary Shares - Diluted 80,817,881 80,817,881 79,582,000 79,582,000 80,679,071 80,679,071
Earnings per share attributable to equity holders of the Group - continuing
operations:
Basic earnings per share (pence) 14.2 13.1 8.3 7.4 19.6 15.9
Diluted earnings per share (pence) 14.1 12.9 8.3 7.4 19.4 15.7
* Refer to Note 18 for the reconciliation of Non-GAAP 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 2022 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
Acquisitions 10,984 409 − 443 29 11,865
Fair value adjustment on acquisitions 467 − − − − 467
Additions 5,383 18 − 164 − 5,565
Disposals (3,478) (76) − 4 − (3,550)
Foreign exchange movements 740 14 − (10) − 744
At 31 December 2022 audited 129,073 2,365 197 4,531 339 136,505
Additions 8,033 24 − 192 − 8,249
Disposals (4,487) − − (6) − (4,493)
Foreign exchange movements (2,347) (43) − (78) (1) (2,469)
At 30 June 2023 unaudited 130,272 2,346 197 4,639 338 137,792
Accumulated depreciation:
At 1 January 2022 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)
Acquisitions (5,920) (338) − (267) (21) (6,546)
Fair value adjustment on acquisitions (1,118) − − (81) − (1,199)
Charge for the period (3,543) (141) (4) (149) (18) (3,855)
Disposals 3,064 43 − (17) − 3,090
Foreign exchange movements (566) (12) − 27 − (551)
At 31 December 2022 audited (98,956) (1,829) (76) (3,597) (235) (104,693)
Charge for the period (4,799) (114) (4) (179) (18) (5,114)
Disposals 4,178 − − 5 − 4,183
Foreign exchange movements 1,929 36 1 61 (2) 2,025
At 30 June 2023 unaudited (97,648) (1,907) (79) (3,710) (255) (103,599)
Net book value:
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
At 31 December 2022 audited 30,117 536 121 934 104 31,812
At 30 June 2023 unaudited 32,624 439 118 929 83 34,193
7. Goodwill and intangible assets
Goodwill Customer relationships Non-compete arrangements Computer software Total
£000 £000 £000 £000 £000
48,651 4,447 208 3,769 57,075
Cost:
At 1 January 2022 audited
Additions − − − 255 255
Foreign exchange movements 534 2 − 9 545
At 30 June 2022 unaudited 49,185 4,449 208 4,033 57,875
Acquisitions 16,852 4,414 274 − 21,540
Additions − − − 470 470
Foreign exchange movements 6 − − (9) (3)
At 31 December 2022 audited 66,043 8,863 482 4,494 79,882
Additions − − − 269 269
Foreign exchange movements (247) − − − (247)
At 30 June 2023 unaudited 65,796 8,863 482 4,763 79,904
Amortisation:
At 1 January 2022 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)
Charge for the period − (246) (13) (185) (444)
Foreign exchange movements − 1 − 13 14
At 31 December 2022 audited − (4,548) (215) (3,098) (7,861)
Charge for the period − (549) (48) (263) (860)
Foreign exchange movements − − − − −
At 30 June 2023 unaudited − (5,097) (263) (3,361) (8,721)
Net book value:
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
At 31 December 2022 audited 66,043 4,315 267 1,396 72,021
At 30 June 2023 unaudited 65,796 3,766 219 1,402 71,183
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, Underwater Cutting Solutions Limited, WeSubsea AS and its
subsidiary WeSubsea UK Limited and Hiretech 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 2023 30 June 2022 31 December 2022
£000 £000 £000
Raw materials and consumables 2,679 2,351 1,865
The cost of inventories recognised as an expense and included in cost of sales
during the period was £3,282,000 (H1 2022: £1,690,000). The impairment
loss recognised as an expense during the period was £54,000 (H1 2022:
£nil).
9. Trade and other receivables
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
£000 £000 £000
Trade receivables 21,959 18,295 16,494
Prepayments 1,386 1,045 1,397
Accrued income 953 2,408 1,565
24,298 21,748 19,456
The Directors consider that the carrying amount of trade receivable and
accrued income approximates to fair value. The impairment loss recognised as
an expense during the period was £320,000 (H1 2022: £211,000).
10. Trade and other payables
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
£000 £000 £000
Trade payables 4,990 5,775 5,896
Accruals 13,789 8,298 13,137
Amounts due to related parties − 123 101
18,779 14,196 19,134
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. Loans and borrowings
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
Non-current £000 £000 £000
Bank loans (held at amortised cost) 30,347 22,678 34,865
At 30 June 2023 the bank loans comprise a revolving credit facility of
£31,512,000 (of which £5,512,000 is denominated in USD) which carries
interest at SONIA plus 2.25%. The lenders are ABN AMRO Bank N.V. and
Citibank N.A., Clydesdale Bank plc and HSBC Bank plc. The Facility Agreement
is subject to a leverage covenant of 3.0x and an interest cover covenant of
4:1. The total commitments are £100,000,000 for the RCF with an additional
£50,000,000 accordion facility available subject to credit approval. As at
30 June 2023 the RCF had an undrawn balance of £68,488,000 and the
£50,000,000 accordion facility was undrawn. A non-utilisation fee of
0.7875% is charged on the non-utilised element of the RCF facility. The
revolving credit facility is fully repayable by April 2027, with an option to
extend by 1 year.
At 30 June 2022 the bank loans comprise a revolving credit facility of
£23,121,000 (of which £11,430,000 is denominated in USD) which carried
interest at SONIA plus 2.2%. The lenders were HSBC Bank plc and Clydesdale
Bank plc. The Facility Agreement was subject to a leverage covenant of 2.5x
and an interest cover covenant of 4:1. The total commitments were
£40,000,000 for the RCF with an additional £10,000,000 accordion facility
available 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. A non-utilisation fee of 0.88% was charged on the non-utilised
element of the RCF facility.
Certain companies within the Group are party to cross guarantees with respect
to bank loans totalling £31,512,000 (31 December 2022: £35,438,000)
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:
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
£000 £000 £000
Within one year − − −
Within one to two years − − −
Within two to three years − 23,121 35,438
Within three to four years 31,512 − −
31,512 23,121 35,438
Deferred finance costs (1,165) (443) (573)
30,347 22,678 34,865
12. Financing liabilities reconciliation
Audited Cash flows Interest paid Other Changes in exchange rates Unaudited
1 January 2022 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.
Unaudited Cash flows Acquisitions Interest paid Other Changes in exchange rates Audited
30 June 2022 non-cash changes 31 December 2022
£000 £000 £000 £000 £000 £000 £000
Cash at bank and in hand 4,425 (3,162) 7,938 − − (164) 9,037
(22,678) (12,067) − − (91) (29) (34,865)
Bank loans
Lease liabilities (2,955) 544 − 69 (310) (204) (2,856)
Net debt (21,208) (14,685) 7,938 69 (401) (397) (28,684)
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.
Audited Cash flows Interest paid Other Changes in exchange rates Unaudited
31 December 2022 non-cash changes 30 June 2023
£000 £000 £000 £000 £000 £000
Cash at bank and in hand 9,037 (1,933) − − (612) 6,492
(34,865) 4,855 − (650) 313 (30,347)
Bank loans
(2,856) 628 63 (171) (184) (2,520)
Lease liabilities
Net debt (28,684) 3,550 63 (821) (483) (26,375)
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 and/or extend 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 2022 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
------
Additions to right-of-use assets 391
Depreciation charge for the period (498)
Effects of movements in exchange rates (8)
------
Balance at 31 December 2022 audited 2,631
------
Additions to right-of-use assets 108
Depreciation charge for the period (523)
Effects of movements in exchange rates 126
------
Balance at 30 June 2023 unaudited 2,342
------
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
Lease liabilities: £000 £000 £000
Current 797 791 865
Non-current 1,723 2,164 1,991
Total lease liabilities 2,520 2,955 2,856
Lease liabilities are repayable as follows:
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
£000 £000 £000
Within one year 895 910 976
Within one to two years 757 690 743
Within two to three years 502 683 668
Within three to four years 376 460 365
Within four to five years 214 335 315
Beyond five years − 198 64
2,744 3,276 3,131
Effect of discounting (224) (321) (275)
Total lease liabilities 2,520 2,955 2,856
b) Amounts recognised in the income statement
Unaudited Unaudited Audited
six months to 30 June 2023 six months to 30 June 2022 year ended
31 December 2022
£000 £000 £000
Depreciation charge 523 432 930
Interest expense on lease liability 63 69 138
Expenses relating to short-term leases 119 100 172
Total amount recognised in the income statement 705 601 1,240
c) Amounts recognised in the cash flow statement
Unaudited Unaudited Audited
six months to 30 June 2023 six months to 30 June 2022 year ended
31 December 2022
£000 £000 £000
Total cash payments for leases 691 589 1,202
14. Capital commitments
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
£000 £000 £000
Capital expenditure contracted for but not provided 9,364 2,720 689
15. Share based payments
IPO LTIP Awards
The IPO LTIP awards were granted on 5 September 2022 and comprise three equal
tranches, with the first tranche vested on the publication of the annual
report for the year ended 31 December 2022, the second tranche vesting on the
publication of the annual report for the year ended 31 December 2023 and the
third tranche vesting on the publication of the annual report for the year
ended 31 December 2024. Certain senior managers from various Group companies
are eligible for nil cost share option awards with Ashtead Technology Holdings
plc granting the awards and on exercise, the awards will be equity settled
with ordinary shares in Ashtead Technology Holdings plc. The IPO LTIP share
awards vesting is subject to the achievement of a target annual Adjusted EPS
and participants remaining employed by the Group over the vesting period.
The outstanding number of IPO LTIP awards at 30 June 2023 is 1,011,329 (30
June 2022: nil).
Share based payments Tranche 1 Tranche 2 Tranche 3
Valuation model Black-Scholes Black-Scholes Black-Scholes
Weighted average share price (pence) 260.5 260.5 260.5
Exercise price (pence) 0 0 0
Expected dividend yield 0.76% 0.81% 0.85%
Expected volatility 41.93% 41.93% 41.93%
Risk-free interest rate 2.79% 3.14% 3.04%
Expected term (years) 0.67 1.67 2.67
Weighted average fair value (pence) 259.2 257.0 254.7
Attrition 5% 5% 5%
Weighted average remaining contractual life (years) 9.17 9.17 9.17
The expected volatility has been calculated using the Group's historical
market data history since IPO in 2021.
Share based payments Number of shares Weighted average exercise price (£)
Outstanding at beginning of the period 1,097,751 −
Granted − −
Exercised (86,422) 375.6
Forfeited − −
Outstanding at the end of the period 1,011,329 −
Exercisable at the end of the period 279,497 −
Share-based payments expense recognised in the consolidated income statement
during the period was £1,185,000 (H1 2022: £nil).
2023 LTIP Awards
The 2023 LTIP awards were granted on 4 May 2023, with vesting on the
announcement of the annual results for the year ended 31 December 2025.
Certain senior managers from various Group companies are eligible for nil cost
share option awards with Ashtead Technology Holdings plc granting the awards
and on exercise, the awards will be equity settled with ordinary shares in
Ashtead Technology Holdings plc. The share awards vesting is subject to the
achievement of agreed Adjusted EPS, ROIC and total shareholder return ("TSR")
targets and participants remaining employed by the Group over the vesting
period.
The outstanding number of awards at 30 June 2023 is 438,622 (30 June 2022:
nil).
Share based payments EPS ROIC TSR
Valuation model Black-Scholes Black-Scholes Monte Carlo
Weighted average share price (pence) 379.0 379.0 379.0
Exercise price (pence) 0 0 0
Expected dividend yield 0.0% 0.0% 0.0%
Expected volatility 40.17% 40.17% 40.17%
Risk-free interest rate 3.71% 3.71% 3.71%
Expected term (years) 3.02 3.02 3.02
Weighted average fair value (pence) 379.0 379.0 298.0
Attrition 5% 5% 5%
Weighted average remaining contractual life (years) 9.84 9.84 9.84
The expected volatility has been calculated using the Group's historical
market data history since IPO in 2021.
Share based payments Number of shares Weighted average exercise price (£)
Outstanding at beginning of the period − −
Granted 438,622 −
Exercised − −
Forfeited − −
Outstanding at the end of the period 438,622 −
Exercisable at the end of the period − −
Share-based payments expense recognised in the consolidated income statement
during the period was £94,000 (H1 2022: £nil).
16. Share capital and reserves
The Group considers its capital to comprise its called up share capital, share
premium, merger reserve, share based payment 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 2023 30 June 2022 31 December 2022
Allotted, called up and fully paid No. £000 No. £000 No. £000
Ordinary shares of £0.05 each 79,947,919 3,997 79,582,000 3,979 79,582,000 3,979
3,997 3,979 3,979
Ordinary share capital represents the number of shares in issue at their
nominal value. 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. 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.
Share based payment reserve
The share based payment reserve is built up of charges in relation to equity
settled share based payment arrangements which have been recognised within the
consolidated income statement.
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.
17. Related parties
There were no transactions with related parties, other than key management
personnel, in the six-month period ended 30 June 2023.
Compensation of key management personnel: Unaudited Unaudited Audited
six months six months year ended
to 30 June 2023 to 30 June 2022 31 December 2022
£000 £000 £000
Salaries and fees 428 407 790
Bonus 530 200* 200*
Other benefits 38 41 72
Share based payment charges (Note 15) 756 - 491
Total 1,752 648 1,553
* 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.
The outstanding balance due to related parties as at 30 June 2022 (£123,000)
and 31 December 2022 (£384,000) related to payments to BP INV2B Bidco
Limited, BP INV2 Holdco Limited and BP INV2 Newco Limited which are no longer
considered related parties as at 30 June 2023.
18. Reconciliation of Non-GAAP Profit Metrics
Reconciliation of Adjusted EBITDA Unaudited Unaudited Audited
six months to 30 June 2023 six months to year ended
30 June 2022 31 December 2022
Notes £000 £000 £000
Adjusted EBITDA 21,288 12,252 28,555
Cost associated with M&A - - (787)
Restructuring costs (20) - (28)
Other exceptional costs - (92) (36)
-------- -------- --------
Operating profit before depreciation, amortisation and foreign exchange
gain/(loss)
21,268 12,160 27,704
Depreciation on property, plant and equipment 6 (5,114) (3,646) (7,501)
Depreciation on right-of-use asset 13 (523) (432) (930)
-------- -------- --------
Operating profit before amortisation and foreign exchange gain/(loss) 15,631 8,082 19,273
Amortisation of intangible assets 7 (860) (758) (1,202)
Foreign exchange gain/(loss) 367 156 (3)
-------- -------- --------
Operating profit 15,138 7,480 18,068
Reconciliation of Adjusted EBITA Unaudited Unaudited Audited
six months to 30 June 2023 six months to 30 June 2022 year ended 31 December 2022
Notes £000 £000 £000
Adjusted EBITA 15,651 8,174 20,124
Cost associated with M&A - - (787)
Restructuring costs (20) - (28)
Other exceptional costs - (92) (36)
Amortisation of intangible assets 7 (860) (758) (1,202)
Foreign exchange gain/(loss) 367 156 (3)
-------- -------- --------
Operating profit 15,138 7,480 18,068
Reconciliation of Adjusted Profit Before Tax Unaudited Unaudited Audited
six months to 30 June 2023 six months to year ended 31 December 2022
30 June 2022
Notes £000 £000 £000
Adjusted Profit Before Tax 14,274 7,595 18,686
Cost associated with M&A - - (787)
Restructuring costs (20) - (28)
Amortisation of deferred finance costs (522) - -
Other exceptional costs - (92) (36)
Foreign exchange gain/(loss) 367 156 (3)
Amortisation of intangible assets 7 (860) (758) (1,202)
-------- -------- --------
Profit before taxation 13,239 6,901 16,630
Reconciliation of Adjusted Profit After Tax Unaudited Unaudited Audited
six months to 30 June 2023 six months to 30 June 2022 year ended
31 December
2022
Notes £000 £000 £000
Adjusted Profit After Tax 11,355 6,581 15,619
Cost associated with M&A - - (787)
Restructuring costs (20) - (28)
Amortisation of deferred finance costs (522) - -
Other exceptional costs - (92) (36)
Foreign exchange gain/(loss) 367 156 (3)
Amortisation of intangible assets 7 (860) (758) (1,202)
Tax impact of the adjustments above 120 17 12
Deferred tax arising from temporary timing differences on intangible assets
- - (910)
-------- -------- --------
Profit for the financial period 10,440 5,904 12,665
Adjusted Profit After Tax is used to calculate the Adjusted earnings per share
in Note 5.
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