REG - Speedy Hire PLC - Half Year Results
17/11/2021 07:05
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RNS Number : 6081S Speedy Hire PLC 17 November 2021
Speedy Hire Plc
("Speedy", "the Company" or "the Group")
Results for the six months to 30 September
2021
Continued strong momentum, well positioned for further growth
Speedy, the UK's leading provider of tools and equipment hire, and services to
the construction, infrastructure and industrial markets, announces results for
the six months to 30 September 2021.
Commenting on the results Russell Down, Chief Executive, said:
"We have delivered another strong set of results through the strength of our
offering, efficient operational delivery and a supportive market backdrop.
Our focus on ESG, digital and customer service including our four-hour
delivery promise, has once again yielded customer renewals and market share
gains.
Positive trading momentum in recent months and the significant growth
opportunities presented by major infrastructure projects give us confidence in
delivering full year results ahead of current market expectations and
sustainable growth in the medium term."
Underlying results (from continuing operations)
6 months ended 6 months ended Change
30 September 2021 (£m) 30 September 2020 (£m)
Revenue (excluding disposals) 186.6 145.5 28.2%
EBITDA(1) 49.1 37.8 29.9%
Adjusted operating profit ('EBITA')(1) 16.2 6.3 £9.9m
Adjusted profit before tax(1) 14.6 4.1 £10.5m
Adjusted earnings per share (pence)(2) 1.81 0.53 1.28p
Statutory results
6 months ended 6 months ended Change
30 September 2021 (£m) 30 September 2020 (£m)
Revenue 188.6 147.0 28.3%
Operating profit 15.9 1.8 £14.1m
Profit/(loss) before tax 14.3 (0.4) £14.7m
Basic earnings per share (pence) 1.81 0.15 1.66p
Other measures
6 months ended 6 months ended Change
30 September 2021 30 September 2020
Net debt(3) £47.9m £57.8m 17.1%
Return on Capital Employed(4) 12.4% 9.1% 3.3pp
Dividend per share 0.75p - 0.75p
Strategic and operational highlights
· Continued strong trading performance:
o Revenue growth throughout H1 with strong performance in hire +3.4% (Q1:
2.3%; Q2: 4.7%) compared to corresponding period in FY2020
o Adjusted profit before tax from continuing operations ahead of FY2021 and
FY2020
o Continual improvement in asset utilisation due to the use of artificial
intelligence; up 1.8% to 57.3% as at 30 September 2021
o Costs tightly controlled; prior year efficiency initiatives reinvested in
growth priorities, notably people, ESG and digital capabilities
o Further market share gains with a number of new contracts and renewals
with key customers including Costain, MGroup, Redrow Homes and Willmott Dixon
· Further strategic and operational progress:
o Improved customer experience through enhanced digital platform
o Successful trial in 16 B&Q stores in H1 expanding retail proposition
through 7-day offering
o ESG initiatives delivering good progress; new Innovation Centre in Milton
Keynes opened in November 2021
· Strong balance sheet and investment in capex:
o Cash and facility headroom of £131.0m (31 March 2021: £142.3m)
o Bank facilities of £180m renewed to July 2024 providing significant
headroom for growth
o Net debt(3) at £47.9m (31 March 2021: £33.2m; 30 September 2020
£57.8m), with leverage(5) of 0.7x (31 March 2021: 0.5x; 30 September 2020:
0.9x)
o Significant investment in hire fleet of £37.6m with a focus on carbon
efficient ECO products
Current trading and outlook
· FY2022 results expected to be ahead of current market
expectations(6)
· Market conditions remain positive:
o Infrastructure and construction sectors bolstered by major projects
o Customer demand continues to improve into H2
· Agreement signed with B&Q; 23 further stores to open from H2
generating incremental revenue
· Targeted price increases offsetting cost pressures
· Improvements to simplify and standardise operating model ongoing:
o Internal digital capabilities improved through successful implementation
of new cloud-based ERP system (Microsoft D365) in October 2021
o Improved B2C platform under development to simplify the digital customer
journey
· Dividend policy maintained; return to interim dividend payments with
proposed dividend of 0.75 pence per share. During 2022 the Board will consider
returns to shareholders of any capital in excess of the Group's needs
consistent with the Group's capital allocation policy
Enquiries:
Speedy Hire
Plc
Tel: 01942 720 000
Russell Down, Chief Executive
James Bunn, Chief Financial Officer
MHP
Communications
Tel: 0203 128 8778
Oliver Hughes
Andrew Jaques
Notes:
Explanatory notes:
(1 )See note 9
(2) See note 7
(3) See note 12
(4) Return on Capital Employed: Profit before interest, tax, amortisation and
exceptional items divided by the average capital employed (where capital
employed equals shareholders' funds and net debt(3)), for the last 12 months.
(5) Leverage: Net debt(3) covered by EBITDA(1). This metric excludes the
impact of IFRS 16.
(6) Analysts' consensus of £29.2m adjusted profit before tax(1)
Inside Information: This announcement contains inside information.
Forward looking statements: The information in this release is based on
management information. This report includes statements that are forward
looking in nature. Forward looking statements involve known and unknown risks,
assumptions, uncertainties and other factors which may cause the actual
results, performance or achievements of the Group to be materially different
from any future results, performance or achievements expressed or implied by
such forward looking statements. Except as required by the Listing Rules and
applicable law, the Company undertakes no obligation to update, revise or
change any forward looking statements to reflect events or developments
occurring after the date of this report.
Notes to Editors: Founded in 1977, Speedy is the UK's leading provider of
tools and equipment hire services to a wide range of customers in the
construction, infrastructure and industrial markets, as well as to local trade
and industry. The Group provides complementary support services through the
provision of training, asset management and compliance services. Speedy is
certified nationally to ISO50001, ISO9001, ISO14001, ISO17020, ISO27001 and
ISO45001. The Group operates from c.200 fixed sites across the UK and Ireland
together with a number of on-site facilities at client locations, and through
a joint venture in Kazakhstan.
Chief Executive's statement
Overview
Our half year results for the six months to 30 September 2021 (first half of
FY2022) show continued momentum from the final quarter of FY2021, which saw us
return to pre-COVID-19 revenue levels. Hire revenue has grown throughout the
first half and was 3.4% ahead of H1 FY2020 which is a more meaningful
comparison than FY2021.
This strong performance results from our relentless focus on excellent
customer service and improved digital offering, which has allowed us to grow
market share. Market conditions are good and our diversified customer base and
the varied markets we operate within provide resilience and optimism for the
future. The recent trial and subsequent agreement to partner with B&Q
provides opportunities within the B2C retail sector.
Strategy and operational review
Our vision is to be the best company in our sector to do business with and the
best to work for. We are constantly improving the customer journey and working
on several key strategic initiatives to support this centred around our
people, digital and ESG.
Customer service remains our top priority. The strong hire revenue performance
reflects our industry leading four-hour delivery promise. This covers our 350
most popular products with a promise that any of these will be delivered
nationally to customers within four hours. The success of our customer service
ethos is evidenced through major customer wins and renewals across a broad
range of sectors including Costain, MGroup, Redrow Homes and Willmott Dixon.
Our rehire business performed particularly well in the first half, with
revenues ahead of both FY2021 and FY2020 as we experienced strong demand for a
range of products, particularly temporary accommodation. Overall services
revenue from continuing operations fell slightly from FY2020 as training
revenue was adversely affected by COVID-19 and market conditions. Whilst the
Group remains committed to short duration training aligned to our core
operations, we ceased the provision of NVQs and Apprenticeships from July
2021.
Developing the retail business is a strategic priority and supports our
commitment to sustainability by providing consumers with the option to hire,
thereby promoting the circular economy through the re-use of DIY tools and
equipment. In FY2021 we commenced a trial of outlets within B&Q stores. I
am pleased to report that following the successful trial in 16 stores we have
entered an agreement with B&Q to expand our presence into 39 stores. This
new agreement demonstrates the strength of the Speedy brand and our market
leading customer service proposition.
We have invested further in developing our digital capabilities. We have
enhanced our website and App including the redesign of new category and
product pages, and improving our customer onboarding and checkout processes to
simplify the overall transaction. An improved B2C platform is under
development designed to further simplify the digital customer journey.
In October we successfully completed our core system upgrade to the latest
cloud-based ERP application from Microsoft (Dynamics 365). The system provides
a fully supported evergreen ERP platform from which we can utilise cloud-based
technologies to become a more agile business. The next phase of its
development will be to utilise the rich functionality to drive operational
efficiency, consolidate peripheral applications and improve customer
interactions.
Artificial Intelligence (AI) remains integral to the management of our hire
fleet and utilisation rates. We have experienced limited supply chain delays
on certain products however these have been mitigated through the strength of
our supply chain relationships and advanced planning by using AI. We invested
strategically in our hire fleet with capex of £37.6m in H1 with a focus on
carbon efficient ECO products.
We have recently implemented a targeted price increase following product and
customer reviews to mitigate cost pressures. Enhanced governance and further
use of AI in this area will facilitate more dynamic pricing.
Our ESG framework underpins our commitment to operating efficiently as a
leading sustainable company. We are targeting net zero by 2035 and are setting
science-based targets this financial year to provide a clearly defined pathway
on how this will be achieved. Following the appointment in April 2021 of an
ESG director, we have established an ESG committee from representatives across
the business to drive continuous improvement in our ESG KPIs, which are
aligned with the United Nations Sustainable Development Goals. We are aiming
to reduce our emissions per employee by 10% in FY2022 with actions including
the roll out of HVO D+ fuel as a replacement for diesel in our commercial
fleet. In November 2021 we opened a new service centre in Milton Keynes which
showcases the latest in innovative products and technology. The property is
fitted with solar panels, rainwater harvesting, energy efficient systems along
with a living wall, bee hotels and a wildflower garden. Sustainable products
now make up c.28% of revenues and we expect this to grow significantly as the
industry moves towards achieving net zero carbon targets.
Group financial performance
Results and commentary are presented on a continuing operations basis unless
otherwise noted, reflecting the disposal of the Middle East business in March
2021. Comparative amounts in the income statement are to 30 September 2020,
which was affected by the COVID-19 pandemic. To aid understanding of the
underlying performance, comparison to H1 FY2020 is given where relevant.
Revenue (excluding disposals) for the period to 30 September 2021 increased by
28.2% to £186.6m (H1 FY2021: £145.5m), following a recovery in activity
levels compared to the prior year which was affected by the COVID-19 pandemic.
Revenue from disposals was £2.0m (H1 FY2021: £1.5m); total revenue for the
period increased by 28.3% to £188.6m (H1 FY2021: £147.0m).
Gross profit was £108.0m (H1 FY2021: £80.9m), an increase of 33.5%. The
gross margin increased to 57.3% (H1 FY2021: 55.0%), reflecting the increase in
core hire revenue with largely fixed depreciation costs.
EBITDA increased by 29.9% to £49.1m (H1 FY2021: £37.8m). EBITA increased by
£9.9m to £16.2m (H1 FY2021: £6.3m), and profit before taxation,
amortisation and exceptional costs increased to £14.6m from £4.1m in H1
FY2021. The Group incurred no exceptional items during the period (H1 FY2021:
£4.1m).
After taxation, amortisation, exceptional items, and discontinued operations
the Group made a profit of £9.5m (H1 FY2021: £0.8m).
Segmental analysis
The Group's segmental reporting is split into UK and Ireland, and Corporate.
The figures in the tables below are presented before the results of the joint
venture, corporate costs, and exceptional items.
UK and Ireland 6 months ended 6 months ended Movement
30 September 30 September
2021 2020
£m £m %
Revenue (excluding disposals) 186.6 145.5 28.2
EBITDA 51.2 39.8 28.6
EBITA 18.4 8.7 111.5
Hire revenues increased by 31.8%, reflecting the impact of the first lockdown
in April 2020. Revenue made a progressive recovery throughout FY2021 with
growth continuing through the current financial year to date. Revenue in H1
was 3.4% ahead of the corresponding period in FY2020. A number of new and
renewed contracts with key customers have been secured in the period which
reflects the strength of our market position.
Services revenues have increased by 22.2% compared to H1 FY2021, with a strong
performance from our rehire business, which reacted quickly to changing
customer demands during COVID-19. Overall services revenue for the period was
affected by the decision to cease the provision of NVQs and Apprenticeships
from July 2021.
Gross margins increased from 55.0% in H1 FY2021 to 57.3%. Hire margin
recovered to 77.3% (H1 FY2021: 74.8%), as volumes increased, utilisation
improved further and other direct costs remained tightly controlled. Asset
utilisation increased to 57.3% at 30 September 2021, 1.8 percentage points
above the comparable period in FY2020 as a result of continued use of AI to
connect customer demand with asset availability. Increased supply chain lead
times have been mitigated by the use of AI to support our replenishment and
asset rebalancing programme.
Services margin has been adversely impacted by the comparably lower training
revenues, which contributed a higher margin than other service revenues.
Overheads remain well controlled and are broadly flat with FY2020.
Improvements have been made to simplify and standardise our operating model,
including the consolidation of a number of depots into larger customer focused
centres. The cost savings from these initiatives have been reinvested in our
people, ESG and technology. The results for the period do not include any
government furlough or loan support.
The UK and Ireland headcount at 30 September 2021 was 3,339 (31 March 2021:
3,253), an increase of 2.6%. 89 colleagues are now employed within B&Q
stores (31 March 2021: 50).
International
Following the disposal of the Middle East business on 1 March 2021, the Group
successfully concluded the transitional services arrangement in the period;
the Group will now formally wind up its operations in the region.
Interest
The Group's net financial expense remained flat at £2.8m (H1 FY2021:
£2.8m).
The Group's main bank facilities were renewed in July 2021 for a three year
term. Borrowings under the facility are now priced based on SONIA (LIBOR prior
to renewal) plus a variable margin, while any unutilised commitment is charged
at 35% of the applicable margin. During the period, the margin payable on the
outstanding debt fluctuated between 1.50% and 2.05% dependent on the weighting
of borrowings between receivables and plant and machinery. The effective
average margin in the period was 1.72% (H1 FY2021: 1.84%).
The Group utilises interest rate hedges to manage fluctuations in rates. The
fair value of these hedges was not material at 30 September 2021 and they have
varying maturity dates.
Interest on lease liabilities of £1.3m (H1 FY2021: £1.2m) was incurred
during the period.
Taxation
The tax charge for the period was £5.0m (H1 FY2021: £0.6m), reflecting a
projected full year effective tax rate before amortisation and exceptional
items of 28.2% (H1 FY2021: 20.3%). An increase in the UK corporation tax
rate to 25% for periods from 1 April 2023 was substantively enacted on 24 May
2021. This rate has been used to calculate the deferred tax assets and
liabilities and has resulted in the increased effective rate of tax for the
period. The impact of the rate change is an increase of £2.0m in the net
deferred tax liability as at 30 September 2021; excluding the impact of this
change in tax rate, the effective rate would be 21.4% before exceptional
items and amortisation.
Shares and earnings per share
At 30 September 2021, 528,498,631 Speedy Hire Plc ordinary shares were
outstanding, of which 4,084,165 were held in the Employee Benefit Trust.
Adjusted earnings per share was 1.81 pence (H1 FY2021: 0.53 pence), an
increase of 1.28p. Basic earnings per share was 1.81 pence (H1 FY2021: 0.15
pence).
Capital expenditure
Total capital expenditure during the period amounted to £43.7m (H1 FY2021:
£9.3m), of which £37.6m (H1 FY2021: £7.2m) related to equipment for hire,
and £6.1m related to other property, plant and equipment (H1 FY2021:
£2.1m).
Our hire fleet investment of £37.6m in H1 was biased toward carbon efficient
ECO products. The average age of the fleet is 3.6 years (H1 FY2021:3.9
years) one of the youngest fleets in the industry. Whilst we have experienced
some limited supply chain pressures, the strength of our supplier
relationships and advanced planning have mitigated the impact.
ROCE and balance sheet
The Group has a strong balance sheet and is well placed to continue to pursue
financial and strategic objectives as demand improves.
Net assets at 30 September 2021 were £222.9m (31 March 2021: £219.2),
equivalent to 42 pence per share. ROCE was 12.4% for the 12 months to
September 2021 (12 months to 30 September 2020: 9.1%).
Net property, plant and equipment (excluding IFRS 16 right of use assets)
increased to £248.4m at 30 September 2021 (31 March 2021: £233.1m). The net
book value of equipment for hire has increased from £207.2m to £220.7m,
representing 88.8% (31 March 2021: 88.9%) of the total property, plant and
equipment balance.
Intangible assets increased marginally to £25.0m (31 March 2021: £24.7m),
with investment in software development partly offset by amortisation charged.
Right of use assets of £65.2m (31 March 2021: £59.1m) and corresponding
lease liabilities of £70.9m (31 March 2021: £65.8m) were recognised at 30
September 2021. The increase is due to various lease renewals and new leases
entered into during the period.
Gross trade receivables totalled £95.5m at 30 September 2021 (31 March 2021:
£93.5m), benefiting from continued strong cash collections and focus on
overdue debt. Bad debt and credit note provisions increased to £5.1m at 30
September 2021 (31 March 2021: £4.9m), equivalent to 5.3% of gross trade
receivables (31 March 2021: 5.2%). In setting the provisions the Directors
have given specific consideration to the impact of COVID-19 on the general
economy, particularly given the tapering of government support. The Group has
not experienced a significant worsening of debt collections or debt write-offs
although continues to monitor the situation closely. UK and Ireland debtor
days were 66.8 days (31 March 2021: 59.4 days), consistent with September
2020 (65.5 days). Trade payables and accruals were £96.7m (31 March 2021:
£94.8m). UK and Ireland creditor days were 89.8 days (31 March 2021: 81.6
days) down from September 2020 (101.8 days).
Cash flow and net debt
Cash generated from operations for the period was £15.0m (H1 FY2021:
£37.1m). Free cash flow (being net cash flow before financing activities)
decreased to £3.7m (H1 FY2021: £33.6m), reflecting the increased spend on
hire equipment.
Net debt increased by £14.7m from £33.2m at the beginning of the period to
£47.9m at 30 September 2021. Net debt to EBITDA (rolling 12 months basis)
increased to 0.7x (31 March 2021: 0.5x).
The Group's continued strong cash position resulted in cash and facility
headroom of £131.0m within the Group's committed bank facility (31 March
2021: £142.3m).
The Group's £180m asset based finance facility has been renewed for three
years, through to July 2024. In addition uncommitted options exist for a
further two one-year extensions until July 2026. The additional uncommitted
accordion of £220m remains in place through to July 2024. The terms of the
facility are broadly similar to the expiring facility. The facility gives the
Group headroom with which to support organic growth and acquisition
opportunities.
The facility includes quarterly leverage and fixed charge cover covenant tests
which are only applied if headroom in the facility falls below £18m. No
covenant test was required during the period, and the Group maintained
significant headroom against these measures.
Dividend
The Board is committed to maintaining an efficient balance sheet and regularly
reviews the Group's capital resources in light of the medium-term investment
requirements and in accordance with the capital allocation policy set out
below. The Board confirms today that it intends to maintain the current
dividend policy of paying progressive dividends with a pay-out ratio of
between 33% and 50% of adjusted profit after tax for the financial year.
The Board has declared an interim dividend of 0.75 pence per share (H1
FY2021 interim dividend: nil pence per share; H1 FY2020 interim dividend 0.70
pence per share), to be paid on 21 January 2022 to shareholders on the
register on 10 December 2021. This represents a return to paying interim
dividends following the decision not to pay a dividend last year whilst in the
midst of the pandemic.
Capital allocation policy
The Board intends to continue to invest in the business in order to grow
revenue, profit and ROCE. This investment is expected to include capital
expenditure within existing operations, as well as value enhancing
acquisitions that fit with the Group's strategy and are returns accretive.
The Board's objective is to maximise long-term shareholder returns through a
disciplined deployment of cash generated, and it has adopted the following
capital allocation policy in support of this:
- Organic growth: the Board will invest in capital
equipment to support demand in our chosen markets. This investment will be in
hire fleet and IT systems to better enable us to serve our customers;
- Regular returns to shareholders: the Board intends to
pay a regular dividend to shareholders, with a policy of growing dividends
through the business cycle, and a payment in the range of between 33% and 50%
adjusted earnings per share;
- Acquisitions: the Board will continue to explore value
enhancing acquisition opportunities in markets adjacent to, and consistent
with its existing operations;
- Gearing and treatment of excess capital: the Board is
committed to maintaining an efficient balance sheet. The Board has adopted a
target gearing in the region of 1.5x net debt to EBITDA through the business
cycle, although it is prepared to move outside this if circumstances warrant.
The Board recognises that the Group's leverage of 0.7x remains below its
business cycle target of 1.5x. This has been appropriate given the significant
economic and market uncertainties during the COVID-19 pandemic. The Board
continues to believe that a strong balance sheet is appropriate for the
current stage of the cycle to allow the company take full advantage of
opportunities that arise as markets recover. During 2022 the Board will review
the medium-term capital needs of the Group and will consider potential returns
to shareholders of any capital in excess of the Group's needs consistent with
its capital allocation policy.
Board
Carol Kavanagh joined the Board and Remuneration Committee of the Company on 1
June 2021 as an Independent Non-executive Director. Carol has over 20 years of
experience working in senior public company human resource roles across
construction and retail sectors, including as Group HR Director for Travis
Perkins Plc from 2007 to 2020. After allowing time for Carol to settle into
her role, Rhian Bartlett stepped down from the Remuneration Committee on 16
November in keeping with the Company's current policy of staffing its Board
Committees with three Independent Non-executive Directors.
Summary and outlook
We have delivered another strong set of results through the strength of our
offering, efficient operational delivery and a supportive market backdrop.
Our focus on ESG, digital and customer service including our four-hour
delivery promise, has once again yielded customer renewals and market share
gains.
Positive trading momentum in recent months and the significant growth
opportunities presented by major infrastructure projects give us confidence in
delivering full year results ahead of current market expectations and
sustainable growth in the medium term.
Russell Down
Chief Executive
Interim condensed consolidated income statement
Six months ended Six months
30 September ended Year ended
2021 30 September 31 March
2020 2021
Note £m £m £m
Revenue 4 188.6 147.0 332.3
Cost of sales (80.6) (66.1) (147.4)
───── ───── ─────
Gross profit 108.0 80.9 184.9
Distribution and administrative costs (92.1) (79.1) (172.4)
Analysis of operating profit
Operating profit before amortisation and exceptional items
16.2 6.3 21.7
Amortisation (0.3) (0.4) (0.8)
Exceptional items 3 - (4.1) (8.4)
Operating profit 15.9 1.8 12.5
Share of results of joint venture 1.2 0.6 1.2
───── ───── ─────
Profit from operations 17.1 2.4 13.7
Financial expense 5 (2.8) (2.8) (5.4)
───── ───── ─────
Profit/(loss) before taxation 14.3 (0.4) 8.3
Taxation 6 (5.0) (0.6) (2.2)
───── ───── ─────
Profit/(loss) for the financial period from continuing operations
9.3 (1.0) 6.1
───── ───── ─────
Profit from discontinued operations, net of tax 0.2 1.8 3.4
───── ───── ─────
Profit for the financial period 9.5 0.8 9.5
═════ ═════ ═════
Earnings per share
- Basic (pence) 7 1.81 0.15 1.82
═════ ═════ ═════
- Diluted (pence) 7 1.79 0.15 1.79
═════ ═════ ═════
Non-GAAP performance measures (continuing operations)
EBITDA before exceptional items 9 49.1 37.8 85.3
═════ ═════ ═════
Adjusted profit before tax 9 14.6 4.1 17.5
═════ ═════ ═════
Adjusted earnings per share (pence) 7 1.81 0.53 2.68
═════ ═════ ═════
Interim condensed consolidated statement of comprehensive income
Six months ended Six months
30 September ended Year ended
2021 30 September 31 March
2020 2021
£m £m £m
Profit for the financial period 9.5 0.8 9.5
───── ───── ─────
Other comprehensive income that may be reclassified subsequently to the Income
Statement:
- Effective portion of change in fair value of cash flow hedges 0.4 (0.2) 0.2
- Exchange difference on retranslation of foreign operations 0.4 (0.8) (1.4)
───── ───── ─────
Other comprehensive income, net of tax 0.8 (1.0) (1.2)
───── ───── ─────
Total comprehensive income/(loss) for the financial period 10.3 (0.2) 8.3
═════ ═════ ═════
Interim condensed consolidated balance sheet
30 September 30 September 31 March
2021 2020 2021
Note £m £m £m
ASSETS
Non-current assets
Intangible assets 25.0 22.8 24.7
Investment in joint venture 7.5 6.6 6.2
Property, plant and equipment
- Hire equipment 10 220.7 212.0 207.2
- Non-hire equipment 10 27.7 27.6 25.9
Right of use assets 11 65.2 58.9 59.1
Deferred tax assets 3.2 2.7 2.5
───── ───── ─────
349.3 330.6 325.6
───── ───── ─────
Current assets
Inventories 8.6 8.5 8.2
Trade and other receivables 99.4 95.4 93.3
Cash 12 6.5 18.9 11.7
Current tax asset - 0.4 1.1
───── ───── ─────
114.5 123.2 114.3
───── ───── ─────
Total assets 463.8 453.8 439.9
───── ───── ─────
LIABILITIES
Current liabilities
Borrowings 12 (1.0) - (0.5)
Lease liabilities (19.6) (18.5) (19.3)
Other financial liabilities (0.2) (0.7) (0.4)
Trade and other payables (96.7) (84.5) (94.8)
Current tax liabilities (0.6) - -
Provisions (3.8) (5.5) (3.1)
───── ───── ─────
(121.9) (109.2) (118.1)
───── ───── ─────
Non-current liabilities
Borrowings 12 (53.4) (76.7) (44.4)
Lease liabilities (51.3) (48.3) (46.5)
Provisions (2.1) (1.7) (2.9)
Deferred tax liabilities (12.2) (7.8) (8.8)
───── ───── ─────
(119.0) (134.5) (102.6)
───── ───── ─────
Total liabilities (240.9) (243.7) (220.7)
───── ───── ─────
Net assets 222.9 210.1 219.2
═════ ═════ ═════
EQUITY
Share capital 26.4 26.4 26.4
Share premium 1.5 0.9 1.3
Merger reserve 1.0 1.0 1.0
Hedging reserve (0.3) (1.1) (0.7)
Translation reserve (0.6) (0.4) (1.0)
Retained earnings 194.9 183.3 192.2
───── ───── ─────
222.9 210.1 219.2
═════ ═════ ═════
Interim condensed consolidated statement of changes in equity
Share Share Merger Hedging Translation Retained Total
capital premium reserve reserve reserve earnings equity
£m £m £m £m £m £m £m
At 1 April 2020 26.4 0.8 1.0 (0.9) 0.4 182.2 209.9
Total comprehensive income/(loss) - - - (0.2) (0.8) 0.8 (0.2)
Issue of shares under the Sharesave Scheme - 0.1 - - - - 0.1
Equity-settled share-based payments - - - - - 0.3 0.3
───── ───── ───── ───── ───── ───── ─────
At 30 September 2020 26.4 0.9 1.0 (1.1) (0.4) 183.3 210.1
Total comprehensive income/(loss) - - - 0.4 (0.6) 8.7 8.5
Issue of shares under the Sharesave Scheme - 0.4 - - - - 0.4
Equity-settled share-based payments - - - - - 0.2 0.2
───── ───── ───── ───── ───── ───── ─────
At 31 March 2021 26.4 1.3 1.0 (0.7) (1.0) 192.2 219.2
Total comprehensive income - - - 0.4 0.4 9.5 10.3
Dividends - - - - - (7.3) (7.3)
Issue of shares under the Sharesave Scheme - 0.2 - - - - 0.2
Equity-settled share-based payments - - - - - 0.5 0.5
───── ───── ───── ───── ───── ───── ─────
At 30 September 2021 26.4 1.5 1.0 (0.3) (0.6) 194.9 222.9
═════ ═════ ═════ ═════ ═════ ═════ ═════
Interim condensed consolidated statement of cash flows
Six months ended Six months
30 September ended Year ended
2021 30 September 31 March
2020 2021
£m £m £m
Cash generated from operating activities
Profit before tax including discontinued operations 14.5 1.4 12.3
Finance expense 2.8 2.9 5.9
Amortisation 0.3 0.4 0.8
Depreciation 32.9 32.8 68.1
Share of profit from joint venture (1.2) (0.6) (1.2)
Loss/(profit) on disposal of leases, property, plant and equipment 0.7 1.2 (2.6)
(Increase)/decrease in working capital (8.0) 5.4 13.4
Movement in provisions (0.1) 0.1 (1.1)
Translation reserve recycled on disposal of Middle East assets - - 1.0
Equity-settled share-based payments 0.5 0.3 0.5
───── ───── ─────
Cash generated from operations before changes in hire fleet 42.4 43.9 97.1
Purchase of hire equipment, net of sale proceeds (27.4) (6.8) (24.2)
───── ───── ─────
Cash generated from operations 15.0 37.1 72.9
Interest paid (4.3) (2.6) (6.0)
Tax (paid)/received (0.6) 1.0 (0.8)
───── ───── ─────
Net cash flow from operating activities 10.1 35.5 66.1
───── ───── ─────
Cash flow from investing activities
Purchase of other fixed assets, net of sale proceeds (6.4) (3.2) (10.4)
Proceeds from disposal of Middle East assets - - 13.0
Investment in joint venture - 1.3 1.0
───── ───── ─────
Net cash flow from investing activities (6.4) (1.9) 3.6
───── ───── ─────
Net cash flow before financing activities 3.7 33.6 69.7
───── ───── ─────
Cash flow from financing activities
Payments for the principal element of leases (12.1) (12.0) (23.6)
Net drawdown/(repayment) of loans 9.8 (25.6) (58.2)
Proceeds from the issue of Sharesave Scheme shares 0.2 0.1 0.5
Dividends paid (7.3) - -
───── ───── ─────
Net cash flow from financing activities (9.4) (37.5) (81.3)
───── ───── ─────
Decrease in cash and cash equivalents (5.7) (3.9) (11.6)
Cash and cash equivalents at the start of the period 11.2 22.8 22.8
───── ───── ─────
Cash and cash equivalents at the end of the period 5.5 18.9 11.2
═════ ═════ ═════
Analysis of cash and cash equivalents
Cash 12 6.5 18.9 11.7
Bank overdraft 12 (1.0) - (0.5)
───── ───── ─────
5.5 18.9 11.2
═════ ═════ ═════
1 Basis of preparation
Speedy Hire Plc ('the Company') is a company incorporated and domiciled in the
United Kingdom. The interim condensed consolidated financial statements of the
Company as at and for the six months ended 30 September 2021 comprise the
Company and its subsidiaries (together referred to as 'the Group').
The financial statements of the Group for the year ended 31 March 2021 are
available from the Company's registered office, or from the website:
www.speedyservices.com (http://www.speedyservices.com) .
The Group has a £180m asset based finance facility ('the facility') which
matures in July 2024 and has no prior scheduled repayment requirements. Cash
and facility headroom as at 30 September 2021 was £131.0m (31 March 2021:
£142.3m) based on the Group's eligible hire equipment and trade receivables.
The Group meets its day-to-day working capital requirements through operating
cash flows, supplemented as necessary by borrowings. The Directors have
prepared a going concern assessment up to 30 November 2022, which confirms
that the Group is capable of continuing to operate within its existing loan
facility and can meet the covenant requirements set out within the facility.
The key assumptions on which the projections are based include an assessment
of the impact of future market conditions on projected revenues and an
assessment of the net capital investment required to support the expected
level of revenues, including a continuation of the impact of the economic
uncertainty resulting from COVID-19.
The Board has considered various possible downside scenarios to the base case,
which result in reduced levels of revenue across the Group, whilst maintaining
the same cost base. Mitigations applied in these downturn scenarios include a
reduction in planned capital expenditure. Despite the significant impact of
the assumptions applied in these scenarios, the Group maintains sufficient
headroom against its available facility and covenant requirements.
Whilst the Directors consider that there is a degree of subjectivity involved
in their assumptions, on the basis of the above the Directors have a
reasonable expectation that the Company and the Group have adequate resources
to continue in operational existence for a period of at least 12 months from
the date of approval of these interim condensed consolidated financial
statements. Accordingly, they continue to adopt the going concern basis of
accounting.
Statement of compliance
This condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted for use in the UK.
The annual financial statements of the group for the year ended 31 March 2022
will be prepared in accordance with UK-adopted international accounting
standards. As required by the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority, the condensed set of financial statements has
been prepared applying the accounting policies and presentation that were
applied in the preparation of the company's published consolidated financial
statements for the year ended 31 March 2021 which were prepared in accordance
with International Financial Reporting Standards (IFRSs) adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union and in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006 except as described below.
They do not include all the information required for full annual financial
statements, and should be read in conjunction with the Group's consolidated
financial statements as at and for the year ended 31 March 2021.
The comparative figures for the financial year ended 31 March 2021 are not the
Company's statutory accounts for that financial year. Those accounts which
were prepared under IFRS as adopted by the EU (adopted IFRS) have been
reported on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditors was (i) unqualified, (ii) did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying their report, and (iii) did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.
The interim report was approved by the Board of Directors on 16 November 2021.
Significant accounting policies
Other accounting policies
In April 2021, the International Financial Reporting Interpretations Committee
('IFRIC') published an agenda decision on the clarification of accounting in
relation to the configuration and customisation costs incurred in implementing
Software-as-a-Service (SaaS). The Group's accounting policy has been aligned
with the IFRIC guidance as follows:
• Amounts paid to cloud vendors for configuration and customisation that are
not distinct from access to the cloud software are expensed over the SaaS
contract term
• Configuration and customisation costs incurred in implementing SaaS
arrangements which give rise to an identifiable intangible asset are
capitalised and amortised over the life of the asset
• Other implementation costs are expensed as incurred
There have been no new standards or interpretations issued or endorsed by the
International Accounting Standards Board (IASB) or IFRIC since the date of the
FY2021 year end financial statements that materially impact the Group.
The accounting policies applied by the Group in these interim condensed
consolidated financial statements are otherwise the same as those applied by
the Group in its consolidated financial statements as at and for the year
ended 31 March 2021.
The carrying amount of goodwill is tested annually for impairment and, along
with other non-financial assets, at each reporting date to the extent that
there are any indicators of impairment.
Seasonality
In addition to economic factors, revenue is subject to a small element of
seasonal fluctuation. Whilst construction activity tends to increase in the
summer months, the equipment range helps to mitigate the impact, specifically
with heating, lighting and power generation products being more in demand
during the winter months. Overall, the Directors do not feel that these
factors have a material effect on the performance of the Group when comparing
first half results to those achieved in the second half.
2 Changes in estimates
The preparation of interim condensed consolidated financial statements
requires management to make judgements, estimates, and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
estimates.
In preparing the interim condensed consolidated financial statements, the
significant judgements made by management in applying the Group's accounting
policies and key sources of estimation uncertainty for the consolidated
financial statements for the year ended 31 March 2021 continued to apply.
3 Exceptional items
During the period there were no exceptional items.
Prior period
During the year to 31 March 2021, exceptional administrative items of £8.4m
were incurred in respect of continuing operations.
Action was taken to manage the Group's cost base following the COVID-19
pandemic, and consequently the network was restructured., with a number of
depot closures. As a result, £5.6m of property provisions and £1.9m of
redundancy costs were incurred during that year. In addition, a further
provision of £0.9m was made to cover legal and other costs relating to the
training business.
Of the £8.4m referred to above, £4.1m was incurred in the period to 30
September 2020 being property provisions (£2.5m) and redundancy costs
(£1.6m).
4 Segmental analysis
The segmental disclosure presented in the interim condensed consolidated
financial statements reflects the format of reports reviewed by the Chief
Operating Decision Maker (CODM). UK and Ireland delivers asset management,
with tailored services and a continued commitment to relationship management.
The Middle East assets which were previously classified as part of the
International segment were disposed on 1 March 2021 and are now shown as
discontinued operations. As a consequence of this change, the results from the
joint venture in Kazakhstan have been reclassified as 'Corporate items', which
also includes certain central activities and costs not directly related to the
activities of the operating segments. The comparative period has been restated
to reflect this change.
For the six months ended 30 September 2021
UK and Ireland Corporate items Total
£m £m £m
Revenue 188.6 - 188.6
═════ ═════ ═════
Segment result:
EBITDA 51.2 (2.1) 49.1
Depreciation (32.8) (0.1) (32.9)
───── ───── ─────
Operating profit/(costs) before amortisation and exceptional items 18.4 (2.2) 16.2
Amortisation (0.3) - (0.3)
───── ───── ─────
Operating profit/(costs) 18.1 (2.2) 15.9
Share of results of joint venture - 1.2 1.2
───── ───── ─────
Trading profit/(costs) 18.1 (1.0) 17.1
═════ ═════
Financial expense (2.8)
─────
Profit before tax 14.3
Taxation (5.0)
─────
Profit for the financial period from continuing operations 9.3
═════
Profit from discontinued operations, net of tax 0.2
─────
Profit for the financial period 9.5
═════
Intangible assets 19.8 5.2 25.0
Investment in joint venture - 7.5 7.5
Hire equipment 220.7 - 220.7
Non-hire equipment 27.7 - 27.7
Right of use assets 65.2 - 65.2
Taxation assets - 3.2 3.2
Current assets 101.1 6.9 108.0
Cash - 6.5 6.5
───── ───── ─────
Total assets 434.5 29.3 463.8
═════ ═════ ═════
Lease liabilities (70.9) - (70.9)
Other liabilities (89.8) (13.0) (102.8)
Borrowings - (54.4) (54.4)
Taxation liabilities - (12.8) (12.8)
───── ───── ─────
Total liabilities (160.7) (80.2) (240.9)
═════ ═════ ═════
For the six months ended 30 September 2020
UK and Ireland Corporate Total- continuing operations Discontinued operations Total
items
£m £m £m £m £m
Revenue 147.0 - 147.0 16.8 163.8
═════ ═════ ═════ ═════ ═════
Segment result:
EBITDA 39.8 (2.0) 37.8 3.2 41.0
Depreciation (31.1) (0.4) (31.5) (1.3) (32.8)
───── ───── ───── ───── ─────
Operating profit/(costs) before amortisation and exceptional items 8.7 (2.4) 6.3 1.9 8.2
Amortisation (0.4) - (0.4) - (0.4)
Exceptional items (4.1) - (4.1) - (4.1)
───── ───── ───── ───── ─────
Operating profit/(costs) 4.2 (2.4) 1.8 1.9 3.7
Share of results of joint venture - 0.6 0.6 - 0.6
───── ───── ───── ───── ─────
Trading profit/(costs) 4.2 (1.8) 2.4 1.9 4.3
═════ ═════ ═════ ═════ ═════
Financial expense (2.8) (0.1) (2.9)
───── ───── ─────
Profit before tax (0.4) 1.8 1.4
Taxation (0.6) - (0.6)
───── ───── ─────
(Loss)/profit for the financial period (1.0) 1.8 0.8
═════ ═════ ═════
Intangible assets 22.8 - 22.8 - 22.8
Investment in joint venture - 6.6 6.6 - 6.6
Hire equipment 202.1 - 202.1 9.9 212.0
Non-hire equipment 25.8 - 25.8 1.8 27.6
Right of use assets 56.7 - 56.7 2.2 58.9
Taxation assets - 3.1 3.1 - 3.1
Current assets 89.5 3.1 92.6 11.3 103.9
Cash - 18.9 18.9 - 18.9
───── ───── ───── ───── ─────
Total assets 396.9 31.7 428.6 25.2 453.8
═════ ═════ ═════ ═════ ═════
Lease liabilities (63.1) - (63.1) (3.7) (66.8)
Other liabilities (78.6) (4.4) (83.0) (9.4) (92.4)
Borrowings - (76.7) (76.7) - (76.7)
Taxation liabilities - (7.8) (7.8) - (7.8)
───── ───── ───── ───── ─────
Total liabilities (141.7) (88.9) (230.6) (13.1) (243.7)
═════ ═════ ═════ ═════ ═════
For the year ended 31 March 2021
UK and Ireland Corporate Total- continuing operations Discontinued operations Total
items
£m £m £m £m £m
Revenue 332.3 - 332.3 31.3 363.6
Segment result:
EBITDA 89.5 (4.2) 85.3 5.2 90.5
Depreciation (63.2) (0.4) (63.6) (1.5) (65.1)
───── ───── ───── ───── ─────
Operating profit/(costs) before amortisation and exceptional items 26.3 (4.6) 21.7 3.7 25.4
Amortisation (0.8) - (0.8) - (0.8)
Exceptional items (8.4) - (8.4) 0.8 (7.6)
───── ───── ───── ───── ─────
Operating profit/(costs) 17.1 (4.6) 12.5 4.5 17.0
Share of results of joint venture - 1.2 1.2 - 1.2
───── ───── ───── ───── ─────
Trading profit/(costs) 17.1 (3.4) 13.7 4.5 18.2
═════ ═════
Financial expense (5.4) (0.5) (5.9)
───── ───── ─────
Profit before tax 8.3 4.0 12.3
Taxation (2.2) (0.6) (2.8)
───── ───── ─────
Profit for the financial year 6.1 3.4 9.5
═════ ═════ ═════
Intangible assets 20.1 4.6 24.7 - 24.7
Investment in joint venture - 6.2 6.2 - 6.2
Hire equipment 206.4 0.8 207.2 - 207.2
Non-hire equipment 25.9 - 25.9 - 25.9
Right of use assets 59.1 - 59.1 - 59.1
Taxation assets - 3.6 3.6 - 3.6
Current assets 96.5 2.2 98.7 2.8 101.5
Cash - 11.7 11.7 - 11.7
───── ───── ───── ───── ─────
Total assets 408.0 29.1 437.1 2.8 439.9
═════ ═════ ═════ ═════ ═════
Lease liabilities (65.8) - (65.8) - (65.8)
Other liabilities (83.9) (8.8) (92.7) (8.5) (101.2)
Borrowings - (44.9) (44.9) - (44.9)
Taxation liabilities - (8.8) (8.8) - (8.8)
───── ───── ───── ───── ─────
Total liabilities (149.7) (62.5) (212.2) (8.5) (220.7)
═════ ═════ ═════ ═════ ═════
The financing of the Group's activities is undertaken at head office level and
consequently net financing costs cannot be analysed by segment. The
unallocated net assets comprise principally working capital balances held by
the support services function and are not directly attributable to the
activities of the operating segments, together with net corporate borrowings
and taxation.
Geographical information
In presenting geographical information, revenue is based on the geographical
location of customers. Assets are based on the geographical location of the
assets.
Six months ended Six months ended Year ended
30 September 2021 30 September 2020 31 March 2021
───────────── ───────────── ─────────────
Revenue Total Total Total
assets Revenue Assets Revenue assets
£m £m £m £m £m £m
UK 183.5 449.6 143.5 415.6 323.6 423.7
Ireland 5.1 14.2 3.5 13.0 8.7 13.4
───── ───── ───── ───── ───── ─────
188.6 463.8 147.0 428.6 332.3 437.1
═════ ═════ ═════ ═════ ═════ ═════
( )
Revenue and assets relating to discontinued operations were based in the
Middle East.
Revenue by type
Revenue is attributed to the following activities:
Six months Six months Year
ended ended ended
30 September 2021 30 September 2020 31 March 2021
£m £m £m
Hire and related activities 120.5 91.4 206.4
Services 66.1 54.1 121.7
Disposals 2.0 1.5 4.2
───── ───── ─────
188.6 147.0 332.3
═════ ═════ ═════
Major customer
No one customer represents more than 10% of revenue, reported profit or
combined assets of all reporting segments.
5 Financial expense
Six months ended Six months
30 September ended Year ended
2021 30 September 31 March
2020 2021
£m £m £m
Total interest on borrowings 1.4 1.5 3.0
Interest on lease liabilities 1.3 1.2 2.4
Other finance costs 0.1 0.1 -
───── ───── ─────
2.8 2.8 5.4
═════ ═════ ═════
6 Taxation
The corporation tax charge for the six months ended 30 September 2021 is based
on an estimated full year effective rate of taxation of 28.2% before
exceptional items and amortisation (2020: 20.3%) and 29.1% (2020: 42.9%) after
exceptional items and amortisation. This has been calculated by reference to
the projected charge for the full year ending 31 March 2022, applying the
applicable UK corporation tax rate of 19% (2020: 19%). Deferred tax is
provided using the tax rates that are expected to apply to the period in which
the liability is settled, based on the tax rates that have been enacted at the
balance sheet date.
During the period, an increase in the tax rate to 25% was substantively
enacted on the 24 May 2021, consequently this has been used to calculate the
deferred tax assets and liabilities and has resulted in the increased
effective rate of taxation. The impact of the rate change is that the net
deferred tax liabilities have increased by £2.0m. Excluding this, the
comparative effective rate of taxation is 21.4% before exceptional items and
amortisation and 22.0% after exceptional items and amortisation.
7 Earnings per share
The calculation of basic earnings per share is based on the earnings
attributable to equity holders of the Company of £9.5m (2020: £0.8m) and the
weighted average number of 5 pence ordinary shares in issue and is calculated
as follows:
Six months ended Six months
30 September ended Year ended
2021 30 September 31 March
2020 2021
Profit (£m)
Profit for the period after tax - basic earnings 9.5 0.8 9.5
Intangible amortisation charge (after tax) 0.2 0.3 0.6
Exceptional items (after tax) - 3.5 6.7
Profit from discontinued operations (after tax) (0.2) (1.8) (2.8)
───── ───── ─────
Adjusted earnings (after tax) 9.5 2.8 14.0
═════ ═════ ═════
Weighted average number of shares in issue (m)
Number of shares at the beginning of the period 523.8 521.3 521.3
Exercise of share options 0.1 0.3 0.3
Movement in shares owned by the Employee Benefit Trust 0.1 - 0.8
───── ───── ─────
Weighted average for the period - basic number of shares 524.0 521.6 522.4
Share options 6.7 4.5 6.5
Employee share schemes 1.5 0.3 0.6
───── ───── ─────
Weighted average for the period - diluted number of shares 532.2 526.4 529.5
═════ ═════ ═════
Earnings per share (pence)
Basic earnings per share 1.81 0.15 1.82
Dilutive shares and options (0.02) - (0.03)
───── ───── ─────
Diluted earnings per share 1.79 0.15 1.79
═════ ═════ ═════
Adjusted earnings per share (from continuing operations) 1.81 0.53 2.68
Dilutive shares and options (0.02) (0.01) (0.03)
───── ───── ─────
Adjusted diluted earnings per share 1.79 0.52 2.65
═════ ═════ ═════
The total number of shares outstanding at 30 September 2021 amounted to
528,498,631 (2020: 527,008,730), including 4,084,165 (2020: 4,434,814) shares
held in the Employee Benefit Trust, which are excluded in calculating the
earnings per share.
8 Dividends
The aggregate amount of dividend comprises:
Six months ended Six months
30 September ended Year ended
2021 30 September 31 March
2020 2021
£m £m £m
2021 final dividend (1.40 pence on 522.9m ordinary shares) 7.3 - -
───── ───── ─────
7.3 - -
═════ ═════ ═════
Subsequent to the end of the period, the Directors have declared a 0.75 pence
per share interim dividend payable (2021 interim dividend: nil pence per
share).
9 Non-GAAP performance measures
The Group believes that the measures below provide valuable additional
information for users of the financial statements in assessing the Group's
performance. The Group uses these measures for planning, budgeting and
reporting purposes and for its internal assessment of the operating
performance of the individual divisions within the Group. The measures on a
continuing basis are as follows.
Six months ended Six months
30 September ended Year ended
2021 30 September 31 March
2020 2021
£m £m £m
Operating profit 15.9 1.8 12.5
Add back: amortisation 0.3 0.4 0.8
Add back: exceptional items - 4.1 8.4
───── ───── ─────
Adjusted operating profit ('EBITA') 16.2 6.3 21.7
Add back: depreciation 32.9 31.5 63.6
───── ───── ─────
EBITDA 49.1 37.8 85.3
═════ ═════ ═════
Profit/(loss) before tax 14.3 (0.4) 8.3
Add back: amortisation 0.3 0.4 0.8
Add back: exceptional items - 4.1 8.4
───── ───── ─────
Adjusted profit before tax 14.6 4.1 17.5
═════ ═════ ═════
( )
10 Property, plant and equipment
Hire Land and
equipment buildings Other Total
£m £m £m £m
Cost
At 1 April 2020 408.1 54.8 83.1 546.0
Foreign exchange (0.6) (0.3) 0.3 (0.6)
Additions 7.2 0.3 1.8 9.3
Disposals (10.4) (0.8) (0.5) (11.7)
Transfers to inventory (3.7) - - (3.7)
───── ───── ───── ─────
At 30 September 2020 400.6 54.0 84.7 539.3
Foreign exchange (0.5) (0.2) 0.3 (0.4)
Additions 28.8 1.4 4.2 34.4
Disposals (35.6) (4.6) (0.7) (40.9)
Transfers to inventory (6.7) - - (6.7)
───── ───── ───── ─────
At 31 March 2021 386.6 50.6 88.5 525.7
Foreign exchange 0.2 0.1 0.3 0.6
Additions 37.6 2.8 3.3 43.7
Disposals (12.1) (1.2) (1.4) (14.7)
Transfers to inventory (5.2) - - (5.2)
───── ───── ───── ─────
At 30 September 2021 407.1 52.3 90.7 550.1
═════ ═════ ═════ ═════
Depreciation
At 1 April 2020 181.0 36.5 70.9 288.4
Foreign exchange (0.3) (0.3) - (0.6)
Charged in period 17.1 1.8 2.6 21.5
Disposals (6.5) (0.3) (0.1) (6.9)
Transfers to inventory (2.7) - - (2.7)
───── ───── ───── ─────
At 30 September 2020 188.6 37.7 73.4 299.7
Foreign exchange (0.3) - - (0.3)
Charged in period 16.6 1.8 3.5 21.9
Disposals (20.9) (2.9) (0.3) (24.1)
Transfers to inventory (4.6) - - (4.6)
───── ───── ───── ─────
At 31 March 2021 179.4 36.6 76.6 292.6
Foreign exchange - - (0.2) (0.2)
Charged in period 17.6 1.8 2.0 21.4
Disposals (6.9) (0.8) (0.7) (8.4)
Transfers to inventory (3.7) - - (3.7)
───── ───── ───── ─────
At 30 September 2021 186.4 37.6 77.7 301.7
═════ ═════ ═════ ═════
Net book value
At 30 September 2021 220.7 14.7 13.0 248.4
═════ ═════ ═════ ═════
At 31 March 2021 207.2 14.0 11.9 233.1
═════ ═════ ═════ ═════
At 30 September 2020 212.0 16.3 11.3 239.6
═════ ═════ ═════ ═════
( )
11 Right of use assets
Land and
buildings Other Total
£m £m £m
Cost
At 1 April 2020 127.8 51.9 179.7
Foreign exchange (0.2) - (0.2)
Additions and remeasurements 2.8 4.8 7.6
Disposals (2.5) (8.5) (11.0)
───── ───── ─────
At 30 September 2020 127.9 48.2 176.1
Foreign exchange (0.4) - (0.4)
Additions and remeasurements 10.9 4.1 15.0
Disposals (7.1) (4.1) (11.2)
───── ───── ─────
At 31 March 2021 131.3 48.2 179.5
Additions and remeasurements 10.6 9.0 19.6
Disposals (3.3) (6.8) (10.1)
───── ───── ─────
At 30 September 2021 138.6 50.4 189.0
═════ ═════ ═════
Depreciation
At 1 April 2020 80.6 34.4 115.0
Charged in period 6.5 5.7 12.2
Disposals (1.9) (8.1) (10.0)
───── ───── ─────
At 30 September 2020 85.2 32.0 117.2
Foreign exchange (0.4) - (0.4)
Charged in period 6.8 5.7 12.5
Disposals (5.0) (3.9) (8.9)
───── ───── ─────
At 31 March 2021 86.6 33.8 120.4
Charged in period 5.9 5.6 11.5
Disposals (3.5) (4.6) (8.1)
───── ───── ─────
At 30 September 2021 89.0 34.8 123.8
═════ ═════ ═════
Net book value
At 30 September 2021 49.6 15.6 65.2
═════ ═════ ═════
At 31 March 2021 44.7 14.4 59.1
═════ ═════ ═════
At 30 September 2020 42.7 16.2 58.9
═════ ═════ ═════
12 Borrowings
30 September 30 September 31 March
2021 2020 2021
£m £m £m
Current borrowings
Bank overdraft 1.0 - 0.5
Lease liabilities 19.6 18.5 19.3
───── ───── ─────
20.6 18.5 19.8
Non-current borrowings
Maturing between two and five years
- ABF facility 53.4 76.7 44.4
- Lease liabilities 51.3 48.3 46.5
───── ───── ─────
104.7 125.0 90.9
Total borrowings 125.3 143.5 110.7
Less: Cash (6.5) (18.9) (11.7)
Exclude lease liabilities (70.9) (66.8) (65.8)
───── ───── ─────
Net debt 47.9 57.8 33.2
═════ ═════ ═════
The Group has a £180m asset based finance facility which is sub divided into:
(a) A secured overdraft facility which secures by cross
guarantees and debentures the bank deposits and overdrafts of the Company and
certain subsidiary companies up to a maximum of £5m.
(b) An asset based finance facility of up to £175m, based on
the Group's hire equipment and trade receivables balance. Cash and facility
headroom as at 30 September 2021 was £131.0m (31 March 2021: £142.3m) based
on the Group's eligible hire equipment and trade receivables.
The facility is for £180m, reduced to the extent that any ancillary
facilities are provided, and is repayable in July 2024, with no prior
scheduled repayment requirements. Uncommitted options exist for a further two
one-year extensions until July 2026. An additional uncommitted accordion of
£220m remains in place.
Interest on the facility is now calculated by reference to SONIA (previously
LIBOR) applicable to the period drawn, plus a margin of 155 to 255 basis
points, depending on leverage and on the components of the borrowing base.
During the period, the effective margin was 1.72% (2020: 1.84%).
The facility is secured by fixed and floating charges over the UK and Ireland
assets.
13 Contingent liabilities
In the normal course of business, the Company and certain subsidiaries have
given performance bonds issued on behalf of Group companies, and parental
guarantees have been given in support of the contractual obligations of Group
companies on both a joint and a several basis.
The Directors do not consider any provision is necessary in respect of
guarantees and bonds.
14 Related party disclosures
There has been no significant change to the nature and size of related party
transactions, including the remuneration provided to the key management, from
that disclosed in the FY2021 Annual Report.
15 Principal risks and uncertainties
The principal risks and uncertainties which could have a material impact upon
the Group's performance over the remaining six months of the 2022 financial
year have not changed from those set out on pages 45 to 54 of the Group's 2021
Annual Report, which is available at www.speedyservices.com
(http://www.speedyservices.com) . These risks and uncertainties include, but
are not limited to the following:
· COVID-19 pandemic;
· Safety, health and environment;
· Service;
· Revenue and trading performance;
· Project and change management;
· People;
· Partner and supplier service levels;
· Operating costs;
· Cyber security and data integrity;
· Funding;
· Economic vulnerability;
· Business continuity; and
· Asset holding and integrity.
16 Post balance sheet events
There are no post balance sheet events.
Directors' Responsibilities
We confirm that to the best of our knowledge:
• the condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU; and
• the interim management report includes a fair review of the information
required by:
(a) 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 set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) 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.
James Bunn
Director
16 November 2021
Independent Review Report to Speedy Hire Plc
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2021 which comprises the interim condensed consolidated statement of
comprehensive income, interim condensed consolidated balance sheet, interim
condensed consolidated cash flow statement, interim condensed consolidated
statement of changes in equity and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2021 is not prepared,
in all material respects, in accordance with IAS 34 Interim Financial
Reporting as adopted for use in the UK and the Disclosure Guidance and
Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the
UK FCA").
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures.
We read the other information contained in the half-yearly financial report
and consider whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the latest annual financial statements of the group
were prepared in accordance with International Financial Reporting Standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European
Union and in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and the next annual financial
statements will be prepared in accordance with UK-adopted international
accounting standards. The directors are responsible for preparing the
condensed set of financial statements included in the half-yearly financial
report in accordance with IAS 34 as adopted for use in the UK.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Nick Plumb
for and on behalf of KPMG LLP
Chartered Accountants
1 St Peter's Square
Manchester
M2 3AE
16 November 2021
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