REG - Speedy Hire PLC - Half Year Results
15/11/2022 07:00
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RNS Number : 3754G Speedy Hire PLC 15 November 2022
Speedy Hire Plc
("Speedy", "the Company" or "the Group")
FY2023 Interim Results
Results for the six months to 30 September
2022
Achieving sustainable growth
Speedy, the UK's leading tools and equipment hire services company, operating
across the construction, infrastructure and industrial markets, announces
results for the six months to 30 September 2022.
Underlying results - from continuing operations
6 months 6 months
ended ended
30 September 30 September Change
2022 (£m) 2021 (£m) %
Revenue (excluding disposals) 212.4 186.6 13.8%
Adjusted operating profit(1) 13.8 16.2 (14.8)%
EBITDA(1) 48.3 49.1 (1.6)%
Adjusted profit before tax(1) 14.1 14.6 (3.4)%
Adjusted earnings per share (pence)(2) 2.27 1.81 25.4%
Statutory results
6 months 6 months
ended ended
30 September 30 September Change
2022 (£m) 2021 (£m) %
Revenue 214.8 188.6 13.9%
Operating profit 12.9 15.9 (18.9)%
Operating cash flow 40.2 42.4 (5.2)%
Profit before tax 13.2 14.3 (7.7)%
Basic earnings per share (pence) 2.13 1.81 17.7%
Other measures
6 months 6 months
ended ended
30 September 30 September Change
2022 2021 %
Net debt(3) £86.7m £47.9m (81.0)%
Return on Capital Employed(4) 12.5% 12.4% 0.1pp
Dividend per share 0.80p 0.75p 6.7%
Trading performance:
• Continued hire revenue growth of 5.5% versus H1 FY2022:
• Improved pricing helping to mitigate inflationary cost
pressures
• Strong service revenue increase of 29.0% versus H1 FY2022:
• Strong performance, particularly in our re-hire business
Customer Solutions (formerly Partnered Services) and the increased revenue
from fuel and energy sales
• Operating profit behind H1 FY2022 reflecting the impact of
inflation on the cost base and the continued investment in growth strategies
• Controlling costs through initiatives to improve operational
efficiency and supply chain collaboration
• Joint venture in Kazakhstan performing well following major
contract wins in FY2022
• Adjusted profit before tax from continuing operations in H1 down
3.4% on H1 FY2022 with the joint venture mitigating the impact of investment
in the cost base
• Profit before tax in H1 down 7.7% on H1 FY2022 to £13.2m;
profit after tax has improved by 13.7% to £10.8m
Strong balance sheet and cash flow maintained:
• Investment in hire fleet of £30.5m in part in response to
retail strategy rollout and advanced purchasing to mitigate the impact of
supply chain lead times and price inflation; H1 utilisation was 54.1%,
improving to 58.1% currently
• Cash and facility headroom of £91.7m (31 March 2022: £110.8m)
• Net debt at £86.7m, leverage(5) of 1.2 times reflective of
share buyback of c.£20.3m to date (31 March 2022: £67.5m, 0.9 times)
• Proposed interim dividend of 0.80 pence per share
Current trading and outlook:
• Continuing revenue growth:
• Hire revenue growth in October and November c.6%, up on the same
period last year
• New contract wins and heathy pipeline
• Price increases continuing to build in H2
• Focus on managing inflationary cost pressure through efficiency
optimisation and further targeted price increases
• Well placed to maximise opportunities within major UK projects
• Cautious outlook amidst macroeconomic uncertainty
• Remain confident of delivering results in line with the Board's
expectation for the full year
Commenting on the results Dan Evans, Chief Executive, said:
"I am pleased to announce resilient results for the six months to 30 September
2022. Revenue growth remained strong, with increased strategic investment in
growth initiatives including Retail and Trade, marketing and ESG.
Revenue growth is continuing with new contract wins, the effect of actions
taken on price and a healthy pipeline of customer activity which gives
confidence for further growth in the second half. Whilst the macroeconomic
outlook is uncertain and inflationary pressures remain high, I take over as
Chief Executive at a time when our business is performing well, is resilient
and positioned to manage changes in market conditions. We remain confident of
delivering results in line with the Board's expectation for the full year."
Enquiries:
Speedy Hire Plc Tel: 01942 720 000
Dan Evans, Chief Executive
Paul Rayner, Interim Chief Financial Officer
MHP Communications Tel: 0203 128 8540
Oliver Hughes
Charlie Barker
Notes:
Explanatory notes:
The Group believes that the non-GAAP performance measures presented in this
announcement provide valuable additional information for readers. Further
details can be found in notes 6, 8 and 11.
(1) See note 8
(2) See note 6
(3) See note 11. This metric excludes lease liabilities.
(4) Return on Capital Employed: Profit before interest, tax, amortisation and
exceptional items from the last 12 months (H1 FY2023 £36.1m; H1 FY2022
£33.4m) divided by the average capital employed where capital employed equals
shareholders' funds and net debt(3), for the last 12 months (H1 FY2023
£289.7m; H1 FY2022 £269.4m).
(5) Leverage: Net debt(3) covered by EBITDA(1). This metric excludes the
impact of IFRS 16.
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 and selected B&Q
stores 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
I am pleased to present our results for the first six months of the financial
year (H1 FY2023). I take over as Chief Executive at a time when the business
is performing well whilst facing cost inflation and macroeconomic uncertainty.
Our focus is on continuing to deliver growth through exceptional customer
service, excellent supplier and customer relationships, and a resilient
business model. In addition, our strong balance sheet enables us to further
invest in our business and build on the Group's successful track record.
Growth
Our interim results for the six months to 30 September 2022 demonstrate we
have continued to deliver sustainable growth. Building on the momentum from
FY2022 revenue in both our hire and services businesses grew by 5.5% and 29.0%
respectively. This is testament to the resilience of our UK and Ireland
business whilst operating in an uncertain economic climate.
Hire revenue grew throughout the first half and was 5.5% ahead of H1 FY2022.
This strong performance results from key customer focused initiatives.
Within our major customer segment, we have won and renewed significant
contracts during the period, including our supply of more than one third of
the generators exported to Ukraine to assist the people of that country. We
continue to maximise our revenue with existing customers working on major UK
projects through offering our unique holistic site solutions across our core
and re-hire range (Customer solutions). We have also grown our Regional and
Local customer base by volume as purchasing behaviours change within some of
our national customers. This is in conjunction with implementing a successful
price increase, partially offsetting the margin dilution from increases in
overheads of 12.3% due to inflationary pressures and higher energy and fuel
prices.
Our diversified services businesses ensure we are more resilient to an
economic downturn. Services revenue performed well during the period,
increasing by 29.0% on H1 FY2022, driven by fuel and energy sales and strong
performance from our re-hire business Customer Solutions.
We recognise that market conditions are uncertain, driven primarily by the
conflict in Ukraine, inflationary pressures and the recent volatility in UK
financial markets. There is some recent evidence of softening in demand as our
end customers review their use of assets with a view to operational
efficiency. In order to deliver profitable growth, and whilst the market
remains competitive, we are focused on tendering for and winning national
contracts that represent value and will deliver collective success for our
customers and our business.
Collaboration and trust are key to our success. During October 2022 our
annual Speedy Expo, the largest private hire exhibition and conference in the
UK, took place in Liverpool. Across two days, over 1,700 of our colleagues,
customers and suppliers came together to discover innovative and sustainable
products, and to understand the key part that data and technology will play in
revolutionising our industry. The collaboration between our customers and
supply chain innovations underpins our ability to achieve our ambitious ESG
commitments, ensuring we play a key role in our customers delivering their
own.
We continue to develop our Trade and Retail strategy in partnership with
B&Q. In 2023 we aim to launch Tool Hire on both DIY.com and
Tradepoint.co.uk, hosted by B&Q and fulfilled exclusively by Speedy.
Following that we have reached agreement in principle to digitally enable
'Home Delivery' Tool Hire from around 300 B&Q stores nationwide;
significantly increasing our retail footprint and expanding our sales channels
for both Trade and Retail customers.
Operational efficiency and cost control
Operational efficiency continues to be a key part of our strategy. The
successful implementation of a new ERP system in the prior year, combined with
artificial intelligence (AI) led decision making continues to optimise our
asset holdings to drive ROCE improvement. Through utilising AI we are
improving product availability ensuring we have the right product, in the
right place, at the right time for every customer, from National customers,
right through to Retail and Trade. We are also now starting to use AI to
optimise our logistics, thereby reducing carbon and costs.
We have continued to develop our future state property programme. This
programme is modernising our network with energy efficient, low carbon
facilities that optimises efficiencies and reduces operational costs whilst
creating better working environments for our people. Our industry first
Innovation Centre in Milton Keynes launched 12 months ago and has now achieved
EPC A+ energy rating, acting as a blueprint for this sustainable strategy.
Cost control remains a key ingredient in delivering sustainable profitable
growth. The significant macro inflationary increases, especially in energy
and fuel, are impacting all businesses at this time. We are controlling
costs through initiatives to improve operational efficiency and the effective
management of our supply chain. These initiatives include an extensive
business review which we have embarked upon in the second half of this year.
ESG
We continue to lead the hire industry in sustainability and embrace product
innovation. We are working actively with supportive partners to deliver award
winning, sustainable solutions for customers and accelerate our own carbon
reduction pathway. We have joined forces with Eminox on a pioneering project
to improve air quality by upgrading existing power generation assets to meet
'Stage V' emissions regulations.
We are the first company in our sector, and one of very few organisations
globally, to commit to Science Based Targets (SBTi's) to achieve net zero
carbon before 2040. We have partnered with leading sustainability
consultants to harness the carbon data of our fleet to support net zero
targets for our customers. During the period we achieved an Ecovadis
sustainability rating positioning us among the top companies of our sector for
sustainability.
During the period we invested £30.5m in our hire fleet, of which 41% was in
Carbon efficient ECO products, increasing the amount of our products that
utilise electric and renewable energy sources. The proportion of our revenue
from Carbon efficient ECO products has increased from c.26% in H1 FY2022 to
32% in H1 FY2023. We have also invested in a range of industry-first
electric commercial vehicles, including 100 all-electric delivery vehicles.
We recognise that our people are the lifeblood of our business. Our
colleagues are central to achieving our ambitions for growth. We have a
unique culture at Speedy, it's what we call our Speedy Spirit. It is something
our customers and supply chain partners have come to know, as we strive, on a
daily basis, to create solutions for our customers' needs. During the period
we accelerated our People First agenda so they are engaged and share in our
vision to inspire and innovate the future of hire. We have launched our Early
and Late careers strategy to accelerate our commitment to the 5% club and
increase earn and learn opportunities for colleagues. We are the first hire
company to be "Youth Verified" by the Youth Group and are seen as an employer
of choice for young talent in our industry. There is a lack of diversity and
inclusivity in the industry and to address this we have established a People
Like Us community to raise the profile and awareness of great career
opportunities within our business and promote Speedy as an inclusive and
diverse employer. During the period we have also introduced more flexible
working arrangements and are trialling alternative working week patterns.
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.
Revenue (excluding disposals) for the period to 30 September 2022 increased by
13.8% to £212.4m (H1 FY2022: £186.6m). Revenue from disposals was £2.4m
(H1 FY2022: £2.0m); total revenue for the period increased by 13.9% to
£214.8m (H1 FY2022: £188.6m).
Gross profit was £116.9m (H1 FY2022: £108.0m), an increase of 8.2%. The
gross margin decreased to 54.4% (H1 FY2022: 57.3%), through hire rate
increases offset by the mix impact of increases in resale fuel.
EBITDA decreased by 1.6% to £48.3m (H1 FY2022: £49.1m). EBITA decreased by
£2.4m to £13.8m (H1 FY2022: £16.2m). The effect of this reduction was
mitigated by the joint venture performance resulting in adjusted profit before
tax decreasing to £14.1m from £14.6m in H1 FY2022.
Profit after taxation, amortisation, and discontinued operations increased to
£10.8m (H1 FY2022: £9.5m).
Revenue and margin analysis
The Group generates revenue through two key categories, Hire and Services.
Revenue and margin by type Six Months Six Months Year
ended ended ended
30 September 30 September 31 March
2022 2021 Change 2022
£m £m % £m
Hire:
Revenue 127.1 120.5 5.5% 243.3
Cost of sales (27.1) (27.4) (54.5)
Gross profit 100.0 93.1 7.4% 188.8
78.7% 77.3% 77.6%
Gross margin
Services:
Revenue 85.3 66.1 29.0% 138.4
Cost of sales (69.5) (51.2) (107.8)
Gross profit 15.8 14.9 6.0% 30.6
18.5% 22.5% 22.1%
Gross margin
Hire revenues increased by 5.5%, reflecting price increases, volume demand and
improved repairs and transport recoveries. A number of new and renewed
contracts with key customers have been secured in the period which commence in
H2 FY2023.
Services revenues increased by 29.0% compared to H1 FY2022, with a strong
performance from our rehire business, Customer Solutions as well as increased
fuel revenue from a higher average selling price in both diesel and
hydrogenated vegetable oil (HVO).
The Group implemented price increases in April 2022 to offset the effects of
cost inflation on both overheads and new equipment purchases. The price
increases take effect as framework agreements and hire contracts are renewed
resulting in the benefit of those increases building throughout the year.
Gross margins decreased from 57.3% in H1 FY2022 to 54.4%. Hire margin
improved to 78.7% (H1 FY2022: 77.3%); services margin decreased from 22.5% in
H1 FY2022 to 18.5% due to the dilutive impact of higher fuel revenue.
Overheads
Inflationary pressures on overheads, particularly pay increases, utilities and
fuel were expected in FY2023. To protect against further inflationary
increases utility prices have been fixed for the period to September 2024 and
fuel hedges are in place on a nine to 12 month rolling basis. We have
experienced above inflation increases in certain areas as we continue to
invest in strategic initiatives for growth, including Retail and Trade, ESG
and marketing. In Spring 2022, we launched a significant campaign, including
TV adverts to bring awareness to consumers of the benefits of hire versus buy.
To ensure we are able to continue to invest we are controlling costs through
initiatives to improve operational efficiency and the effective management of
our supply chain.
The UK and Ireland headcount at 30 September 2022 was 3,623 (31 March 2022:
3,554), an increase of 1.9%. 156 colleagues are now employed within B&Q
stores (31 March 2022: 162).
Interest
The Group's net financial expense increased to £3.6m (H1 FY2022: £2.8m)
reflecting higher debt levels and increased cost of borrowing.
The Group's main bank facilities were renewed in July 2021 for a three year
term. Borrowings under the facility are priced based on SONIA 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 1.55% and 2.05% dependent on the weighting of borrowings
between receivables and plant and machinery. The effective average margin in
the period was 1.80% (H1 FY2022: 1.72%).
The Group utilises interest rate hedges to manage fluctuations in rates. The
fair value of these hedges was £2.2m at 30 September 2022. The hedges have
varying maturity dates, notional amounts and rates and provide the Group with
mitigation against interest rate rises. Over the next 12 months c50% of the
expected net debt is hedged.
Interest on lease liabilities of £1.6m (H1 FY2022: £1.3m) was charged during
the period, impacted by the rise in interest rates which are used to calculate
the incremental borrowing rate.
Taxation
The tax charge for the period was £2.4m (H1 FY2022: £5.0m), reflecting a
projected full year effective tax rate before amortisation and exceptional
items of 18.4% (H1 FY2022: 28.2%). An increase in the UK corporation tax rate
to 25% for periods from 1 April 2023 was substantively enacted on 24 May 2021,
impacting the FY2022 effective tax rate; excluding the impact of this change
in tax rate, the comparable effective rate would be 21.4%. The effective rate
has reduced year on year due to the relative performance of the joint venture.
Share buyback
The Board reviewed the capital allocation policy and medium-term capital needs
of the Group in January 2022 and considered that a £30m share buyback
programme was appropriate. Authority to continue the buyback was renewed at
the AGM in September 2022. The buyback reflects the strong balance sheet
with significant facility headroom. As of 30 September 2022 c.£18.6m of
shares out of the £30m shares have been purchased under this programme.
Shares and earnings per share
At 30 September 2022, 490,449,192 (31 March 2022: 518,220,366) Speedy Hire Plc
ordinary shares were outstanding, of which 4,215,142 were held in the Employee
Benefit Trust. Adjusted earnings per share was 2.27 pence (H1 FY2022: 1.81
pence), an increase of 0.46p (25.4%). Basic earnings per share was 2.13
pence (H1 FY2022: 1.81 pence).
Capital expenditure and disposals
Total capital expenditure during the period amounted to £34.4m (H1 FY2022:
£43.7m), of which £30.5m (H1 FY2022: £37.6m) related to equipment for hire,
and £3.9m related to other property, plant and equipment (H1 FY2022: £6.1m).
Our hire fleet investment included a significant proportion of carbon
efficient ECO products, in line with the increasing relevance of sustainable
solutions including customers mandating zero site emissions in some
instances. Whilst we have experienced some limited supply chain pressures,
the strength of our supplier relationships and advanced planning have
mitigated the impact.
Balance sheet
The Group has maintained a strong balance sheet and is well placed to continue
to pursue financial and strategic objectives despite the macroeconomic
uncertainties.
Net assets at 30 September 2022 were £221.8m (31 March 2022: £226.4m). ROCE
was 12.5% for the 12 months to September 2022 (12 months to 30 September 2021:
12.4%).
Net property, plant and equipment (excluding IFRS 16 right of use assets)
increased to £264.6m at 30 September 2022 (31 March 2022: £257.7m). The
net book value of equipment for hire has increased from £226.9m to £234.4m,
representing 88.6% (31 March 2022: 88.0%) of the total property, plant and
equipment balance.
Intangible assets decreased marginally to £25.4m (31 March 2022: £25.9m),
with investment in software development offset by amortisation charged.
Right of use assets of £79.6m (31 March 2022: £73.3m) and corresponding
lease liabilities of £82.7m (31 March 2022: £76.7m) were recognised at 30
September 2022. The increase is due to new leases and renewals entered into
during the period.
Gross trade receivables totalled £111.4m at 30 September 2022 (31 March 2022:
£104.9m), benefiting from continued strong cash collections and focus on
overdue debt. Bad debt and credit note provisions were to £4.6m at 30
September 2022 (31 March 2022: £4.8m), equivalent to 4.1% of gross trade
receivables (31 March 2022: 4.6%). In setting the provisions the Directors
have given specific consideration to the impact of macroeconomic
uncertainties. The Group has not experienced a significant worsening of debt
collections or debt write-offs although continues to monitor the situation
closely. Debtor days were 68.3 days (31 March 2022: 66.6 days), broadly
consistent with September 2021 (66.8 days). Trade payables and accruals were
£107.9m (31 March 2022: £96.6m). Creditor days were 55.7 days (31 March
2022: 55.9 days) in line with September 2021.
Cash flow and net debt
Cash generated from operations for the period was £22.5m (H1 FY2022:
£15.0m). Free cash flow (being net cash flow before financing activities)
increased to £15.3m (H1 FY2022: £3.7m), reflecting the lower amount of net
capital expenditure in H1 FY2022.
Net debt increased by £19.2m from £67.5m at the beginning of the period to
£86.7m at 30 September 2022. Net debt to EBITDA (rolling 12 months basis)
increased to 1.2 times (31 March 2022: 0.9 times).
The Group's continued strong cash position resulted in cash and facility
headroom of £91.7m within the Group's committed bank facility (31 March 2022:
£110.8m).
The Group's £180m asset based finance facility is available 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 facility provides the Group
headroom with which to support organic growth and bolt-on acquisition
opportunities.
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 0.80 pence per share (H1
FY2022 interim dividend: 0.75 pence per share), to be paid on 20
January 2023 to shareholders on the register on 9 December 2022.
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 leverage 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 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.
Board
As announced in August 2022, I succeeded Russell Down as Chief Executive
effective 1 October 2022, following his retirement.
The Board also announced in October 2022 that James Bunn had tendered his
resignation as Chief Financial Officer to pursue an opportunity in an
unrelated sector and stepped down from the Board on 1 November 2022. The
Board has appointed an external head-hunter to start the process to find a
permanent successor. In the intervening period, Paul Rayner has assumed the
role of interim CFO with effect from 1 November 2022, for a period of up to 12
months allowing time for the Board to complete the recruitment process.
Outlook
We have announced resilient results for the six months to 30 September 2022.
Revenue growth remains strong, with increased strategic investment in growth
initiatives including Retail and Trade, marketing and ESG.
Revenue growth is continuing with new contract wins, the effect of actions
taken on price and a healthy pipeline of customer activity gives confidence
for further growth in the second half. Whilst the macroeconomic outlook is
uncertain and inflationary pressures remain high, the business is performing
well, is resilient and positioned to manage changes in market conditions.
The Board remains confident of delivering results for the full year in line
with its expectations.
Dan Evans
Chief Executive
Interim condensed consolidated income statement
Six months
Six months ended Year
ended 30 September ended
30 September 2021 31 March
Restated*
2022 2022
Note £m £m £m
Revenue 3 214.8 188.6 386.8
Cost of sales (97.9) (80.6) (165.7)
───── ───── ─────
Gross profit 116.9 108.0 221.1
Distribution and administrative costs (102.1) (90.6) (185.7)
Impairment losses on trade receivables (1.9) (1.5) (3.8)
Analysis of operating profit
Operating profit before amortisation 13.8 16.2 32.6
Amortisation (0.9) (0.3) (1.0)
Operating profit 12.9 15.9 31.6
Share of results of joint venture 3.9 1.2 3.2
───── ───── ─────
Profit from operations 16.8 17.1 34.8
Financial expense 4 (3.6) (2.8) (5.7)
───── ───── ─────
Profit before taxation 13.2 14.3 29.1
Taxation 5 (2.4) (5.0) (7.7)
───── ───── ─────
Profit for the financial period from continuing operations
10.8 9.3 21.4
───── ───── ─────
Profit from discontinued operations, net of tax - 0.2 0.2
───── ───── ─────
Profit for the financial period 10.8 9.5 21.6
═════ ═════ ═════
Earnings per share
- Basic (pence) 6 2.13 1.81 4.13
═════ ═════ ═════
- Diluted (pence) 6 2.07 1.79 4.07
═════ ═════ ═════
Non-GAAP performance measures (continuing operations)
EBITDA before exceptional items 8 48.3 49.1 99.3
═════ ═════ ═════
Adjusted profit before tax 8 14.1 14.6 30.1
═════ ═════ ═════
Adjusted earnings per share (pence) 6 2.27 1.81 4.24
═════ ═════ ═════
*See Note 16
Interim condensed consolidated statement of comprehensive income
Six months ended Six months Year
30 September ended ended
2022 30 September 31 March
2021 2022
£m £m £m
Profit for the financial period 10.8 9.5 21.6
───── ───── ─────
Other comprehensive income that may be reclassified subsequently to the Income
Statement:
- Effective portion of change in fair value of cash flow hedges 1.7 0.4 0.8
- Exchange difference on retranslation of foreign operations 2.2 0.4 (0.8)
- Tax on items (0.2) - (0.2)
───── ───── ─────
Other comprehensive income, net of tax 3.7 0.8 (0.2)
───── ───── ─────
Total comprehensive income for the financial period 14.5 10.3 21.4
═════ ═════ ═════
Interim condensed consolidated balance sheet
30 September
30 September 2021 31 March
Restated*
2022 2022
Note £m £m £m
ASSETS
Non-current assets
Intangible assets 25.4 25.0 25.9
Investment in joint venture 10.2 7.5 7.8
Property, plant and equipment
- Hire equipment 9 234.4 220.7 226.9
- Non-hire equipment 9 30.2 27.7 30.8
Right of use assets 10 79.6 65.2 73.3
Deferred tax assets 1.5 2.8 1.7
───── ───── ─────
381.3 348.9 366.4
───── ───── ─────
Current assets
Inventories 12.3 8.6 8.1
Trade and other receivables 117.0 99.4 108.7
Cash 11 0.9 6.5 2.5
Derivative financial assets 2.2 - -
Current tax asset 1.1 - -
───── ───── ─────
133.5 114.5 119.3
───── ───── ─────
Total assets 514.8 463.4 485.7
───── ───── ─────
LIABILITIES
Current liabilities
Borrowings 11 (1.5) (1.0) (1.7)
Lease liabilities 11 (20.4) (17.0) (20.6)
Derivative financial liabilities - (0.2) -
Trade and other payables (107.9) (97.3) (96.6)
Current tax liabilities - (0.6) (1.0)
Provisions (2.1) (3.8) (2.8)
───── ───── ─────
(131.9) (119.9) (122.7)
───── ───── ─────
Non-current liabilities
Borrowings 11 (86.1) (53.4) (68.3)
Lease liabilities 11 (62.3) (51.3) (56.1)
Provisions (0.9) (2.1) (1.2)
Deferred tax liabilities (11.8) (12.2) (11.0)
───── ───── ─────
(161.1) (119.0) (136.6)
───── ───── ─────
Total liabilities (293.0) (238.9) (259.3)
───── ───── ─────
Net assets 221.8 224.5 226.4
═════ ═════ ═════
EQUITY
Share capital 25.8 26.4 25.9
Share premium 1.9 1.5 1.8
Capital redemption reserve 0.7 - 0.6
Merger reserve 1.0 1.0 1.0
Hedging reserve 1.8 (0.3) 0.1
Translation reserve 0.4 (0.6) (1.8)
Retained earnings 190.2 196.5 198.8
───── ───── ─────
221.8 224.5 226.4
═════ ═════ ═════
*See Note 16
Interim condensed consolidated statement of changes in equity
Share Share Capital redemption Merger Hedging Translation Retained Total
Capital premium reserve reserve reserve reserve earnings equity
£m £m £m £m £m £m £m £m
At 1 April 2021 Reported 26.4 1.3 - 1.0 (0.7) (1.0) 192.2 219.2
Restatement* - - - - - - 1.6 1.6
───── ───── ───── ───── ───── ───── ───── ─────
At 1 April 2021 Restated* 26.4 1.3 - 1.0 (0.7) (1.0) 193.8 220.8
-
Total comprehensive income - - - - 0.4 0.4 9.5 10.3
-
Dividends - - - - - - (7.3) (7.3)
Equity-settled share-based payments - - - - - - 0.5 0.5
Issue of shares under the Sharesave Scheme - 0.2 - - - - - 0.2
───── ───── ───── ───── ───── ───── ───── ─────
At 30 September 2021 Restated* 26.4 1.5 - 1.0 (0.3) (0.6) 196.5 224.5
Total comprehensive income - - - - 0.4 (1.2) 11.9 11.1
-
Dividends - - - - - - (4.0) (4.0)
Equity-settled share-based payments - - - - - - 0.7 0.7
Purchase and cancellation of shares (0.6) - 0.6 - - - (6.2) (6.2)
Tax on items taken directly to equity - - - - - - (0.1) (0.1)
Issue of shares under the Sharesave Scheme -
0.1 0.3 - - - - 0.4
───── ───── ───── ───── ───── ───── ───── ─────
At 31 March 2022 25.9 1.8 0.6 1.0 0.1 (1.8) 198.8 226.4
Total comprehensive income - - - - 1.7 2.2 10.6 14.5
Dividends - - - - - - (7.1) (7.1)
Equity-settled share-based payments - - - - - - 0.6 0.6
Purchase and cancellation of shares (0.1) - 0.1 - - - (12.6) (12.6)
Tax on items taken directly to equity - - - - - - (0.1) (0.1)
Issue of shares under the Sharesave Scheme - 0.1 - - - - - 0.1
───── ───── ───── ───── ───── ───── ───── ─────
At 30 September 2022 25.8 1.9 0.7 1.0 1.8 0.4 190.2 221.8
═════ ═════ ═════ ═════ ═════ ═════ ═════ ═════
*See Note 16
Interim condensed consolidated statement of cash flows
Six months
Six months ended Year
ended 30 September ended
30 September 2021 31 March
2022 Restated* 2022
£m £m £m
Cash generated from operating activities
Profit before tax including discontinued operations 13.2 14.5 29.3
Finance expense 3.6 2.8 5.7
Amortisation 0.9 0.3 1.0
Depreciation 34.5 32.9 66.7
Share of profit from joint venture (3.9) (1.2) (3.2)
(Profit) / loss on disposal of leases, property, plant and equipment (0.8) 0.7 (0.6)
Increase in working capital (6.9) (8.0) (11.6)
Movement in provisions (1.0) (0.1) (2.0)
Equity-settled share-based payments 0.6 0.5 1.2
───── ───── ─────
Cash generated from operations before changes in hire fleet 40.2 42.4 86.5
Purchase of hire equipment, net of proceeds (17.7) (27.4) (57.9)
───── ───── ─────
Cash generated from operations 22.5 15.0 28.6
Interest paid (3.0) (4.3) (6.0)
Tax paid (2.8) (0.6) (3.0)
───── ───── ─────
Net cash flow from operating activities 16.7 10.1 19.6
───── ───── ─────
Cash flow from investing activities
Purchase of other fixed assets, net of proceeds (3.7) (6.4) (16.0)
Dividends and loan repayments from joint venture 2.3 - 1.9
───── ───── ─────
Net cash flow from investing activities (1.4) (6.4) (14.1)
───── ───── ─────
Net cash flow before financing activities 15.3 3.7 5.5
───── ───── ─────
Cash flow from financing activities
Payments for the principal element of leases (14.7) (12.1) (24.6)
Drawdown of loans* 295.2 233.7 482.6
Repayment of loans* (277.7) (223.9) (457.2)
Proceeds from the issue of Sharesave Scheme shares 0.1 0.2 0.6
Purchase of own shares (12.6) - (6.0)
Dividends paid (7.1) (7.3) (11.3)
───── ───── ─────
Net cash flow from financing activities (16.8) (9.4) (15.9)
───── ───── ─────
Decrease in cash and cash equivalents (1.5) (5.7) (10.4)
Cash and cash equivalents at the start of the period 0.9 11.2 11.2
───── ───── ─────
Cash and cash equivalents at the end of the period (0.6) 5.5 0.8
═════ ═════ ═════
Analysis of cash and cash equivalents
Cash 11 0.9 6.5 2.5
Bank overdraft 11 (1.5) (1.0) (1.7)
───── ───── ─────
(0.6) 5.5 0.8
═════ ═════ ═════
*See Note 16
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 2022 comprise the
Company and its subsidiaries (together referred to as 'the Group').
The financial statements of the Group for the year ended 31 March 2022 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 2022 was £91.7m (31 March 2022:
£110.8m) 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 2023, 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 current and future market conditions on projected revenues
and an assessment of the net capital investment required to support those
expected level of revenues.
The Board has considered various possible downside scenarios to the base case,
which result in reduced levels of revenue across the Group, whilst also
reflecting inflationary pressures on the 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 in preparing the interim condensed consolidated financial
Statements.
Statement of compliance
This condensed consolidated interim financial report for the six months ended
30 September 2022 has been prepared in accordance with the UK-adopted
International Accounting Standard 34, 'Interim Financial Reporting' and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
The interim report does not include all of the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 31 March 2022, which
has been prepared in accordance with UK-adopted international accounting
standards and the requirements of the Companies Act 2006, and any public
announcements made by Speedy Hire Plc during the interim reporting period.
These condensed interim financial statements do not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 March 2022 were approved by the board
of directors on 27 May 2022 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement under section
498 of the Companies Act 2006.
The financial statements have been reviewed, not audited.
The interim report was approved by the Board of Directors on 14 November 2022.
Significant accounting policies
Other accounting policies
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
FY2022 year end financial statements that materially impact the Group.
The accounting policies applied by the Group in these interim condensed
consolidated financial statements are the same as those applied by the Group
in its consolidated financial statements as at and for the year ended 31 March
2022.
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. No indicators of impairment have been
identified at the interim period end.
Seasonality
In addition to economic factors, revenue is subject to an 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 2022 continued to apply.
3 Segmental analysis
The segmental disclosure presented in the Financial Statements reflects the
format of reports reviewed by the 'chief operating decision-maker'. UK and
Ireland business delivers asset management, with tailored services and a
continued commitment to relationship management. Corporate items comprise
certain central activities and costs that are not directly related to the
activity of the operating segment. 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 that are not
directly attributable to the activity of the operating segment, together with
net corporate borrowings and taxation. The Middle East assets were disposed
of on 1 March 2021 and are shown as discontinued operations.
For the six months ended 30 September 2022
Hire
excluding UK and Corporate
disposals Services Ireland* items Total
£m £m £m £m £m
Revenue 127.1 85.3 214.8 - 214.8
Cost of sales (27.1) (69.5) (97.9) - (97.9)
───── ───── ───── ───── ─────
Gross Profit 100.0 15.8 116.9 - 116.9
═════ ═════ ═════ ═════ ═════
Segment result:
EBITDA 49.8 (1.5) 48.3
Depreciation (34.4) (0.1) (34.5)
───── ───── ─────
Operating profit/(costs) before amortisation 15.4 (1.6) 13.8
Amortisation (0.2) (0.7) (0.9)
───── ───── ─────
Operating profit/(costs) 15.2 (2.3) 12.9
Share of results of joint venture - 3.9 3.9
───── ───── ─────
Profit from operations 15.2 1.6 16.8
═════ ═════
Financial expense (3.6)
─────
Profit before tax 13.2
Taxation (2.4)
─────
Profit for the financial period from continuing operations 10.8
═════
Profit from discontinued operations, net of tax -
─────
Profit for the financial period 10.8
═════
Intangible assets 19.3 6.1 25.4
Investment in joint venture - 10.2 10.2
Hire equipment 234.4 - 234.4
Non-hire equipment 30.2 - 30.2
Right of use assets 79.6 - 79.6
Taxation assets - 2.6 2.6
Current assets 124.4 7.1 131.5
Cash - 0.9 0.9
───── ───── ─────
Total assets 487.9 26.9 514.8
═════ ═════ ═════
Lease liabilities (82.7) - (82.7)
Other liabilities (105.9) (5.0) (110.9)
Borrowings - (87.6) (87.6)
Taxation liabilities - (11.8) (11.8)
───── ───── ─────
Total liabilities (188.6) (104.4) (293.0)
═════ ═════ ═════
* UK and Ireland also includes revenue and costs relating to the disposal of
hire assets.
For the six months ended 30 September 2021 Restated*
Hire
excluding UK and Corporate
disposals Services Ireland** items Total
£m £m £m £m £m
Revenue 120.5 66.1 188.6 - 188.6
Cost of sales (27.4) (51.2) (80.6) - (80.6)
───── ───── ───── ───── ─────
Gross Profit 93.1 14.9 108.0 - 108.0
═════ ═════ ═════ ═════ ═════
Segment result:
EBITDA 51.2 (2.1) 49.1
Depreciation (32.8) (0.1) (32.9)
───── ───── ─────
Operating profit/(costs) before amortisation 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
───── ───── ─────
Profit/(costs) from operations 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 (restated)* - 2.8 2.8
Current assets 101.1 6.9 108.0
Cash - 6.5 6.5
───── ───── ─────
Total assets 434.5 28.9 463.4
═════ ═════ ═════
Lease liabilities (restated)* (68.3) - (68.3)
Other liabilities (restated)* (90.4) (13.0) (103.4)
Borrowings - (54.4) (54.4)
Taxation liabilities - (12.8) (12.8)
───── ───── ─────
Total liabilities (158.7) (80.2) (238.9)
═════ ═════ ═════
*See Note 16
** UK and Ireland also includes revenue and costs relating to the disposal of
hire assets.
For the year ended 31 March 2022 Restated*
Corporate
Hire UK and items Total
excluding Ireland**
disposals Services
£m £m £m £m £m
Revenue 243.3 138.4 386.8 - 386.8
Cost of sales (54.5) (107.8) (165.7) - (165.7)
───── ───── ───── ───── ─────
Gross Profit 188.8 30.6 221.1 - 221.1
═════ ═════ ═════ ═════ ═════
Segment result:
EBITDA 103.3 (4.0) 99.3
Depreciation (66.4) (0.3) (66.7)
───── ───── ─────
Operating profit/(costs) before amortisation 36.9 (4.3) 32.6
Amortisation (1.0) - (1.0)
───── ───── ─────
Operating profit/(costs) 35.9 (4.3) 31.6
Share of results of joint venture - 3.2 3.2
───── ───── ─────
Profit/(costs) from operations 35.9 (1.1) 34.8
═════ ═════
Financial expense (5.7)
─────
Profit before tax 29.1
Taxation (7.7)
─────
Profit for the financial year from continuing operations 21.4
═════
Profit from discontinued operations, net of tax 0.2
─────
Profit for the financial year 21.6
═════
Intangible assets 19.5 6.4 25.9
Investment in joint venture - 7.8 7.8
Hire equipment 226.9 - 226.9
Non-hire equipment 30.8 - 30.8
Right of use assets 73.3 - 73.3
Taxation assets - 1.7 1.7
Current assets 112.7 4.1 116.8
Cash - 2.5 2.5
───── ───── ─────
Total assets 463.2 22.5 485.7
═════ ═════ ═════
Lease liabilities (76.7) - (76.7)
Other liabilities (92.1) (8.5) (100.6)
Borrowings - (70.0) (70.0)
Taxation liabilities - (12.0) (12.0)
───── ───── ─────
Total liabilities (168.8) (90.5) (259.3)
═════ ═════ ═════
* See Note 16
** UK and Ireland also includes revenue and costs relating to the disposal of
hire assets.
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 2022 30 September 2021 Restated* 31 March 2022
───────────── ───────────── ─────────────
Revenue Total Total Total
assets Revenue Assets Revenue assets
£m £m £m £m £m £m
UK 210.0 500.9 183.5 449.2 376.5 472.6
Ireland 4.8 13.9 5.1 14.2 10.3 13.1
───── ───── ───── ───── ───── ─────
214.8 514.8 188.6 463.4 386.8 485.7
═════ ═════ ═════ ═════ ═════ ═════
( )
Revenue and assets relating to discontinued operations were based in the
Middle East.
*See Note 16.
Revenue by type
Revenue is attributed to the following activities:
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2022 2021 2022
£m £m £m
Hire and related activities 127.1 120.5 243.3
Services 85.3 66.1 138.4
Disposals 2.4 2.0 5.1
───── ───── ─────
214.8 188.6 386.8
═════ ═════ ═════
Major customer
No one customer represents more than 10% of revenue, reported profit or
combined assets of all reporting segments.
4 Financial expense
Six months Six months Year
ended ended ended
30 September 2022 30 September 2021 31 March
2022
£m £m £m
Total interest on borrowings 2.1 1.4 3.2
Interest on lease liabilities 1.6 1.3 2.5
Other finance (income)/costs (0.1) 0.1 -
───── ───── ─────
3.6 2.8 5.7
═════ ═════ ═════
5 Taxation
The corporation tax charge for the six months ended 30 September 2022 is based
on an estimated full year effective rate of taxation of 18.4% before
exceptional items and amortisation (2021: 28.2%) and 18.2% (2021: 29.1%) after
exceptional items and amortisation. This has been calculated by reference to
the projected charge for the full year ending 31 March 2023, applying the
applicable UK corporation tax rate of 19% (2021: 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 substantively
enacted at the balance sheet date.
6 Earnings per share
The calculation of basic earnings per share is based on the earnings
attributable to equity holders of the Company of £10.8m (2021: £9.5m) and
the weighted average number of 5 pence ordinary shares in issue and is
calculated as follows:
Six months ended Six months Year
30 September ended ended
2022 30 September 31 March
2021 2022
Weighted average number of shares in issue (m)
Number of shares at the beginning of the period 513.6 523.8 523.8
Exercise of share options - 0.1 0.4
Movement in shares owned by the Employee Benefit Trust 0.1 0.1 0.1
Shares repurchased (7.4) - (1.0)
───── ───── ─────
Weighted average for the period - basic number of shares 506.3 524.0 523.3
Share options 6.4 6.7 5.7
Employee share schemes 8.4 1.5 0.8
───── ───── ─────
Weighted average for the period - diluted number of shares 521.1 532.2 529.8
═════ ═════ ═════
Profit (£m)
Profit for the period after tax - basic and diluted earnings 10.8 9.5 21.6
Intangible amortisation charge (after tax) 0.7 0.2 0.8
Profit from discontinued operations (after tax) - (0.2) (0.2)
───── ───── ─────
Adjusted earnings (after tax) 11.5 9.5 22.2
═════ ═════ ═════
Earnings per share (pence)
Basic earnings per share 2.13 1.81 4.13
Dilutive shares and options (0.06) (0.02) (0.06)
───── ───── ─────
Diluted earnings per share 2.07 1.79 4.07
═════ ═════ ═════
Adjusted earnings per share (from continuing operations) 2.27 1.81 4.24
Dilutive shares and options (0.06) (0.02) (0.06)
───── ───── ─────
Adjusted diluted earnings per share 2.21 1.79 4.18
═════ ═════ ═════
The total number of shares outstanding at 30 September 2022 amounted to
490,449,192 (2021: 528,498,631), including 4,215,142 (2021: 4,084,165) shares
held in the Employee Benefit Trust, which are excluded in calculating the
earnings per share.
7 Dividends
The aggregate amount of dividend comprises:
Six months ended Six months Year
30 September ended ended
2022 30 September 31 March
2021 2022
£m £m £m
2021 final dividend (1.40 pence on 522.9m ordinary shares) - 7.3 7.3
2022 interim dividend (0.75 pence on 524.2m ordinary shares) - - 4.0
2022 final dividend (1.45 pence on 489.5m ordinary shares) 7.1 - -
───── ───── ─────
7.1 7.3 11.3
═════ ═════ ═════
Subsequent to the end of the period, the Directors have declared a 0.80 pence
per share interim dividend payable (2022 interim dividend: 0.75 pence per
share).
8 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 Year
30 September ended ended
2022 30 September 31 March
2021 2022
£m £m £m
Operating profit 12.9 15.9 31.6
Add back: amortisation of intangibles 0.9 0.3 1.0
Add back: exceptional items - - -
───── ───── ─────
Adjusted operating profit 13.8 16.2 32.6
Add back: depreciation 34.5 32.9 66.7
───── ───── ─────
EBITDA before exceptional items 48.3 49.1 99.3
═════ ═════ ═════
Profit before tax 13.2 14.3 29.1
Add back: amortisation 0.9 0.3 1.0
Add back: exceptional items - - -
───── ───── ─────
Adjusted profit before tax 14.1 14.6 30.1
═════ ═════ ═════
9 Property, plant and equipment
Land and Hire
buildings equipment Other Total
£m £m £m £m
Cost
At 1 April 2021 50.6 386.6 88.5 525.7
Foreign exchange 0.1 0.2 0.3 0.6
Additions 2.8 37.6 3.3 43.7
Disposals (1.2) (12.1) (1.4) (14.7)
Transfers to inventory - (5.2) - (5.2)
───── ───── ───── ─────
At 30 September 2021 52.3 407.1 90.7 550.1
Foreign exchange (0.1) (1.2) (0.6) (1.9)
Additions 3.3 30.8 4.3 38.4
Disposals (2.3) (3.7) (2.7) (8.7)
Transfers to inventory - (10.3) - (10.3)
───── ───── ───── ─────
At 31 March 2022 53.2 422.7 91.7 567.6
Foreign exchange 0.1 1.0 0.3 1.4
Additions 0.8 30.5 3.1 34.4
Disposals (0.5) (12.1) (0.2) (12.8)
Transfers to inventory - (9.0) - (9.0)
───── ───── ───── ─────
At 30 September 2022 53.6 433.1 94.9 581.6
═════ ═════ ═════ ═════
Depreciation
At 1 April 2021 36.6 179.4 76.6 292.6
Foreign exchange - - (0.2) (0.2)
Charged in period 1.8 17.6 2.0 21.4
Disposals (0.8) (6.9) (0.7) (8.4)
Transfers to inventory - (3.7) - (3.7)
───── ───── ───── ─────
At 30 September 2021 37.6 186.4 77.7 301.7
Foreign exchange - (0.1) - (0.1)
Charged in period 2.1 17.6 2.1 21.8
Disposals (2.1) (0.3) (3.3) (5.7)
Transfers to inventory - (7.8) - (7.8)
───── ───── ───── ─────
At 31 March 2022 37.6 195.8 76.5 309.9
Foreign exchange 0.1 0.5 - 0.6
Charged in period 2.2 16.9 2.1 21.2
Disposals (0.2) (7.7) - (7.9)
Transfers to inventory - (6.8) - (6.8)
───── ───── ───── ─────
At 30 September 2022 39.7 198.7 78.6 317.0
═════ ═════ ═════ ═════
Net book value
At 30 September 2022 13.9 234.4 16.3 264.6
═════ ═════ ═════ ═════
At 31 March 2022 15.6 226.9 15.2 257.7
═════ ═════ ═════ ═════
At 30 September 2021 14.7 220.7 13.0 248.4
═════ ═════ ═════ ═════
10 Right of use assets
Land and
buildings Other Total
£m £m £m
Cost
At 1 April 2021 131.3 48.2 179.5
Additions 5.3 5.0 10.3
Remeasurements 5.3 4.0 9.3
Disposals (3.3) (6.8) (10.1)
───── ───── ─────
At 30 September 2021 138.6 50.4 189.0
Additions 1.3 10.9 12.2
Remeasurements 7.5 1.7 9.2
Disposals (3.9) (7.4) (11.3)
───── ───── ─────
At 31 March 2022 143.5 55.6 199.1
Additions 1.9 15.3 17.2
Remeasurements 1.7 2.5 4.2
Disposals (2.3) (11.4) (13.7)
───── ───── ─────
At 30 September 2022 144.8 62.0 206.8
═════ ═════ ═════
Depreciation
At 1 April 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
Charged in period 6.3 5.7 12.0
Disposals (3.0) (7.0) (10.0)
───── ───── ─────
At 31 March 2022 92.3 33.5 125.8
Charged in period 6.8 6.5 13.3
Disposals (1.9) (10.0) (11.9)
───── ───── ─────
At 30 September 2022 97.2 30.0 127.2
═════ ═════ ═════
Net book value
At 30 September 2022 47.6 32.0 79.6
═════ ═════ ═════
At 31 March 2022 51.2 22.1 73.3
═════ ═════ ═════
At 30 September 2021 49.6 15.6 65.2
═════ ═════ ═════
11 Borrowings
30 September 30 September 31 March
2022 2021 2022
Restated*
£m £m £m
Current borrowings
Bank overdraft 1.5 1.0 1.7
Lease liabilities* 20.4 17.0 20.6
───── ───── ─────
21.9 18.0 22.3
Non-current borrowings
Maturing between two and five years
- ABF facility 86.1 53.4 68.3
- Lease liabilities 62.3 51.3 56.1
───── ───── ─────
148.4 104.7 124.4
Total borrowings 170.3 122.7 146.7
Less: Cash (0.9) (6.5) (2.5)
Exclude lease liabilities* (82.7) (68.3) (76.7)
───── ───── ─────
Net debt 86.7 47.9 67.5
═════ ═════ ═════
*See Note 16
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 2022 was £91.7m (31 March 2022: £110.8m) 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
by reference to LIBOR until July 2021) 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 1.80%
(2021: 1.72%).
The facility is secured by fixed and floating charges over the UK and Ireland
assets.
12 Contingent liabilities
In the normal course of business, the Company has given parental guarantees 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 the
guarantees.
13 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 FY2022 Annual Report.
14 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 2023 financial
year have not changed from those set out on pages 84 to 91 of the Group's 2022
Annual Report, which is available at www.speedyservices.com
(http://www.speedyservices.com) . These risks and uncertainties include the
following:
· COVID-19 pandemic;
· Safety, health and environment;
· Service;
· Sustainability and climate change;
· 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.
15 Post balance sheet events
There are no post balance sheet events.
16 Prior period adjustment
The following adjustments were made in the financial statements for the Group
for the year ended 31 March 2022 and have now been incorporated in the
comparative amounts in this interim report.
On transition to IFRS 16 in FY2020 the lease liabilities were overstated and
accruals understated. This was corrected by restating each of the affected
financial statement items in the balance sheet as at 1 April 2021 in line with
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. There
is no impact on the amounts recognised in the income statement.
A summary of the affected items and the restatements made as at 30 September
2021 are as follows:
Reported Adjustment Restated
£m £m £m
Assets:
Deferred tax asset 3.2 (0.4) 2.8
═════ ═════ ═════
Liabilities:
Lease liabilities (70.9) 2.6 (68.3)
Accruals (within trade and other payables) (35.3) (0.6) (35.9)
───── ───── ─────
(106.2) 2.0 (104.2)
═════ ═════ ═════
Net assets 222.9 1.6 224.5
═════ ═════ ═════
Equity:
Retained earnings as at 1 April 2021 192.2 1.6 193.8
Retained earnings as at 30 September 2021 194.9 1.6 196.5
═════ ═════ ═════
Impairment losses on trade receivables of £1.5m for the six months ended 30
September 2021, as determined in accordance with IFRS 9 Financial Instruments,
were previously included in distribution and administration expenses. These
are now shown separately on the face of the Income Statement.
Loan drawdowns and repayments previously shown net in the Cash Flow Statement
are now shown separately. The comparative net drawdown of £9.8m for the six
months ended 30 September 2021 has been restated to show loan drawdowns of
£233.7m and repayments of £223.9m.
In the current period the Group's reported segments have been changed to be
consistent with the information reported to the chief operating decision
maker. The Group's reportable and operating segments were Hire and Services
both in the current and prior periods presented. Previously these segments
were combined and disclosed as the UK and Ireland.
Statement of directors' responsibilities
The directors confirm that these condensed interim financial statements have
been prepared in accordance with UK adopted International Accounting Standard
34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority and that
the interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
• an indication of important events that have occurred during the first
six months 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 financial year; and
• material related-party transactions in the first six months and any
material changes in the related-party transactions described in the last
annual report.
The maintenance and integrity of the Speedy Hire Plc website is the
responsibility of the directors; the work carried out by the authors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that might have occurred to the interim
financial statements since they were initially presented on the website.
The directors of Speedy Hire Plc are listed in the Speedy Hire Plc annual
report for 31 March 2022, with the exception of the following changes in the
period:
· Russell Down (resigned 30 September 2022)
· Dan Evans (appointed 1 October 2022)
· James Bunn (resigned 1 November 2022)
A list of current directors is maintained on the Speedy Hire Plc's website:
www.speedyservices.com
Dan Evans
Director
14 November 2022
Independent Review Report to Speedy Hire Plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Speedy Hire Plc's condensed consolidated interim financial
statements (the "interim financial statements") in the FY2023 Interim results
of Speedy Hire Plc for the 6 month period ended 30 September 2022 (the
"period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Interim condensed consolidated balance sheet as at
30 September 2022;
· the Interim condensed consolidated income statement and Interim
condensed consolidated statement of comprehensive income for the period then
ended;
· the Interim condensed consolidated statement of cash flows for the
period then ended;
· the Interim condensed consolidated statement of changes in equity for
the period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the FY2023 Interim results of
Speedy Hire Plc have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the FY2023 Interim results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with this ISRE. However, future events or
conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The FY2023 Interim results, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the FY2023 Interim results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the FY2023 Interim results,
including the interim financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the FY2023 Interim results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
Manchester
14 November 2022
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