REG - Speedy Hire PLC - Half Year Results
21/11/2024 07:00
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RNS Number : 0431N Speedy Hire PLC 21 November 2024
Speedy Hire Plc
("Speedy Hire", "the Company" or "the Group")
21 November 2024
FY2025 Interim Results
Results for the six months to 30 September 2024
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 2024.
Financial Highlights
6 months ended 6 months ended Change
30 September 2024 (£m) 30 September 2023 (£m)
Revenue 203.6 208.5 (2.4)%
Adjusted EBITDA(1 2) 44.2 45.4 (2.6)%
Adjusted profit before tax(1) 0.4 5.9 £(5.5)m
Adjusted earnings per share (pence)(3) 0.07 0.98 (0.91)p
Operating profit 4.6 9.4 £(4.8)m
(Loss)/profit before tax (2.2) 5.6 £(7.8)m
Basic earnings per share (pence)(3) (0.35) 0.91 (1.26)p
Hire fleet capital spend £26.4m £16.0m 65.0%
Free cash flow(4) £(1.6)m £10.6m £(12.2)m
Net debt(5) £111.8m £89.6m £22.2m
Dividend per share 0.80p 0.80p -
Commenting on the results Dan Evans, Chief Executive, said:
"We have delivered resilient results for the first half of FY2025 against a
challenging but manageable market backdrop, whilst maintaining investment in
our Velocity strategy. The Group secured significant contract wins and
renewals earlier in the calendar year, which will deliver revenue and profit
growth in this financial year and beyond.
The second half has started well with hire revenues for October and November
to date, up c.3% on this time last year. Consistent with prior years, the
Group expects a strong second half weighting to its hire revenues and profits,
as the seasons change and new contracts fully mobilise. It is particularly
encouraging that we are mobilising the Amey contract earlier than anticipated,
in addition to a strong pipeline of further opportunities that give us
confidence in the outlook for the business.
The Board anticipates the Group meeting its full year expectations."
Trading and operations update:
· Hire revenue performance in line with H1 FY2024:
o Challenging market conditions which the business has navigated well
o National & Regional customer hire performance flat year on year
o Recent National key contract wins and extensions, as well as a strong
pipeline
o Trade and Retail now profitable due to changed business model at the end
of FY2024 (loss making in H1 FY2024)
· Service revenue decrease of 5.4% versus H1 FY2024:
o Strong performance in our Lloyds British Testing, Inspection &
Certification ('TIC') business, up 10.7% versus H1 FY2024
o Decline in wholesale fuel prices impacting pass through fuel revenue, down
15.6%, however margin maintained
· Executing well on the 'Enable' phase of our Velocity
transformation and growth strategy
· Accelerated investment in hire fleet to support contract
mobilisations and strategic growth engines:
o c.£7m in specialist powered access
o Expansion of our Battery Storage Unit ('BSU') fleet by c.£5m
o Stage V power generation investment of c.£2m to complement energy
strategy
Financial Performance
· Revenue of £203.6m (H1 FY2024: £208.5m)
· Adjusted EBITDA(1) of £44.2m (H1 FY2024: £45.4m(2)) and margin
maintained at 22% with disciplined price and cost control
· Adjusted profit before tax(1) of £0.4m, down on H1 FY2024 due to:
o The operational gearing impact of the shortfall in revenue, coupled with
the investment in people costs in the first half
o Kazakhstan joint venture down due to project phasing and against a strong
performance last year
o Higher interest costs due to the increase in net debt following the
acquisition of Green Power Hire Limited ('GPH') in October 2023, for £20.2m,
and accelerated hire fleet capital spend in the first half
· Loss after tax in the first half, impacted by non-underlying costs of
£2.3m for the 'Enable' phase of our transformation programme
· Strong operating cash flow of £42.7m (H1 FY2024: £42.4m) with cash
conversion of 96.6% (H1 FY2024: 93.4%(2))
· Accelerated hire fleet investment of £26.4m (H1 FY2024: £16.0m)
· Free cash outflow of £1.6m (H1 FY2024: £10.6m inflow)
· Cash and facility headroom of £40.8m (31 March 2024: £56.7m)
· Net debt(5) at £111.8m, leverage(6) of 1.8 times (31 March 2024:
£101.3m, 1.5 times), representing a temporary increase to support contract
wins mobilising in the second half and beyond
· Interim dividend of 0.80 pence per share (H1 FY2024: 0.80 pence
per share)
Current trading
· October and November to date hire revenue c.3% ahead of prior year
· Amey has commenced mobilisation in October, earlier than
originally anticipated
· Trade and Retail continues to be profitable with opportunities to
develop and further expand our proposition
Enquiries:
Speedy Hire
Plc
Tel: 01942 720 000
Dan Evans, Chief Executive
Paul Rayner, Chief Financial Officer
MHP Communications
Tel: 0203 128 8540
Oliver Hughes
Katie Hunt
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 7, 9 and 13.
(1) See note 9.
(2) Six months ended 30 September 2023 revised, see note 18.
(3) See note 7.
(4) Free cash flow: net cash flow before movement in loan balances and returns
to shareholders.
(5) See note 13. This metric excludes lease liabilities.
(6) Leverage: Net debt(5) covered by EBITDA(1). This metric excludes the
impact of IFRS 16.
Inside Information: This announcement contains inside information for the
purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms
part of domestic law by virtue of the European Union (Withdrawal) Act 2018.
Upon the publication of this announcement via Regulatory Information Service,
this inside information is now considered to be in the public domain.
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 Hire is the UK's leading provider of
tools and equipment hire services to a wide range of customers in the
construction, infrastructure, industrial, and support services markets, as
well as to local trade, and retail. 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 144 Service Centres
and on-site locations across the UK and Ireland and through a joint venture in
Kazakhstan. *Lloyds British National Contracts only.
Chief Executive's statement
Overview
Our interim results for the six months to 30 September 2024 demonstrate the
Group's ability to perform in challenging market conditions. During the first
half, the Group has made good progress in the mobilisation of major contract
wins, which will benefit the second half. We have focussed on operational
efficiencies and enabling improvements across the business, in addition to
necessary investment in our cost base to deliver on the significant contract
opportunities, both secured and in the Group's strong pipeline.
Group hire revenue in the first half was satisfactory and is positioned for
growth in the second half. Within our National customer segment, our recent
market success in winning and renewing major contracts and our pipeline of
opportunities are expected to contribute to growth in the remainder of the
year and into FY2026. We continue to focus on maximising our revenue with
existing customers and on major UK infrastructure and construction projects,
including CP7 in the rail sector, AMP8 in the water sector and the various
opportunities in the wider energy sector, including nuclear. Additionally, we
were pleased to see continued government support for HS2.
We have continued to invest in our Velocity strategy during the second year of
the 'Enable' phase, making the necessary foundational improvements to deliver
on our targets for growth and long-term sustainable returns.
Supporting this, we have accelerated our hire fleet capital spend in the first
half, aligned to our three growth engines of Core Hire, Specialist products
and services and Trade & Retail. This continued commitment to our
Velocity strategy and investment in our hire fleet to drive contract wins and
renewals, despite the challenging market conditions, gives us confidence in
the outlook for the business.
The Group's Trade and Retail proposition is profitable in the first half,
following the change to a lower cost to serve digital operating model during
FY2024. We continue to focus on opportunities to develop and further expand
our proposition in this customer segment.
The business is well positioned to deliver growth in the second half and
capitalise on opportunities as they arise. In order to deliver profitable
growth, and whilst the market remains competitive, our priority remains on
mobilising our significant contract wins, converting additional opportunities
from the Group's strong pipeline, as well as achieving operational
efficiencies through our transformation programme.
Operational efficiency and cost control
Operational efficiency remains a key part of our Velocity strategy. Our
strategic collaboration with PEAK has supported our progression in the use of
data and Artificial Intelligence ("AI") in decision making. AI is helping us
ensure we have the right products, in the right place, at the right time to
meet customer demand, in the most efficient way; utilising our national
service centre network, logistics and asset intelligence. During the first
half, we have maintained and progressed pricing disciplines and asset
optimisation with continued development of our digital channels and CRM, which
will be live in the second half of the financial year.
We have continued the work we did in FY2024 on our future state property
programme. This programme is modernising our network with energy efficient,
low carbon facilities that improve energy consumption and reduce operational
costs whilst creating better working environments for our people and a market
leading experience for our customers.
Cost discipline remains a key factor in delivering sustainable profitable
growth. We have continued to control costs and implement initiatives to
improve operational efficiency and the effective management of our supply
chain. These initiatives are expected to generate benefit in the second half
of the year and beyond, supporting our continued investment in the
transformational aspect of our Velocity strategy.
ESG
We continue to lead the hire industry in sustainability and are embracing
product innovation in areas that are increasingly in demand from our customer
base. We are working with our partners to deliver award winning, sustainable
solutions for customers and to accelerate our own carbon reduction pathway. We
have continued to support the partnership with Niftylift and Speedy Hydrogen
Solutions (joint venture with AFC Energy) secured in FY2024, as well as
expanding our fleet of BSUs through GPH.
During the period we invested significantly in our hire fleet, of which 68%
was in carbon efficient ECO products. The proportion of our hire revenue from
carbon efficient ECO products has increased from 50% in the comparative period
to 56% in the first half of FY2025.
Trading performance
Total revenue for the period to 30 September 2024 decreased by 2.4% to
£203.6m (H1 FY2024: £208.5m) with hire rate increases across our customer
segments mitigating some softening in volume with our National and Regional
customers. Revenue from disposals was £1.6m (H1 FY2024: £2.0m).
Gross profit was £113.4m (H1 FY2023: £112.7m), an increase of 0.6%. The
gross margin increased to 55.7% (H1 FY2024: 54.1%), with gross profit
benefiting from a greater weighting toward hire revenue than in H1 FY2024.
Adjusted EBITDA(1) down 2.6% on year at £44.2m (H1 FY2024: £45.4m(2)). The
slight increase in gross profit has been offset by an increase in underlying
overheads, primarily the result of our investment in our people (£2.7m). The
net result is a £2.5m decrease in underlying operating profit to £6.9m (H1
FY2024: £9.4m). Adjusted profit before tax(1) decreased by £5.5m to £0.4m
(H1 FY2024: £5.9m), the result of higher interest costs and some delays in
major project opportunities in the joint venture in Kazakhstan.
The Group made a loss after taxation of £1.6m (H1 FY2024: £4.2m profit), the
result of non-underlying costs in respect of our transformation programme.
Revenue and margin analysis
The Group generates revenue through two key categories, Hire and Services.
Revenue and margin by type Change
Six Months ended Six Months ended
30 September 30 September
2024 2023
£m £m %
Hire:
Revenue 125.5 125.6 (0.1)%
Cost of sales (26.6) (28.8)
Gross profit 98.9 96.8 2.2%
78.8% 77.1%
Gross margin
Services:
Revenue 76.5 80.9 (5.4)%
Cost of sales (61.6) (65.1)
Gross profit 14.9 15.8 (5.7)%
19.5% 19.5%
Gross margin
Hire revenues were flat year on year, reflecting price increases offsetting a
softening in volume demand from our National and Regional customers. A number
of new and renewed contracts with key customers have been secured in the
period and the Group has a strong pipeline of opportunities which will
contribute in H2 FY2025 and into FY2026.
Services revenues (including fuel) performed well in challenging conditions,
although decreased by 5.4% compared to H1 FY2024. Excluding fuel, services
revenues were down 2.5% versus H1 FY2024 (£62.5m), with some softening in
Customer Solutions, partially offset by 10.7% year on year growth in Lloyds
British TIC revenue, following an organisational restructure and digital
transformation of that business unit in FY2024. Fuel revenue decreased 15.6%
versus H1 FY2024 as a result of the decline in the wholesale price of both
diesel and hydrogenated vegetable oil (HVO), which does not impact gross
margin.
The Group continues to monitor pricing and introduce increases 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 increased from 54.1% in H1 FY2024 to 55.7%. Hire margin
increased to 78.8% (H1 FY2024: 77.1%), primarily the result of pricing
increases offset by some lower utilisation and lower provisions required due
to continually improving asset control. Services margin remained flat at
19.5%, with falls in lower margin sales, partially offset by higher margin
sales in Lloyds British.
Overheads
The overheads (excluding non-underlying items) disclosed in the income
statement can be further analysed as follows:
Six Months ended Six Months ended
30 September 30 September
2024 2023
£m £m
Distribution and administrative costs 105.9 101.4
Amortisation (2.4) (1.0)
Underlying overheads 103.5 100.4
Disciplined cost management, with savings realised from our operational and
management restructuring in the last financial year, has restricted any
significant growth in our underlying cost base whilst implementing salary
increases (c.£5.4m annual investment) and investing in the business for
growth. To ensure we can continue to invest in our growth strategy, we are
continuing to control costs through initiatives to improve operational
efficiency and build on the effective management of our supply chain.
The UK and Ireland headcount at 30 September 2024 was 3,394 (31 March 2024:
3,293), an increase of 3.1%.
Non-underlying items
Six Months ended Six Months ended
30 September 30 September
2024 2023
£m £m
Transformation costs 2.3 -
As outlined in the results for the year end 31 March 2024, the Group expects
to incur non-underlying costs in respect of the investment in implementing our
Velocity strategy and executing our transformation programme. This represents
a significant cost to the business over the initial phases of the programme
and in the first half resulted in an incremental cost of £2.3m (H1 FY2024:
£nil).
Interest and banking facilities
The Group's net financial expense increased to £7.5m (H1 FY2024: £5.7m)
reflecting higher average gross borrowings throughout the year following the
acquisition of GPH in October 2023.
The Group's main bank facilities, including the additional uncommitted
accordion of £220m, expire in July 2026. The current facility continues to
give the Group headroom to support organic growth and acquisition
opportunities. 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 1.75% and 2.35% dependent on the weighting of
borrowings between receivables and plant and machinery. The effective average
margin in the period was 2.12% (H1 FY2024: 1.89%).
The Group utilises interest rate hedges to manage fluctuations in rates. The
fair value of these hedges was £(0.2)m at 30 September 2024. 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 54% of the
expected net debt is hedged. As of October 2024, 52% of the Group' net debt is
hedged with a weighted average hedge rate of 4.21%.
Interest on lease liabilities of £3.0m (H1 FY2024: £2.3m) was charged during
the period, impacted by new, longer vehicle leases entered into during the
period.
Taxation
The tax credit for the period was £0.6m (H1 FY2024: £1.4m charge),
reflecting a projected full year effective tax rate after amortisation and
non-underlying items of 28.3% (H1 FY2024: 24.4%). The effective rate has
increased year on year due to reduced operating profits increasing the
proportion of depreciation in relation to non-qualifying assets.
Shares and earnings per share
At 30 September 2024, 516,983,637 (31 March 2024: 516,983,637) Speedy Hire Plc
ordinary shares were in issue, of which 55,141,657 were held in treasury and
1,616,733 were held in the Employee Benefit Trust. Adjusted earnings per share
was 0.07 pence (H1 FY2024: 0.98 pence), a decrease of 0.91p. Basic earnings
per share was (0.35) pence (H1 FY2024: 0.91 pence).
Balance sheet
The Group has maintained a strong balance sheet and is well placed to continue
to pursue financial and strategic objectives despite continued challenging
market conditions.
Total capital expenditure during the period amounted to £40.4m (H1 FY2024:
£22.4m), of which £35.6m (H1 FY2024: £17.6m) related to equipment for hire,
and £4.8m related to non-hire property, plant and equipment (H1 FY2024:
£4.8m).
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.
Net property, plant and equipment (excluding IFRS 16 right of use assets)
increased to £244.5m at 30 September 2024 (31 March 2024: £233.1m). The net
book value of equipment for hire has increased from £210.6m at 31 March 2024
to £221.9m, representing 90.8% (31 March 2024: 90.3%) of the total property,
plant and equipment balance.
Intangible assets decreased marginally to £39.2m (31 March 2024: £39.7m),
primarily being the result of amortisation charged in the period.
Right of use assets of £93.8m (31 March 2024: £97.3m) and corresponding
lease liabilities of £94.4m (31 March 2024: £97.6m) were recognised at 30
September 2024. The movement from 31 March 2024 is primarily from a net
reduction in the Group's active property leases.
Gross trade receivables totalled £93.8m at 30 September 2024 (31 March 2024:
£97.3m), benefiting from continued strong cash collections and a focus on
overdue debt. Bad debt and credit note provisions were £3.3m at 30 September
2024 (31 March 2024: £3.4m), equivalent to 3.5% of gross trade receivables
(31 March 2024: 3.5%). In setting the provisions the Directors have given
specific consideration to the impact of macroeconomic uncertainties. Whilst
the Group has not experienced a worsening of debt collections or debt
write-offs in H1 FY2025, there remain some indications of economic
vulnerability and increasing insolvencies and therefore we continue to monitor
the situation closely.
Debtor days were 68 days (31 March 2024: 64 days), broadly consistent with
September 2023 (67 days). Trade payables were £58.8m (31 March 2024:
£44.9m). Creditor days were 69 days (31 March 2024: 40 days), the result of
us collaborating with suppliers to align our working capital cycle.
Cash flow and net debt
Cash generated from operations (before changes in hire fleet) for the period
was £42.7m (H1 FY2024: £42.4m), representing 96.6% conversion from adjusted
EBITDA(1) (H1 FY2024: 93.4%(2)), reflecting the continued focus on working
capital improvements. Free cash flow(4) decreased by £12.2m to an outflow of
£1.6m (H1 FY2024: £10.6m inflow), the result of accelerated capital spend to
support contract growth.
Net debt(5) increased by £10.5m, from £101.3m at the beginning of the
period, to £111.8m at 30 September 2024 due to accelerated hire fleet capital
investment. As a result, net debt to adjusted EBITDA(6) (rolling 12 months
basis) increased to 1.8 times (31 March 2024: 1.5 times).
The Group retained substantial headroom within its committed facility, with
cash and undrawn facility availability of £40.8m at 30 September 2024 (31
March 2024: £56.7m).
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.
The Board has declared an interim dividend of 0.80 pence per share (H1
FY2024 interim dividend: 0.80 pence per share), to be paid on 17
January 2025 to shareholders on the register on 6 December 2024.
A Dividend Reinvestment Plan ("DRIP") is provided by Equiniti Financial
Services Limited. The DRIP enables the Company's shareholders to elect to have
their cash dividend payments used to purchase the Company's shares. More
information can be found at www.shareview.co.uk/info/drip
(http://www.shareview.co.uk/info/drip) .34
(http://www.shareview.co.uk/info/drip) .
Outlook
We have delivered resilient results for the first half of FY2025 against a
challenging but manageable market backdrop, whilst maintaining investment in
our Velocity strategy. The Group secured significant contract wins and
renewals earlier in the calendar year, which will deliver revenue and profit
growth in this financial year and beyond. We also look forward to long-term
government commitments to the infrastructure and construction sectors.
The government announced a number of items in its autumn budget that will
impact the Group. There is no expected impact for FY2025, however the Board
has assessed the financial impact on FY2026 at c.£5m before any mitigation.
The second half has started well with hire revenues for October and November
to date, up c.3% on this time last year. Consistent with prior years, the
Group expects a strong second half weighting to its hire revenues and profits,
as the seasons change and new contracts fully mobilise. It is particularly
encouraging that we are mobilising the Amey contract earlier than anticipated,
in addition to a strong pipeline of further opportunities that give us
confidence in the outlook for the business.
The Board anticipates the Group meeting its full year expectations.
Dan Evans
Chief Executive
Interim condensed consolidated income statement
Six months ended Six months ended
30 September 2024 30 September 2023
_________________________________ _________________________________
Non-underlying items¹ Non-underlying items¹
Underlying performance Underlying performance
Total Total
Note £m £m £m £m £m £m
Revenue 3 203.6 - 203.6 208.5 - 208.5
Cost of sales (90.2) - (90.2) (95.8) - (95.8)
───── ───── ───── ───── ───── ─────
Gross profit 113.4 - 113.4 112.7 - 112.7
Distribution and administrative costs (105.9) (2.3) (108.2) (101.4) - (101.4)
Impairment losses on trade receivables (0.6) - (0.6) (1.9) - (1.9)
───── ───── ───── ───── ───── ─────
Operating profit/(loss) 6.9 (2.3) 4.6 9.4 - 9.4
Share of results of joint venture 0.7 - 0.7 1.9 - 1.9
───── ───── ───── ───── ───── ─────
Profit/(loss) from operations 7.6 (2.3) 5.3 11.3 - 11.3
Financial expense 5 (7.5) - (7.5) (5.7) - (5.7)
───── ───── ───── ───── ───── ─────
Profit/(loss) before taxation 0.1 (2.3) (2.2) 5.6 - 5.6
Taxation 6 - 0.6 0.6 (1.4) - (1.4)
───── ───── ───── ───── ───── ─────
Profit/(loss) for the financial period 0.1 (1.7) (1.6) 4.2 - 4.2
═════ ═════ ═════ ═════ ═════ ═════
Earnings per share
- Basic (pence) 7 (0.35) 0.91
═════ ═════
- Diluted (pence) 7 (0.35) 0.91
═════ ═════
Non-GAAP performance measures
EBITDA before non-underlying items² 9 44.2 45.4
═════ ═════
Adjusted profit before tax² 9 0.4 5.9
═════ ═════
Adjusted earnings per share (pence)³ 7 0.07 0.98
Adjusted diluted earnings per share (pence)³ 7 0.06 0.97
═════ ═════
¹ See note 4.
² See notes 9 and 18.
³ See note 7.
All activities in each period presented related to continuing operations.
Interim condensed consolidated statement of comprehensive income
Six months ended Six months
30 September ended
2024 30 September
2023
£m £m
(Loss)/profit for the financial period (1.6) 4.2
───── ─────
Other comprehensive (expense)/income that may be reclassified subsequently to
the Income Statement:
- Effective portion of change in fair value of cash flow hedges (0.7) 0.8
- Exchange difference on retranslation of foreign operations (0.7) (0.1)
- Tax on items (0.1) -
───── ─────
Other comprehensive (expense)/income (1.5) 0.7
───── ─────
Total comprehensive (expense)/income for the financial period (3.1) 4.9
═════ ═════
Interim condensed consolidated balance sheet
30 September 30 September 31 March
2024 2023 2024
Note £m £m £m
ASSETS
Non-current assets
Intangible assets 10 39.2 24.1 39.7
Investment in joint venture 6.6 8.4 8.8
Property, plant and equipment
- Land and buildings 11 16.1 14.3 14.5
- Hire equipment 11 221.9 200.1 210.6
- Other 11 6.5 15.2 8.0
Right of use assets 12 93.8 83.4 97.3
───── ───── ─────
384.1 345.5 378.9
───── ───── ─────
Current assets
Inventories 11.6 12.5 11.8
Trade and other receivables 104.4 108.4 102.3
Cash 13 1.4 1.8 4.0
Current tax asset 3.0 1.2 2.7
Derivative financial assets 14 0.1 1.5 0.5
───── ───── ─────
120.5 125.4 121.3
───── ───── ─────
Total assets 504.6 470.9 500.2
───── ───── ─────
LIABILITIES
Current liabilities
Borrowings 13 (0.5) (0.8) (1.2)
Lease liabilities 13 (20.8) (20.0) (22.1)
Trade and other payables (107.6) (89.0) (96.4)
Derivative financial liabilities 14 (0.3) - (0.1)
Provisions (7.6) (7.5) (8.8)
───── ───── ─────
(136.8) (117.3) (128.6)
───── ───── ─────
Non-current liabilities
Borrowings 13 (112.7) (90.6) (104.1)
Lease liabilities 13 (73.6) (66.6) (75.5)
Provisions (8.1) (7.0) (7.6)
Deferred tax liabilities (8.8) (7.5) (8.7)
───── ───── ─────
(203.2) (171.7) (195.9)
───── ───── ─────
Total liabilities (340.0) (289.0) (324.5)
───── ───── ─────
Net assets 164.6 181.9 175.7
═════ ═════ ═════
EQUITY
Share capital 25.8 25.8 25.8
Share premium 1.9 1.9 1.9
Capital redemption reserve 0.7 0.7 0.7
Merger reserve 1.0 1.0 1.0
Hedging reserve (0.5) 1.1 0.2
Translation reserve (2.2) (1.4) (1.5)
Retained earnings 137.9 152.8 147.6
───── ───── ─────
Total equity 164.6 181.9 175.7
═════ ═════ ═════
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
Note £m £m £m £m £m £m £m £m
At 1 April 2023 25.8 1.9 0.7 1.0 0.3 (1.3) 156.2 184.6
Profit for the period - - - - - - 4.2 4.2
Other comprehensive income/(expense) - - - - 0.8 (0.1) - 0.7
───── ───── ───── ───── ───── ───── ───── ─────
Total comprehensive income/(expense) - - - - 0.8 (0.1) 4.2 4.9
Dividends 8 - - - - - - (8.2) (8.2)
Equity-settled share-based payments - - - - - - 0.6 0.6
───── ───── ───── ───── ───── ───── ───── ─────
At 30 September 2023 25.8 1.9 0.7 1.0 1.1 (1.4) 152.8 181.9
Loss for the period - - - - - - (1.5) (1.5)
Other comprehensive expense - - - - (0.9) (0.1) - (1.0)
───── ───── ───── ───── ───── ───── ───── ─────
Total comprehensive expense - - - - (0.9) (0.1) (1.5) (2.5)
Dividends - - - - - - (3.6) (3.6)
Equity-settled share-based payments - - - - - - (0.1) (0.1)
───── ───── ───── ───── ───── ───── ───── ─────
At 31 March 2024 25.8 1.9 0.7 1.0 0.2 (1.5) 147.6 175.7
Loss for the period - - - - - - (1.6) (1.6)
Other comprehensive expense - - - - (0.7) (0.7) (0.1) (1.5)
───── ───── ───── ───── ───── ───── ───── ─────
Total comprehensive expense - - - - (0.7) (0.7) (1.7) (3.1)
Dividends 8 - - - - - - (8.2) (8.2)
Equity-settled share-based payments - - - - - - 0.2 0.2
───── ───── ───── ───── ───── ───── ───── ─────
At 30 September 2024 25.8 1.9 0.7 1.0 (0.5) (2.2) 137.9 164.6
═════ ═════ ═════ ═════ ═════ ═════ ═════ ═════
Interim condensed consolidated statement of cash flows
Six months ended Six months ended
30 September 30 September Year ended
2024 2023 31 March
Restated(1) 2024
£m £m £m
Cash generated from operating activities
(Loss)/profit before tax (2.2) 5.6 5.1
Net financial expense 5 7.5 5.7 12.7
Amortisation 10 2.4 1.0 3.6
Depreciation 34.2 34.6 66.9
Share of profit from joint venture (0.7) (1.9) (2.9)
Termination of lease contracts (0.1) (0.1) -
Loss on planned disposals of hire equipment(1) 0.7 0.4 2.4
Loss on other disposals of hire equipment(1) 0.7 0.8 0.2
Decrease in inventories 0.2 0.2 0.9
(Increase)/decrease in trade and other receivables (1.7) (1.3) 5.6
Increase/(decrease) in trade and other payables 2.2 (2.1) (1.6)
(Decrease)/increase in provisions (0.7) (1.1) 0.8
Equity-settled share-based payments 0.2 0.6 0.5
───── ───── ─────
Cash generated from operations before changes in hire fleet 42.7 42.4 94.2
Purchase of hire equipment (26.4) (16.0) (41.3)
Proceeds from planned sale of hire equipment 1.6 2.0 5.4
Proceeds from customer loss/damage of hire equipment 4.5 5.1 10.7
───── ───── ─────
Cash generated from operations 22.4 33.5 69.0
Interest paid (7.5) (5.7) (12.7)
Tax paid (0.2) (2.3) (3.7)
───── ───── ─────
Net cash flow from operating activities 14.7 25.5 52.6
───── ───── ─────
Cash flow used in investing activities
Purchase of non-hire property, plant and equipment (4.8) (4.8) (9.0)
Capital expenditure on IT development (1.9) (0.2) (1.9)
Acquisition of a subsidiary - - (20.2)
Proceeds from sale of non-hire property, plant and equipment 1.3 0.1 3.0
Investment in joint venture (Speedy Hydrogen Solutions) (0.6) - -
Dividends and loan payments from joint venture(2) 2.9 2.7 3.9
───── ───── ─────
Net cash flow used in investing activities (3.1) (2.2) (24.2)
───── ───── ─────
Net cash flow before financing activities 11.6 23.3 28.4
───── ───── ─────
Cash flow from financing activities
Payments for the principal element of leases (13.8) (12.7) (26.0)
Drawdown of loans 266.0 263.2 574.3
Repayment of loans (257.5) (264.4) (561.9)
Dividends paid (8.2) (8.2) (11.8)
───── ───── ─────
Net cash flow from financing activities (13.5) (22.1) (25.4)
───── ───── ─────
(Decrease)/increase in cash and cash equivalents (1.9) 1.2 3.0
Cash and cash equivalents at the start of the period 2.8 (0.2) (0.2)
───── ───── ─────
Cash and cash equivalents at the end of the period 0.9 1.0 2.8
═════ ═════ ═════
Analysis of cash and cash equivalents
Cash 13 1.4 1.8 4.0
Bank overdraft 13 (0.5) (0.8) (1.2)
───── ───── ─────
0.9 1.0 2.8
═════ ═════ ═════
(1) Six months ended 30 September 2023 restated to present loss on planned
disposals of hire equipment separately from all other disposals of hire
equipment.
(2) Relates wholly to the joint venture in Kazakhstan.
1 Accounting policies
Speedy Hire Plc is a public limited company listed on the London Stock
Exchange, incorporated and domiciled in the United Kingdom. The interim
condensed consolidated financial statements of the Company for the six months
ended 30 September 2024 comprise the Company and its subsidiaries (together
referred to as the 'Group').
The financial statements of the Group for the year ended 31 March 2024 are
available from the Company's registered office, or from the website:
www.speedyhire.com (http://www.speedyhire.com) .
Basis of preparation
These interim condensed consolidated financial statements have been prepared
under the historical cost convention, with the exception of certain financial
assets and liabilities (including derivative instruments) which are measured
at fair value through profit or loss.
The Directors consider the going concern basis of preparation for the Group
and Company to be appropriate for the following reasons.
The Group's £180m asset based finance facility terminates in July 2026. There
are no prior scheduled repayment requirements. Cash and facility headroom as
at 30 September 2024 was £40.8m (31 March 2024: £56.7m) 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 covering at least 12 months from the date
on which these interim condensed consolidated financial statements were
authorised for issue, 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 severe but plausible downside scenarios to the base
case, which result in reduced levels of revenue across the Group, whilst
maintaining a broadly similar cost base in the short-term. Mitigations applied
in these downturn scenarios include a reduction in planned capital expenditure
and some cost saving measures. 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
These interim condensed consolidated financial statements for the six months
ended 30 September 2024 have 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 2024, 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 interim condensed consolidated 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 2024 were approved by the
Board of Directors on 18 June 2024 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was qualified in
respect of the Group's opening property, plant and equipment balance, however
did not contain any statement under section 498 of the Companies Act 2006.
These interim condensed consolidated financial statements have been reviewed,
not audited.
The interim report was approved by the Board of Directors on 20 November 2024.
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
FY2024 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 for the year ended 31 March 2024.
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. Due to the market capitalisation of
the Group at 30 September 2024 being below the consolidated net asset
position, an impairment test has been undertaken at the interim reporting
date, details of which can be found in note 10.
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 2024 continued to apply.
This includes the basis for estimating the dilapidations provision, having
taken account of subsequent settlements. At 30 September 2024, the calculated
provision is £15.7m (31 March 2024: £16.4m). If the provision were to change
by £1 per square foot, a £2.3m movement in the provision would result.
Management will continue to monitor and assess the adequacy of the provision
recognised and the appropriateness of the judgements made.
3 Segmental analysis
The segmental disclosure presented in these interim condensed consolidated
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.
For the six months ended 30 September 2024 / As at 30 September 2024
Hire excluding disposals Services UK and Ireland¹ Corporate items Total
£m £m £m £m £m
Revenue 125.5 76.5 203.6 - 203.6
Cost of sales (26.6) (61.6) (90.2) - (90.2)
───── ───── ───── ───── ─────
Gross Profit 98.9 14.9 113.4 - 113.4
═════ ═════ ═════ ═════ ═════
Segment result:
Adjusted EBITDA 45.6 (1.4) 44.2
Depreciation² (34.0) (0.2) (34.2)
Loss on planned disposals of hire equipment (0.7) - (0.7)
───── ───── ─────
Operating profit/(loss) before amortisation 10.9 (1.6) 9.3
Amortisation² (2.4) - (2.4)
Non-underlying items (0.6) (1.7) (2.3)
───── ───── ─────
Operating profit/(loss) 7.9 (3.3) 4.6
Share of results of joint venture - 0.7 0.7
───── ───── ─────
Profit/(loss) from operations 7.9 (2.6) 5.3
═════ ═════
Financial expense (7.5)
─────
Loss before tax (2.2)
Taxation 0.6
─────
Loss for the financial period (1.6)
═════
Intangible assets² 29.1 10.1 39.2
Investment in joint venture 0.6 6.0 6.6
Land and buildings 16.1 - 16.1
Hire equipment 221.9 - 221.9
Non-hire equipment 6.5 - 6.5
Right of use assets 93.8 - 93.8
Taxation assets - 3.0 3.0
Current assets 109.3 6.8 116.1
Cash - 1.4 1.4
───── ───── ─────
Total assets 477.3 27.3 504.6
═════ ═════ ═════
Lease liabilities (94.4) - (94.4)
Other liabilities (120.1) (4.0) (124.1)
Borrowings - (112.7) (112.7)
Taxation liabilities - (8.8) (8.8)
───── ───── ─────
Total liabilities (214.5) (125.5) (340.0)
═════ ═════ ═════
(¹) UK and Ireland also includes revenue and costs relating to the disposal
of hire assets.
(²) Intangible assets in Corporate items relate to the Group's ERP system,
amortisation is charged to the UK and Ireland segment as this is fundamental
to the trading operations of the Group. Depreciation in Corporate items
relates to computers and is recharged from the UK and Ireland based on
proportional usage.
For the six months ended 30 September 2023 / As at 30 September 2023
revised(3)
Hire excluding disposals Services UK and Ireland¹ Corporate items Total
£m £m £m £m £m
Revenue 125.6 80.9 208.5 - 208.5
Cost of sales (28.8) (65.1) (95.8) - (95.8)
───── ───── ───── ───── ─────
Gross Profit 96.8 15.8 112.7 - 112.7
═════ ═════ ═════ ═════ ═════
Segment result:
Adjusted EBITDA(3) 46.2 (0.8) 45.4
Depreciation² (34.4) (0.2) (34.6)
Loss on planned disposals of hire equipment(3) (0.4) - (0.4)
───── ───── ─────
Operating profit/(loss) before amortisation 11.4 (1.0) 10.4
Amortisation² (1.0) - (1.0)
───── ───── ─────
Operating profit/(loss) 10.4 (1.0) 9.4
Share of results of joint venture - 1.9 1.9
───── ───── ─────
Profit from operations 10.4 0.9 11.3
═════ ═════
Financial expense (5.7)
─────
Profit before tax 5.6
Taxation (1.4)
─────
Profit for the financial period 4.2
═════
Intangible assets² 18.8 5.3 24.1
Investment in joint venture - 8.4 8.4
Land and buildings 14.3 - 14.3
Hire equipment 200.1 - 200.1
Non-hire equipment 15.2 - 15.2
Right of use assets 83.4 - 83.4
Taxation assets - 1.2 1.2
Current assets 116.0 6.4 122.4
Cash - 1.8 1.8
───── ───── ─────
Total assets 447.8 23.1 470.9
═════ ═════ ═════
Lease liabilities (86.6) - (86.6)
Other liabilities (85.7) (18.6) (104.3)
Borrowings - (90.6) (90.6)
Taxation liabilities - (7.5) (7.5)
───── ───── ─────
Total liabilities (172.3) (116.7) (289.0)
═════ ═════ ═════
(¹) UK and Ireland also includes revenue and costs relating to the disposal
of hire assets.
(²) Intangible assets in Corporate items relate to the Group's ERP system,
amortisation is charged to the UK and Ireland segment as this is fundamental
to the trading operations of the Group. Depreciation in Corporate items
relates to computers and is recharged from the UK and Ireland based on
proportional usage.
(3) See note 18.
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
30 September 2024 30 September 2023
──────────────── ──────────────
( ) Non-current Non-current
Revenue assets¹ Revenue assets¹
£m £m £m £m
UK 200.3 375.9 205.0 336.5
Ireland 3.3 8.2 3.5 9.0
───── ───── ───── ─────
203.6 384.1 208.5 345.5
═════ ═════ ═════ ═════
¹ Non-current assets excluding financial instruments and deferred tax assets.
Revenue by type
Revenue is attributed to the following activities:
Six months Six months
ended ended
30 September 30 September
2024 2023
£m £m
Hire and related activities 125.5 125.6
Services 76.5 80.9
Disposals 1.6 2.0
───── ─────
203.6 208.5
═════ ═════
Major customer
No one customer represents more than 10% of revenue, reported profit or
combined assets of all reporting segments.
4 Non-underlying items
Six months Six months
ended ended
30 September 2024 30 September 2023
£m £m
Transformation costs 2.3 -
═════ ═════
Our Velocity strategy is split into two distinct phases through to 31 March
2028, being 'Enabling Growth' (years 1 to 3) and 'Delivering Growth' (years 1
to 5). The investment in implementing our Velocity strategy and executing our
transformation programme represents a significant cost to the business and
will continue to do so throughout the 'Enabling' phase to March 2026. There
has been no significant change in the anticipated cost of this phase to what
was reported at 31 March 2024 (between £19m and £22m).
Management will continue to monitor and reassess the above based on the
phasing and delivery of the transformation programme.
The £2.3m non-underlying cost to the business in HY2025 relates primarily to
incremental people costs, which also represents the cash outflow.
There were no non-underlying items for the six months ended 30 September 2023.
5 Financial expense
Six months Six months
ended ended
30 September 2024 30 September 2023
£m £m
Interest on bank loans and overdrafts 4.5 3.6
Amortisation of issue costs 0.1 0.3
───── ─────
Total interest on borrowings 4.6 3.9
Interest on lease liabilities 3.0 2.3
Other finance income (0.1) (0.5)
───── ─────
Financial expense 7.5 5.7
═════ ═════
6 Taxation
The corporation tax credit for the six months ended 30 September 2024 is based
on an estimated full year effective rate of taxation of 27.1% before
non-underlying items and amortisation (2023: 25.0%) and 28.3% (2023: 24.4%)
after non-underlying items and amortisation. This has been calculated by
reference to the projected charge for the full year ending 31 March 2025,
applying the applicable UK corporation tax rate of 25% (2023: 25%). 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.
7 Earnings per share
The calculation of basic earnings per share is based on the loss for the
financial period of £1.6m (2023: £4.2m profit) and the weighted average
number of ordinary shares in issue, and is calculated as follows:
Six months ended Six months
30 September ended
2024 30 September
2023
Weighted average number of shares in issue (m)
Number of shares at the beginning of the period 457.7 457.7
Exercise of share options 0.1 -
Movement in shares owned by the Employee Benefit Trust 1.1 -
Vested shared not yet exercised 0.5 2.1
───── ─────
Weighted average for the period - basic number of shares 459.4 459.8
Share options 3.8 2.9
Employee share schemes 0.4 -
───── ─────
Weighted average for the period - diluted number of shares 463.6 462.7
═════ ═════
Profit (£m)
(Loss)/profit for the period after tax - basic and diluted earnings (1.6) 4.2
Intangible amortisation charge - acquired intangibles (after tax) 0.2 0.3
Non-underlying items (after tax) 1.7 -
───── ─────
Adjusted earnings (after tax) 0.3 4.5
═════ ═════
Earnings per share (pence)
Basic earnings per share (0.35) 0.91
Dilutive shares and options - -
───── ─────
Diluted earnings per share (0.35) 0.91
═════ ═════
Adjusted earnings per share 0.07 0.98
Dilutive shares and options (0.01) (0.01)
───── ─────
Adjusted diluted earnings per share 0.06 0.97
═════ ═════
The total number of shares outstanding at 30 September 2024 amounted to
516,983,637 (30 September 2023: 516,983,637), including 1,616,733 (30
September 2023: 4,106,820) shares held in the Employee Benefit Trust and
55,141,657 (30 September 2023: 55,146,281) shares held in treasury, which are
excluded in calculating basic earnings per share.
8 Dividends
The aggregate amount of dividend comprises:
Six months ended Six months
30 September ended
2024 30 September
2023
£m £m
2023 final dividend (1.80 pence on 452.9m ordinary shares) - 8.2
2024 final dividend (1.80 pence on 454.7m ordinary shares) 8.2 -
───── ─────
8.2 8.2
═════ ═════
Subsequent to the end of the period, the Directors have declared a 0.80 pence
per share interim dividend (2024 interim dividend: 0.80 pence per share),
payable 17 January 2025.
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 by adjusting for the effect of non-underlying items and
significant non-cash depreciation and amortisation. 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 ended
30 September 30 September
2024 2023
Restated(1)
£m £m
Operating profit 4.6 9.4
Add back: amortisation 2.4 1.0
Add back: non-underlying items 2.3 -
───── ─────
Adjusted operating profit 9.3 10.4
Add back: depreciation 34.2 34.6
Add back: loss on planned disposals of hire equipment(1) 0.7 0.4
───── ─────
Adjusted EBITDA 44.2 45.4
═════ ═════
(Loss)/profit before tax (2.2) 5.6
Add back: amortisation of acquired intangibles 0.3 0.3
Add back: non-underlying items 2.3 -
───── ─────
Adjusted profit before tax 0.4 5.9
═════ ═════
Return on capital employed (ROCE)
Adjusted profit before tax 0.4 5.9
Interest 7.5 5.7
───── ─────
Profit before tax, interest, amortisation of acquired intangibles and 7.9 11.6
non-underlying items
Profit for the six months prior 15.8 22.3
───── ─────
Annualised profit before tax, interest, amortisation of acquired intangibles 23.7 33.9
and non-underlying items(2)
Average gross capital employed(3) 274.0 285.0
ROCE 8.6% 11.9%
( )
(1) See note 18. Six months ended 30 September 2023 revised to add back profit
or loss on planned disposals of hire equipment in the calculation of adjusted
EBITDA (previously profit or loss on all disposals).
(2) Profit before tax, interest, amortisation of acquired intangibles and
non-underlying items for the last 12 months.
(3) Average gross capital employed (where capital employed equals total equity
and net debt) based on a two-point average for the last 12 months.
10 Intangible assets
Internally generated
Acquired
Goodwill Customer lists Brands Total acquired intangibles IT development Total intangible assets
£m £m £m £m £m £m
Cost
At 1 April 2023 17.5 2.9 1.3 21.7 7.8 29.5
Additions - - - - 0.1 0.1
───── ───── ───── ───── ───── ─────
At 30 September 2023 17.5 2.9 1.3 21.7 7.9 29.6
Transfer from property, plant and equipment - - - - 8.3 8.3
Additions - - - - 1.8 1.8
Acquisitions 9.9 1.0 - 10.9 - 10.9
───── ───── ───── ───── ───── ─────
At 31 March 2024 27.4 3.9 1.3 32.6 18.0 50.6
Additions - - - - 1.9 1.9
───── ───── ───── ───── ───── ─────
At 30 September 2024 27.4 3.9 1.3 32.6 19.9 52.5
═════ ═════ ═════ ═════ ═════ ═════
Accumulated amortisation
At 1 April 2023 - 1.7 0.9 2.6 1.9 4.5
Charged in period - 0.2 0.1 0.3 0.7 1.0
───── ───── ───── ───── ───── ─────
At 30 September 2023 - 1.9 1.0 2.9 2.6 5.5
Transfer from property, plant and equipment - - - - 2.8 2.8
Charged in period - 0.2 0.1 0.3 2.3 2.6
───── ───── ───── ───── ───── ─────
At 31 March 2024 - 2.1 1.1 3.2 7.7 10.9
Charged in period - 0.2 0.1 0.3 2.1 2.4
───── ───── ───── ───── ───── ─────
At 30 September 2024 - 2.3 1.2 3.5 9.8 13.3
═════ ═════ ═════ ═════ ═════ ═════
Net book value
At 30 September 2024 27.4 1.6 0.1 29.1 10.1 39.2
═════ ═════ ═════ ═════ ═════ ═════
At 31 March 2024 27.4 1.8 0.2 29.4 10.3 39.7
═════ ═════ ═════ ═════ ═════ ═════
At 30 September 2023 17.5 1.0 0.3 18.8 5.3 24.1
═════ ═════ ═════ ═════ ═════ ═════
Analysis of goodwill, customer lists, brands and IT development by cash
generating unit:
Goodwill Customer Brands IT development Total
lists
£m £m £m £m £m
Allocated to
Hire 26.4 1.2 0.1 8.7 36.4
Services 1.0 0.4 - 1.4 2.8
───── ───── ───── ───── ─────
At 30 September 2024 27.4 1.6 0.1 10.1 39.2
═════ ═════ ═════ ═════ ═════
Allocated to
Hire 26.4 1.4 0.1 8.9 36.8
Services 1.0 0.4 0.1 1.4 2.9
───── ───── ───── ───── ─────
At 31 March 2024 27.4 1.8 0.2 10.3 39.7
═════ ═════ ═════ ═════ ═════
All goodwill has arisen from business combinations and has been allocated to
the cash-generating unit (CGU) expected to benefit from those business
combinations. The Group tests goodwill annually for impairment, or more
frequently if there are indications that goodwill might be impaired. All
intangible assets are held in the UK.
The Group tests goodwill for impairment annually, or more frequently if there
are indications that goodwill might be impaired, and considers at each
reporting date whether there are indicators that impairment may have occurred.
Other assets are assessed at each reporting date for any indicators of
impairment and tested if an indicator is identified. The Group's reportable
CGUs comprise the UK&I Hire business (Hire) and UK&I Services business
(Services), representing the lowest level within the Group at which the
associated assets are monitored for management purposes.
The recoverable amounts of the assets allocated to the CGUs are determined by
a value-in-use calculation. The value-in-use calculation uses cash flow
projections based on five-year financial forecasts approved by management. The
key assumptions for these forecasts are those regarding trading performance
and discount rate, which management estimates based on past experience
adjusted for current market trends and expectations of future changes in the
market. To prepare the value-in-use calculation, the Group uses cash flow
projections from the Board approved FY2025 budget, and a subsequent four-year
period using the Group's strategic plan, together with a terminal value into
perpetuity using long-term growth rates. The resulting forecast cash flows are
discounted back to present value, using an estimate of the Group's pre-tax
weighted average cost of capital, adjusted for risk factors associated with
the CGUs and market-specific risks.
The impairment model is prepared in nominal terms. The future cash flows are
based on current price terms inflated into future values, using general
inflation and any known cost or sales initiatives. The discount rate is
calculated in nominal terms, using market and published rates.
The pre-tax discount rates and terminal growth rates applied are as follows:
30 September 2024 31 March 2024
──────────────────────── ──────────────────────────
Pre-tax Terminal value Pre-tax Terminal value
discount rate growth rate discount rate growth rate
UK and Ireland Hire and Services 12.0% 2.0% 12.2% 2.0%
A single discount rate is applied to both CGUs as they operate in the same
market, with access to the same shared Group financing facility, with no
additional specific risks applicable to either CGU.
At 30 September 2024, the headroom between value in use and carrying value of
related assets for the UK and Ireland was £128.1m (31 March 2024: £131.0m) -
£52.4m for Hire (31 March 2024: £45.0m) and £75.7m for Services (31 March
2024: £86.0m).
Impairment calculations are sensitive to changes in key assumptions around
trading performance and discount rate.
The sensitivity applied in relation to trading performance is consistent with
that applied in relation to going concern. This represents a severe but
plausible downside scenario, which involves the following changes in key
assumptions from the base impairment model:
FY2025 FY2026 FY2027 to FY2029
Reduced Trading Performance ──────────── ──────────── ────────────
Annual revenue growth (% change) (9.1) (11.8) (1.5)
Annual overheads growth (% change) (4.8) (4.5) (1.1)
Proportion of overheads to revenue (% change) 2.2 5.0 5.2
The table below shows the reduction in headroom created by a change in
assumptions:
Reduction in headroom at 30 September 2024 (£m)
──────────────────────── ──────────────────────────
Reduced trading performance Pre-tax discount rate - 0.5% increase
Hire 25.3 19.1
Services 31.6 3.4
There are no reasonable variations in these assumptions that would be
sufficient to result in an impairment of either CGU at 30 September 2024. The
position will be reassessed at the next reporting date.
It is noted that the market capitalisation of the Group at 30 September 2024
was below the consolidated net asset position - one indicator that an
impairment may exist. Based on the impairment test performed, it is determined
that no impairment is required in this regard.
11 Property, plant and equipment
Land and Hire
buildings equipment Other Total
£m £m £m £m
Cost
At 1 April 2023 54.5 395.9 96.6 547.0
Foreign exchange - (0.2) - (0.2)
Additions 2.4 17.6 2.4 22.4
Disposals (1.1) (22.9) (4.4) (28.4)
Transfers to inventory - (9.0) - (9.0)
───── ───── ───── ─────
At 30 September 2023 55.8 381.4 94.6 531.8
Transfer to intangible assets(1) - - (8.3) (8.3)
Foreign exchange - (0.3) - (0.3)
Acquisitions - 11.8 - 11.8
Additions 4.3 24.9 - 29.2
Disposals (1.9) (13.0) (58.1) (73.0)
Transfers to inventory - (18.8) - (18.8)
───── ───── ───── ─────
At 31 March 2024 58.2 386.0 28.2 472.4
Foreign exchange - (0.2) - (0.2)
Additions 4.4 35.6 0.4 40.4
Disposals (1.7) (11.3) (0.7) (13.7)
Transfers to inventory - (8.7) - (8.7)
───── ───── ───── ─────
At 30 September 2024 60.9 401.4 27.9 490.2
═════ ═════ ═════ ═════
Accumulated depreciation
At 1 April 2023 40.6 188.0 80.7 309.3
Charged in period 2.1 16.8 2.8 21.7
Disposals (1.2) (16.7) (4.1) (22.0)
Transfers to inventory - (6.8) - (6.8)
───── ───── ───── ─────
At 30 September 2023 41.5 181.3 79.4 302.2
Transfer to intangible assets(1) - - (2.8) (2.8)
Foreign exchange - (0.2) - (0.2)
Charged in period 2.3 15.8 0.7 18.8
Disposals (0.1) (7.8) (57.1) (65.0)
Transfers to inventory - (13.7) - (13.7)
───── ───── ───── ─────
At 31 March 2024 43.7 175.4 20.2 239.3
Foreign exchange - (0.2) - (0.2)
Charged in period 2.0 16.7 1.3 20.0
Disposals (0.9) (6.0) (0.1) (7.0)
Transfers to inventory - (6.4) - (6.4)
───── ───── ───── ─────
At 30 September 2024 44.8 179.5 21.4 245.7
═════ ═════ ═════ ═════
Net book value
At 30 September 2024 16.1 221.9 6.5 244.5
═════ ═════ ═════ ═════
At 31 March 2024 14.5 210.6 8.0 233.1
═════ ═════ ═════ ═════
At 30 September 2023 14.3 200.1 15.2 229.6
═════ ═════ ═════ ═════
(1) At 30 September 2023, software with a net book value of £7.3m was
included in other property, plant and equipment. This was transferred to
intangible assets during H2 FY2024.
The net book value of land and buildings is made up of improvements to short
leasehold properties.
Of the £221.9m (2023: £200.1m) net book value of hire equipment, £28.7m
(2023: £29.8m) relates to non-itemised assets.
The net book value of other - non-hire equipment - comprises fixtures,
fittings, office equipment and IT equipment.
At 30 September 2024, no indicators of impairment were identified in relation
to property, plant and equipment.
12 Right of use assets
Land and
buildings Other Total
£m £m £m
Cost
At 1 April 2023 145.3 64.8 210.1
Additions 1.0 3.9 4.9
Remeasurements 8.9 0.5 9.4
Disposals (5.4) (8.0) (13.4)
───── ───── ─────
At 30 September 2023 149.8 61.2 211.0
Additions 8.0 9.1 17.1
Remeasurements 9.0 0.3 9.3
Disposals (1.3) (3.7) (5.0)
───── ───── ─────
At 31 March 2024 165.5 66.9 232.4
Additions 1.3 4.3 5.6
Remeasurements 3.2 2.5 5.7
Disposals (5.1) (5.2) (10.3)
───── ───── ─────
At 30 September 2024 164.9 68.5 233.4
═════ ═════ ═════
Accumulated depreciation
At 1 April 2023 100.3 26.6 126.9
Charged in period 6.2 6.7 12.9
Disposals (4.2) (8.0) (12.2)
───── ───── ─────
At 30 September 2023 102.3 25.3 127.6
Charged in period 6.4 7.1 13.5
Disposals (2.4) (3.6) (6.0)
───── ───── ─────
At 31 March 2024 106.3 28.8 135.1
Charged in period 7.0 7.2 14.2
Disposals (5.0) (4.7) (9.7)
───── ───── ─────
At 30 September 2024 108.3 31.3 139.6
═════ ═════ ═════
Net book value
At 30 September 2024 56.6 37.2 93.8
═════ ═════ ═════
At 31 March 2024 59.2 38.1 97.3
═════ ═════ ═════
At 30 September 2023 47.5 35.9 83.4
═════ ═════ ═════
Land and buildings leases comprise depots and associated ancillary leases such
as car parks and yards.
Other leases consist of cars, lorries, vans and forklifts.
13 Borrowings
30 September 30 September 31 March
2024 2023 2024
£m £m £m
Current borrowings
Bank overdraft 0.5 0.8 1.2
Lease liabilities 20.8 20.0 22.1
───── ───── ─────
21.3 20.8 23.3
Non-current borrowings
Maturing between two and five years
- Asset based finance facility 112.7 90.6 104.1
- Lease liabilities 73.6 66.6 75.5
───── ───── ─────
186.3 157.2 179.6
Total borrowings 207.6 178.0 202.9
Less: Cash (1.4) (1.8) (4.0)
Exclude lease liabilities (94.4) (86.6) (97.6)
───── ───── ─────
Net debt¹ 111.8 89.6 101.3
═════ ═════ ═════
¹ Key performance indicator - excluding lease liabilities.
Reconciliation of financing liabilities and net debt
1 April Non-cash movement Cash flow 30 September
2024 2024
£m £m £m £m
Bank borrowings (104.1) (0.1) (8.5) (112.7)
Lease liabilities (97.6) 20.0 (16.8) (94.4)
───── ───── ───── ─────
Liabilities arising from financing activities (201.7) 19.9 (25.3) (207.1)
Cash at bank and in hand 4.0 - (2.6) 1.4
Bank overdraft (1.2) - 0.7 (0.5)
───── ───── ───── ─────
Net debt (198.9) 19.9 (27.2) (206.2)
═════ ═════ ═════ ═════
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 itemised hire equipment and trade receivables balance. Cash and
facility headroom as at 30 September 2024 was £40.8m (31 March 2024: £56.7m)
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 2026, with no prior
scheduled repayment requirements. An additional uncommitted accordion of
£220m is 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 2.12% (period ended 30 September
2023: 1.89%).
The facility is secured by fixed and floating charges over the Group's
itemised hire fleet assets and trade receivables.
The facility has a Minimum Excess Availability covenant: At any time, 10 per
cent of the Total Commitments.
Where availability falls below the Minimum Excess Availability, the financial
covenants (below) are required to be tested. Covenants are not required to be
tested where availability is above Minimum Excess Availability.
Leverage in respect of any Relevant Period shall be
less than or equal to 3:1;
Fixed Charge Cover in respect of any Relevant Period
shall be greater than or equal to 2.1:1
14 Fair value measurement of financial instruments
The Group holds and uses financial instruments to finance its operations and
to manage its interest rate and liquidity risks.
Fair value hierarchy
The Group's financial assets and liabilities are principally short-term in
nature and therefore their fair value is not materially different from their
carrying value. The valuation method for the Group's financial assets and
liabilities can be defined as follows in accordance with IFRS 13:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3: Techniques which use inputs that have a significant effect on the
recorded fair value that are not based on observable market data.
Basis for determining fair values
The following summarises the principal methods and assumptions used in
estimating the fair value of Group's financial instruments, in line with the
fair value hierarchy above:
a) Derivatives - Broker quotes are used for all interest rate swaps and
fuel hedges (Level 1).
b) Interest-bearing loans and borrowings - Fair value is calculated based on
discounted expected future principal and interest cash flows at a market rate
of interest (Level 2).
c) Trade and other receivables and payables - For receivables and payables
with a remaining life of less than one year, the notional amount is deemed to
reflect the fair value. All other receivables and payables are discounted to
determine the fair value.
d) Lease liabilities - not within the scope of IFRS 13; accounted for in
accordance with IFRS 16.
Fair value of financial assets and liabilities
The carrying value of the Group's financial assets and financial liabilities
at 30 September 2024 are set out below:
Fair value through other comprehensive income
Amortised
Cost Total
£m £m £m
Financial assets
Trade and other receivables(1) 94.9 - 94.9
Cash(2) 1.4 - 1.4
Derivative financial assets - 0.1 0.1
───── ───── ─────
96.3 0.1 96.4
═════ ═════ ═════
Financial liabilities
Bank overdraft(2) (0.5) - (0.5)
Borrowings(2) (112.7) - (112.7)
Lease liabilities - Current (20.8) - (20.8)
Lease liabilities - Non-current (73.6) - (73.6)
Trade and other payables(3) (71.6) - (71.6)
Accruals (23.9) - (23.9)
Customer rebates (12.1) - (12.1)
Derivative financial liabilities - (0.3) (0.3)
───── ───── ─────
(315.2) (0.3) (315.5)
═════ ═════ ═════
(1) Trade and other receivables excluding prepayments and accrued income.
(2) Under the terms of the Group's banking facilities, net indebtedness is
permitted up to the net limit of £5m. There have been no changes to the
offsetting arrangements in the six months ending 30 September 2024.
(3) Trade and other payables excluding non-financial liabilities.
Impairment reviews did not identify any material impairment of financial
assets from carrying values as reported at the balance sheet date and, as
such, no material impairments are included in the interim condensed
consolidated income statement.
15 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.
16 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 FY2024 Annual Report and Accounts.
17 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 2025 financial
year have not changed from those set out on pages 68 to 73 of the Group's 2024
Annual Report, which is available at www.speedyhire.com
(http://www.speedyhire.com) . These risks and uncertainties include the
following:
· 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;
· Funding;
· Cyber security and data integrity;
· Economic vulnerability;
· Business continuity; and
· Asset holding and integrity.
18 Prior period adjustment
The definition of adjusted EBITDA has been amended to operating profit before
depreciation, amortisation and non-underlying items, where depreciation
includes the net book value of planned hire equipment disposals, less the
proceeds on those disposals (profit or loss on planned disposals of hire
equipment). Such disposals relate to auction sales which are planned
divestment, hence do not form an underlying part of the trading business.
This measure has been revised to more accurately reflect the underlying
performance of the business.
Adjusted EBITDA has been revised for the six months ended 30 September 2023
(from £46.2m to £45.4m) for consistency.
Statement of directors' responsibilities
The directors confirm that these interim condensed consolidated 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 auditors 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 2024.
A list of current directors is maintained on the Speedy Hire Plc's website:
www.speedyhire.com
Dan Evans
Director
20 November 2024
Independent Review Report to Speedy Hire Plc
Report on the interim condensed consolidated financial statements
Qualified conclusion
We have reviewed Speedy Hire plc's condensed consolidated interim financial
statements (the "interim financial statements") in the FY2025 Interim Results
of Speedy Hire plc for the 6 month period ended 30 September 2024 (the
"period").
Except for any adjustments to the interim financial statements that we might
have become aware of had it not been for the situation described in the Basis
for qualified conclusion paragraph below, 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 2024;
* 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 FY2025 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 qualified conclusion
As at 31 March 2023, the Group had Property, plant and equipment of £237.7m
recorded on the balance sheet and recorded an exceptional asset write-down of
£20.4m. For the audit in relation to the year ended 31 March 2023, as a
result of weaknesses in the Group's historical record-keeping in respect of
property, plant and equipment, we were unable to satisfactorily complete our
testing of assets between physical asset counts and the Group's asset
registers. Consequently, we were unable to obtain sufficient appropriate audit
evidence in respect of these assets, and we were therefore unable to determine
whether any further adjustments were necessary to Property, plant and
equipment as at 31 March 2023, and the related asset write-down, depreciation
charges and any associated tax impact recorded in that year. Since opening
Property, plant and equipment entered into the determination of the financial
performance for the year ended 31 March 2024, our opinion was subsequently
modified. As a result, in relation to the 6 month period ended 30 September
2024, our conclusion on the current period's financial statements is also
modified because of the possible effects of this on the comparability of the
current period figures and the corresponding figures presented.
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 ("ISRE (UK) 2410"). 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 FY2025 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 qualified 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 ISRE (UK) 2410. 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 FY2025 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 FY2025 Interim results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the FY2025 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 FY2025 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
qualified 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
20 November 2024
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