TIDMSDY
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 (GBPm) 2021 (GBPm) %
Revenue (excluding disposals) 212.4 186.6 13.8%
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Adjusted operating profit(1) 13.8 16.2 (14.8)%
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EBITDA(1) 48.3 49.1 (1.6)%
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Adjusted profit before tax(1) 14.1 14.6 (3.4)%
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Adjusted earnings per share
(pence)(2) 2.27 1.81 25.4%
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Statutory results
6 months 6 months
ended ended
30 September 30 September Change
2022 (GBPm) 2021 (GBPm) %
Revenue 214.8 188.6 13.9%
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Operating profit 12.9 15.9 (18.9)%
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Operating cash flow 40.2 42.4 (5.2)%
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Profit before tax 13.2 14.3 (7.7)%
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Basic earnings per share (pence) 2.13 1.81 17.7%
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Other measures
6 months 6 months
ended ended
30 September 30 September Change
2022 2021 %
Net debt(3) GBP86.7m GBP47.9m (81.0)%
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Return on Capital Employed(4) 12.5% 12.4% 0.1pp
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Dividend per share 0.80p 0.75p 6.7%
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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 GBP13.2m;
profit after tax has improved by 13.7% to GBP10.8m
Strong balance sheet and cash flow maintained:
-- Investment in hire fleet of GBP30.5m 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 GBP91.7m (31 March 2022: GBP110.8m)
-- Net debt at GBP86.7m, leverage (5) of 1.2 times reflective of
share buyback of c.GBP20.3m to date (31 March 2022: GBP67.5m, 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 GBP36.1m; H1 FY2022 GBP33.4m) divided by the average capital
employed where capital employed equals shareholders' funds and net
debt(3) , for the last 12 months (H1 FY2023 GBP289.7m; H1 FY2022
GBP269.4m).
(5) Leverage: Net debt(3) covered by EBITDA(1) . This metric
excludes the impact of IFRS 16.
Inside Information: This announceme nt 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. T here 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 GBP30.5m 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 GBP 212.4m (H1 FY2022: GBP186.6m).
Revenue from disposals was GBP 2.4m (H1 FY2022: GBP2.0m); total
revenue for the period increased by 13.9 % to GBP 214.8 m (H1
FY2022: GBP 188.6 m).
Gross profit was GBP 116.9m (H1 FY2022: GBP 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 GBP 48.3m (H1 FY2022: GBP 49.1m ).
EBITA decreased by GBP2.4m to GBP 13.8m (H1 FY2022: GBP 16.2m ).
The effect of this reduction was mitigated by the joint venture
performance resulting in adjusted profit before tax decreasing to
GBP14.1m from GBP 14.6m in H1 FY 2022.
Profit after taxation, amortisation, and discontinued operations
increased to GBP 10.8m (H1 FY2022: GBP 9.5m ).
Revenue and margin analysis
The Group generates revenue through two key categories, Hire and
Services.
Six Months Six Months Year
ended ended ended
Revenue and margin by 30 September 30 September 31 March
type 2022 2021 Change 2022
GBPm GBPm % GBPm
Hire:
Revenue 127.1 120.5 5.5% 243.3
Cost of sales (27.1) (27.4) (54.5)
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Gross profit 100.0 93.1 7.4% 188.8
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Gross margin 78.7% 77.3% 77.6%
Services:
Revenue 85.3 66.1 29.0% 138.4
Cost of sales (69.5) (51.2) (107.8)
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Gross profit 15.8 14.9 6.0% 30.6
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Gross margin 18.5% 22.5% 22.1%
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 GBP 3.6m (H1
FY2022: GBP2.8m) 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 GBP2.2m 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 GBP 1.6m (H1 FY2022: GBP1.3m)
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 GBP 2.4m (H1 FY2022: GBP5.0m),
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
GBP30m 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.GBP18.6m of shares out of the
GBP30m 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 GBP
34.4m (H1 FY2022: GBP 43.7m ), of which GBP 30.5m (H1 FY2022: GBP
37.6m ) related to equipment for hire, and GBP 3.9m related to
other property, plant and equipment (H1 FY2022: GBP 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 GBP 221.8m (31 March 2022:
GBP226.4m). 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 GBP 264.6m at 30 September 2022 (31 March
2022: GBP257.7m). The net book value of equipment for hire has
increased from GBP226.9m to GBP 234.4m , representing 88.6 % (31
March 2022: 88.0%) of the total property, plant and equipment
balance.
Intangible assets decreased marginally to GBP 25.4m (31 March
2022: GBP25.9m), with investment in software development offset by
amortisation charged.
Right of use assets of GBP 79.6m (31 March 2022: GBP73.3m) and
corresponding lease liabilities of GBP 82.7 m (31 March 2022:
GBP76.7m) were recognised at 30 September 2022. The increase is due
to new leases and renewals entered into during the period.
Gross trade receivables totalled GBP 111.4m at 30 September 2022
(31 March 2022: GBP104.9m), benefiting from continued strong cash
collections and focus on overdue debt. Bad debt and credit note
provisions were to GBP 4.6m at 30 September 2022 (31 March 2022:
GBP4.8m), 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 GBP 107.9m (31 March
2022: GBP96.6m). 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 GBP 22.5m (H1
FY2022: GBP 15.0m ). Free cash flow (being net cash flow before
financing activities) increased to GBP 15.3 m (H1 FY2022: GBP 3.7
m), reflecting the lower amount of net capital expenditure in H1
FY2022.
Net debt increased by GBP 19.2 m from GBP67.5m at the beginning
of the period to GBP 86.7 m 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 GBP 91.7 m within the Group's committed bank
facility (31 March 2022: GBP110.8m).
The Group's GBP180m 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 GBP220m 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
2022 Restated* 2022
Note GBPm GBPm GBPm
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 Six months Year
ended ended ended
30 September 30 September 31 March
2022 2021 2022
GBPm GBPm GBPm
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
2022 Restated* 2022
Note GBPm GBPm GBPm
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
Capital
Share Share redemption Merger Hedging Translation Retained Total
Capital premium reserve reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
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
GBPm GBPm GBPm
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 .
The Group has a GBP180m 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 GBP91.7m (31 March 2022: GBP110.8m) 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
GBPm GBPm GBPm GBPm GBPm
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)
---------- ---------- ----------
( 293
Total liabilities (188.6) (104.4) .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
GBPm GBPm GBPm GBPm GBPm
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*
Hire
excluding UK and Corporate
disposals Services Ireland** items Total
GBPm GBPm GBPm GBPm GBPm
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
30 September 30 September Year ended
2022 2021 Restated* 31 March 2022
-------------------------- -------------------------- --------------------------
Total Total Total
Revenue assets Revenue Assets Revenue assets
GBPm GBPm GBPm GBPm GBPm GBPm
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
GBPm GBPm GBPm
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 30 September 31 March
2022 2021 2022
GBPm GBPm GBPm
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 GBP10.8m
(2021: GBP9.5m) and the weighted average number of 5 pence ordinary
shares in issue and is calculated as follows:
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2022 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 (GBPm)
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 Six months Year
ended ended ended
30 September 30 September 31 March
2022 2021 2022
GBPm GBPm GBPm
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 Six months Year
ended ended ended
30 September 30 September 31 March
2022 2021 2022
GBPm GBPm GBPm
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
GBPm GBPm GBPm GBPm
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
GBPm GBPm GBPm
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 2021 31 March
2022 Restated* 2022
GBPm GBPm GBPm
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 GBP180m 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
GBP5m.
(b) An asset based finance facility of up to GBP175m, based on
the Group's hire equipment and trade receivables balance. Cash and
facility headroom as at 30 September 2022 was GBP91.7m (31 March
2022: GBP110.8m) based on the Group's eligible hire equipment and
trade receivables.
The facility is for GBP180m, 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 GBP220m 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 D irectors 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 . 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
GBPm GBPm GBPm
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 GBP1.5m 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 GBP9.8m for the six months ended 30 September 2021 has
been restated to show loan drawdowns of GBP233.7m and repayments of
GBP223.9m.
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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END
IR BKQBPBBDBFDD
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November 15, 2022 02:00 ET (07:00 GMT)
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