TIDMAT.
RNS Number : 7055N
Ashtead Technology Holdings plc
06 June 2022
6 June 2022
Ashtead Technology Holdings plc
("the Company")
Full-year Results 2021
Ashtead Technology Holdings plc (AIM: AT.), a leading subsea
equipment rental and solutions provider for the global offshore
energy sector, announces its full-year results for the period ended
31 December 2021.
Highlights
Financial Results
-- Group revenue up by 32% to GBP55.8m (2020: GBP42.4m), driven
by increased demand in both offshore renewables and offshore oil
and gas markets
o Revenues from oil and gas of GBP37.3m, up 23% on the previous
year (2020: GBP30.3m), reflecting industry-wide recovery following
pandemic-driven downturn in global energy activity in 2020
o Strong growth in offshore renewables revenues up over 50% at
GBP18.5m (2020: GBP12.1m) now representing 33% of Group revenue
(2020: 29%), with the Group targeting revenue from the offshore
renewables market of at least 50% in the medium term
-- Adjusted EBITDA margin of 40.2% (2020: 40.2%), resulting in
Adjusted EBITDA of GBP22.4m (2020: GBP17.0m), up 32% on the year
prior
-- Adjusted EBITA increased 118% to GBP13.7m (2020: GBP6.3m),
with an Adjusted EBITA margin of 24.6% (2020: 14.9%)
-- Net debt reduced to GBP22.7m as at 31 December 2021, with net
debt / Adjusted EBITDA 1.0x, following GBP15m primary capital raise
as part of successful IPO in November 2021
-- GBP50m RCF in place (GBP40m facility plus GBP10m accordion),
of which GBP25.0m has been drawn as at 31 December 2021
*Adjusted EBITDA is defined as operating profit adjusted to add
back, depreciation, amortisation, foreign exchange movements and
non-trading items as described in Note 27 to the accounts.
Adjustments predominantly owing to one off costs related to IPO
*Adjusted EBITA is defined as operating profit adjusted to add
back, amortisation, foreign exchange movements and non-trading
items as described in Note 27 to the accounts. Adjustments
predominantly owing to one off costs related to IPO
Operational Highlights
-- Reinforced market leading position in subsea rental,
investing GBP6.6m in new subsea equipment and technology to further
expand our extensive equipment rental fleet, the largest
independent fleet in the industry
-- Continued focus on operational excellence ensuring the
reliability and availability of equipment, employee training and
development, digitalisation of internal processes and by focusing
on the delivery of integrated solutions and service agility
-- Cost utilisation of 43%, up from 37% in 2020, reflecting
increased market activity across both renewables and oil and gas
industries
-- Increased proportion of total revenue derived from the Group's services offering
-- Leveraging significant product knowledge and domain expertise
to better serve a broad range of customers and increase market
share
-- Continuing to review M&A opportunities to complement
organic growth and consolidate a highly fragmented market
Outlook
-- The twin themes of energy transition and energy security are
providing strong market growth drivers for the Group, across both
renewables and oil and gas markets, and are contributing to high
levels of tendering activity
-- The Group's trading in the first four months of 2022 has been
strong, benefiting from positive utilisation and pricing trends,
and as a result, the Board has modestly raised its profit
expectations for the full year 2022
-- The fungibility of the Group's rental fleet leaves the
business well positioned to capitalise on favourable market
dynamics following the renewed focus on energy security
Allan Pirie, Chief Executive Officer, commented:
"2021 was a significant year for Ashtead Technology with the
completion of our IPO on AIM, providing a strong platform for
future growth and enabling us to support our customers more widely
in the delivery of the energy transition.
We delivered a solid financial performance in 2021 which is
testament to the resilience of our business, the growing market
opportunities available, particularly in offshore wind, and the
expertise and efforts of our people who are central to our
success.
One of the most significant challenges facing our industry is
being able to deliver sources of energy in a more sustainable,
affordable and responsible way. Based on the fungibility of our
equipment and solutions across the offshore wind and oil and gas
end markets, we are well-positioned to support this as investment
increases across all forms of energy in order to secure supply.
We have made a promising start to 2022 and look forward to an
exciting future."
For further information, please contact:
Ashtead Technology Via Vigo Consulting
Allan Pirie, Chief Executive Officer
Ingrid Stewart, Chief Financial
Officer
Vigo Consulting (Financial PR) Tel: +44 (0)20 7390 0230
Patrick d'Ancona Ashteadtechnology@vigoconsulting.com
Finlay Thomson
Numis Securities Limited (Nomad Tel: +44 (0)20 7260 1000
and Broker)
Julian Cater
George Price
Jonny Abbott
Kevin Cruickshank (QE)
Notes to editors:
Ashtead Technology is a leading subsea equipment rental and
solutions provider for the global offshore energy sector. Ashtead
Technology's specialist equipment, advanced-technologies and
support services enable its customers to understand the subsea
environment and manage offshore energy production
infrastructure.
The Company's service offering is applicable across the
lifecycle of offshore wind farms and offshore oil and gas
infrastructure. Headquartered in the UK, the Company operates
globally, servicing customers from its nine international customer
service hubs.
In the fast-growing offshore wind sector, Ashtead Technology's
specialist equipment and services are essential through the project
development, construction and installation phase. Once wind farms
are operational, Ashtead Technology supports customers with
inspection, maintenance and repair ("IMR") equipment and services.
In the more mature oil and gas sector, Ashtead Technology's focus
is on IMR and decommissioning.
Chairman's Statement
I am delighted to introduce Ashtead Technology's maiden
full-year results following the Company's Initial Public Offering
(IPO) on AIM in November 2021.
As a newly listed company, this is the start of an exciting new
chapter for Ashtead Technology, which will enable us to accelerate
our growth plans and support our customers more widely in the
delivery of the energy transition.
Financial results
Total revenue for the year to 31 December 2021 increased by 32%
to GBP55.8m reflecting an improving market backdrop both in the
offshore renewables and oil and gas sectors. Our oil and gas
business provides a strong underpin and grew 23% in the year and we
were particularly pleased to see the continued rapid growth of our
offshore renewables business which grew over 50% year on year.
Adjusted EBITA of GBP13.7m compares to GBP6.3m in 2020. Profit
before tax of GBP2.5m, after IPO and other adjusting costs of
GBP4.4m, compares to a loss before tax of GBP0.7m in 2020
delivering Adjusted earnings per share of 13.2p in 2021. This
performance reflects a strong finish to the year and was ahead of
our expectations at the time of the IPO.
With the Board's support, management's focus is on long-term
value creation through continued organic growth and an increased
focus on M&A opportunities as we set out on our journey to
fulfil the strategy as detailed in our IPO investment case. We will
continue to do this while maintaining capital discipline. With net
debt at GBP22.7m (2020: GBP36.2m), leverage at 31 December 2021 was
1.0x with the business having a stated leverage target of 1-2x in
the medium term. The Board recognises the merits of establishing a
small, progressive dividend flow and will consider this from 2022
onwards subject to the Company having sufficient distributable
profits.
Employees
The Group would not have delivered this performance in 2021
without the continued dedication of its employees. On behalf of the
Board, I would like to thank all of the Group's employees for their
continued contribution to its success. Particular thanks go to our
offshore team who with continued quarantine requirements have had
to deal with challenging logistical issues and extended periods
away from their families.
Environment, Social and Governance
The Board recognises the importance of our role in
environmental, social and governance matters ("ESG") and the part
we play to help deliver a lower carbon future.
As a market leader in subsea technology rental and solutions,
built over a 37-year history, Ashtead Technology's offering sits
firmly at the heart of the energy transition providing critical
late life and decommissioning support to the oil and gas industry
and supporting the extensive growth in offshore wind globally.
The Group is committed to trading responsibly and creating
sustainable value for all stakeholders and is focused on five key
priorities aligned with the United Nations Sustainable Development
Goals.
Board and governance
I would like to thank my fellow Board members, and in particular
Allan Pirie (CEO) and Ingrid Stewart (CFO), for their contribution
to the successful IPO. The Board welcomed independent Non-Executive
Directors Tony Durrant and Thomas Thomsen to the Board shortly
before the IPO, who bring significant industry experience and
expertise to the Board. Having been involved with the business for
six years, Joe Connolly continues to serve as a Non-Executive
Director in his capacity for Buckthorn Partners who remain a
substantial shareholder.
Summary and outlook
The Group displayed strong financial resilience during the
COVID-19 pandemic and, whilst challenges remain with restrictions
in the movement of personnel and quarantines in certain countries,
the business has continued to demonstrate this resilience through
2021.
As I write, the world has been rocked by Russia's invasion of
Ukraine and our thoughts are with those who are personally impacted
by the tragic events that are unfolding.
The impact on the energy markets, both renewables and oil and
gas, is significant and as the focus on energy security increases
the outlook for the business remains positive. Recent months have
seen a high level of tendering across both renewables and oil and
gas projects and Ashtead Technology remains well-positioned for
long-term growth in demand for its services as the industry
delivers the infrastructure required to address the changing energy
landscape.
Bill Shannon
Chairman
Chief Executive Officer's Review
A resilient business with an exciting future
Overview
2021 was a milestone year for Ashtead Technology as we
successfully listed the business on AIM in November, providing a
strong, long-term platform for future growth.
The Group performed well throughout the year and ahead of the
expectations set out at IPO.
We delivered a resilient financial performance in 2021, reduced
our leverage, while also continuing to invest in our high-quality
equipment rental fleet. This was achieved despite the challenging
operating backdrop, resulting from the COVID-19 restrictions and is
testament to the resilience of our business, the tremendous efforts
and commitment of our people, and our growing presence in the
offshore renewables market.
A solid performance
As a market leader in subsea equipment rental and solutions for
the global offshore energy sector, we benefitted from improving
market conditions across both wind, and oil and gas, end
markets.
Group revenue for the year to 31 December 2021 grew by 32% to
GBP55.8m (2020: GBP42.4m), with Adjusted EBITA of GBP13.7m (2020:
GBP6.3m) up 118% against the prior year, resulting in a margin of
25% and showing a recovery towards pre-COVID levels. Adjusted
earnings per share was 13.2p.
Strategic and operational review
Through our three service lines - Survey & Robotics,
Mechanical Solutions and Asset Integrity - we support the
installation, IMR (inspection, maintenance & repair), and
decommissioning of offshore energy infrastructure through the
provision of subsea equipment rental and solutions. Our target is
to achieve low double-digit organic revenue growth by executing on
our proven strategy of:
-- Continuing to support the energy transition and capitalise on
the significant expected increase in expenditure in the global
offshore wind market
-- Maintaining Ashtead Technology's position as the leading
independent subsea equipment rental business, growing and
strengthening our business in subsea technology rental and
solutions, whilst continuing to capitalise on customers' increasing
propensity to rent
-- Continuing to broaden the range of complementary equipment
and services and leveraging the Group's global footprint through
the further internationalisation of Ashtead Technology's products
and services
During the year, we continued to deliver against these
objectives. Revenue from offshore renewables continued to increase,
rising to 33% of Group revenue (2020: 29%). The Group is targeting
revenue from the offshore renewables market of at least 50% in the
medium term.
We also continued to cement our market leading position,
investing GBP7.9m in capital expenditure which includes investment
in new subsea equipment and technology to further expand our
extensive equipment rental fleet, the largest independent fleet in
the industry. There was further evidence of customers' increasing
propensity to rent evidenced through increased outsourced asset
management interest, and we expect this trend to continue.
We remained focused on operational excellence, ensuring the
reliability and availability of equipment, the delivery of
integrated solutions and service agility, employee training and
development, digitisation of internal processes and utilising our
significant domain expertise and product knowledge, increasing
operational benefits through continuous improvement to better serve
our customers.
The Group plans to complement its organic growth through a clear
and focused M&A strategy, building on its strong track record
of value-enhancing M&A. We are focused on strengthening
geographic, equipment and service capability to better support the
Group's customers globally, and continue to review opportunities to
acquire businesses which complement our current offering. The
acquisition pipeline contains a number of opportunities across each
of the Group's service lines.
Sustainability
In 2021, we made good progress in our sustainability journey
through focusing on five priorities that are aligned with the
principals of the UN Global Compact - employee health, safety &
wellbeing, labour practices & human rights, energy transition,
ecological impact and business ethics.
Throughout the year, we took action to reduce our environmental
impact, support the communities where we live and operate, improve
and respect diversity and inclusion in the Group, reinforce our
health and safety culture, and reaffirm our commitments to
respecting human rights and to corporate governance. Whilst we are
pleased with what we have achieved so far, we recognise that more
needs to be done to support our ambitions and create value for all
our stakeholders. Led by a sustainability working group, we have
developed an enhanced sustainability strategy for 2022 and beyond
to ensure sustainability issues are firmly integrated into our
day-to-day operations and to help guide our efforts and improve our
performance.
Market
In an ever-evolving energy industry, one of the most significant
challenges we face is the increased demand society places on being
able to deliver sources of energy in a sustainable, affordable and
responsible way. The expansion of offshore wind as a means of
energy production, alongside the decommissioning of existing oil
and gas infrastructure, is critical to a successful energy
transition process.
Throughout 2021 we saw market forecasts for offshore renewable
energy spend increase, with analysts forecasting strong growth for
wind energy, evidenced in our own business by a step change in our
offshore renewables pipeline. The backdrop for the industry
continues to strengthen with 25GW capacity awarded in the ScotWind
1 auction in the UK, and several new lease awards in the US alone.
This has been further propelled by the UK Government's Energy
Strategy to accelerate the offshore wind industry and increase the
pace of deployment to deliver 50GW by 2030 as countries look to
secure domestic energy sources in light of rising global energy
prices, provoked by surging demand after the pandemic as well as
Russia's invasion of Ukraine.
Oil and gas will also continue to be important constituents in
meeting energy demand as the industry continues its transition to
cleaner energy production and the need to focus on energy security.
Significant expenditure will be required to maintain oil and gas
production from existing fields, as well as investment in new oil
and gas developments and associated infrastructure.
The fungibility of Ashtead Technology's equipment and solutions
across the offshore wind and oil and gas markets makes for a
compelling and robust proposition, enabling the Group to capture
growth across both these adjacent markets.
Our people
Our people are central to the success of our business, and I
would like to extend my thanks to all our employees for their
contributions in the delivery of the Group's solid operational
performance during another year in which we operated amid a global
pandemic.
Our employee headcount increased from 172 to 204 during the year
and we continued to encourage personal development through training
and progression. Our senior leadership team was enhanced with the
appointment of Ingrid Stewart as CFO and we expanded our business
development, marketing and QHSE teams globally to meet the growing
needs of our enlarged business, including the recruitment of
Caroline Merson as Marketing & Communications Director.
Current trading and outlook
We remain well placed to support the changing requirements of
the global offshore energy sector as the transition to more
renewable sources of energy continues apace and our large fleet of
rental equipment allows us to support the increased investment
required to ensure energy security.
While we are mindful of uncertainty arising from the current
geopolitical environment, inflationary pressures have been
mitigated by tightening market conditions and increasing pricing.
We remain confident of making further progress in 2022, with a
clear organic growth strategy and pipeline of acquisition
opportunities.
The Group has continued to perform strongly in the first four
months of 2022, supported by good ongoing customer demand across
both offshore wind and oil and gas end markets. Activity levels
experienced are higher than the same period in the prior year, with
utilisation rates remaining strong supporting increased pricing.
Given the performance to date, the Board expects outturn for the
year to be modestly ahead of its previous expectations.
I am proud of all we have accomplished in our short period so
far as a publicly listed company and look forward to an exciting
future.
Allan Pirie
Chief Executive Officer
Chief Financial Officer's Review
Strong progress and growth in our performance
Introduction
It has been an exciting year for Ashtead Technology as we
returned to growth following the downturn in 2020 caused by
COVID-19 restrictions.
Our IPO in November 2021 is testament to the quality of our
business and the resilience shown through the latest downturn and
was the culmination of a lot of hard work from many people in the
organisation. I would like to express my sincere thanks to those
involved in helping us reach this milestone in our Group's
history.
Revenue
Group revenue grew year-on-year by 32% from GBP42.4m to GBP55.8m
driven by an increase in demand from both the offshore renewables
and offshore oil and gas markets.
Region Revenue 2020 Revenue 2021 Revenue Growth
2020-2021
Europe GBP23.6m GBP33.2m 41%
-------------- -------------- ---------------
Americas GBP10.0m GBP11.8m 18%
-------------- -------------- ---------------
APAC GBP5.1m GBP7.9m 54%
-------------- -------------- ---------------
Middle East GBP3.7m GBP2.7m (22%)
-------------- -------------- ---------------
Renewables revenues represented 33% of Group revenue in 2021
(2020: 29%), representing over 50% growth from this market, whilst
revenues from oil and gas also grew by 23%.
Gross profit
Gross profit increased to GBP40.5m (a gross margin of 73%) from
GBP31.4m in 2020 (a gross margin of 74%) with the margin reduction
due to a higher proportion of revenue in the year coming from
equipment sales versus rental. In our rental business, we saw cost
utilisation increase from 37% in 2020 to 43% in 2021.
Administration costs
Administration expenses of GBP33.9m in 2021 compared to GBP29.8m
in 2020 with the increase (GBP4.1m) coming from personnel costs
(GBP3.1m) and legal and professional fees (GBP2.6m) predominantly
as a result of the IPO. Personnel cost increases were the result of
post-COVID salary increases following salary reductions in 2020 as
well as an increase in personnel from 172 at December 2020 to 204
at December 2021. This was offset by a decrease in depreciation of
GBP2m. Whilst the Group maintains a blue-chip customer base, the
Group also increased its provision for doubtful debts by
GBP0.7m.
Profitability
Adjusted EBITA of GBP13.7m compares to GBP6.3m in 2020 and was
ahead of our expectations at the time of the IPO process following
a strong finish to the year. This represents an EBITA margin of
24.6% compared to 14.8% in the prior year. As a result, ROIC
(Return on Invested Capital) increased to 17% (2020: 7%), a return
to historical levels.
Where we have provided adjusted figures, they are after the
add-back of various one-off items which, in relation to 2021
predominantly related to professional and other fees arising from
the admission to AIM.
Profit before tax of GBP2.5m, after IPO and other adjusting
costs of GBP4.4m, compares to a loss before tax of GBP0.7m in
2020.
Net finance expense
Net finance costs were GBP4m in 2021, reflecting our pre-IPO
debt structure. As part of the IPO process the Company raised
GBP15m of primary capital that was utilised to repay existing debt
facilities, including high interest loan notes held under the
previous private equity ownership structure. The business also
refinanced its external debt facilities and achieved more
favourable pricing. The 2021 costs are not representative of
ongoing expectations.
Taxation
The total tax charge was GBP1.1m (2020: GBP0.3m), giving rise to
an effective tax rate of 29.5%. In future years we expect the
Group's effective tax rate to be closer to the UK corporation tax
rate although this will be impacted by the amount of profit the
Group earns in its overseas jurisdictions where, in some cases,
corporation tax rates are higher than those in the UK.
EPS and dividend
Adjusted EPS is 13.2 pence with statutory EPS at 3.6 pence. The
adjusted figures exclude the impact of one-off costs as set out in
note 27 of the accounts as well as foreign exchange profit/loss and
amortisation.
The Group paid dividends totalling GBP1,296,000 in 2021 which
related to the pre-IPO group restructure. As noted at the time of
the IPO, the Group has elected not to pay a further dividend in
relation to the 2021 results. In terms of capital allocation, the
Group's current focus is on organic fleet growth, complemented by
bolt-on M&A. It is the Directors' intention to implement a
progressive dividend policy in the near future, subject to the
discretion of the Board and to the Company having distributable
reserves.
Cash flow and net debt
Free cash flow in the year was impacted by one-off costs as a
result of the admission to AIM as well as an increase in working
capital caused by the uplift in trading and a general slowdown of
debtor payments at the year end.
The Group increased investment in capital expenditure in the
year to GBP7.9m, investing predominantly in rental equipment as the
market continued to improve. Overall, net debt reduced from
GBP36.2m to GBP22.7m from 31 December 2020 to 31 December 2021 due
predominantly to the raising of GBP15m of primary capital. As a
result of the primary capital raise, borrowings reduced during the
year with drawn RCF of GBP25.0m at 31 December 2021 versus external
bank loans of GBP43.0m at 31 December 2020. Leverage at 31 December
2021 was 1x.
Going concern
The consolidated financial statements of the Group are prepared
on a going concern basis. The Directors of the Group assert that
the preparation of the consolidated financial statements on a going
concern basis is appropriate, which is based upon a review of the
future forecast performance of the Group.
During 2021 the Group has continued to generate positive cash
flow from operating activities with a cash and cash equivalents
balance of GBP4.9m (2020: GBP11m). The Group has access to a multi
currency RCF and additional accordion facility. The RCF and
accordion facility have total commitments of GBP40m and GBP10m
respectively, both of which expire in November 2024, with an option
to extend subject to credit approval. As at 31 December 2021 the
RCF had an undrawn balance of GBP15m and the GBP10m accordion
facility was undrawn.
The Facility Agreement is subject to a leverage covenant of 2.5x
and an interest cover covenant of 4:1, which are both to be tested
on a quarterly basis. The Group has complied with all covenants
from entering the Facility Agreement until the date of these
financial statements.
The Group monitors its funding and liquidity position throughout
the year to ensure it has sufficient funds to meet its ongoing cash
requirements. Cash forecasts are produced based on a number of
inputs such as estimated revenues, margins, overheads, collection
and payment terms, capex requirements and the payment of interest
and capital on its existing debt facilities. Consideration is also
given to the availability of bank facilities. In preparing these
forecasts, the Directors have considered the principal risks and
uncertainties to which the business is exposed.
Taking account of reasonable changes in trading performance and
bank facilities available, the cash forecast prepared by management
and reviewed by the Directors indicates that the Group is cash
generative, has adequate financial resources to continue to trade
for the foreseeable future, and to meet its obligations as they
fall due.
Reconciliation of adjusted and reported IFRS results
The Group uses certain measures that it believes assist a reader
of the Report and Accounts in understanding the business. The
measures are not defined under IFRS and, therefore, may not be
directly comparable with adjusted measures presented by other
companies. The non-GAAP measures are not intended to be a
substitute for or superior to any IFRS measures of performance.
However, they are considered by management to be important measures
used in the business for assessing performance.
In establishing Adjusted EBITDA, Adjusted EBITA and Adjusted
EPS, the Group has added back various costs, deemed to be one-off
in nature, which in 2021 predominantly relate to Admission costs
and restructuring of the group entity structure in preparation for
Admission.
Ingrid Stewart
Chief Financial Officer
Note - Where we have provided adjusted figures, they are after
the add-back of various one-off items which, in relation to 2021,
predominantly relate to professional and other fees arising from
the admission to AIM. Please see Note 27.
Consolidated income statement
for the year ended 31 December 2021
Unaudited
2021 2020
Notes GBP000 GBP000
Revenue 4 55,805 42,401
Cost of sales 5 (15,262) (11,044)
-------- ---------
Gross profit 40,543 31,357
Administrative expenses 5 (33,930) (29,796)
Other operating income 5 995 1,547
-------- ---------
Operating profit 5 7,608 3,108
Finance costs 7 (4,019) (3,849)
-------- ---------
Profit/(loss) before taxation 3,589 (741)
Taxation charge 8 (1,060) (257)
-------- ---------
Profit/(loss) for the financial
year 2,529 (998)
======== =========
Profit/(loss) attributable
to:
Owners of the Company 2,529 (998)
======== =========
Earnings per share
Basic 9 3.6 (1.4)
Diluted 9 3.6 (1.4)
======== =========
The below financial measures
are non-GAAP metrics used
by management and are not
an IFRS disclosure:
Adjusted EBITDA^ 27 22,437 17,037
Adjusted EBITA^^ 27 13,724 6,284
====== ======
^ Adjusted EBITDA is calculated as earnings before interest,
tax, depreciation, amortisation and items not considered part of
underlying trading including share based payments and foreign
exchange gains and losses, is a non-GAAP metric used by management
and is not an IFRS disclosure. See Note 27 to the financial
statements for calculations.
^^ Adjusted EBITA is calculated as earnings before interest,
tax, amortisation and items not considered part of underlying
trading including share based payments and foreign exchange gains
and losses, is a non-GAAP metric used by management and is not an
IFRS disclosure. See Note 27 to the financial statements for
calculations.
All results derive from continuing operations.
The accompanying notes are an integral part of these
consolidated financial statements.
Consolidated statement of comprehensive income
for the year ended 31 December 2021
Unaudited
2021 2020
GBP000 GBP000
Profit/(loss) for the year 2,529 (998)
Other comprehensive income/(loss):
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translation of foreign
operations 163 (365)
Net gain/(loss) on cash flow hedges 351 (108)
------ ---------
Other comprehensive income/(loss) for the
year, net of tax 514 (473)
Total comprehensive income/(loss) 3,043 (1,471)
====== =========
Total comprehensive income/(loss) attributable
to:
Equity shareholders of the Company 3,043 (1,471)
====== =========
The accompanying notes are an integral part of these
consolidated financial statements.
Consolidated balance sheet
at 31 December 2021
Unaudited
2021 2020
Notes GBP000 GBP000
Non-current assets
Property, plant and equipment 10 20,832 21,830
Goodwill 11 48,651 48,585
Intangible assets 11 1,760 2,459
Right-of-use assets 19 2,923 2,816
Deferred tax asset 8 1,010 747
------- ---------
75,176 76,437
------- ---------
Current assets
Inventories 12 1,778 1,245
Trade and other receivables 13 17,224 11,256
Cash and cash equivalents 14 4,857 10,958
------- ---------
23,859 23,459
------- ---------
Total assets 99,035 99,896
======= =========
Current liabilities
Loans and borrowings 17 - 8,007
Trade and other payables 15 9,415 7,243
Income tax payable 8 821 515
Lease liabilities 19 783 676
Derivative financial instruments 16 - 38
------- ---------
11,019 16,479
------- ---------
Non-current liabilities
Loans and borrowings 17 24,425 36,122
Lease liabilities 19 2,351 2,376
Provisions for liabilities 20 108 134
------- ---------
26,884 38,632
------- ---------
Total liabilities 37,903 55,111
------- ---------
Equity
Share capital 23 3,979 3,500
Share premium 23 14,115 -
Merger reserve 23 9,435 9,429
Hedging reserve 23 - (351)
Foreign currency translation reserve 23 (1,290) (1,453)
Retained earnings 23 34,893 33,660
------- ---------
Total equity 61,132 44,785
------- ---------
Total equity and liabilities 99,035 99,896
======= =========
The accompanying notes are an integral part of these
consolidated financial statements.
The financial statements of Ashtead Technology Holdings plc
(registered number 13424040) for the year ended 31 December 2021
were authorised by the Board of Directors on 4 June 2022 and signed
on its behalf by:
A W Pirie I Stewart
Chief Executive Officer Chief Financial Officer
4 June 2022 4 June 2022
Consolidated statement of changes in equity
for the year ended 31 December 2021
Foreign
currency
Hedging translation Retained
Share capital Share premium Merger reserve reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January
2020 3,500 - 9,429 (243) (1,088) 34,658 46,256
------------- ------------- -------------- ------------- ------------- ------------- -------
Loss for the
year - - - - - (998) (998)
Other
comprehensive
income/(loss) - - - (108) (365) - (473)
------------- ------------- -------------- ------------- ------------- ------------- -------
Total
comprehensive
loss - - - (108) (365) (998) (1,471)
------------- ------------- -------------- ------------- ------------- ------------- -------
At 31 December
2020
(Unaudited) 3,500 - 9,429 (351) (1,453) 33,660 44,785
------------- ------------- -------------- ------------- ------------- ------------- -------
Profit for the
year - - - - - 2,529 2,529
Other
comprehensive
income - - - 351 163 - 514
------------- ------------- -------------- ------------- ------------- ------------- -------
Total
comprehensive
income - - - 351 163 2,529 3,043
------------- ------------- -------------- ------------- ------------- ------------- -------
Issue of
shares from
IPO 479 15,044 - - - - 15,523
Transaction
fees on issue
of shares from
IPO - (929) - - - - (929)
Issue of
shares* - - 6 - - - 6
Dividends
declared** - - - - - (1,296) (1,296)
------------- ------------- -------------- ------------- ------------- ------------- -------
At 31 December
2021 3,979 14,115 9,435 - (1,290) 34,893 61,132
============= ============= ============== ============= ============= ============= =======
*The movement in merger reserve represents the issue of shares
in BP INV2 Pledgeco Limited and Ashtead US Pledgeco Inc pre
IPO.
**The dividends declared relate to the pre-IPO group
restructure.
The accompanying notes are an integral part of these
consolidated financial statements.
Consolidated cash flow statement
for the year ended 31 December 2021
Unaudited
2021 2020
Note GBP000 GBP000
Cash generated from operating activities
Profit/(loss) before taxation 3,589 (741)
Adjustments to reconcile profit/(loss)
before taxation to net cash from
operating activities
Finance costs 4,019 3,849
Depreciation 8,713 10,753
Amortisation 11 1,516 1,567
Gain on sale of property, plant
and equipment (995) (1,156)
Forgiveness of loan - US Paycheck
Protection Program - (391)
Provision for liabilities (28) 5
-------- ---------
Cash generated before changes in
working capital 16,814 13,886
Increase in inventories (524) (154)
(Increase)/decrease in trade and
other receivables (6,597) 4,788
Increase in trade and other payables 2,016 109
-------- ---------
Cash inflow from operations 11,709 18,629
Interest paid (3,615) (2,884)
Tax paid (858) (763)
Net cash from operating activities 7,236 14,982
-------- ---------
Cash flow used in investing activities
Purchase of property, plant and
equipment (7,889) (5,073)
Disposal of property, plant and
equipment 1,453 1,620
Net cash outflow on investing activities (6,436) (3,453)
-------- ---------
Cash flow used in financing activities
Proceeds from IPO share issue 15,523 -
Transaction fees on share issue (929) -
Proceeds from share issue 50 -
Loans received 25,107 3,409
Transaction fees on loans received (914) -
Repayment of bank loans (44,121) (7,863)
Payment of lease liability (1,012) (721)
Repayment of loan notes (830) -
Net cash outflow from financing
activities (7,126) (5,175)
-------- ---------
Net (decrease)/increase in cash
and cash equivalents (6,326) 6,354
Cash and cash equivalents at beginning
of year 10,958 4,855
Net foreign exchange difference 225 (251)
Cash and cash equivalents at end
of year 4,857 10,958
======== =========
The accompanying notes are an integral part of these
consolidated financial statements.
Notes to the consolidated financial statements
for the year ended 31 December 2021
1. General information
1.1 Background
Ashtead Technology Holdings plc (the "Company") is a public
limited company incorporated in the United Kingdom under the
Companies Act 2006, whose shares are traded on AIM. The
consolidated financial statements of the Company as at and for the
year ended 31 December 2021 comprise the Company and its interest
in subsidiaries (together referred to as the "Group"). The Company
is domiciled in the United Kingdom and its registered address is 1
Gateshead Close, Sunderland Road, Sandy, Bedfordshire, SG19 1RS,
United Kingdom.
1.2 Basis of preparation
The financial information set out in this statement has been
prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards
("IFRSs"), IFRIC interpretations and the Companies Act 2006
applicable to companies reporting under IFRS. It does not include
all the information required for full annual accounts.
The financial information does not constitute the Company's
statutory accounts for the years ended 31 December 2021 or 31
December 2020 but is derived from those accounts. Statutory
accounts 2021 will be delivered to the Registrar of Companies in
due course. The Auditor has reported on the 2021 accounts; his
reports (i) were unqualified, (ii) did not include a reference to
any matters to which the Auditor drew attention by way of emphasis
without qualifying his report and (iii) did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006. An other
matter was noted as follows, "The corresponding figures presented
for the year ended 31 December 2020 are unaudited". The
corresponding figures presented for the year ended 31 December 2020
are unaudited as the Group was not in existence in its current
form. A full explanation of the accounting treatment to provide
comparatives can be found in Note 1.4.
1.3 Predecessor accounting
Ashtead Technology Holdings plc was incorporated on 27 May 2021
and became the parent entity of the Group on 17 November 2021 when
Ashtead Technology Holdings plc acquired the entire shareholding of
both BP INV2 Pledgeco Limited and Ashtead US Pledgeco Inc by way of
share for share exchange agreement.
This does not constitute a business combination under IFRS 3
'Business Combinations' as it is effectively a combination among
entities under common control. There is currently no guidance in
IFRS on the accounting treatment for combinations among entities or
businesses under common control. IAS 8 requires management, if
there is no specifically applicable standard or interpretation, to
develop a policy that is relevant to the decision making needs of
users and that is reliable. The entity first considers requirements
and guidance in other international standards and interpretations
dealing with similar issues, and then the content of the IASB's
Conceptual Framework for Financial Reporting (Conceptual
Framework). Management might consider the pronouncements of other
standard-setting bodies that use a similar conceptual framework to
the IASB's, provided that they do not conflict with the IASB's
sources of guidance.
Considering facts and circumstances management has decided to
apply a method broadly described as predecessor accounting. The
principles of predecessor accounting are:
-- Assets and liabilities of the acquired entity are stated at
predecessor carrying values. Fair value measurement is not
required.
-- No new goodwill arises in predecessor accounting.
-- Any difference between the consideration given and the
aggregate carrying value of the assets and liabilities of the
acquired entity at the date of the transaction is included in
equity in retained earnings or in a separate reserve.
Management has used merger accounting and taken merger relief at
a Company level. Under merger accounting principles, the assets and
liabilities of the subsidiaries are consolidated at book value in
the Group financial statements and the consolidated reserves of the
Group have been adjusted to reflect the statutory share capital of
Ashtead Technology Holdings plc with the difference presented as
the merger reserve. The cost of investments in subsidiaries is
determined by the historical cost of investments in the
subsidiaries of the Group transferred from the previous owning
entities, including transaction costs. The value of total equity
reflects the combination of the former BP INV2 Pledgeco Limited and
Ashtead US Pledgeco Inc Group.
These consolidated financial statements of the Group are the
first set of financial statements for the newly formed Group and
the prior period has been presented as a continuation of the former
combined BP INV2 Pledgeco Limited and Ashtead US Pledgeco Inc Group
on a consistent basis as if the Group reorganisation had taken
place at the start of the earliest period presented. The prior
period comparatives are those of the former combined BP INV2
Pledgeco Limited and Ashtead US Pledgeco Inc Group since no
substantive economic changes have occurred. BP INV2 Pledgeco
Limited and Ashtead US Pledgeco Inc and their respective
subsidiaries did not form a legal group, however, they were under
common management and control throughout the period.
1.4 Prior period comparatives
The financial statements for the year ended 31 December 2020,
forming the comparative figures of the financial statements for the
year ended 31 December 2021, are referenced as unaudited. Prior to
the restructuring the Group was not in existence in its current
form, as described above. A statutory audit within the meaning of
section 434 of the Companies Act 2006 was not performed and hence
no audit opinion was issued in respect of the year ended 31
December 2020. However, as part of the process of Admission to
listing and trading on AIM, an accountant's report, undertaken by
BDO LLP and Deloitte LLP, in accordance with the Standards for
Investment Reporting 2000 ("SIR 2000") issued by the Auditing
Practices Board in the United Kingdom, was issued on the historical
information included in the Prospectus. The accountant's report,
dated 18 November 2021, included an unqualified opinion on the
historical information presented.
1.5 Presentational currency
The consolidated financial statements unless otherwise stated
are presented in sterling, to the nearest thousand. The functional
currency of the Group is sterling.
1.6 Going concern
The consolidated financial statements of the Group are prepared
on a going concern basis. The Directors of the Group assert that
the preparation of the consolidated financial statements on a going
concern basis is appropriate, which is based upon a review of the
future forecast performance of the Group for a two year period
ending 31 December 2023.
During 2021 the Group has continued to generate positive cash
flow from operating activities with a cash and cash equivalents
balance of GBP4,857,000 (2020: GBP10,958,000). The Group has access
to a multi currency RCF and additional accordion facility. The RCF
and accordion facility have total commitments of GBP40,000,000 and
GBP10,000,000 respectively, both of which expire in November 2024,
with an option to extend subject to credit approval. As at 31
December 2021 the RCF had an undrawn balance of GBP15,047,000 and
the GBP10,000,000 accordion facility was undrawn.
The Facility Agreement is subject to a leverage covenant of 2.5x
and an interest cover covenant of 4:1, which are both to be tested
on a quarterly basis. The Group has complied with all covenants
from entering the Facility Agreement until the date of these
financial statements.
The Group monitors its funding and liquidity position throughout
the year to ensure it has sufficient funds to meet its ongoing cash
requirements. Cash forecasts are produced based on a number of
inputs such as estimated revenues, margins, overheads, collection
and payment terms, capex requirements and the payment of interest
and capital on its existing debt facilities. Consideration is also
given to the availability of bank facilities. In preparing these
forecasts, the Directors have considered the principal risks and
uncertainties to which the business is exposed.
Taking account of reasonable changes in trading performance and
bank facilities available, the application of severe but plausible
downside scenarios to the forecasts, the cash forecasts prepared by
management and reviewed by the Directors indicate that the Group is
cash generative and has adequate financial resources to continue to
trade for the foreseeable future and to meet its obligations as
they fall due.
1.7 Basis of consolidation
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
In assessing control, the Group takes into consideration potential
voting rights and rights to variable returns of the subsidiaries.
The acquisition date is the date on which control is transferred to
the acquirer. The financial information of subsidiaries is included
in the consolidated financial statements from the date that control
commences until the date that control ceases. Control is reassessed
whenever facts and circumstances indicate that there may be a
change in any of these elements of control.
The consolidated financial statements present the results of the
Company and its subsidiaries as if they formed a single entity.
Intercompany transactions and balances between Group companies are
therefore eliminated in full.
The consolidated financial statements incorporate the results of
the business combinations using the acquisition method. In the
balance sheet, the acquiree's identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair
values at the acquisition date.
1.8 Business combinations
All business combinations are accounted for by applying the
acquisition method as at the acquisition date, which is the date on
which control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
-- the fair value of the consideration transferred; plus
-- the recognised amount of any non-controlling interests in the acquiree; plus
-- the fair value of the existing equity interest in the acquiree; less
-- the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed as
incurred.
Any contingent consideration payable is recognised at fair value
at the acquisition date. Subsequent changes to the fair value of
the contingent consideration are recognised in the income
statement.
1.9 New and amended standards adopted by the Group
There are no new IFRS or IFRIC Interpretations that are
effective for the first time this financial year which have a
material impact on the Group.
1.10 Standards issued but not effective
A number of new standards are effective for annual periods
beginning after 1 January 2022 and earlier application is
permitted; however, the Group has not early adopted the new or
amended standards in preparing these consolidated financial
statements.
The following new and amended standards are not expected to have
a significant impact on the Group's consolidated financial
statements:
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16).
-- Reference to Conceptual Framework (Amendments to IFRS 3).
-- Classification of Liabilities as Current or Non-current (Amendments to IAS 1).
-- IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts.
-- Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16).
-- Onerous contracts - Cost of fulfilling a contract (Amendments to IAS 37).
-- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2).
-- Definition of Accounting Estimates (Amendments to IAS 8).
-- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12).
1.11 Statement of compliance
The preparation of financial statements in compliance with
adopted IFRS requires the use of certain critical accounting
estimates. It also requires Group management to exercise judgment
in applying the Group's accounting policies. The areas where
significant judgments and estimates have been made in preparing the
financial statements and their effect are disclosed in Note 2.
2. Summary of significant accounting policies
2.1 Foreign currencies
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are retranslated to the functional currency at
the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income
statement. Non-monetary assets and liabilities that are measured in
terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction.
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on consolidation, are
translated to the Group's presentational currency, sterling, at
foreign exchange rates ruling at the balance sheet date. The
revenues and expenses of foreign operations are translated at an
average rate for each month where this rate approximates to the
foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign
operations are reported as an item of other comprehensive income
and accumulated in the translation reserve, within equity. When a
foreign operation is disposed of, such that control, joint control
or significant influence (as the case may be) is lost, the entire
accumulated amount in the foreign currency translation reserve is
recycled to the income statement as part of the gain or loss on
disposal.
2.2 Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses. Depreciation is
charged to the income statement on a straight-line basis over the
estimated useful lives of each part of an item of property, plant
and equipment. The estimated useful lives are as follows:
Leasehold improvements - remaining lease term
Freehold property - 25 years
Fixtures and fittings - 5 years
Motor vehicles - 5 years
Assets held for rental - 5-7 years
Depreciation methods, useful lives and residual values are
reviewed at each balance sheet date.
Any gain or loss on disposal of an item of property, plant and
equipment is recognised in the income statement.
Subsequent expenditure is capitalised only if it is probable
that the future economic benefits associated with the expenditure
will flow to the Group.
2.3 Intangible assets and goodwill
Goodwill
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash- generating units and is not
amortised but is tested annually for impairment.
Other intangible assets
Expenditure on internally generated goodwill and brands is
recognised in the income statement as an expense as incurred.
Other intangible assets that are acquired by the Group are
stated at cost less accumulated amortisation and accumulated
impairment losses.
Amortisation
Amortisation is charged to the income statement on a
straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Intangible assets with an
indefinite useful life and goodwill are systematically tested for
impairment at each balance sheet date. Other intangible assets are
amortised from the date they are available for use. The estimated
useful lives are as follows:
Non-compete arrangements - 3 years
Customer relationships - 3 years
Computer software - 5 years
Both the non-compete arrangements and customer relationships are
intangible assets arising from business combinations. The fair
value of the non-compete arrangements at the acquisition date has
been determined using the 'with and without method', an income
approach which considers the difference between discounted future
cash flow models, with and without the non-compete clause. The fair
value of the customer relationships at the acquisition date has
been determined using the multi-period excess earnings method.
2.4 Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost is calculated using the FIFO (first in, first out)
method.
2.5 Impairment of non-financial assets excluding inventories,
deferred tax assets and contract assets
The carrying amounts of the Group's non-financial assets, other
than inventories, deferred tax assets and contract assets, are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated. For goodwill, and
intangible assets that have indefinite useful lives or that are not
yet available for use, the recoverable amount is estimated each
year at the reporting date.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. For the purpose of impairment
testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the
cash inflows of other assets or groups of assets (the
"cash-generating unit"). The goodwill acquired in a business
combination, for the purpose of impairment testing, is allocated to
groups of cash-generating units ("CGUs") that are expected to
benefit from the synergies of the combination. For the purposes of
goodwill impairment testing, CGUs to which goodwill has been
allocated are aggregated so that the level at which impairment is
tested reflects the lowest level at which goodwill is monitored for
internal reporting purposes. This is subject to an operating
segment ceiling test.
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of CGUs are allocated first
to reduce the carrying amount of any goodwill allocated to the
units, and then to reduce the carrying amounts of the other assets
in the unit (group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In
respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss
is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
2.6 Employee benefits
Defined contribution plans
The Group pays contributions to selected employees' defined
contribution pension plans. The amounts charged to the income
statement in respect of pension costs are the contributions payable
in the period. Differences between contributions payable in the
period and contributions actually paid are shown as either accruals
or prepayments on the balance sheet.
2.7 Provisions
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, and it is probable that an outflow of economic benefits
will be required to settle the obligation. If the effect is
material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, when appropriate, the
risks specific to the liability.
2.8 Revenue recognition
Revenue relates to the provision of services, rental of
equipment and sale of equipment. Revenues arising from the rental
of equipment are recognised in accordance with the requirements of
IFRS 16: Leases. Revenues arising from all other revenue streams
are recognised in accordance with the requirements of IFRS 15.
Revenue under IFRS 15
Revenues for the provision of services are recognised over time
as the services are provided. The services provided to customers
meet the criterion that the customer simultaneously receives and
consumes the benefits provided. Accordingly, these services qualify
for over-time revenue recognition.
Revenues for the provision of goods are recognised at a point in
time, which is the point at which the Group satisfies the
performance obligation under the terms of the contract. The
performance obligation is the delivery of the goods to the
customer, which is the point at which the customer obtains
control.
Revenues for the provision of goods and services are measured at
the transaction price, stated net of VAT.
Revenue under IFRS 16
All contracts for leases of equipment entered into by the Group
are classified as operating leases. The contracts for equipment
rentals do not transfer substantially all of the risks and rewards
incidental to ownership of the underlying asset to the
customer.
The Group recognises lease payments received under operating
leases as revenue on a straight-line basis over the lease term.
Where customers are billed in advance, deferred rental income is
recognised, which represents the portion of billed revenue to be
deferred to future periods. Where customers are billed in arrears
for equipment rentals, accrued rental income is recognised, which
represents unbilled revenues recognised in the period.
2.9 Operating segments
The Group operates in the following four geographic regions,
which have been determined as the Group's reportable segments. The
operations of each geographic region are similar.
-- Europe
-- Americas
-- Asia-Pacific
-- Middle East
The Chief Operating Decision Maker (CODM) is determined as the
Group's Board of Directors. The Group's Board of Directors reviews
the internal management reports of each geographic region monthly
as part of the monthly management reporting. The operations within
each of the above regional segments display similar economic
characteristics. There are no reportable segments which have been
aggregated for the purpose of the disclosure of segment
information.
2.10 Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment
to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be
realised; such reductions are reversed when the probability of
future taxable profits improves. Unrecognised deferred tax assets
are reassessed at each reporting date and recognised to the extent
that it has become probable that future taxable profits will be
available against which they can be used.
Current tax assets and current tax liabilities are offset only
when:
-- the Group has a legally enforceable right to set off current
tax assets against current tax liabilities; and
-- the Group intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
Deferred tax assets and liabilities are offset only if:
-- the Group has a legally enforceable right to set off current
tax liabilities and assets; and
-- the deferred tax liabilities and assets relate to income
taxes levied by the same tax authority.
2.11 Leases
At the inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration.
As a lessee
At commencement or on modification of a contract that contains a
lease component, along with one or more other lease or non-lease
components, the Group accounts for each lease component separately
from the non-lease components. The Group allocates the
consideration in the contract to each lease component on the basis
of its relative stand-alone price and the aggregate stand-alone
price of the non-lease components.
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or
to restore the underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the end of the
lease term, unless the lease transfers ownership of the underlying
asset to the Group by the end of the lease term or the cost of the
right-of-use asset reflects that the Group will exercise a purchase
option. In that case the right-of-use asset will be depreciated
over the useful life of the underlying asset, which is determined
on the same basis as those of property, plant and equipment. In
addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group's incremental
borrowing rate.
Lease payments included in the measurement of the lease
liability comprise the following:
-- fixed payments, including in-substance fixed payments;
-- variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement
date;
-- amounts expected to be payable under a residual value guarantee;
-- the exercise price under a purchase option that the Group is
reasonably certain to exercise;
-- lease payments in an optional renewal period if the Group is
reasonably certain to exercise an extension option; and
-- penalties for early termination of a lease unless the Group
is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or rate,
there is a change in the Group's estimate of the amount expected to
be payable under a residual value guarantee, if the Group changes
its assessment of whether it will exercise a purchase, extension or
termination option or if there is a revised in-substance fixed
lease payment.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the
right-of-use asset, to the extent that the right-of-use asset is
reduced to nil, with any further adjustment required from the
remeasurement being recorded in the income statement.
The Group presents right-of-use assets and lease liabilities as
separate line items on the balance sheet.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and
lease liabilities for lease of low-value assets and short-term
leases. The Group recognises the lease payments associated with
these leases as an expense on a straight-line basis over the lease
term.
As a lessor
Refer to the revenue accounting policy note for the Group's
accounting policy under IFRS 16, as a lessor.
2.12 Financial instruments
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of the
instrument.
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the Group after deducting all of
its liabilities.
Financial assets and liabilities
All financial assets and liabilities are initially measured at
transaction price (including transaction costs), except for those
financial assets classified as at fair value through profit or
loss, which are initially measured at fair value (which is normally
the transaction price excluding transaction costs).
Financial assets and liabilities are only offset in the balance
sheet when, and only when there exists a legally enforceable right
to set off the recognised amounts and the Group intends either to
settle on a net basis, or to realise the asset and settle the
liability simultaneously.
Commitments to make and receive loans which meet the conditions
mentioned above are measured at cost (which may be nil) less
impairment.
Financial assets are derecognised when and only when (a) the
contractual rights to the cash flows from the financial asset
expire or are settled, (b) the Group transfers to another party
substantially all of the risks and rewards of ownership of the
financial asset, or (c) the Group, despite having retained some,
but not all, significant risks and rewards of ownership, has
transferred control of the asset to another party.
Financial liabilities are derecognised only when the obligation
specified in the contract is discharged, cancelled or expires.
Non-derivative financial assets are classified on initial
recognition in accordance with the Group's business model as trade
and other receivables, or cash and cash equivalents and accounted
for as follows:
-- Trade and other receivables: These are non-derivative
financial assets that are primarily held in order to collect
contractual cash flows and are measured at amortised cost, using
the effective interest rate method, and stated net of allowances
for credit losses.
-- Cash and cash equivalents: Cash and cash equivalents include
cash in hand and deposits held on call.
Non-derivative financial liabilities, including loans and
borrowing, and trade and other payables, are stated at amortised
cost using the effective interest method.
Derivative financial instruments
The Group uses derivative financial instruments from time to
time to reduce exposure to interest rate movements. The Group does
not hold or issue derivative financial instruments for speculative
purposes.
Derivatives are initially recognised at fair value at the date a
derivative contract is entered into and are subsequently remeasured
to their fair value at each reporting date. The resulting gain or
loss is recognised in the income statement immediately unless the
derivative is designated and effective as a hedging instrument, in
which event the timing of the recognition in the income statement
depends on the nature of the hedge relationship.
Fair value measurement
The best evidence of fair value is a quoted price for an
identical asset in an active market. When quoted prices are
unavailable, the price of a recent transaction for an identical
asset provides evidence of fair value as long as there has not been
a significant change in economic circumstances or a significant
lapse of time since the transaction took place. If the market is
not active and recent transactions of an identical asset on their
own are not a good estimate of fair value, the fair value is
estimated by using a valuation technique.
Hedge accounting
The Group designates certain derivatives as hedging instruments
in cash flow hedges.
At the inception of the hedge relationship, the entity documents
the economic relationship between the hedging instrument and the
hedged item, along with its risk management objectives and clear
identification of the risk in the hedged item that is being hedged
by the hedging instrument. Furthermore, at the inception of the
hedge the Group determines and documents causes for hedge
ineffectiveness.
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income. The gain or loss relating
to the ineffective portion is recognised immediately in the income
statement. Amounts previously recognised in other comprehensive
income and accumulated in equity are reclassified to profit or loss
in the periods in which the hedged item affects profit or loss or
when the hedging relationship ends.
Hedge accounting is discontinued when the hedging relationship,
the hedging instrument expires or is sold, terminated, or
exercised, or no longer qualifies for hedge accounting. Any gain or
loss accumulated in equity at that time is reclassified to profit
or loss when the hedged item is recognised in profit or loss. When
a forecast transaction is no longer expected to occur, any gain or
loss that was recognised in other comprehensive income is
reclassified immediately to profit or loss.
Impairment of financial assets
The Group recognises loss allowances for expected credit losses
(ECLs) on financial assets measured at amortised cost.
Loss allowances for trade receivables and accrued lease
receivables are measured at an amount equal to the lifetime ECL.
Trade receivables do not contain a significant financing component
and typically have a short duration of less than 12 months. The
Group prepares a provision matrix when measuring its ECLs. Trade
receivables and contract assets are segmented on the basis of
historic credit loss experience, based on geographic region.
Historical loss experience is applied to trade receivables and
contract assets, after being adjusted for:
-- information about current economic conditions; and
-- reasonable and supportable forecasts of future economic conditions.
Write-offs
The gross carrying amount of a financial asset is written off
(either partially or in full) to the extent that there is no
realistic prospect of recovery.
2.13 Government grants
Grants that compensate the Group for expenses incurred are
recognised in the income statement as other income on a systematic
basis in the periods in which the expenses are recognised, unless
the conditions for receiving the grant are met after the related
expenses have been recognised. In this case, the grant is
recognised at the point when there is reasonable assurance that the
terms for the forgiveness of a government loan will be met. Refer
to Note 5 for further disclosure related to government grants
received.
2.14 Borrowing costs
Borrowing costs are capitalised and amortised over the term of
the related debt. The amortisation of borrowing costs is recognised
as finance expenditure in the income statement.
2.15 Critical estimates and judgements
In the application of the Group's accounting policies the
Directors are required to make judgements that have a significant
impact on the amounts recognised and to make estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
The Directors have not identified any critical judgements that
have a significant effect on the amounts recognised in the
consolidated financial statements, apart from those involving
estimations (which are explained separately below).
2.16 Key Sources of Estimation Uncertainty
The key assumptions concerning the future, and other key sources
of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are discussed below.
Provision for bad debts
The Group applies IFRS 9 to measure the lifetime expected credit
loss of trade receivables. The lifetime expected credit loss is
based upon historic loss experience, which is then adjusted for
information about current economic conditions and reasonable and
supportable forecasts of future economic conditions. The expected
credit loss on trade receivables at the reporting date is estimated
on the basis of these underlying assumptions. Refer to Note 24(a)
for the carrying value of trade receivables to which the expected
credit loss model is applied.
Impairment of goodwill
The Group determines whether goodwill is impaired on an annual
basis. For each group of CGUs to which goodwill has been allocated
a goodwill impairment review is performed. The carrying value of
each group of CGUs to which goodwill is allocated is compared to
the recoverable amount, which is determined through a value in use
calculation. The value in use at each reporting date is based on
certain assumptions, including future forecast cash flows, discount
rates and growth rates. Refer to Note 11 for further information in
respect of the key assumptions applied in determining the value in
use for each group of CGUs.
Carrying value and useful lives of property, plant and
equipment
The Group reviews the estimated useful lives of property, plant
and equipment at the end of each reporting period based on
condition and usage of those assets. Based on management's
assessment as at the end of the reporting period, the useful lives
of property, plant and equipment remain appropriate. The Group
reviews at the end of each reporting period, the carrying amounts
of its property, plant and equipment to determine whether there is
any indication that these assets have suffered an impairment loss.
No impairment loss was recognised during the period.
2.17 Adjusting items
Adjusting items are significant items of income or expense in
revenue, profit from operations, net finance costs and/or taxation
which individually or, if of a similar type, in aggregate, are
relevant to an understanding of the Group's underlying financial
performance because of their size, nature or incidence. In
identifying and quantifying adjusting items, the Group consistently
applies a policy that defines criteria that are required to be met
for an item to be classified as an adjusting item. These items are
separately disclosed in the segmental analysis or in the notes to
the accounts as appropriate.
The Group believes that these items are useful to users of the
consolidated financial statements in helping them to understand the
underlying business performance and are used to derive the Group's
principal non-GAAP measure of Adjusted EBITDA, which is before the
impact of adjusting items and which is reconciled from profit from
operations.
3. Segmental analysis
For the year ended 31 December 2021
Asia Middle Head
Europe Americas Pacific East Office Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Total revenue 33,241 11,779 7,911 2,874 - 55,805
(7,723) (4,599) (1,817) (1,123) - (15,262)
Cost of sales -------- -------- -------- -------- -------- --------
Gross profit 25,518 7,180 6,094 1,751 - 40,543
Administrative expenses (9,143) (3,799) (2,169) (1,064) (7,311) (23,486)
351 313 77 254 - 995
Other operating income -------- -------- -------- -------- -------- --------
Operating profit before
depreciation, amortisation
and foreign exchange
gain/(loss) 16,726 3,694 4,002 941 (7,311) 18,052
Foreign exchange loss (215)
Depreciation (8,713)
(1,516)
Amortisation --------
Operating profit Finance
costs 7,608
(4,019)
--------
Profit before taxation 3,589
Taxation charge (1,060)
--------
Profit for the financial 2,529
year --------
Total assets 62,402 15,912 9,669 5,102 5,950 99,035
Total liabilities 8,343 3,014 1,080 644 24,822 37,903
For the year ended 31 December 2020 (Unaudited)
Asia Middle Head
Europe Americas Pacific East Office Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Total revenue 23,609 9,990 5,125 3,677 - 42,401
(5,117) (2,718) (1,308) (1,901) - (11,044)
Cost of Sales -------- -------- -------- -------- -------- --------
Gross profit 18,492 7,272 3,817 1,776 - 31,357
Administrative
expenses (9,629) (3,873) (862) (1,122) (1,678) (17,164)
231 869 298 149 - 1,547
Other operating income -------- -------- -------- -------- -------- --------
Operating profit
before
depreciation,
amortisation
and foreign exchange
(loss)/gain 9,094 4,268 3,253 803 (1,678) 15,740
Foreign exchange loss (312)
Depreciation (10,753)
(1,567)
Amortisation --------
Operating profit 3,108
Finance costs (3,849)
--------
Loss before taxation (741)
Taxation charge (257)
--------
Loss for the financial (998)
year --------
Total assets 56,047 16,721 9,443 4,415 13,270 99,896
Total liabilities 5,976 2,457 710 351 45,617 55,111
Central administrative expenses represent expenditures which are
not directly attributable to any single operating segment. The
expenditure has not been allocated to individual operating
segments.
The revenues generated by each geographic segment almost
entirely comprise revenues generated in a single country. Revenues
in the Europe, Americas, Asia Pacific and Middle East segments are
almost entirely generated in the UK, USA, Singapore and UAE
respectively. Revenues generated outside of these jurisdictions are
not material to the Group. The basis for the allocation of revenues
to individual countries is dependent upon the depot from which the
equipment is provided.
The carrying value of non-current assets, other than deferred
tax assets, split by the country in which the assets are held is as
follows:
Unaudited
As at 31 As at 31
Dec Dec
2021 2020
GBP000 GBP000
UK 51,411 49,663
USA 11,394 13,868
Singapore 7,799 8,376
UAE 3,562 3,783
4. Revenue
(a) Revenue streams:
The Group's key revenue generating activity comprises equipment
rental, sale of equipment and provision of related services
(non-rental revenue). The revenue is attributable to the continuing
activities of renting equipment, selling equipment or providing a
service.
Unaudited
2021 2020
GBP000 GBP000
Rental income (Note 19) 43,913 34,183
Non-rental revenue 11,892 8,218
------ ---------
Total revenue 55,805 42,401
====== =========
(b) Disaggregation of revenue from contracts with customers:
Revenue from contracts with customers from sale of equipment and
provision of related services is disaggregated by primary
geographical market, major products and services and timing of
revenue recognition.
Unaudited
2021 2020
Primary geographical markets GBP000 GBP000
Europe 7,579 5,222
Americas 3,052 1,409
Asia Pacific 550 171
Middle East 711 1,416
------ ---------
Non-rental revenue 11,892 8,218
====== =========
Major products and services and timing of revenue recognition of
non-rental revenue:
Unaudited
2021 2020
GBP000 GBP000
Sale of equipment, transferred at a point
in time 6,147 3,661
Provision of related services, transferred
over time 5,745 4,557
------ ---------
Non-rental revenue 11,892 8,218
====== =========
5. Operating profit
This is stated after charging/(crediting):
Unaudited
2021 2020
GBP000 GBP000
Spares, consumables and external repairs 2,838 2,651
Facilities costs 329 332
Depreciation on property, plant and equipment
(Note 10) 7,878 9,924
Depreciation on right-of-use assets (Note
19) 835 829
Amortisation of intangible assets (Note
11) 1,516 1,567
Staff costs (Note 6) 13,851 10,696
Transaction costs 3,332 865
Other external charges 18,398 13,664
Foreign exchange losses 215 312
------ ---------
Total cost of sales and administrative
expenses 49,192 40,840
====== =========
The above includes:
Operating lease rentals 165 289
Impairment loss on trade receivables 788 401
====== ===========
Other operating income
Gain on sale of property, plant and equipment 995 1,156
Loan forgiveness - US Paycheck Protection
Program* - 391
------ ---------
995 1,547
====== =========
*During the year ended 31 December 2020 Ashtead Technology
Offshore Inc had taken a government loan of GBP391,000 under the US
'Paycheck Protection Program'. The loan was forgiven on meeting the
required criteria of the program.
Fees payable to the auditor for the audit
of the financial statements:
Total audit fees 167 116
=== =====
Fees payable to the auditor and its associates
for other services to the Group
Tax compliance services - 97
Corporate finance services** - 322
Reporting accountant services*** 152 -
--- ---
Total non-audit fees 152 419
=== ===
**These fees were capitalised in 2020 as part of the acquisition
accounting and not charged through the income statement.
***These fees were incurred as reporting accountant services
provided by BDO LLP in relation to the listing. Included in the
total fee is GBP18,000 that was deducted from share premium.
6. Staff costs
Unaudited
2021 2020
GBP000 GBP000
Wages and salaries 12,520 9,597
Social security costs 908 736
Other pension costs (Note
22) 423 363
13,851 10,696
====== =========
The average number of employees during the year was as
follows:
No. No.
Operations 122 100
Sales and administrative 77 76
199 176
=== ===
Full details of the Directors' remuneration and interests are
set out in the Directors' Remuneration Report on pages 37 to 38 of
the Group's Annual Report.
7. Finance costs
Unaudited
2021 2020
GBP000 GBP000
Interest on bank loans (held at amortised
cost) 2,261 2,919
Amortisation of deferred finance costs 1,222 674
Loan note interest 71 76
Interest expense on lease liability (Note
19) 151 168
Hedge reserve movement 313 -
Other interest and charges 1 12
4,019 3,849
====== =========
8. Tax
(a) Tax on profit/(loss) on ordinary activities
The tax charge is made up as follows:
Unaudited
2021 2020
GBP000 GBP000
Current tax:
UK corporation tax on profit/loss for the
year 1,397 392
Adjustment in respect of previous periods (78) (23)
Foreign tax 1 203
Foreign tax adjustment in respect of previous
periods - (21)
Exchange rate differences 4 (4)
------ ---------
Total current income tax 1,324 547
------ ---------
Deferred tax:
Origination and reversal of temporary differences (227) (220)
Origination and reversal of temporary differences
- prior periods 292 38
Effect of changes in tax rates (326) (99)
Exchange rate differences (3) (9)
Total deferred tax (264) (290)
------ ---------
Tax charge in the profit and loss account
(Note 8(b)) 1,060 257
====== =========
(b) Factors affecting the current tax charge for the year
The tax assessed for the year differs from the standard rate of
corporation tax in the UK of 19% (2020: 19%). The differences are
explained below:
Unaudited
2021 2020
GBP000 GBP000
Profit/(loss) on ordinary activities before
taxation 3,589 (741)
====== =========
Profit/(loss) on ordinary activities multiplied
by standard rate of corporation tax in the
UK of 19% (2020: 19%) 682 (141)
Effects of:
Expenses not deductible for tax purposes 500 316
Income not taxable (43) (107)
RDEC expenditure credit - (6)
Gains/rollover relief 11 27
Effects of overseas tax rates 213 85
Adjustments in respect of previous periods 213 (7)
Tax rate changes (326) (61)
Unrecognised temporary differences - 35
Recognition of previously unrecognised tax
losses (176) (118)
Current year losses for which no deferred
tax asset is recognised - 251
Exchange rate difference 7 (17)
Adjustment in relation to IFRS 16 (21) -
------ ---------
Tax charge 1,060 257
====== =========
(c) Income tax due
Unaudited
2021 2020
GBP000 GBP000
Income tax due 821 515
====== =========
(d) Unrecognised tax losses:
The Group has tax losses which arose in the UK, Canada and USA
of GBP10,255,000 (2020: GBP15,767,000) that are available
indefinitely for offset against future taxable profits of the Group
companies in which the losses arose.
Deferred tax assets have not been recognised in respect of these
losses as they may not be used to offset taxable profits elsewhere
in the Group and they have arisen in subsidiaries that are loss
making.
(e) Deferred tax:
Deferred tax included in the Group balance sheet is as
follows:
Unaudited
2021 2020
GBP000 GBP000
Fixed asset timing differences 838 258
Short-term timing differences 76 17
Tax losses 242 472
Intangible asset timing differences (146) -
Deferred tax asset 1,010 747
====== =========
The recoverability of the deferred tax asset is as follows:
Unaudited
2021 2020
GBP000 GBP000
Current 17 42
Non-current 993 705
1,010 747
====== =========
9. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of Ordinary Shares in issue during the year.
Diluted earnings per share
For diluted earnings per share, the weighted average number of
Ordinary Shares in issue is adjusted to assume conversion of all
potentially dilutive Ordinary Shares. During the year ended 31
December 2021, the Group had no potentially dilutive Ordinary
Shares.
Adjusted earnings per share
Earnings attributable to ordinary shareholders of the Group for
the year, adjusted to remove the impact of adjusting items and the
tax impact of these, divided by the weighted average number of
Ordinary Shares outstanding during the period.
Adjusted Statutory Adjusted Statutory
2021 2021 2020 2020
Earnings attributable to equity shareholders of the Group:
Profit/(loss) for the year (GBP000) 9,385* 2,529 2,022* (998)
---------- ---------- ---------- ----------
Number of shares:
Weighted average number of Ordinary Shares - Basic 70,995,578 70,995,578 69,998,000 69,998,000
Weighted average number of Ordinary Shares - Diluted 70,995,578 70,995,578 69,998,000 69,998,000
---------- ---------- ---------- ----------
Earnings per share attributable to equity holders of the Group -
continuing operations:
Basic earnings per share (pence) 13.2 3.6 2.9 (1.4)
Diluted earnings per share (pence) 13.2 3.6 2.9 (1.4)
---------- ---------- ---------- ----------
* Refer to Note 27 for the reconciliation of Non-IFRS Profit
Metrics.
10. Property, plant and equipment
Assets held for Leasehold Freehold Fixture and
rental improvements property fittings Motor vehicles Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cost:
At 1 January 2020 106,402 1,439 197 3,344 148 111,530
Additions 4,197 113 - 283 121 4,714
Disposals (4,479) (1) - (282) (20) (4,782)
Foreign exchange
movements (1,214) (14) - (23) (4) (1,255)
At 31 December 2020
(Unaudited) 104,906 1,537 197 3,322 245 110,207
---------------- ---------------- ---------------- ---------------- -------------- --------
Accumulated
depreciation:
At 1 January 2020 (80,335) (839) (52) (2,585) (143) (83,954)
Charge for the year (9,523) (145) (8) (209) (36) (9,921)
Disposals 4,059 1 - 183 17 4,260
Foreign exchange
movements 1,206 9 - 18 5 1,238
At 31 December 2020
(Unaudited) (84,593) (974) (60) (2,593) (157) (88,377)
---------------- ---------------- ---------------- ---------------- -------------- --------
Net book value:
At 31 December 2020
(Unaudited) 20,313 563 137 729 88 21,830
================ ================ ================ ================ ============== ========
Assets held for Leasehold Fixture and
rental improvements Freehold property fittings Motor vehicles Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cost:
At 1 January 2021 104,906 1,537 197 3,322 245 110,207
Additions 6,625 201 - 421 56 7,303
Disposals (6,666) - - (29) - (6,695)
Foreign exchange
movements 2 1 - (31) 4 (24)
At 31 December
2021 104,867 1,739 197 3,683 305 110,791
---------------- ----------------- ----------------- ----------------- -------------- --------
Accumulated
depreciation:
At 1 January 2021 (84,593) (974) (60) (2,593) (157) (88,377)
Charge for the
year (7,158) (244) (8) (296) (24) (7,730)
Disposals 6,252 - - 12 - 6,264
Foreign exchange
movements (122) (1) - 10 (3) (116)
At 31 December
2021 (85,621) (1,219) (68) (2,867) (184) (89,959)
---------------- ----------------- ----------------- ----------------- -------------- --------
Net book value:
At 31 December
2021 19,246 520 129 816 121 20,832
================ ================= ================= ================= ============== ========
11. Goodwill and intangible assets
Customer Non-compete Computer
Goodwill relationships arrangements software Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost:
At 1 January 2020 48,722 4,448 208 2,647 56,025
Additions - - - 156 156
Disposals - - - (1) (1)
Foreign exchange movements (137) (1) - (1) (139)
-------- -------------- ------------- --------- -------
At 31 December 2020
(Unaudited) 48,585 4,447 208 2,801 56,041
======== ============== ============= ========= =======
Amortisation:
At 1 January 2020 - (764) (39) (2,626) (3,429)
Charge for the year - (1,497) (70) (3) (1,570)
Disposals - - - 1 1
Foreign exchange movements - - - 1 1
-------- -------------- ------------- --------- -------
At 31 December 2020
(Unaudited) - (2,261) (109) (2,627) (4,997)
======== ============== ============= ========= =======
Net book value:
At 31 December 2020
(Unaudited) 48,585 2,186 99 174 51,044
======== ============== ============= ========= =======
Customer Non-compete Computer
Goodwill relationships arrangements software Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost:
At 1 January 2021 48,585 4,447 208 2,801 56,041
Additions - - - 966 966
Foreign exchange movements 66 - - 2 68
-------- -------------- ------------- --------- -------
At 31 December 2021 48,651 4,447 208 3,769 57,075
======== ============== ============= ========= =======
Amortisation:
At 1 January 2021 - (2,261) (109) (2,627) (4,997)
Charge for the year - (1,449) (67) (148) (1,664)
Foreign exchange movements - - - (3) (3)
-------- -------------- ------------- --------- -------
At 31 December 2021 - (3,710) (176) (2,778) (6,664)
======== ============== ============= ========= =======
Net book value:
At 31 December 2021 48,651 737 32 991 50,411
======== ============== ============= ========= =======
Goodwill has arisen on the acquisition of the following
subsidiaries: Amazon Group Limited (the parent company of the
existing Ashtead Technology Group at the time of acquisition, in
April 2016), TES Survey Equipment Services LLC, Welaptega Marine
Limited, Aqua-Tech Solutions LLC and its subsidiary Alpha Subsea
LLC, and Underwater Cutting Solutions Limited, as well as the
acquisition of the trade and assets of Forum Subsea Rentals, a
division of Forum Energy Technologies (UK) Limited, Forum Energy
Asia Pacific PTE Ltd and Forum US, Inc.
There has been a reclassification of computer software from
property, plant and equipment to intangible assets. The impact on
2020 is immaterial.
Impairment testing for CGUs containing goodwill
For the purpose of impairment testing, goodwill has been
allocated to the Group's CGUs as follows. The group of CGUs to
which goodwill has been allocated are consistent with the Group's
operating segments.
Unaudited
2021 2020
GBP000 GBP000
Europe 34,916 34,916
Americas 6,569 6,503
Asia Pacific 5,336 5,336
Middle East 1,830 1,830
------ ---------
An impairment test has been performed in respect of each of the
groups of CGUs to which goodwill has been allocated on each
reporting date.
For each of the operating segments to which goodwill has been
allocated, the recoverable amount has been determined on the basis
of a value in use calculation. In each case, the value in use was
found to be greater than the carrying amount of the group of CGUs
to which the goodwill has been allocated. Accordingly, no
impairment to goodwill has been recognised. The value in use has
been determined by discounting future cash flows forecast to be
generated by the relevant regional segment.
A summary of the key assumptions on which management has based
its cash flow projections at each reporting date is as follows:
Unaudited
2021 2020
GBP000 GBP000
Europe :
Pre-tax discount rate 11.6% 11.8%
Terminal value growth
rate 2% 2%
Forecast period 2 years 3 years
Americas :
Pre-tax discount rate 11.6% 12.3%
Terminal value growth
rate 2% 2%
Forecast period 2 years 3 years
Asia Pacific:
Pre-tax discount rate 11.6% 11.6%
Terminal value growth
rate 2% 2%
Forecast period 2 years 3 years
Middle East:
Pre-tax discount rate 11.6% 10%
Terminal value growth
rate 2% 2%
Forecast period 2 years 3 years
In determining the above key assumptions, management has
considered past experience together with external sources of
information where available (e.g., industry-wide growth forecasts).
The discount rate applied to each CGU represents a pre-tax rate
that reflects the market assessment of the time value of money as
at 31 December 2021 and the risks specific to the CGU. Beyond the
two year Group forecast period these projections are extrapolated
using a terminal value growth rate. Sensitivity analysis has been
performed in respect of the key assumptions above with no
impairment identified from the sensitivities performed.
12. Inventories
Unaudited
2021 2020
GBP000 GBP000
Raw materials and consumables 1,778 1,245
====== =========
The cost of inventories recognised as an expense and included in
cost of sales during the year is disclosed in Note 5.
13. Trade and other receivables
Unaudited
2021 2020
GBP000 GBP000
Trade receivables (Note 24(a)) 14,212 7,723
Prepayments and accrued income 3,012 2,241
Amounts due from related parties (Note 25) - 1,292
17,224 11,256
====== =========
The Directors consider that the carrying amount of trade and
other receivables approximates to fair value. The amounts owed by
related parties bear no interest and are due on demand.
Information about the Group's exposure to credit and market
risks, and impairment losses for trade receivables is included in
Note 24.
14. Cash and cash equivalents
Unaudited
2021 2020
GBP000 GBP000
Cash at bank 4,842 10,953
Cash in hand 15 5
Cash and cash equivalents 4,857 10,958
====== =========
Cash at bank earns interest at floating rates based on daily
bank overnight deposit rates. The Directors consider that the
carrying amount of cash and cash equivalents equates to fair
value.
Foreign currency denominated balances within Group cash and cash
equivalents amount to:
Unaudited
2021 2020
GBP000 GBP000
US dollar denominated balances 1,581 3,124
Singapore dollar denominated balances 864 2,612
Canadian dollar denominated balances 150 200
AED denominated balances 133 154
2,728 6,090
====== =========
All other balances are denominated in sterling.
15. Trade and other payables
Unaudited
2021 2020
GBP000 GBP000
Trade payables 3,349 2,487
Accruals 5,682 4,701
Amounts due to related parties (Note 25) 384 55
9,415 7,243
====== =========
The Directors consider that the carrying amount of trade and
other payables equates to fair value. The amounts due to related
parties bear no interest and are due on demand.
The Group's exposure to currency and liquidity risks is included
in Note 24.
16. Derivative financial instruments
The Group held three interest rate swaps which are designated to
hedge a portion of the interest payments on each of the sterling
and US dollar denominated facilities arising until 30 June 2021.
The fair value of interest rate swaps has been valued by
calculating the present value of future cash flows, estimated using
forward rates from third party market price quotations.
The table below summarises the fair value of the interest rate
swaps at each reporting date:
Unaudited
2021 2020
GBP000 GBP000
Current liabilities
Interest rate swaps used for hedging - (38)
======= =========
Average contract fixed interest rate (%) 0.6607% 0.6607%
Notional principal value - 13,661
The interest rate swaps settled on a quarterly basis. The
floating rate on the interest rate swaps was three months LIBOR.
The Group settled the difference between the fixed and floating
interest rate on a net basis. All interest rate swap contracts
exchanging floating rate interest amounts for fixed rate interest
amounts are designated as cash flow hedges to reduce the Group's
cash flow exposure resulting from variable interest rates on
borrowings. The hedged cash flows were expected to occur and to
affect profit or loss over the period to maturity of the interest
rate swaps.
Amount recognised in profit or loss:
The Group has recognised derivatives initially at fair value at
the date a derivative contract is entered into and subsequently
remeasured to their fair value at each reporting date. The amount
recognised in the consolidated income statement in relation to
derivatives for the year ended 31 December 2021 is GBP313,000.
Amount recognised in other comprehensive income:
The Group has applied hedge accounting for the interest rate
swaps. The table below details the changes in fair value of
derivative assets recorded in the consolidated other comprehensive
income:
Interest rate Total hedging
swaps reserves
GBP000 GBP000
At 1 January 2020 (243) (243)
Changes in fair value of hedging instruments
recognised in other comprehensive income (108) (108)
-------- --------
At 31 December 2020 (Unaudited) (351) (351)
Changes in fair value of hedging instruments
recognised in other comprehensive income 351 351
At 31 December 2021 -------- --------
- -
-------- --------
(a) Sterling interest rate swap
The fair value of the sterling interest rate swap at the balance
sheet date was GBPnil (2020: liability GBP24,000). This swap is
designated as a hedge on approximately 36% (2020: 34%) of the
expected floating rate payments expected to arise in the period to
30 June 2021 on GBP26,841,000 (2020: GBP29,663,000) senior sterling
bank loans. The terms of this contract is that the Group paid a
fixed rate of 0.5355% and 0.525% and received 3 month floating
LIBOR rate from HSBC (net settled quarterly) on a GBP9,564,000
(2020: GBP9,948,000) notional sum subject to a repayment schedule
in line with the bank loan.
(b) US dollar interest rate swap
The fair value of the US dollar interest rate swap at the
balance sheet date was GBPnil (2020: liability GBP14,000). This
swap is designated as a hedge on approximately 35% (2020: 33%) of
the expected floating rate payments expected to arise in the period
to 30 June 2021 on $13,236,000 (2020: $15,314,000) US dollar bank
loan. The terms of this contract are that the Group paid a fixed
rate of 1.003% and received three month floating LIBOR rate from
HSBC (net settled quarterly) on a $4,693,000 (2020: $5,087,000)
notional sum subject to a repayment schedule in line with the bank
loan.
Information about the Group's exposure to interest rate, credit
and market risks is included in Note 24.
17. Loan and borrowings
Unaudited
2021 2020
GBP000 GBP000
Current
Bank loans (held at amortised cost) - 8,007
- 8,007
====== =========
Non-current
Bank loans (held at amortised cost) 24,425 35,001
Related party loan notes (Note 25) - 1,121
24,425 36,122
====== =========
At 31 December 2021 the bank loans comprise a revolving credit
facility of GBP24,953,000 which carried interest at SONIA plus
2.2%. The lenders are HSBC Bank plc and Clydesdale Bank plc. The
Facility Agreement is subject to a leverage covenant of 2.5 and an
interest cover covenant of 4:1. The total commitments are
GBP40,000,000 for the RCF and an additional GBP10,000,000 accordion
facility. As at 31 December 2021 the RCF had an undrawn balance of
GBP15,047,000 and the GBP10,000,000 accordion facility was undrawn.
A non-utilisation fee of 0.88% is charged on the non-utilised
element of the RCF facility. The revolving credit facility is fully
repayable by November 2024.
At 31 December 2020 the bank loans comprised senior bank debt of
GBP43,841,000 and the senior A, B and revolving credit facility
debt carried interest at LIBOR plus 3.5%, 4.0% and 5.0%
respectively. The senior A, B and revolving credit facility were
repaid in full in November 2021.
Certain companies within the Group joined in cross guarantees
with respect to bank loans totalling GBP24,953,000 (2020:
GBP43,841,000) advanced to Ashtead Technology Limited and Ashtead
Technology Offshore Inc. The lenders have a floating charge over
certain assets of the Group.
Bank loans are repayable as follows:
Unaudited
2021 2020
GBP000 GBP000
Within one year - 8,674
Within one to two years - 35,167
Within two to three years 24,953 -
------ ---------
24,953 43,841
Deferred finance costs (528) (833)
24,425 43,008
====== =========
The related party loan notes carried interest at 7% which
capitalised quarterly and was repaid in full in November 2021.
The weighted average interest rates on floating rate instruments
during the year was as follows:
Unaudited
2021 2020
Weighted average interest rates 5.54% 5.84%
===== =========
The Group's exposure to interest rate, foreign currency and
liquidity risks is included in Note 24.
18. Financing liabilities reconciliation
Forgiveness Other Changes in Unaudited
of US PPP non-cash exchange 31 December
1 January 2020 Cash flows loan Interest paid changes rates 2020
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cash at bank
and in hand 4,855 6,354 - - - (251) 10,958
-------------- ---------- ------------- ------------- ------------- ------------- --------------
Bank loans (47,490) 4,454 391 - (674) 311 (43,008)
Related party
loan notes (1,045) - - - (76) - (1,121)
Lease
liabilities (3,483) 721 - 168 (510) 52 (3,052)
-------------- ---------- ------------- ------------- ------------- ------------- --------------
Net debt (47,163) 11,529 391 168 (1,260) 112 (36,223)
============== ========== ============= ============= ============= ============= ==============
The non-cash movement relates to amortisation of deferred
finance costs, accrual of finance costs on related party loan notes
and lease liability, and addition of new leases during the
year.
Other Changes in
1 January 2021 Cash flows Interest paid non-cash changes exchange rates 31 December 2021
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cash at bank and in
hand 10,958 (6,326) - - 225 4,857
-------------- ---------- ------------- ----------------- ----------------- ----------------
Bank loans (43,008) 19,928 - (1,222) (123) (24,425)
Related party loan
notes (1,121) 830 - 291 - -
Lease liabilities (3,052) 1,012 151 (919) (326) (3,134)
-------------- ---------- ------------- ----------------- ----------------- ----------------
Net debt (36,223) 15,444 151 (1,850) (224) (22,702)
============== ========== ============= ================= ================= ================
The non-cash movement relates to the amortisation of deferred
finance costs, accrual of finance costs on related party loan notes
and lease liability, and the addition of new leases during the
year.
19. Leases
Leases as lessee
The Group leases warehouses, offices, and other facilities in
different locations (UK, UAE, Singapore, Canada, USA). The lease
term ranges from 2 to 15 years with an option to renew available
for some of the leases. Lease payments are renegotiated every 3-5
years to reflect market terms. The Group has elected not to
recognise right-of-use assets and lease liabilities for leases that
are short-term and/or of low-value items. The Group recognises the
lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
Further information about leases is presented below:
a) Amounts recognised in consolidated balance sheet
Right-of-use assets GBP000
Balance at 1 January 2020 3,349
Additions to right-of-use assets 342
Depreciation charge for the year (829)
(46)
Effects of movements in exchange rates --------
2,816
Balance at 31 December 2020 (Unaudited) --------
Additions to right-of-use assets 940
Depreciation charge for the year (835)
2
Effects of movements in exchange rates --------
2,923
Balance at 31 December 2021 --------
Unaudited
2021 2020
Lease liabilities: GBP000 GBP000
Current 783 676
Non-current 2,351 2,376
Total lease liabilities 3,134 3,052
====== =========
Refer to Note 24(b) for more information on maturity analysis of
lease liabilities.
b) Amounts recognised in the income statement
Unaudited
2021 2020
GBP000 GBP000
Depreciation charge 835 829
Interest expense on lease liability 151 168
Expenses relating to short-term leases 165 289
Total amount recognised in the income statement 1,151 1,286
====== =========
c) Amounts recognised in the cash flow statement
Unaudited
2021 2020
GBP000 GBP000
Total cash payments for leases 1,163 890
====== =========
Leases as a lessor
The Group leases out equipment to its customers. The lease
period is short term which ranges from weeks to a few months. All
leases are classified as operating leases from a lessor
perspective, because they do not transfer substantially all of the
risks and rewards incidental to the ownership of the equipment.
The Group as a lessor recognises lease payments received from
operating leases as income on a straight-line basis. Increases (or
decreases) in rental payments over a period of time, other than
variable lease payments, are reflected in the determination of the
lease income, which is recognised on a straight-line basis (refer
to Note 4).
20. Provisions for liabilities
Other
GBP000
At 1 January 2020 112
Charge for the year 34
Paid during the year (6)
Movement in foreign exchange (6)
At 31 December 2020 (Unaudited) 134
------
Charge for the year 28
Paid during the year (56)
Movement in foreign exchange 2
At 31 December 2021 108
======
Other
Other provisions relate to end of service benefits for certain
employees. The actual amount payable is dependent on the length of
service of the impacted employees when their employment ceases and
their salary at that time. The provision is calculated on the
impacted employees' length of service and salary at the balance
sheet date.
21. Capital commitments
Unaudited
2021 2020
GBP000 GBP000
Capital expenditure contracted for but not
provided 2,825 297
====== =========
22. Employee benefits
Defined contribution scheme
The Group operates defined contribution retirement benefit
schemes for all qualifying employees. The total expense charged to
the income statement in the year ended 31 December 2021 was
GBP423,000 (2020: GBP363,000). There was a balance outstanding of
GBP59,000 in relation to pension liabilities at 31 December 2021
(2020: GBP44,000).
23. Share capital and reserves
The Group considers its capital to comprise its invested
capital, called up share capital, merger reserve, retained earnings
and foreign exchange translation reserve. Quantitative detail is
shown in the consolidated statement of changes in equity. The
Directors' objective when managing capital is to safeguard the
Group's ability to continue as a going concern in order to provide
returns for the shareholders and benefits for other
stakeholders.
Unaudited
31 December 31 December
Called up share capital 2021 2020
Allotted, called up and
fully paid No. GBP000 No. GBP000
Ordinary shares of GBP0.05
each 79,580,000 3,979 69,998,000 3,500
----------- ------------
3,979 3,500
=========== ============
Ordinary share capital represents the number of shares in issue
at their nominal value. In the current year, the share capital of
the former Group has been replaced with the newly issued listed
shares following the IPO. Ordinary Shares of 9,582,000 with a
nominal value of GBP479,000 were issued on IPO. The holders of
Ordinary Shares are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at meetings of
the Company.
Share premium
Share premium represents the amount over the par value which was
received by the Group upon the sale of the Ordinary Shares. Upon
the date of listing the par value of the shares was GBP0.05 but the
initial offering price was GBP1.62. Share premium is stated net of
direct costs of GBP929,000 relating to the issue of the shares.
Merger reserve
The merger reserve was created as a result of the share for
share exchange under which Ashtead Technology Holdings plc became
the parent undertaking prior to the IPO. Under merger accounting
principles, the assets and liabilities of the subsidiaries were
consolidated at book value in the Group financial statements and
the consolidated reserves of the Group were adjusted to reflect the
statutory share capital, share premium and other reserves of the
Company as if it had always existed, with the difference presented
as the merger reserve.
Hedging reserve
The hedging reserve records the portion of the gains and losses
from changes in fair value on hedging instruments that are deemed
to be effective.
Foreign currency translation reserve
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on consolidation, are
translated to the Group's presentational currency, sterling, at
foreign exchange rates ruling at the balance sheet date. The
revenues and expenses of foreign operations are translated at an
average rate for each month where this rate approximates to the
foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign
operations are reported as an item of other comprehensive income
and accumulated in the translation reserve, within invested
capital. When a foreign operation is disposed of, such that
control, joint control or significant influence (as the case may
be) is lost, the entire accumulated amount in the foreign currency
translation reserve is recycled to the income statement as part of
the gain or loss on disposal.
Retained earnings
The movement in retained earnings is as set out in the
Consolidated Statement of Changes in Equity. Retained earnings
represent cumulative profits or losses, net of dividends and other
adjustments.
24. Financial instruments
Financial risk management
Risk management framework:
The Group's risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk
limits and controls and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Group's
activities.
The Group has exposure to the following risks arising from
financial instruments:
-- Credit risk
-- Liquidity risk
-- Market risk
a) Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the
Group's receivables from customers. The Group has no significant
concentration of credit risk, with exposure spread over a large
number of customers.
The credit risk on liquid funds held with HSBC and Bank of
Montreal is considered to be low. The long-term credit rating for
HSBC is AA-/A+ per Fitch/Standard & Poor's. The long-term
credit rating for Bank of Montreal is AA/A+ per Fitch/Standard
& Poor's.
The Group has established a credit policy under which each new
customer is analysed individually for creditworthiness before the
Group's standard payment and delivery terms and conditions are
offered. The Group's review includes external ratings, if they are
available, financial statements, credit agency information,
industry information and in some cases bank references. Sale limits
are established for each customer and reviewed quarterly. Any sales
exceeding those limits require approval from management.
Trade receivables
The Group has used a practical expedient by computing the
expected credit loss allowance for trade receivables based on a
provision matrix. The provision percentage is determined for each
subsidiary independently.
Unaudited
2021 2020
GBP000 GBP000
Current (not past
due) 4,698 2,447
Past due 0-90 days 8,934 5,181
Past due 91-180 days 1,459 756
Past due 181-270
days 484 376
Past due 271-365
days 51 60
410 182
More than 365 days -------- --------
16,036 9,002
-------- --------
Movements in the allowance for impairment in respect of trade
receivables
The movement in the allowance for impairment in respect of trade
receivables during the year was as follows:
Movement in provision for doubtful debts GBP000
Balance at 1 January 2020 (1,250)
Movement during the year (29)
--------
At 31 December 2020 (Unaudited) (1,279)
Movement during the year (545)
--------
At 31 December 2021 (1,824)
--------
Cash and cash equivalents
The Group held cash and cash equivalents and other bank balances
of GBP4,857,000 at 31 December 2021 (2020: GBP10,958,000). The cash
and cash equivalents are held with the HSBC Bank plc and Bank of
Montreal.
Derivative financial instruments
The derivatives were entered into with HSBC Bank plc.
b) Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's objective when managing liquidity is
to ensure that it will have sufficient liquidity to meet its
liabilities when they are due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage
to the Group's reputation. The Group utilises both long and
short-term borrowing facilities.
Cash flow forecasting is performed centrally with rolling
forecasts of the Group's liquidity requirements regularly monitored
to ensure it has sufficient cash to meet operational needs. The
Group's revenue model results in a strong level of cash conversion
allowing it to service working capital requirements.
The Group has access to multicurrency RCF and accordion facility
which have total commitments of GBP40,000,000 and GBP10,000,000
respectively. As at 31 December 2021 the RCF had an undrawn balance
of GBP15,047,000 and the GBP10,000,000 accordion facility was
undrawn.
Maturities of financial liabilities
The table below analyses the Group's financial liabilities into
relevant maturity groupings based on their contractual
maturities:
As at 31 December 2020 (Unaudited) Contractual cash flows
Between one to two Between two to More than five
Carrying total Total Within one year years five years years
Non-derivative
financial
liabilities GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Bank loans 43,008 43,841 8,674 35,167 - -
Related party loan
notes 1,121 1,121 - 1,121 - -
Trade and other
payables 7,243 7,243 7,243 - - -
Lease liabilities 3,052 3,480 810 721 1,330 619
-------------- ------ --------------- ------------------ ----------------- ------------------
54,424 55,685 16,727 37,009 1,330 619
============== ====== =============== ================== ================= ==================
Derivative
financial
liabilities
Interest rate
swaps 38 38 38 - - -
-------------- ------ --------------- ------------------ ----------------- ------------------
38 38 38 - - -
============== ====== =============== ================== ================= ==================
As at 31 December Contractual cash flows
2021
Between one to two Between two to More than five
Carrying total Total Within one year years five years years
Non-derivative
financial
liabilities GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Bank loans 24,425 24,953 - - 24,953 -
Trade and other
payables 9,415 9,415 9,415 - - -
Lease liabilities 3,134 3,672 966 767 1,577 362
-------------- ------ --------------- ------------------ ----------------- ------------------
36,974 38,040 10,381 767 26,530 362
============== ====== =============== ================== ================= ==================
c) Market risk
Market risk is the risk that changes in market prices - such as
foreign exchange rates, interest rates and equity prices - will
affect the Group's income or the value of its holdings of financial
instruments. The Group's exposure to market risk is primarily
related to currency risk and interest rate risk.
Currency risk
Currency risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The Group's activities expose it
primarily to the financial risks of movements in foreign currency
exchange rates. The Group monitors net currency exposures and
hedges as necessary.
The Company has no monetary assets and liabilities denominated
in currencies that are different to the functional currency of the
Company.
Interest risk
Interest rate risk can be either fair value interest rate risk
or cash flow interest rate risk. Fair value interest rate risk is
the risk of changes in fair values of fixed interest-bearing
investments and loans. Cash flow interest rate risk is the risk
that the future cash flows of floating interest-bearing investments
and loans will fluctuate because of fluctuations in the interest
rates.
The Group is exposed to interest rate movements on its external
bank borrowing. Based on average loans and borrowings an
increase/(decrease) of 0.25% in effective interest rates would
increase/(decrease) the interest charged to the income statement by
GBP62,000 (2020: GBP68,000).
d) Capital risk management
The Group's objectives when managing capital (defined as net
debt plus equity) are to safeguard the Group's ability to continue
as a going concern in order to provide returns to shareholders and
benefits for other stakeholders, while optimising returns to
shareholders through an appropriate balance of debt and equity
funding. The Group manages its capital structure and makes
adjustments to it with respect to changes in economic conditions
and strategic objectives.
As at 31 December 2021, the Group had gross borrowings of
GBP24,953,000 through its RCF and a cash and cash equivalents
balance of GBP4,857,000. Currently interest is payable on the RCF
at a rate of SONIA plus 2.2%. The Group remains in compliance with
its banking covenants.
25. Related parties
Note 26 provides information about the entities included in the
consolidated financial statements as well as the Group's structure,
including details of the subsidiaries and the holding company.
Key managerial personnel:
Allan Pirie
Ingrid Stewart
Bill Shannon
Joe Connolly
Tony Durrant
Thomas Thomsen
Directors' interests in the Ordinary Shares of the Group are
included in the Directors Report on page 38 of the Group's Annual
Report.
Entity with significant influence over the Group:
BP INV2 Holdco Limited
BP INV2 Newco Limited
BP INV2B Bidco Limited
A. Transactions during the period with Unaudited
related parties: 2021 2020
GBP000 GBP000
Dividend expense*
BP INV2 Newco Limited 476 -
BP INV2B Bidco Limited 820 -
Interest expense
BP INV2B Bidco Limited 71 75
Compensation to key management personnel
Emoluments 838 282
====== =========
* The dividend expense related to the pre-IPO group
restructure.
Full details of the Directors' remuneration and interests are
set out in the Directors' Remuneration Report on pages 37 to 38 of
the Group's Annual Report.
B. Outstanding balances with related parties Unaudited
as at year end: 2021 2020
GBP000 GBP000
Receivables from:
BP INV2B Bidco Limited - 820
BP INV2 Holdco Limited - 421
BP INV2 Newco Limited - 51
- 1,292
====== =========
Payables to:
BP INV2B Bidco Limited (362) -
BP INV2 Holdco Limited (20) (46)
BP INV2 Newco Limited (2) (9)
(384) (55)
====== =========
Related party loan notes payable to:
BP INV2B Bidco Limited - (1,121)
====== =========
26. Group structure
A full list of subsidiary undertakings of Ashtead Technology
Holdings plc as defined by IFRS as at 31 December 2021 is disclosed
below.
Equity interest
at
Country of incorporation Unaudited
Name of the Group company 2021 2020
BP INV2 Pledgeco Limited (1) England & Wales 100% 100%
Ashtead US Pledgeco Inc USA 100% 100%
Amazon Acquisitions Limited^
(1) England & Wales 100% 100%
Ashtead Technology (South East
Asia)
PTE Limited^ (2) Singapore 100% 100%
Ashtead Technology Limited^
(3) Scotland 100% 100%
TES Survey Equipment Services
LLC^ (5) UAE 100% 100%
Ashtead Technology Offshore
Inc ^ (4) USA 100% 100%
Welaptega Marine Limited^ (6) Canada 100% 100%
Aqua-Tech Solutions LLC^ (4) USA 100% 100%
Alpha Subsea LLC^ (4) USA 100% 100%
Underwater Cutting Solutions
Ltd^ (1) England & Wales 100% 100%
^ Shares held by a subsidiary undertaking.
(1) The registered address of the subsidiary is 1 Gateshead
Close, Sunderland Road, Sandy, Bedfordshire, SG19 1RS, United
Kingdom.
(2) The registered address of the subsidiary is 80 Raffles
Place, #32-01 UOB Plaza 1, Singapore, 048624.
(3) The registered address of the subsidiary is Ashtead House,
Discovery Drive, Arnhall Business Park, Westhill, AB32 6FG, United
Kingdom.
(4) The registered address of the subsidiary is 2711 Centerville
Road, Suite 400, Wilmington, Delaware, 19808, USA.
(5) The registered address of the subsidiary is Warehouse B301,
Plot M29, ICAD III, Musaffah, Abu Dhabi, UAE.
(6) The registered address of the subsidiary is 238 Brownlow
Avenue, Unit 103, Dartmouth, Nova Scotia, B3B 1Y2, Canada.
27. Reconciliation of Non-IFRS Profit Metrics
Reconciliation of Adjusted EBITDA Unaudited
For the year ended 31 December 2021 2020
GBP000 GBP000
Adjusted EBITDA 22,437 17,037
Cost associated with IPO (3,332) -
Cost associated with M&A - (865)
Restructuring costs (1,314) (374)
One-off upgrade of IT system - (113)
One-off bad debts & debt collection
costs (39) (319)
One-off inventory adjustment 205 -
One-off asset disposal 130 -
US PPP loan forgiveness - 391
(35) (17)
Other exceptional costs -------- --------
Operating profit before depreciation,
amortisation and foreign exchange gain/(loss) 18,052 15,740
Depreciation on property, plant and
equipment 10 (7,878) (9,924)
(835) (829)
Depreciation on right-of-use asset 19 -------- --------
Operating profit before amortisation
and foreign exchange gain/(loss) 9,339 4,987
Amortisation of intangible assets 11 (1,516) (1,567)
(215) (312)
Foreign exchange gain/(loss) -------- --------
Operating profit 7,608 3,108
=============== ==========
Reconciliation of Adjusted EBITA Unaudited
For the year ended 31 December 2021 2020
GBP000 GBP000
Adjusted EBITA 13,724 6,284
Cost associated with IPO (3,332) -
Cost associated with M&A - (865)
Restructuring costs (1,314) (374)
One-off upgrade of IT system - (113)
One-off bad debts & debt collection
costs (39) (319)
One-off inventory adjustment 205 -
One-off asset disposal 130 -
US PPP loan forgiveness - 391
Other exceptional costs (35) (17)
Amortisation of intangible assets 11 (1,516) (1,567)
(215) (312)
Foreign exchange gain/(loss) -------- --------
Operating profit 7,608 3,108
=============== ==========
Reconciliation of Adjusted Profit Unaudited
After Tax 2021 2020
For the year ended 31 December
GBP000 GBP000
Adjusted Profit After Tax 9,385 2,022
Cost associated with IPO (3,332) -
Cost associated with M&A - (865)
Restructuring costs (1,314) (374)
One-off upgrade of IT system - (113)
One-off bad debts & debt collection
costs (39) (319)
One-off inventory adjustment 205 -
One-off asset disposal 130 -
US PPP loan forgiveness - 391
One-off hedge reserve movement (313) -
Loan repayment fees (100) -
Deferred finance cost write off (704) -
Other exceptional costs (35) (17)
Foreign exchange gain/(loss) (215) (312)
Amortisation of intangible assets 11 (1,516) (1,567)
377 156
Tax impact of the adjustments above -------- --------
Profit/(loss) for the financial year 2,529 (998)
=============== ===============
Adjusted Profit After Tax is used to calculate the Adjusted
basic earnings per share in Note 9. A reconciliation of adjusted
profit before tax is included in the CFO report on page 19 of the
Group's Annual Report.
Company Information
Directors
W M F C Shannon (appointed 23 November 2021)
A W Pirie (appointed 4 November 2021)
I Stewart (appointed 4 November 2021)
J A Connolly (appointed 4 November 2021)
A R C Durrant (appointed 23 November 2021)
T Hamborg-Thomsen (appointed 23 November 2021)
P Blackburn (appointed 27 May 2021, resigned 4 November
2021)
M A Caveley (appointed 27 May 2021, resigned 4 November
2021)
Company Secretary
I Stewart
Auditor
BDO LLP
Statutory Auditor
4 Atlantic Quay
70 York Street
Glasgow G2 8JX
Bankers
HSBC Bank plc
95-99 Union Street
Aberdeen AB11 6BD
Clydesdale Bank plc
1 Queen's Cross
Aberdeen AB15 4XU
Solicitors
White & Case LLP
5 Old Broad Street
London EC2N 1DW
Corporate broker
Numis Securities Ltd
45 Gresham Street
London EC2V 7BF
Registrar
Computershare Limited
The Pavilions
Bridgwater Road
Bristol BS13 8AE
Registered Office
1 Gateshead Close
Sunderland Road
Sandy
Bedfordshire SG19 1RS
Registered number: 13424040
Website
www.ashtead-technology.com
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END
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June 06, 2022 02:02 ET (06:02 GMT)
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