TIDMHSS
RNS Number : 0758B
HSS Hire Group PLC
29 September 2022
HSS Hire Group Plc
Double digit growth, improved returns and dividend
reinstated
HSS Hire Group plc ("HSS" or the "Group") today announces
results for the 26 week period ended 2 July 2022
Financial Highlights (Unaudited) H1 2022 H1 2021 Change Like-for-like(2) change
Continuing operations(1) (26 weeks to 2 July 2022) (27 weeks to 3 July 2021)
---------------------------------- --------------------------- --------------------------- --------- ------------------------
Revenue GBP159.9m GBP146.3m 9.3% 11.3%
---------------------------------- --------------------------- --------------------------- --------- ------------------------
Adjusted EBITDA(3) GBP32.9m GBP32.8m 0.4% 5.6%
Adjusted EBITA(4) GBP13.6m GBP13.1m 3.6% 18.3%
Adjusted profit before tax(5) GBP8.4m GBP0.8m GBP7.6m GBP9.2m
Adjusted basic EPS 0.96p 0.09p 0.87p 1.10p
---------------------------------- --------------------------- --------------------------- --------- ------------------------
ROCE(6) 23.8% 19.2% 4.6pp
Net debt leverage(7) - non IFRS16 0.9x 1.7x 0.8x
Net debt leverage(7) - IFRS16 1.5x 2.0x 0.5x
---------------------------------- --------------------------- --------------------------- --------- ------------------------
Other statutory extracts (2021 comparators including non-recurring credits(8) of GBP9.0m)
Operating profit GBP10.2m GBP18.1m GBP(7.9)m
Profit before tax GBP6.5m GBP6.8m GBP(0.3)m
Basic EPS 0.86p 0.96p (0.10)p
Like-for-like performance excludes the impact of the following
non-recurring benefits in 2021: additional week's trading and COVID
related income from a business interruption insurance claim and the
Republic of Ireland wage subsidy scheme
-- Solid trading performance with capital-light Services business
like-for-like(2) growth of 16%
o H1 22 like-for-like(2) revenues 11% ahead of H1 21
o Services business growth enabled by technology and broadening
the rehire partner network
o Rental revenue like-for-like(2) growth of 9% with utilisation
of 56%, maintained at high levels on larger fleet
o Strong price management and cost discipline navigating through
inflationary pressures
-- Underlying earnings progression and improved returns.
o Like-for-like(2) Adjusted EBITDA and Adjusted EBITA up 6%
and 18% respectively with Adjusted EBITA margin increased
0.5pp to 8.5%
o Significant increase in Adjusted profit before tax and Adjusted
basic EPS through improved margins and lower interest cost
o Technology-led, lower-cost operating model driving an increase
in ROCE to 23.8% (H1 21: 19.2%)
-- Robust balance sheet with leverage at 0.9x(9)
o Net debt(9) GBP49.3m, materially lower than H1 21 (GBP97.6m)
following completion of strategic divestitures in 2021
o Reduced exposure to interest base rate changes following
successful 2021 refinancing
-- Delivery of technology roadmap ahead of plan; well positioned
to build on strong H1 performance
o New operating model built around HSS ProService (customer
acquisition and enquiry conversion) and HSS Operations (fulfilment
and service) driving growth; legal restructuring completed
3 July
o Low-cost builders merchant network expanded to 60 locations
(June 21: 43), and delivered 15% growth on a same stores
basis(10)
o Continued technology investment improved enquiry conversion
to 73% with over 20% of transactions through our online channel
o Received EcoVadis(11) sustainability Advanced award; rated
at 91(st) percentile in our industry
-- Current trading and outlook
o Revenue growth of 10% in Q3 22 to date with EBITDA and EBITA
in line with management expectations
o Management remains confident that full year EBITA will be
in line with market expectations
o Capex investment forecast for 2022 is unchanged with GBP5-GBP10m
to support delivery of our technology roadmap
o Significantly strengthened balance sheet and continued positive
trajectory supports reintroduction of dividend with interim
dividend of 0.17 pence per share declared, payable on 2 November
2022 to shareholders on the register as at close of business
on 7 October 2022 (12)
Steve Ashmore, Chief Executive Officer, said:
"I am very pleased with our performance in the first half of
2022. Despite the volatile macroeconomic backdrop, we achieved
double-digit revenue growth with our capital-light, technology-led
business providing flexibility and the data to deliver for our
customers while effectively managing prices to navigate
inflationary pressures. The Board's decision to reinstate the
dividend reflects the confidence it has in our long-term growth
strategy.
We have continued to invest in our digital capabilities,
achieving key milestones on our technology roadmap ahead of
schedule, which will underpin the future growth of our two
businesses: HSS ProService and HSS Operations. The roadmap includes
the rollout of our new portal for larger customers - a self-service
platform where all hire requirements can be efficiently managed in
one place. Our first customer is already being onboarded with
significant expansion to come in the next 12 months.
While mindful of the macroeconomic backdrop we are confident
that full year EBITA will be in line with market expectations as
our operating model continues to drive growth and further cement
our position as a technology leader within the industry."
Notes
1) Results for H1 22 and H1 21 are on a continuing operations
basis (excluding Laois Hire Limited and All Seasons Hire Limited
sold in April 2021 and September 2021 respectively)
2) Like-for-like performance excludes the impact of the
following in 2021: additional week's trading and non-recurring
COVID related benefits associated with a business interruption
insurance claim and the Republic of Ireland wage subsidy scheme
3) Adjusted EBITDA is defined as operating profit before
depreciation, amortisation, and exceptional items. For this purpose
depreciation includes the net book value of hire stock losses and
write offs, and the net book value of other fixed asset disposals
less the proceeds on those disposals
4) Adjusted EBITA defined as Adjusted EBITDA less depreciation
5) Adjusted Profit before tax defined as profit before tax
excluding amortisation of brand and customer lists and exceptional
items
6) ROCE is calculated as Adjusted EBITA for the 52 weeks to 2
July 2022 divided by the average of total assets less current
liabilities (excluding intangible assets, cash and debt items) over
the same period
7) Net debt leverage is calculated as closing net debt divided
by adjusted EBITDA for the 52 weeks to 2 July 2022 (prior year 53
weeks to 3 July 2021).
8) Non-recurring credits include release of onerous property
cost provisions, business interruption insurance claim and benefit
under the Republic of Ireland wage subsidy scheme
9) Non-IFRS16 basis
10) Merchant locations open for comparable period in both H1 22 and H1 21
11) EcoVadis is one of the world's largest providers of business
sustainability ratings, assessing over 90,000 companies
worldwide
12) All dividends will be paid in cash and no scrip dividend,
other dividend reinvestment plan or scheme or currency election
will be offered to shareholders. Ex-dividend date of 6 October
2022
-Ends-
Disclaimer:
This announcement has been prepared solely to provide additional
information to shareholders and meets the relevant requirements of
the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority. This announcement should not be relied on by any
other party or for any other purpose.
This announcement contains forward-looking statements relating
to the business, financial performance and results of HSS Hire
Group plc and the industry in which HSS Hire Group plc operates.
These statements may be identified by words such as "expect",
"believe", "estimate", "plan", "target", or "forecast" and similar
expressions, or by their context. These statements are made on the
basis of current knowledge and assumptions and involve risks and
uncertainties. Various factors could cause actual future results,
performance or events to differ materially from those described in
these statements and neither HSS Hire Group plc nor any other
person accepts any responsibility for the accuracy of the opinions
expressed in this presentation or the underlying assumptions. No
obligation is assumed to update any forward-looking statements.
Notes to editors
HSS Hire Group plc provides tool and equipment hire and related
services in the UK and Ireland through a nationwide network of
Group companies and third-party suppliers. It offers a one-stop
shop for all equipment through a combination of its complementary
rental and re-hire business to a diverse, predominantly B2B
customer base serving a range of end markets and activities. Over
90% of its revenues come from business customers. HSS is listed on
the AIM Market of the London Stock Exchange. For more information
please see www.hsshiregroup.com .
For further information, please contact:
HSS Hire Group plc Tel: 020 3757 9248 (on 29
September 2022)
Steve Ashmore, Chief Executive Officer Thereafter, please email:
Investors@hss.com
Paul Quested, Chief Financial Officer
Greig Thomas, Head of Group Finance
Teneo
Tom Davies Tel: 07557 491 860
Charles Armitstead Tel: 07703 330 269
Numis Securities (Nominated Adviser Tel: 020 7260 1000
and Broker)
Stuart Skinner
George Price
Chief Executive Officer's Report
The first six months of 2022 has seen the business continue to
deliver increasingly impressive results. With strong like-for-like
revenue growth on improved Adjusted EBITA margins, combined with
further improvement in returns, our operating model is performing
well.
Our business reorganisation was finalised with the incorporation
of HSS ProService which we completed on 3(rd) July, creating a
business focused on customer acquisition, sales enquiry conversion
and leveraging our digital assets. Our technology roadmap is ahead
of schedule, helping our asset-light, technology-focused ProService
business deliver exciting results and putting us in a strong
position for further profitable growth.
Technology Roadmap
In our FY21 results presentation we set out our technology
roadmap for 2022 which involved four key milestones for our
technology development. I am pleased to report that, following a
period of successful development, we are ahead of plan:
1. Cash transactions through HSS Pro. HSS Pro is the interface
colleagues use to fulfil enquiries which we rolled out for all
account-based transactions in 2021. We have now added the necessary
functionality to allow colleagues to fulfil enquiries for cash
customers (including ID-checking and payment-processing). We have
just started rolling this out and with significant improvements in
the user journey, we forecast much better conversion rates and
strengthening enquiry levels, mirroring our experience with the
initial rollout of HSS Pro.
2. Extended rehire range available on hss.com. Our rehire
revenues have for a long time grown ahead of the Group, despite
limited visibility and no transactional functionality for these
products on our website. We are now completing the development of
our platform that will allow us to surface an extended range of
products on our website and enable customers to complete a seamless
end-to-end rehire transaction online. This tech is currently in
test, and we expect to roll it out in Q4, driving up page views and
conversion rates amongst trade and retail customers.
3. Enhance the ProService platform. This interface to our
technology provides larger customers with the ability to
efficiently manage and control their building services requirements
on a single platform, including the procurement of equipment hire
and other related services such as equipment sales, waste
management, training and potentially more. We have commenced the
rollout to one of the UK's top 20 construction companies, which
will use this platform within its procurement team. We also have
agreement with our number one strategic account to transfer their
business to this platform in Q1 23. We are very excited about the
prospect of offering this technology to many more key accounts next
year, increasing our share of their wallets.
4. Further development of the supplier portal. Following
enhancements to the supplier interface, we are now promoting
reciprocal business from suppliers who can use the platform to
source equipment for their customers that they cannot otherwise
fulfil. This allows them to benefit from our network of suppliers,
improving their own proposition and returns.
In summary, all four elements of our 2022 roadmap will be rolled
out in the near term, leaving the HSS ProService business well
poised for its next stage of growth.
Builders Merchant Network Expansion
In H1 2022 we increased the number of builders merchant
locations from 53 to 60, and they now typically account for 15-20%
of transactions raised in England and Wales. The 60 locations
provide customers with a convenient location to collect equipment
alongside their building materials, saving them time during their
busy working day. We have 18 builders merchant partners all of whom
have provided positive feedback on the mutually beneficial
partnerships. We continue to benefit from access to the merchants'
customer base and footfall, and the combination of our brand and
service offering strengthens their overall customer proposition.
This channel delivered 15% like-for-like growth in H1 22 and we
continue to be delighted with the way in which these partnerships
are maturing.
Incorporation of HSS ProService
In 2021 we began to reorganise our business into two divisions
to bring new focus on how we acquire customers and then fulfil
their requirements. We recently completed the legal separation of
the two businesses. Our newly incorporated ProService business is
an asset-light, technology-driven marketplace business with 27,000
customers and over 600 suppliers, all connected through our
technology platform Brenda. The platform provides customers with
access to the full market of hire equipment with, we believe, the
broadest range of products and best availability in our industry.
The platform provides suppliers with low-cost access to lots of
customers, and the ability to drive utilisation and returns. We are
very excited about the growth prospects for our ProService
business, together with our HSS Operations business which is the
primary supplier to it.
HSS Operations
In H1 2022 our HSS Operations business completed the rollout of
route optimisation software (Satalia). This technology has been
embedded into the operation of our transport teams in Customer
Distribution Centres and is delivering improved efficiency as well
as maintaining delivery performance at 99%. Average mileage per job
has reduced by 12%, helping us to reduce scope one carbon emissions
and to counter inflationary pressures. With the technology embedded
we can begin the second phase of this project, which will be
delivered in 2023 and result in an improved delivery time window
proposition being available for customers at the point of
order.
Our HSS Operations business continues to deliver strong
performance metrics beyond transport efficiency. Accident frequency
rates are materially lower than FY21, and these were already at
historically low levels. Fleet utilisation remains high at 56%,
supporting the Group's excellent ROCE. Click and collect adoption
remains strong at 16%.
ESG Progress
In June 2022 we published our first ever ESG Impact report,
which sets out our 2040 Net Zero plan, our ESG targets and the
progress we are making. The report has been exceptionally well
received by a broad selection of stakeholders, who are pleased to
see the progress made and the ambitious plans we have set out. In
August 2022, following an extensive evidence-based assessment by
EcoVadis, we were awarded their 'Advanced' sustainability rating
award. EcoVadis is the world's largest provider of business
sustainability ratings, assessing over 90,000 companies worldwide,
and we are delighted that they have placed us in the 91(st)
percentile of businesses in our industry for ESG performance.
Market Outlook
Despite inflationary pressures and uncertainty created by the
war in Ukraine, we have seen resilience across the broad range of
end markets our business is exposed to. Whilst uncertainty remains,
the construction output forecasts in the market continue to point
to growth in 2023 and 2024. We are confident that should the
outlook worsen, our flexible, low-cost business model and strong
balance sheet puts us in the best possible position to outperform
the sector.
In summary, during H1 2022 we finalised the reorganisation of
our business, made great advances on our technology roadmap and
delivered an impressive set of financial results. All this while
operating safely, maintaining high levels of customer service and
pursuing our ambitious ESG targets. I would like to thank all
stakeholders and in particular our colleagues for their great work
and its part in delivering these results.
Group Financial Performance
Results and commentary are presented on a continuing operations
basis unless otherwise noted, reflecting the impact of the
strategic disposals of Laois and All Seasons Hire in April and
September 2021 respectively.
Revenue and segmental contribution
The H1 22 results are based on 26 weeks of trading whereas H1 21
was 27 weeks. Revenue growth metrics versus H1 21 have been
adjusted to exclude the impact of this additional week as well as
non-recurring COVID related benefits in H1 21 associated with a
business interruption insurance claim and the Republic of Ireland
wage subsidy scheme (with the adjusted metric shown in
brackets).
Revenue in H1 22 was GBP159.9m, 9% (11%) higher than the
previous period (H1 21: GBP146.3m), a solid trading performance
delivered through effective strategy execution in a difficult
macro-environment. The Group has managed well-documented
inflationary pressures through continued price management.
Turning to segmental performance, Rental and related revenues
were GBP99.3m in H1 22 (H1 21: GBP92.9m), 7% (9%) higher than in H1
21, and with a high level of utilisation at 56% despite a larger
fleet. Contribution is GBP64.9m (H1 21: GBP64.8m). Margin decreased
to 65.3% (H1 21: 69.7%) with continued strong price management
offset by the increased cost of fuel impacting revenue mix to the
detriment of margin.
Services revenue has increased by 13% (16%) to GBP60.6m (H1 21:
GBP53.4m). Contribution increased to GBP9.1m (H1 21: GBP7.7m).
Margins have increased by 0.6pp at 15.1% (H1 21: 14.5%) with the
overall performance driven by improved customer experience (via
ongoing technology enhancements and broadening the third party
rehire supply chain) and record profit levels in the Training
business.
Costs
In October 2020 the Group implemented a new digitally led
operating model, reducing the fixed cost base by GBP15m. During H1
21 significant financial benefit was achieved due to the early
surrender of property leases (GBP7.4m) which resulted in the
release of related provisions and liabilities. These non-recurring
items mask the ongoing benefit from the new operating model and the
disciplined cost control that has been maintained since then.
Cost of sales increased to GBP81.3m during the period (H1 21:
GBP71.0m) driven by the growth in the Services business but also as
a result of the increase in resale fuel prices noted in the
segmental commentary above.
Distribution costs increased by GBP2.1m to GBP14.4m (H1 21:
GBP12.4m). Costs have been tightly managed but have increased due
to the combined impact of higher road fuel prices and a volume
driven uplift in activity, as well as additional payments made to
colleagues in H1 22 to support them through the cost-of-living
challenge.
Administrative expenses increased by GBP8.1m to GBP53.2m (H1 21:
GBP45.1m) however the prior year benefited by GBP7.5m from property
liability releases following surrender of a significant number of
non-trading stores and the current year includes GBP0.7m of
exceptional expenses principally related to the Group's restructure
(see below) all of which have been treated as exceptional.
Excluding these items, costs are broadly flat despite one-off
payments being made to colleagues as part of the cost-of-living
support noted above.
Net finance expenses
Net finance expenses have reduced by GBP7.6m, following the
successful refinancing completed in November 2021, which saw the
Group reducing its level of senior finance facility to GBP70m and
achieving a significant reduction in the interest rate.
Other operating income
Other operating income of GBP0.3m relates to sub-let income on
property space not required by the Group. In the prior year GBP1.6m
was recognised with GBP1.2m received under a COVID-19 business
interruption insurance claim, GBP0.2m release of provision held
against Irish Temporary Wage Subsidy Scheme 2020 receipts and the
balance being sublease rental income.
Exceptional items
Total exceptional items of GBP0.6m have been recognised in the
period. Cost of GBP0.9m relates to completing the legal separation
of the ProService and HSS Operations businesses into separate
entities. The separation will create better visibility of results
and allow increased focus on delivery within each business. The
actual separation took place after the reporting date. Revisiting
the discount rate on the Group's onerous contract provision
resulted in a credit of GBP0.2m and GBP0.2m was released from
provisions for closed stores. In the prior year, an exceptional
credit of GBP7.4m was recognised, the result of efforts to
negotiate and complete early surrenders on stores closed as part of
the Group's acceleration of strategy announced in October 2020.
Profitability
Adjusted EBITDA of GBP32.9m in H1 22 is slightly higher than the
prior period (H1 21: GBP32.8m), however as noted above, the prior
year benefited from an additional week's trading as well as GBP1.6m
of COVID related income and cost recovery. Adjusting for these
items, EBITDA is 6% ahead of the prior year as the Group's lower
cost operating model and investments in technology continue to
deliver.
Adjusted EBITA increased from GBP13.1m in H1 21 to GBP13.6m in
H1 22 with margin decreasing slightly from 9% in H1 21 to 8% in the
current year. Adjusting for the additional week's trading and
non-recurring COVID related income, EBITA margins increased by
0.5pp.
The result of the drivers noted above is that the Group
recognised a much-improved Adjusted profit before tax of GBP8.4m
versus GBP0.8m in the prior period . The Group has changed the
definition of Adjusted profit before tax to include amortisation of
software (refer to note 19). Profit from continuing operations
before tax decreased slightly to GBP6.5m (H1 21: GBP6.8m)
reflecting the significant impact of exceptional credits in the
prior year.
The improved profitability led to the adjusted basic earnings
per share increasing to 0.96p in H1 22 from 0.09p in the prior
period. Basic earnings per share were 0.86p versus 0.96p in the
prior period. The diluted basic earnings per share were only
marginally lower at 0.84p versus 0.93p in H1 21, despite the prior
period benefitting from the material non-recurring items already
highlighted.
Profit from discontinued operations (H1 21)
To enable the Group to strengthen its balance sheet and focus on
its strategic priority to Transform the Tool Hire Business, the
Group made two strategic divestments during the year ended 1
January 2022:
Laois Hire Services Limited
Laois Hire Services Limited, the Irish large plant hire
business, was sold to Briggs Equipment Ireland Limited on 7 April
2021. Proceeds of the disposal, net of transaction costs, were
GBP10.0m generating a profit on disposal of GBP3.2m.
All Seasons Hire Limited
All Seasons Hire Limited, a cooling and heating provider, was
sold to Cross Rental Services Limited with the transaction
completing on 29 September 2021. Proceeds of the disposal, net of
transaction costs, were GBP54.3m generating a profit on disposal of
GBP38.0m. In the H1 21 comparator the All Seasons Hire result has
been re-presented as profit from discontinued operations.
As part of these transactions, the Group entered into commercial
agreements to cross-hire equipment to ensure the broadest possible
distribution of, and customer access to, each party's existing
fleet.
Return on Capital Employed
ROCE increased to 24% from 19% in the prior year, supported by
strong performance in the capital-light Services business, targeted
fleet investment using the Group's insight capability and growth
through the digitally led low-cost operating model established in
2020. ROCE is calculated as Adjusted EBITA (last twelve months)
divided by average capital employed, where capital employed is
total assets except intangibles, derivatives and cash, less current
liabilities excluding debt items.
Net debt
Net debt on 2 July 2022 was GBP103.2m, a reduction of GBP54.5m
from the H1 21 (GBP157.8m). This has been driven by improved
EBITDA, strong working capital management, proceeds from the
disposal of Laois and ASH and a reduction in lease liabilities
following property surrenders. Leverage has reduced to 1.5x from
2.0x (H1 21 as reported, FY 21: 1.5x).
The debt facilities consist of a GBP70.0m senior finance
facility and an undrawn revolving credit and overdraft facility of
GBP23.2m, both maturing in November 2025 but with an option to
extend for a further 12 months. Including cash balances of
GBP38.7m, the Group had access to GBP74.3m of combined liquidity at
2 July 2022.
Dividend
The Group has made great progress in delivering its strategy,
including strengthening the balance sheet, which has resulted in
increased profitability and cash generation while continuing to
invest in the technology roadmap. The Board has therefore decided
to implement a progressive dividend policy. An interim dividend of
0.17p per share was approved by the Board on 28 September and will
be paid during November 2022.
Going concern
While encouraged by the resilience of the Group during a period
of continued disruption, the Directors continue to model via a
number of scenarios current macroeconomic factors such as
increasing inflation and interest rates. At 28 September 2022 the
Group had sufficient liquidity to operate within banking covenants
for the next 12 months even under a 'reasonable worst case'
scenario. The reasonable worst case scenario models lower than
forecast market growth rates, increased inflationary pressures and
an increase in debtor days.
After reviewing the above, considering current and future
developments and principal risks and uncertainties, and making
appropriate enquiries, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational
existence over a period of at least twelve months from the date of
approval of these financial statements. Accordingly, they continue
to adopt the going concern basis in preparing these unaudited
condensed consolidated financial statements.
Risks and uncertainties
The principal risks and uncertainties that could have a material
impact upon the Group's performance over the remaining 26 weeks of
the 2022 financial year have not changed significantly from those
described in the Group's 2021 Annual Report and are summarised in
note 18 of this interim report.
The main risk expected to affect the Group in the remaining 26
weeks of the 2022 financial year is macroeconomic conditions, which
includes the impact of supply chain pressures, high inflation on
energy costs and colleagues, and on demand from new and existing
customers within the numerous and diverse market sectors which HSS
serves.
By order of the Board
Steve Ashmore
Director
28 September 2022
HSS Hire Group plc
Unaudited condensed consolidated income statement
As restated
26 weeks 27 weeks
ended ended
2 July 3 July
2022 2021
Note GBP000s GBP000s
Revenue 3 159,937 146,298
Cost of sales (81,254) (71,027)
Gross profit 78,683 75,271
--------- ------------
Distribution costs (14,425) (12,359)
Administrative expenses (53,160) (45,106)
Impairment losses on contract assets (1,204) (1,283)
Other operating income 4 315 1,554
Adjusted EBITDA 19 32,917 32,788
Less: Depreciation 6 (19,359) (19,707)
Adjusted EBITA 19 13,558 13,081
Less: Exceptional items (non-finance) 5 (488) 7,539
Less: Amortisation 6 (2,861) (2,543)
------------
Operating profit 10,209 18,077
--------- ------------
Finance expense 7 (3,674) (11,322)
Adjusted profit before tax 19 8,376 764
Less: Exceptional items (non-finance) 5 (488) 7,539
Less: Exceptional items (finance) 5 (66) (120)
Less: Amortisation of customer relationships
and brands 6 (1,287) (1,428)
------------
Profit on continuing operations before
tax 6,535 6,755
--------- ------------
Income tax charge (449) (54)
Profit from continuing operations 6,086 6,701
--------- ------------
Profit on disposal of discontinued
operations 17 - 3,180
Profit from discontinued operations,
net of tax 17 - 4,170
Profit for the financial period 6,086 14,051
========= ============
Earnings per share (pence)
Continuing operations
Adjusted basic earnings per share 8 0.96 0.09
Adjusted diluted earnings per share 8 0.94 0.09
Basic earnings per share 8 0.86 0.96
Diluted earnings per share 8 0.84 0.93
Continuing and discontinued operations
Basic earnings per share 8 0.86 2.02
Diluted earnings per share 8 0.84 1.95
The notes form part of these condensed consolidated financial
statements.
HSS Hire Group plc
Unaudited condensed consolidated statement of comprehensive
income
26 weeks 27 weeks
ended ended
2 July 3 July
2022 2021
GBP000s GBP000s
Profit for the financial period 6,086 14,051
Items that may be reclassified
to profit or loss:
Foreign currency translation
differences arising on consolidation
of foreign operations 7 (654)
Other comprehensive gain/(loss)
for the period, net of tax 7 (654)
--------- ---------
Total comprehensive profit
for the period 6,093 13,397
========= =========
Attributable to owners of the
Group 6,093 13,397
========= =========
The notes form part of these condensed consolidated financial
statements.
HSS Hire Group plc
Unaudited condensed consolidated statement of financial
position
2 July 1 January
2022 2022
Note GBP000s GBP000s
ASSETS
Non-current assets
Intangible assets 9 147,561 147,648
Property, plant and equipment
- Hire equipment 10 53,177 44,332
- Non-hire assets 10 13,682 15,605
Right of use assets
- Hire equipment 11 20,776 20,651
- Non-hire assets 11 49,593 55,329
Deferred tax asset 2,596 2,404
---------- ----------
287,385 285,969
Current assets
Inventories 3,105 2,682
Trade and other receivables 12 80,758 78,680
Cash 38,689 42,269
---------- ----------
122,552 123,631
Total assets 409,937 409,600
LIABILITIES
Current liabilities
Trade and other payables 13 (80,286) (78,704)
Lease liabilities 14 (17,946) (19,310)
Provisions 16 (4,532) (4,713)
Current tax liabilities - (293)
---------- ----------
(102,764) (103,020)
Non-current liabilities
Lease liabilities 14 (53,601) (57,255)
Borrowings 15 (68,407) (68,166)
Provisions 16 (16,665) (19,110)
Deferred tax liabilities (148) (148)
---------- ----------
(138,821) (144,679)
Total liabilities (241,585) (247,699)
Net assets 168,352 161,901
========== ==========
EQUITY
Share capital 7,050 7,050
Share premium 45,552 45,552
Merger reserve 97,780 97,780
Foreign exchange translation reserve (747) (754)
Retained earnings 18,717 12,273
---------- ----------
Total equity 168,352 161,901
========== ==========
The notes form part of these condensed consolidated financial
statements.
HSS Hire Group plc
Unaudited condensed consolidated statement of changes in
equity
Foreign
exchange
Share Share Warrant Merger translation Retained Total
capital premium reserve reserve reserve earnings equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
At 2 January 2022 7,050 45,552 - 97,780 (754) 12,273 161,901
Profit for the period - - - - - 6,086 6,086
Foreign currency translation
differences arising on
consolidation
of foreign operations - - - - 7 - 7
--------- --------- --------- --------- ------------- ---------- --------
Total comprehensive profit
for the period - - - - 7 6,086 6,093
--------- --------- --------- --------- ------------- ---------- --------
Transactions with owners
recorded directly in equity
Share-based payment charge - - - - - 358 358
--------- --------- --------- --------- ------------- ---------- --------
At 2 July 2022 7,050 45,552 - 97,780 (747) 18,717 168,352
========= ========= ========= ========= ============= ========== ========
Foreign
exchange
Share Share Warrant Merger translation Retained Total
capital premium reserve reserve reserve deficit equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
At 27 December 2020 6,965 45,580 2,694 97,780 15 (45,444) 107,590
Profit for the period - - - - - 14,051 14,051
Foreign currency translation
differences arising on consolidation
of foreign operations - - - - (654) - (654)
--------- --------- --------- --------- ------------- --------- --------
Total comprehensive income/(loss)
for the period - - - - (654) 14,051 13,397
--------- --------- --------- --------- ------------- --------- --------
Cost true up relating to FY
20 share issue - (28) - - - - (28)
Share-based payment charge - - - - - 451 451
Share-based payment transfer
to reserves - - - - - (77) (77)
--------- --------- --------- --------- ------------- --------- --------
At 3 July 2021 6,965 45,552 2,694 97,780 (639) (31,019) 121,333
========= ========= ========= ========= ============= ========= ========
The notes form part of these condensed consolidated financial
statements.
HSS Hire Group plc
Unaudited condensed consolidated statement of cash flows
26 weeks 27 weeks
ended ended
2 July 3 July
Note 2022 2021
GBP000s GBP000s
Profit after income tax 6,086 14,051
Adjustments for:
- Tax 449 37
- Profit on disposal of discontinued
operations 17 - (3,180)
- Amortisation 6 2,851 2,634
- Depreciation 6 17,749 19,398
- Accelerated depreciation relating to
hire stock customer losses and hire stock
write offs 6 1,666 1,766
- Profit on disposal of property, plant
and equipment and right of use assets 6 (64) (47)
- Lease disposals 14 - (3,463)
- Capital element of net investment in
sublease receipts - 129
- Share-based payment charge 358 451
- Foreign exchange gains on operating
activities (40) (378)
- Finance expense 7 3,674 11,388
Changes in working capital (excluding
the effects of disposals and exchange
differences on consolidation):
- Inventories (423) (389)
- Trade and other receivables 12 (1,775) 3,265
- Trade and other payables 13 1,954 10,217
- Provisions 16 (1,800) (6,929)
--------- ---------
Net cash flows from operating activities
before changes in hire equipment 30,685 48,950
Purchase of hire equipment 10 (14,404) (9,749)
Cash generated from operating activities 16,281 39,201
--------- ---------
Net interest paid (3,228) (10,498)
Income tax (paid)/received (1,238) 7
--------- ---------
Net cash generated from operating activities 11,815 28,710
Cash flows from investing activities
Proceeds on disposal of business, net
of cash disposed of 17 - 9,550
Proceeds on disposal of assets as part
of business divestiture 17 - 526
Purchases of non-hire property, plant,
equipment and software 10,11 (3,670) (2,836)
--------- ---------
Net cash generated (used in)/from investing
activities (3,670) 7,240
Cash flows from financing activities
Costs associated with capital raise - (1,556)
Repayment of borrowings - (38,432)
Capital element of lease liability payments 14 (11,725) (12,279)
Net cash used in financing activities (11,725) (52,267)
Net decrease in cash (3,580) (16,317)
Cash at the start of the period 42,269 97,573
-------- ---------
Cash at the end of the period - continuing
operations 38,689 79,626
Cash at the end of the period - discontinued
operations - 1,630
-------- ---------
Cash at the end of the period 38,689 81,256
The notes form part of these condensed consolidated financial
statements.
HSS Hire Group plc
Notes forming part of the unaudited condensed consolidated
financial statements
1. General information
The Company is a public limited company, is quoted on the AIM
market of the London Stock Exchange and is incorporated and
domiciled in the United Kingdom. The address of the registered
office is Building 2, Think Park, Mosley Road, Manchester M17 1FQ.
These condensed consolidated financial statements comprise the
Company and its subsidiaries (the 'Group') and cover the 26 week
period ended 2 July 2022.
The Group is primarily involved in providing tool and equipment
hire and related services in the United Kingdom and the Republic of
Ireland.
The condensed consolidated financial statements were approved
for issue by the Board on 28 September 2022.
The condensed consolidated financial statements do not
constitute the Statutory Accounts within the meaning of Section 434
of the Companies Act 2006 and have not been subject to audit by the
Group's auditor. Statutory Accounts for the year ended 1 January
2022 were approved by the Board on 27 April 2022 and delivered to
the Registrar of Companies. The auditor's report on those accounts
was unqualified and did not contain a statement under Section
498(2) or (3) of the Companies Act 2006.
2. Basis of preparation and significant accounting policies
The condensed consolidated financial statements for the 26 weeks
ended 2 July 2022 have been prepared in accordance with IAS 34
Interim Financial Reporting. The condensed consolidated financial
statements should be read in conjunction with the Group's Annual
Report and Accounts for the year ended 1 January 2022, which were
prepared in accordance with IFRS as adopted by the UK (IFRS).
Accounting policies are consistent with those in the Statutory
Accounts for the year ended 1 January 2022.
Going concern
At 2 July 2022, the Group's financing arrangements consisted of
a drawn senior finance facility of GBP70.0m, undrawn overdraft
facilities of GBP6.0m, undrawn revolving credit facilities of
GBP17.2m and finance lease lines to fund hire fleet capital
expenditure, of which GBP12.4m had not been utilised. Both the
senior finance facility and revolving credit facility are subject
to net debt leverage and interest rate cover financial covenant
tests each quarter. At the reporting date the Group had significant
headroom against these covenants. Cash at 2 July 2022 was
GBP38.7m.
While encouraged by the resilience of the Group during a period
of continued disruption, the Directors continue to model via a
number of scenarios current macroeconomic factors such as
increasing inflation and interest rates. At 28 September 2022 the
Group had sufficient liquidity to operate within banking covenants
for the next 12 months even under a 'reasonable worst case'
scenario. The reasonable worst case scenario models lower than
forecast market growth rates, increased inflationary pressures and
an increase in debtor days.
After reviewing the above, considering current and future
developments and principal risks and uncertainties, and making
appropriate enquiries, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational
existence over a period of at least twelve months from the date of
approval of these financial statements. Accordingly, they continue
to adopt the going concern basis in preparing these unaudited
condensed consolidated financial statements.
Prior period restatement
The group made two strategic divestitures during the year ended
1 January 2022 (see note 17). These met the IFRS 5 definition of
discontinued operations and so the prior period figures included in
the Consolidated Income Statement and the supporting notes have
been re-presented to exclude amounts relating to discontinued
operations.
Following a review of the Annual Report and Accounts for the
year to 26 December 2020 by the FRC's Corporate Reporting Review
Team, a change has been made to separately disclose the impairment
loss on trade receivables of GBP1.3m on the face of the
Consolidated Income Statement. Previously it was included within
administrative expense. There is no impact on the profit for the
period.
3. Segmental reporting
The Group's operations are segmented into the following
reportable segments:
- Rental and related revenue; and
- Services.
Rental and related revenue comprises the rental income earned
from owned tools and equipment, including powered access, power
generation and HVAC assets, together with directly related revenue
such as resale (fuel and other consumables), transport and other
ancillary revenues. Services comprise the Group's HSS OneCall
rehire business and HSS Training. HSS OneCall provides customers
with a single point of contact for the hire of products that are
not held within HSS' fleet and are obtained from approved third
party partners; HSS Training provides customers with specialist
safety training across a wide range of products and sectors.
Contribution is defined as segment operating profit before
branch and selling costs, central costs, depreciation, amortisation
and exceptional items.
All segment revenue, operating profit, assets and liabilities
are attributable to the principal activity of the Group being the
provision of tool and equipment hire and related services in, and
to customers in, the United Kingdom and the Republic of Ireland. No
single customer represented more than 10% of Group Revenue in the
26 week period ending 2 July 2022 (27 weeks ending 3 July 2021: one
customer was 10% or more of Group Revenue).
26 weeks ended 2 July 2022
Rental
(and related
revenue) Services Central Total
GBP000s GBP000s GBP000s GBP000s
Total revenue from external
customers from continuing
operations 99,311 60,626 - 159,937
-------------- --------- --------- ---------
Contribution 64,872 9,129 - 74,001
Branch and selling costs (26,740) (26,740)
Central costs (14,344) (14,344)
Adjusted EBITDA 32,917
Less: Exceptional items (non-finance) (488) (488)
Less: Depreciation and amortisation (12,295) (224) (9,701) (22,220)
Operating profit 10,209
Net finance expenses (3,674)
Profit before tax from continuing
operations 6,535
---------
As at 2 July 2022
Rental
(and related
revenue) Services Central Total
GBP000s GBP000s GBP000s GBP000s
Additions to non-current assets
Property, plant and equipment 15,416 41 865 16,322
Right of use assets 3,700 144 1,307 5,151
Intangibles 1,037 39 1,688 2,764
-------------- --------- ---------- ----------
Non-current assets net book
value
Property, plant and equipment 53,177 150 13,532 66,859
Right of use assets 20,776 401 49,192 70,369
Intangibles 4,692 3,910 138,959 147,561
Unallocated corporate assets
Deferred tax assets 2,596 2,596
Current assets 122,552 122,552
Current liabilities (102,764) (102,764)
Non-current liabilities (138,821) (138,821)
168,352
----------
As restated(1)
27 weeks ended 3 July 2021
Rental
(and related
revenue) Services Central Total
GBP000s GBP000s GBP000s GBP000s
Total revenue from external
customers from continuing
operations 92,864 53,434 - 146,298
-------------- --------- --------- ---------
Contribution 64,756 7,745 - 72,501
Branch and selling costs (24,863) (24,863)
Central costs (14,850) (14,850)
Adjusted EBITDA 32,788
Add back: Exceptional credit 7,539 7,539
Less: Depreciation and amortisation (13,590) (297) (8,363) (22,250)
Operating loss 18,077
Net finance expenses (11,322)
Profit before tax from continuing
operations 6,755
---------
1. The notes supporting the income statement have been restated
to disclose continuing operations (note 2).
As at 1 January 2022
Rental
(and related
revenue) Services Central Total
GBP000s GBP000s GBP000s GBP000s
Additions to non-current assets
Property, plant and equipment 18,558 16 2,750 21,324
Right of use assets 8,558 56 6,826 15,440
Intangibles 2,928 39 1,361 4,328
-------------- --------- ---------- ----------
Non-current assets net book
value
Property, plant and equipment 44,332 129 15,476 59,937
Right of use assets 20,651 384 54,945 75,980
Intangibles 143,553 836 3,259 147,648
Unallocated corporate assets
Deferred tax asset 2,404 2,404
Current assets 123,631 123,631
Current liabilities (103,020) (103,020)
Non-current liabilities (144,679) (144,679)
Net assets 161,901
----------
4. Other operating income
As restated(1)
26 weeks 27 weeks
ended ended
2 July 2022 3 July 2021
GBP000s GBP000s
COVID-19 Government grant income:
Job retention schemes - 232
Insurance proceeds - 1,203
Sublease rental and service
charge income 315 119
-------------- ---------------
315 1,554
============== ===============
During the period sub-let rental income of GBP0.3m (27 weeks
ended 3 July 2021: GBP0.1m) was received on properties no longer
used by the Group for trading purposes.
During the 27 weeks ended 3 July 2021 the Group recognised
GBP0.2m of income received in 2020 as a result of earlier
participation in the Republic of Ireland's COVID-19 Wage Subsidy
Scheme. Recognition had been deferred pending confirmation of
entitlement. During the 27 weeks ended 3 July 2021 the Group also
received GBP1.2m from a COVID-19 business interruption insurance
claim.
1. The notes supporting the income statement have been restated
to disclose continuing operations (note 2).
5. Exceptional items
Items of income or expense have been shown as exceptional
because of their size and nature or because they are outside the
normal course of business. As a result, during the 26 weeks ended 2
July 2022 the Group has recognised exceptional items as
follows:
Included 26 weeks
Included in other Included ended
in administrative operating in finance 2 July
expenses income expense 2022
GBP000s GBP000s GBP000s GBP000s
Onerous property costs/(credits) 12 (258) 13 (233)
Costs relating to restructure 945 - - 945
Onerous contract (211) - 53 (158)
------------------- ----------- ------------ ---------
Total 746 (258) 66 554
------------------- ----------- ------------ ---------
During the 27 weeks ended 3 July 2021, the Group recognised
exceptional items analysed as follows:
27 weeks
Included Included ended
in administrative in finance 3 July
expenses expense 2021
GBP000s GBP000s GBP000s
Release of onerous
property (credits)/costs (7,539) 120 (7,419)
------------------- ------------ ---------
Exceptional items - continuing
operations (7,539) 120 (7,419)
Business divesture - discontinued
operations (note 17) (3,180) - (3,180)
Total (10,719) 120 (10,599)
=================== ============ =========
Costs related to onerous properties: branch and office closures
(incurred in 2022 and 2021)
In the 26 weeks ended 2 July 2022 an exceptional credit of
GBP0.2m has been recognised, this mainly relates to sublease income
on vacant stores. In the 27 weeks ended 3 July 2021 an exceptional
credit of GBP7.4m was recognised. This related to the release of
lease liabilities and onerous non-rental property cost and
dilapidation provisions on surrender of properties closed as part
of the Group's acceleration of strategy announced in October
2020.
Cost relating to restructuring (incurred in 2022 only)
Following the changes made to its operating network in Q4 2020
and the roll-out of HSS Pro in Q1 2021, the Group commenced an
exercise to legally separate the HSS Operations and Pro Service
divisions into distinct entities. Fees incurred relating to the
restructure of GBP0.9m have been recognised as exceptional. The
legal separation was completed on 3 July 2022 although further
costs are expected in relation to increasing the technological
capability and efficiency of the Group.
Business divesture (incurred in 2021 only)
To enable the Group to focus on its strategic priority to
Transform the Tool Hire Business, the disposal of Laois Hire
Service Limited, the Irish large plant hire business, to Briggs
Equipment Ireland Limited ("Briggs") completed on 7 April 2021.
Proceeds of the disposal, net of transaction costs, were GBP10.0m
generating a profit on disposal of GBP3.2m. As part of the
transaction, HSS entered into a commercial agreement with Briggs
for the cross hire of equipment to ensure the broadest possible
distribution of, and customer access to, each party's existing
fleet.
6. Depreciation and amortisation expense
As restated(1)
26 weeks 27 weeks
ended ended
2 July 2022 3 July 2021
GBP000s GBP000s
Amortisation 2,861 2,543
Depreciation 19,359 19,707
====================== =================
Amounts charged in respect 26 weeks ending 2 July 27 weeks ending 3 July
of depreciation: 2022 2021
Property, Right Property, Right
plant and of use plant of use
equipment assets Total and equipment assets Total
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Depreciation (notes
10,11) 8,087 9,662 17,749 7,889 11,509 19,398
Accelerated depreciation
relating to hire stock
lost by customers or
written off (notes 10,11) 1,404 262 1,666 6,488 133 6,621
Loss on disposal of
other assets (notes
10,11) 56 - 56 625 304 929
Total depreciation per
notes 10,11 9,547 9,924 19,471 15,002 11,946 26,948
----------- -------- ---------- --------------- -------------- ----------
Items not charged to income statement (continuing
operations)
Dilapidations profit
on surrender (120) - (120) - - -
Accelerated depreciation
included in exceptionals 8 - 8 (243) - (243)
Disposal of discontinued
operations hire stock
assets - - - (4,612) - (4,612)
(Loss)/profit on disposals
included in exceptional
amounts - - - (94) 145 51
Disposal of discontinued
operations other assets - - - (588) (439) (1,027)
Depreciation from discontinued
operations - - - (1,172) (238) (1,410)
Total non-exceptional
depreciation from continuing
operations 9,435 9,924 19,359 8,293 11,414 19,707
=========== ======== ========== =============== ============== ==========
1. The notes supporting the income statement have been restated
to disclose continuing operations (note 2).
Amounts charged in respect of amortisation:
26 weeks 27 weeks
ended ended
2 July 2022 3 July 2021
GBP000s GBP000s
Intangible assets
Amortisation (note
9) 2,851 2,634
Loss on write off 10 -
2,861 2,634
--------------- -------------
Less amortisation from discontinued
operations - (91)
Total non-exceptional
amortisation 2,861 2,543
=============== =============
7. Finance income and expense
As restated(1)
26 weeks 27 weeks
ended ended
2 July 2022 3 July 2021
GBP000s GBP000s
Senior finance facility 1,269 7,590
Amortisation of debt issue costs 254 1,085
Accelerated amortisation of debt
issue costs - 166
Lease liabilities 1,936 2,031
Interest unwind on discounted
provisions 94 13
Revolving credit facility, including
commitment fees 132 299
Other interest (received)/paid (11) 138
3,674 11,322
============== ===============
1. The notes supporting the income statement have been restated
to disclose continuing operations (note 2).
8. Earnings per share
Basic earnings per share:
Profit Profit Weighted Earnings Earnings
after tax after tax average after after tax
from total from continuing number tax from from continuing
operations operations of shares total operations
operations per share
per share
GBP000s GBP000s 000s pence pence
------------ ----------------- ----------- ------------ -----------------
26 weeks ended
2 July 2022 6,086 6,086 704,988 0.86 0.86
27 weeks ended 3
July 2021 14,051 6,701 696,478 2.02 0.96
============ ================= =========== ============ =================
Basic earnings per share is calculated by dividing the result
attributable to equity holders by the weighted average number of
ordinary shares in issue for that period.
Diluted earnings per share:
Profit Profit Weighted Earnings Earnings
after tax after average after after tax
from total tax from number tax from from continuing
operations continuing of shares total operations
operations operations per share
per share
GBP000s GBP000s 000s pence pence
------------ ------------ ----------- ------------ -----------------
26 weeks ended 2
July 2022 6,086 6,086 722,559 0.84 0.84
27 weeks ended 3 July
2021 14,051 6,701 721,364 1.95 0.93
============ ============ =========== ============ =================
Diluted earnings per share is calculated using the result
attributable to equity holders divided by the weighted average
number of shares outstanding assuming the conversion of potentially
dilutive equity derivatives outstanding, being market value
options, nil-cost share options (LTIP shares), restricted stock
grants, deferred bonus shares and warrants.
All of the Group's potentially dilutive equity derivative
securities were dilutive for the purpose of diluted basic earnings
per share for the period (27 weeks ending 3 July 2021: all equity
derivative securities were dilutive except for the market value
options and their related CSOP's which were anti-dilutive).
The following is a reconciliation between the basic earnings per
share and the adjusted basic earnings per share:
As restated(1)
26 weeks ended 2 27 weeks ended 3
July 2022 July 2021
Continuing Total Continuing
Total operations operations operations operations
pence pence pence pence
Basic earnings per
share 0.86 0.86 2.02 0.96
Add back:
Exceptional items
per share 0.08 0.08 (1.52) (1.07)
Amortisation of customer
relationships and
brands per share 0.18 0.18 0.21 0.21
Tax per share 0.06 0.06 0.01 0.01
Charge:
Tax charge at prevailing
rate (0.22) (0.22) (0.14) (0.02)
Adjusted basic earnings
per share 0.96 0.96 0.58 0.09
================== ============= ============= =============
The following is a reconciliation between the diluted earnings
per share and the adjusted diluted earnings per share:
As restated(1)
26 weeks ended 27 weeks ended
2 July 2022 3 July 2021
Total Continuing Continuing
operations operations Total operations operations
pence pence pence Pence
Diluted earnings per
share 0.84 0.84 1.95 0.93
Add back:
Adjustment to basic
loss per share for
the impact of dilutive
securities
Exceptional items per
share 0.08 0.08 (1.47) (1.03)
Amortisation of customer
relationships and brands
per share 0.18 0.18 0.20 0.20
Tax per share 0.06 0.06 0.01 0.01
Charge:
Tax charge at prevailing
rate (0.22) (0.22) (0.13) (0.02)
Adjusted diluted earnings
per share 0.94 0.94 0.56 0.09
============= ============= ================== =============
1. The notes supporting the income statement have been restated
to disclose continuing operations (note 2).
The weighted average number of shares for the purposes of
calculating the diluted earnings per share are as follows:
26 weeks 27 weeks
ended ended
2 July 2022 3 July 2021
Weighted Weighted
average number average number
of shares of shares
000s 000s
Basic 704,988 696,478
Warrants - 8,505
LTIP share options 4,687 8,368
Restricted stock grant 12,801 7,265
CSOP options 83 748
Diluted 722,559 721,364
================ ================
9. Intangible assets
Customer
Goodwill relationships Brands Software Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Cost
At 2 January 2022 115,855 25,400 22,590 31,856 195,701
Additions - - - 2,764 2,764
At 2 July 2022 115,855 25,400 22,590 34,620 198,465
------------- ---------------- -------- --------- ----------
Amortisation
At 2 January 2022 - 23,301 298 24,454 48,053
Charge for the
period - 1,270 17 1,564 2,851
At 2 July 2022 - 24,571 315 26,018 50,904
------------- ---------------- -------- --------- ----------
Net book value
At 2 July 2022 115,855 829 22,275 8,602 147,561
============= ================ ======== ========= ==========
Customer
Goodwill relationships Brands Software Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Cost
At 27 December
2020 124,877 26,744 23,222 27,580 202,423
Additions - - - 1,751 1,751
Disposals (1,695) - - (138) (1,833)
At 3 July 2021 123,182 26,744 23,222 29,193 202,341
--------- ---------------- -------- --------- --------
Amortisation
At 27 December
2020 - 21,348 622 21,955 43,925
Charge for the
period - 1,377 51 1,206 2,634
Disposals - - - (138) (138)
At 3 July 2021 - 22,725 673 23,023 46,421
--------- ---------------- -------- --------- --------
Net book value
At 3 July 2021 123,182 4,019 22,549 6,170 155,920
========= ================ ======== ========= ========
Customer
Goodwill relationships Brands Software Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Cost
At 27 December
2020 124,877 26,744 23,222 27,580 202,423
Additions - - - 4,328 4,328
Disposals - - - (52) (52)
Business disposal (9,018) (1,344) (632) - (10,994)
Foreign exchange
differences (4) - - - (4)
At 1 January 2022 115,855 25,400 22,590 31,856 195,701
--------- --------------- -------- --------- ---------
Amortisation
At 27 December
2020 - 21,348 622 21,955 43,925
Charge for the
period - 2,675 84 2,551 5,310
Disposals - - - (52) (52)
Business disposal - (722) (408) - (1,130)
At 1 January 2022 - 23,301 298 24,454 48,053
--------- --------------- -------- --------- ---------
Net book value
At 1 January 2022 115,855 2,099 22,292 7,402 147,648
========= =============== ======== ========= =========
The Group tests property, plant and equipment, goodwill and
indefinite life brands for impairment annually and considers at
each reporting date whether there are indicators that impairment
may have occurred.
10. Property, plant and equipment
Materials
& equipment
Land Plant held for
& buildings & machinery hire Total
GBP000s GBP000s GBP000s GBP000s
Cost
At 2 January 2022 37,303 43,163 133,674 214,140
Transferred to right
of use assets - - (1,504) (1,504)
Transferred from right
of use assets - - 4,498 4,498
Additions 221 685 15,416 16,322
Disposals (266) (41) (7,086) (7,393)
Remeasurement (790) - - (790)
Foreign exchange differences 4 9 71 84
At 2 July 2022 36,472 43,816 145,069 225,357
------------- ------------- ------------- --------
Accumulated depreciation
At 2 January 2022 25,453 39,408 89,342 154,203
Transferred from right
of use assets - - 2,140 2,140
Charge for the year 1,163 833 6,091 8,087
Disposals (209) (42) (5,682) (5,933)
Foreign exchange differences - - 1 1
At 2 July 2022 26,407 40,199 91,892 158,498
------------- ------------- ------------- --------
Net book value
At 2 July 2022 10,065 3,617 53,177 66,859
============= ============= ============= ========
The transferred to right of use assets category represents
assets that were purchased in the prior period and subsequently
financed through hire purchase agreements.
The transferred from right of use assets category represents the
acquisition of ROU assets at expiry of the lease in cases where the
title is transferred to the Group.
Materials
& equipment
Land Plant held for
& buildings & machinery hire Total
GBP000s GBP000s GBP000s GBP000s
Cost
At 27 December 2020 58,419 55,315 149,534 263,268
Transferred from right
of use assets - - 5,967 5,967
Additions 673 412 9,749 10,834
Disposals (618) (1,235) (17,669) (19,522)
Foreign exchange differences (31) (31) (581) (643)
At 3 July 2021 58,443 54,461 147,000 259,904
------------- ------------- ------------- ---------
Accumulated depreciation
At 27 December 2020 45,208 50,580 99,105 194,893
Transferred from right
of use assets - - 3,336 3,336
Charge for the year 1,318 859 5,712 7,889
Disposals (163) (1,065) (11,181) (12,409)
Foreign exchange differences (6) (56) (322) (384)
At 3 July 2021 46,357 50,318 96,650 193,325
------------- ------------- ------------- ---------
Net book value
At 3 July 2021 12,086 4,143 50,350 66,579
============= ============= ============= =========
Materials
& equipment
Land & Plant held for
buildings & machinery hire Total
GBP000s GBP000s GBP000s GBP000s
Cost
At 27 December 2020 58,419 55,315 149,534 263,268
Transferred from right
of use assets - - 8,742 8,742
Additions 2,011 755 18,558 21,324
Disposals (22,394) (11,193) (16,515) (50,102)
Business disposal (702) (1,683) (26,064) (28,449)
Foreign exchange differences (31) (31) (581) (643)
At 1 January 2022 37,303 43,163 133,674 214,140
----------- ------------- ------------- ---------
Accumulated depreciation
At 27 December 2020 45,208 50,580 99,105 194,893
Transferred to right
of use assets - - 5,200 5,200
Charge for the year 2,543 1,710 12,482 16,735
Impairment 264 - - 264
Disposals (22,325) (11,171) (13,145) (46,641)
Business disposal (231) (1,485) (14,148) (15,864)
Foreign exchange differences (6) (56) (322) (384)
Transfers - (170) 170 -
At 1 January 2022 25,453 39,408 89,342 154,203
----------- ------------- ------------- ---------
Net book value
At 1 January 2022 11,850 3,755 44,332 59,937
=========== ============= ============= =========
11. Right of use assets
Equipment
for internal Equipment
Property Vehicles use for hire Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Cost
At 2 January
2022 56,847 26,283 520 25,339 108,989
Additions - 1,451 - 3,700 5,151
Transferred from property,
plant and equipment - - - 1,504 1,504
Transferred to property,
plant and equipment - - - (3,761) (3,761)
Disposals (71) (334) - (489) (894)
Foreign exchange differences 4 12 - - 16
At 2 July
2022 56,780 27,412 520 26,293 111,005
--------- --------- --------------- ---------- --------
Accumulated depreciation
At 1 January
2022 15,104 12,773 444 4,688 33,009
Transferred to property,
plant and equipment - - - (1,403) (1,403)
Charge for the period 3,878 3,296 29 2,459 9,662
Disposals (71) (334) - (227) (632)
At 2 July
2022 18,911 15,735 473 5,517 40,636
--------- --------- --------------- ---------- --------
Net book value
At 2 July
2022 37,869 11,677 47 20,776 70,369
========= ========= =============== ========== ========
The transferred from property, plant and equipment category
represents assets that were purchased in the prior period and
subsequently financed through hire purchase agreements.
The transferred to property, plant and equipment category
represents the acquisition of ROU assets at expiry of the lease in
cases where the title is transferred to the Group.
Equipment
for internal Equipment
Property Vehicles use for hire Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Cost
At 27 December 2020 61,253 23,681 562 21,998 107,494
Additions 519 651 - 3,590 4,760
Remeasurements 227 137 - - 364
Transferred to property,
plant and equipment - - - (5,967) (5,967)
Disposals (7,785) (805) - (727) (9,317)
Foreign exchange differences (120) (23) - - (143)
At 3 July
2021 54,094 23,641 562 18,894 97,191
--------- --------- -------------- ---------- --------
Accumulated depreciation
At 27 December 2020 15,403 6,854 327 1,422 24,006
Transferred to property,
plant and equipment - - - (3,336) (3,336)
Charge for
the period 4,340 3,783 76 3,310 11,509
Disposals (7,920) (366) - (594) (8,880)
At 3 July
2021 11,823 10,271 403 802 23,299
--------- --------- -------------- ---------- --------
Net book
value
At 3 July
2021 42,271 13,370 159 18,092 73,892
========= ========= ============== ========== ========
Equipment
for internal Equipment
Property Vehicles use for hire Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Cost
At 27 December 2020 61,253 23,681 562 21,998 107,494
Additions 1,882 5,000 - 8,558 15,440
Remeasurements 3,407 128 (12) - 3,523
Transferred to property,
plant and equipment - - - (4,462) (4,462)
Business disposal (1,304) (1,662) (30) - (2,996)
Disposals (8,755) (859) - (755) (10,369)
Amount re-recognised on
disposal of sublease 544 - - - 544
Foreign exchange differences (180) (5) - - (185)
At 1 January
2022 56,847 26,283 520 25,339 108,989
--------- --------- -------------- ---------- ---------
Accumulated depreciation
At 27 December 2020 15,403 6,854 327 1,422 24,006
Transfers to property,
plant and equipment - - - (920) (920)
Charge for
the period 7,840 7,099 147 4,307 19,393
Impairments 233 - - - 233
Business disposal (397) (538) (30) - (965)
Disposals (7,975) (642) - (121) (8,738)
At 1 January
2022 15,104 12,773 444 4,688 33,009
--------- --------- -------------- ---------- ---------
Net book value
At 1 January
2022 41,743 13,510 76 20,651 75,980
========= ========= ============== ========== =========
Disclosures relating to lease liabilities are included in note
14.
12. Trade and other receivables
26 week period ended 2 July
2022
Provision
Provision for credit Net
Gross for impairment notes of provision
GBP000s GBP000s GBP000s GBP000s
Trade receivables 71,815 (3,446) (3,612) 64,757
Accrued income 7,254 (71) - 7,183
Trade receivables and contract
assets 79,069 (3,517) (3,612) 71,940
Net investment in sublease 961 - - 961
Other debtors 1,206 - - 1,206
Prepayments 6,651 - - 6,651
Total trade and other receivables 87,887 (3,517) (3,612) 80,758
Year ended 1 January 2022
Provision
Provision for credit Net of
Gross for impairment notes provision
GBP000s GBP000s GBP000s GBP000s
Trade receivables 73,873 (3,884) (3,225) 66,764
Accrued income 4,165 (47) - 4,118
Trade receivables and contract
assets 78,038 (3,931) (3,225) 70,882
Net investment in sublease 961 - - 961
Other debtors 1,282 - - 1,282
Prepayments 5,555 - - 5,555
Total trade and other receivables 85,836 (3,931) (3,225) 78,680
The following table details the movements in the provisions for
credit notes and impairment of trade receivables and contract
assets:
26 week period Year ended
ended 1 January 2022
2 July 2022
Provision Provision
Provision for credit Provision for credit
for impairment notes for impairment notes
GBP000s GBP000s GBP000s GBP000s
Balance at the beginning
of the period (3,931) (3,225) (3,023) (2,458)
Increase in provision (1,204) (1,446) (1,835) (3,746)
Utilisation 1,618 1,059 910 2,752
Business disposals - - 17 227
Balance at the end
of the period (3,517) (3,612) (3,931) (3,225)
The bad debt provision based on expected credit losses and
applied to trade receivables and contract assets, all of which are
current assets, is as follows:
2 July 2022 0-60 61-365 1-2
days days years
past past past
Current due due due Total
Trade receivables and contract
assets 61,234 7,829 8,287 1,719 79,069
Expected loss rate 0.9% 3.1% 20.6% 59.6% 4.4%
Provision for impairment
charge 546 243 1,704 1,024 3,517
1 January 2022 0-60 61-365 1-2
days days years
past past past
Current due due due Total
Trade receivables and contract
assets 44,209 22,847 9,376 1,606 78,038
Expected loss rate 1.0% 2.4% 19.7% 68.7% 5.0%
Provision for impairment
charge 435 544 1,848 1,104 3,931
Contract assets consist of accrued income.
The bad debt provision is estimated using the simplified
approach to expected credit loss methodology and is based upon past
default experience and the Directors' assessment of the current
economic environment for each of the Group's ageing categories.
The Directors have given specific consideration to the level of
uncertainty in the economy driven by the impact of COVID-19, the
associated pressures on businesses facing staff and material
shortages and, more latterly, increased inflation. At the reporting
date, the Group has seen an increase in debt write-offs due to
customer failure. This was anticipated following the withdrawal of
COVID-19 related government support in the prior year and
accordingly the Group had exercised judgement in the creation of a
significant additional provision to cover this eventuality, some of
which has now been released. The Group still considers that
historical losses are not a reliable predictor of future failures
and so has continued with its practice of increasing the expected
loss rates across all categories of debt. In so doing the provision
has been increased by around GBP0.6m (1 January 2022: GBP1.2m) from
that which would have been required based on loss experience over
the past two years. As in the prior year, historical loss rates
have been increased where debtors have been identified as high risk
with a reduction applied to customer debt covered by credit
insurance. Unless the counterparty is in liquidation, these amounts
are still subject to enforcement action.
In line with the requirements of IFRS 15, provisions are made
for credit notes expected to be raised after the reporting date for
income recognised during the period.
The combined provisions for bad debt and credit notes amount to
9.0% of trade receivables and contract assets at 2 July 2022 (1
January 2022: 9.2%).
13. Trade and other payables
2 July 1 January
2022 2022
GBP000s GBP000s
Current
Trade payables 42,776 43,062
Other taxes and social security
costs 3,439 5,175
Other creditors 1,842 1,308
Accrued interest on borrowings 369 271
Accruals 31,233 28,494
Deferred income 627 394
80,286 78,704
14. Lease liabilities
2 July 1 January
2022 2022
GBP000s GBP000s
Current
Lease liabilities 17,946 19,310
Non-current
Lease liabilities 53,601 57,255
71,547 76,565
The interest rates on the Group's lease liabilities are as
follows:
2 July 1 January
2022 2022
Equipment for %age above the lenders 2.4 to 2.4 to
hire Floating base rate 3.3% 3.3%
3.5 to 3.5 to
Other Fixed 6.0% 6.0%
The weighted average interest rates on the Group's lease
liabilities are as follows:
2 July 1 January
2022 2022
Lease liabilities 5.4% 4.8%
The Group's leases have the following maturity profile:
2 July 1 January
2022 2022
GBP000s GBP000s
Less than one year 21,411 23,015
Two to five years 46,336 48,755
More than five years 17,225 19,354
84,972 91,124
Less interest cash
flows: (13,425) (14,559)
Total principal cash
flows 71,547 76,565
The maturity profile, excluding interest cash flows of the
Group's leases is as follows:
2 July 1 January
2022 2022
GBP000s GBP000s
Less than one year 17,946 19,310
Two to five years 39,435 41,417
More than five years 14,166 15,838
71,547 76,565
The lease liability movements Equipment
are detailed below: for hire
and internal
Property Vehicles use Total
GBP000s GBP000s GBP000s GBP000s
At 2 January 2022 44,879 14,247 17,439 76,565
Additions - 1,451 5,204 6,655
Discount unwind 1,364 225 190 1,779
Payments (including interest) (5,056) (3,181) (5,267) (13,504)
Foreign exchange differences (3) 18 37 52
At 2 July 2022 41,184 12,760 17,603 71,547
Equipment
for hire
and internal
Property Vehicles use Total
GBP000s GBP000s GBP000s GBP000s
At 27 December 2020 57,181 16,861 15,530 89,572
Additions 1,981 5,029 8,591 15,601
Remeasurements 3,407 128 (12) 3,523
Discount unwind 2,805 535 5 3,345
Payments (including interest) (13,209) (7,012) (6,675) (26,896)
Disposals (6,006) (216) - (6,222)
Business disposals (1,063) (1,048) - (2,111)
Foreign exchange differences (217) (30) - (247)
At 1 January 2022 44,879 14,247 17,439 76,565
15. Borrowings
2 July 1 January
2022 2022
GBP000s GBP000s
Non-current
Senior finance facility 68,407 68,166
The senior finance facility is stated net of transaction fees of
GBP1.6m (1 January 2022: GBP1.8m) which are being amortised over
the loan period.
The nominal value of the Group's loans at each reporting date is
as follows:
2 July 1 January
2022 2022
GBP000s GBP000s
Senior finance facility 70,000 70,000
The interest rates on the Group's borrowings are as follows:
2 July 1 January
2022 2022
Revolving credit facility Floating %age above SONIA 3.0% 3.0%
Senior finance facility Floating %age above SONIA 3.0% 3.0%
The weighted average interest rates on the Group's borrowings is
3.0% (1 January 2022: 3.0%).
The Group's borrowings have the following maturity profile:
2 July 1 January
2022 2022
GBP000s GBP000s
Less than one year 2,932 2,235
Two to five years 76,908 76,498
79,840 78,733
Less interest cash
flows:
Senior finance facility (9,840) (8,733)
Total principal cash
flows 70,000 70,000
The Group had undrawn committed borrowing facilities of GBP35.6m
at 2 July 2022 (1 January 2022: GBP35.8m), including GBP12.4m of
finance lines (1 January 2022: GBP12.6m) to fund hire fleet capital
expenditure not yet utilised. Including net cash balances, the
Group had access to GBP74.3m at 2 July 2022 (1 January 2022:
GBP78.1m) of combined liquidity from available cash and undrawn
committed borrowing facilities.
16. Provisions
Onerous
property Onerous
costs Dilapidations contracts Total
GBP000s GBP000s GBP000s GBP000s
At 2 January 2022 186 10,174 13,463 23,823
Additions - 148 - 148
Utilised during the
period (11) (43) (1,644) (1,698)
Unwind of provision - 41 53 94
Impact of change
in discount rate - (729) (211) (940)
Releases (3) (236) - (239)
Foreign exchange - 9 - 9
At 2 July 2022 172 9,364 11,661 21,197
Of which:
Current 69 1,355 3,108 4,532
Non-current 103 8,009 8,553 16,665
172 9,364 11,661 21,197
Onerous
property Onerous
costs Dilapidations contracts Total
GBP000s GBP000s GBP000s GBP000s
At 27 December 2020 3,959 12,677 17,018 33,654
Additions 86 1,471 - 1,557
Utilised during the
period (212) (2,538) (3,290) (6,040)
Unwind of provision (1) 24 (8) 15
Impact of change in
discount rate (31) (457) (257) (745)
Releases (3,615) (643) - (4,258)
Business disposals - (361) - (361)
Foreign exchange - 1 - 1
At 1 January 2022 186 10,174 13,463 23,823
Of which:
Current 70 1,453 3,190 4,713
Non-current 116 8,721 10,273 19,110
186 10,174 13,463 23,823
Onerous property costs
The provision for onerous property costs represents the current
value of contractual liabilities for future rates payments and
other unavoidable costs (excluding lease costs) on leasehold
properties the Group no longer uses. The releases are the result of
early surrenders being agreed with landlords - the associated
liabilities are generally limited to the date of surrender but were
provided for to the date of the first exercisable break clause to
align with the recognition of associated lease liabilities.
Onerous contract
The onerous contract represents amounts payable in respect of
the agreement reached in 2017 between the Group and Unipart to
terminate the contract to operate the NDEC.
17. Business disposals - 27 weeks ended 3 July 2021 only
To enable the Group to strengthen its balance sheet and focus on
its strategic priority to Transform the Tool Hire Business, the
Group made two strategic divestments during the year ended 1
January 2022:
Laois Hire Services Limited
Laois Hire Services Limited, the Irish large plant hire
business, was sold to Briggs Equipment Ireland Limited on 7 April
2021. Proceeds of the disposal, net of transaction costs were
GBP10.0m generating a profit on disposal of GBP3.2m.
All Seasons Hire Limited
All Seasons Hire Limited, a cooling and heating provider, was
sold to Cross Rental Services Limited with the transaction
completing on 29 September 2021. Proceeds of the disposal, net of
transaction costs were GBP54.3m generating a profit on disposal of
GBP38.0m.
As part of these transactions, the Group entered into commercial
agreements to cross-hire equipment to ensure the broadest possible
distribution of, and customer access to, each party's existing
fleet.
The table below shows the results of discontinued operations for
the 27 weeks ended 3 July 2021:
GBP000s
Result of discontinued operations
Revenue 7,143
Expenses other than finance costs, amortisation
and depreciation (1,480)
Depreciation (1,410)
Finance costs (66)
Taxation (17)
Loss from discontinued operations, net of tax 4,170
Profit on disposal of discontinued operations 3,180
Profit for the period 7,350
Basic earnings per share 1.06
Diluted earnings per share 1.02
The revenue relating to Laois Hire Services Limited is GBP3.0m
with a loss after tax of GBP0.3m. The revenue relating to All
Seasons Hire Limited is GBP4.1m with a profit after tax of
GBP4.5m.
Included in the results for the 27 weeks ended 3 July 2021 are
profits of GBP3.2m realised on the sale of Laois Hire Services
Limited on 7 April 2021. The table below shows how this amount
arose:
GBP000s
Description of assets and liabilities
Intangible assets (incl Goodwill) 1,695
Property, plant and equipment 5,200
Right of use assets 439
Current assets, excluding cash 2,509
Cash 504
Current liabilities (incl lease
liabilities) (3,241)
Foreign exchange reserve (53)
Net assets disposed of 7,053
Proceeds of disposal less transaction
costs 9,950
Profit on asset sale 283
Less net assets disposed of (7,053)
Total profit from disposal of Laois
Hire Limited 3,180
18. Risks and uncertainties
The principal risks and uncertainties which could have a
material impact upon the Group's performance over the remaining 26
weeks of the 2022 financial year have not changed significantly
from those set out on pages 32 to 34 of the Group's 2021 Annual
Report, which is available at
https://www.hsshiregroup.com/investors-section-landing/.
These risks and uncertainties are:
1) Macroeconomic conditions;
2) Competitor challenge;
3) Strategy execution;
4) Customer service;
5) Third party reliance;
6) IT infrastructure;
7) Financial risk;
8) Inability to attract and retain personnel;
9) Legal and regulatory requirements;
10) Safety; and
11) Environment, Social and Governance (ESG).
COVID-19 and the impact of the war in Ukraine have been
considered in terms of their impact on relevant principal risks and
uncertainties. The risk presented by COVID-19 is considered to have
reduced significantly but been replaced by the macroeconomic
impacts of the war in Ukraine - namely increasing inflation and
interest rates. The main risk expected to affect the Group in the
remaining 26 weeks of the 2022 financial year is therefore
macroeconomic conditions, which includes the impact of high
inflation on energy costs, colleagues, the supply chain and on
demand from new and existing customers within the numerous and
diverse market sectors which HSS serves.
19. Alternative performance measures
Earnings before interest, tax, depreciation and amortisation
(EBITDA) and Adjusted EBITDA, earnings before interest, tax and
amortisation (EBITA) and Adjusted EBITA and Adjusted profit/(loss)
before tax are alternative, non-IFRS and non-Generally Accepted
Accounting Practice (GAAP), performance measures used by the
Directors and management to assess the operating performance of the
Group.
- EBITDA is defined as operating profit before depreciation and
amortisation. For this purpose depreciation includes: depreciation
charge for the year on property, plant and equipment and on right
of use assets; the net book value of hire stock losses and
write-offs; the net book value of other fixed asset disposals less
the proceeds on those disposals; impairments of right of use
assets; the net book value of right of use asset disposals, net of
the associated lease liability disposed of; and the loss on
disposal of sub-leases. Amortisation is calculated as the total of
the amortisation charge for the year and the loss on disposal of
intangible assets. Exceptional items are excluded from EBITDA to
calculate Adjusted EBITDA.
- EBITA is defined by the Group as operating profit before
amortisation. Exceptional items are excluded from EBITA to
calculate Adjusted EBITA.
- Adjusted profit/(loss) before tax is defined by the Group as
profit/(loss) before tax, amortisation of customer relationships
and brands related intangibles as well as exceptional items. The
way the Group calculates Adjusted profit/(loss) before tax has been
modified from that included in the financial statements for the
period ended 1 January 2022, to include amounts relating to
amortisation of software. Comparative figures have been restated to
reflect this change.
The Group discloses Adjusted EBITDA, Adjusted EBITA and Adjusted
profit/(loss) before tax as supplemental non-IFRS financial
performance measures because the Directors believe they are useful
metrics by which to compare the performance of the business from
period to period and such measures similar to Adjusted EBITDA,
Adjusted EBITA and Adjusted profit/(loss) before tax are broadly
used by analysts, rating agencies and investors in assessing the
performance of the Group. Accordingly, the Directors believe that
the presentation of Adjusted EBITDA, Adjusted EBITA and Adjusted
profit/(loss) before tax provides useful information to users of
the Financial Statements.
As these are non-IFRS measures, Adjusted EBITDA and adjusted
operating profit measures used by other entities may not be
calculated in the same way and are hence not directly
comparable.
Adjusted EBITDA is calculated as follows:
As restated(1)
26 weeks 27 weeks
ended ended
2 July 2022 3 July 2021
Continuing Continuing
operations operations
GBP000s GBP000s
Operating profit 10,209 18,077
Add: Depreciation of property, plant and
equipment and right of use assets 19,359 19,707
Add: Amortisation of intangible assets 2,861 2,543
EBITDA 32,429 40,327
Add: Exceptional items (non-finance) 488 (7,539)
Adjusted EBITDA 32,917 32,788
Adjusted EBITA is calculated as follows:
As restated(1)
26 weeks 27 weeks
ended ended
2 July 2022 3 July 2021
Continuing Continuing
operations operations
GBP000s GBP000s
Operating profit/(loss) 10,209 18,077
Add: Amortisation of intangible assets 2,861 2,543
EBITA 13,070 20,620
Add: Exceptional items (non-finance) 488 (7,539)
Adjusted EBITA 13,558 13,081
Adjusted profit before tax is calculated as follows:
As restated(1)
26 weeks 27 weeks
ended ended
2 July 2022 3 July 2021
Continuing Continuing
operations operations
GBP000s GBP000s
Profit before tax 6,535 6,755
Add: Amortisation of customer relationships
and brands 1,287 1,428
Profit before tax and amortisation of customer
relationships and brands 7,822 8,183
Add: Exceptional items (finance and non-finance) 554 (7,419)
Adjusted profit before tax 8,376 764
1. The notes supporting the income statement have been restated
to disclose continuing operations (note 2).
20. Post Balance Sheet Events
Given the excellent progress made on strategy which has resulted
in increased profitability and cash generation as well as
strengthening the balance sheet, the Board has decided to implement
a progressive dividend policy. An interim dividend of 0.17p per
share was approved by the Board on 28 September, will be paid in
cash during November 2022 and has an ex-dividend date of 6 October
2022.
On 23 September 2022 the Government announced that from 1 April
2023 the corporate tax rate would remain at 19% (rather than
increase to 25% as previously enacted). If this legislation had
been enacted at the balance sheet date the deferred tax asset would
be reduced by GBP623,000 to GBP1,973,000.
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END
IR FLFSTASITFIF
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