TIDMSDY
RNS Number : 6486F
Speedy Hire PLC
18 November 2020
Speedy Hire Plc
("Speedy", "the Company" or "the Group")
Results for the six months to 30 September 2020
Resilient performance, well positioned as activity recovers
Speedy, the UK's leading provider of tools and equipment hire,
and services to the construction, infrastructure and industrial
markets, announces results for the six months to 30 September
2020.
Commenting on the results Russell Down, Chief Executive,
said:
" I am pleased with the resilient performance of our business
during this unprecedented period. Cash flow performance has been
excellent, due to actions taken quickly to control costs and
preserve cash, and our balance sheet remains strong.
This performance is testament to the strength of our model, hard
work of all my colleagues and strong operational delivery. Our
customer service focus and capital commitment promise have once
again delivered customer renewals and market share gains.
I am pleased to report ongoing positive trading momentum in
recent months. Moving into the second half, while conditions remain
uncertain due to COVID-19, utilisation has returned to 2019 levels
and the business is well positioned and invested to take advantage
as trading recovers to more normal levels. As a consequence full
year results are expected to be towards the top end of analysts'
expectations(6) ."
Underlying results
6 months 6 months Change
ended ended %
30 September 30 September
2020 (GBPm) 2019 (GBPm)
Revenue (excluding disposals) 162.3 204.2 (20.5)
-------------- -------------- -------
EBITDA(1) 41.0 52.7 (22.2)
-------------- -------------- -------
Adjusted operating profit(1) 8.2 18.6 (55.9)
-------------- -------------- -------
Adjusted profit before
tax(1) 5.9 16.4 (64.0)
-------------- -------------- -------
Adjusted earnings per
share(2) 0.88 2.56 (65.6)
-------------- -------------- -------
Statutory results
6 months 6 months Change
ended ended %
30 September 30 September
2020 (GBPm) 2019 (GBPm)
Revenue 163.8 205.7 (20.4)
-------------- -------------- -------
Operating profit 3.7 17.9 (79.3)
-------------- -------------- -------
Profit before tax 1.4 16.4 (91.5)
-------------- -------------- -------
Basic earnings per share 0.15 2.58 (94.2)
-------------- -------------- -------
Other measures
6 months 6 months Change
ended ended %
30 September 30 September
2020 (GBPm) 2019 (GBPm)
Net debt(3) 57.8 85.1 (32.1)
-------------- -------------- -------
Return on Capital Employed(4) 8.6% 12.2% (29.5)
-------------- -------------- -------
Dividend (pence per - 0.70 -
share)
-------------- -------------- -------
Strategic and Operational highlights
-- Decisive action taken to manage costs and preserve cash in response to COVID-19:
o Prioritised customer and colleague wellbeing
o Capex managed tightly in period, NBV of hire fleet GBP212.0m
(31 March 2020: GBP227.1m)
o Average fleet age remains low at 3.9 years (31 March 2020: 3.4
years)
o 13 depots closed and staff numbers reduced to 3,756 at 30
September (2019: 4,070) following restructuring programme
-- Strong balance sheet and cash generation:
o Strong cash collections in the period
o Net debt(3) reduced to GBP57.8m (31 March 2020: GBP79.3m),
with leverage(5) of 0.9x (31 March 2020: 1.0x)
o Cash and facility headroom of GBP110.7m (31 March 2020:
GBP99.0m)
-- Continued strategic and operational progress:
o Continuing growth in higher margin SME revenues, up 12% in
September
o Artificial intelligence supporting growth through fleet
optimisation and identification of revenue opportunities
o Environmental, Social and Governance (ESG) initiatives
delivering good progress against objectives set in October 2019
Current trading and outlook
-- Ongoing recovery in trading post-period end:
o Customer demand continues to improve, with UK and Ireland core
hire revenue c.3.5% below prior year in October
o Improved UK and Ireland asset utilisation, increased to 60.2%
by 31 October (2019: 57.9%)
o Second lockdown not materially impacting the Group to date,
with construction and infrastructure markets continuing to
operate
-- Improvements to simplify and standardise operating model ongoing:
o Further depot consolidations underway
o Continuing focus on cost control, delivering enhanced
efficiencies
-- No staff on furlough post 30 September and no intention of
further utilising COVID-19 support schemes
-- Dividend policy remains unchanged. Assuming current trading
continues, the Board intends to pay a dividend for the full year,
taking into account the results for the year as a whole.
Enquiries:
Speedy Hire Plc Tel: 01942 720 000
Russell Down, Chief Executive
James Bunn, Chief Financial Officer
MHP Communications Tel: 0203 128 8778
Oliver Hughes
Andrew Jaques
Notes:
Explanatory notes:
(1) See note 9
(2) See note 7
(3) See note 12
(4) Return on Capital Employed: Profit before tax, amortisation
and exceptional items divided by the average capital employed
(where capital employed equals shareholders' funds and net debt(3)
), for the last 12 months.
(5) Leverage: Net debt(3) covered by EBITDA(1) . This metric
excludes the impact of IFRS 16.
(6) Current analysts' expectations range between GBP10m-GBP17m
for adjusted profit before tax(1)
Inside Information: This announceme nt contains inside
information.
Forward looking statements: The information in this release is
based on management information. This report includes statements
that are forward looking in nature. Forward looking statements
involve known and unknown risks, assumptions, uncertainties and
other factors which may cause the actual results, performance or
achievements of the Group to be materially different from any
future results, performance or achievements expressed or implied by
such forward looking statements. Except as required by the Listing
Rules and applicable law, the Company undertakes no obligation to
update, revise or change any forward looking statements to reflect
events or developments occurring after the date of this report.
Notes to Editors: Founded in 1977, Speedy is the UK's leading
provider of tools, equipment and plant hire services to a wide
range of customers in the construction, infrastructure and
industrial markets, as well as to local trade and industry. The
Group provides complementary support services through the provision
of training, asset management and compliance services. Speedy is
certified nationally to ISO50001, ISO9001, ISO14001, ISO17020,
ISO27001 and OHSAS18001. The Group operates from over 200 fixed
sites across the UK and Ireland together with a number of on-site
facilities at client locations, from an international office based
in Abu Dhabi and through a joint venture in Kazakhstan.
Chief Executive's statement
Overview
Following the outbreak of COVID-19, and the first lockdown in
March, we took swift and decisive action to pro tect the health and
safety of our colleagues and stakeholders, whilst preserving the
operating capability of the business to support our customers.
The results we are reporting today are testament to the hard
work of all our colleagues in supporting us throughout this
challenging period whilst providing excellent service to our
customers. I am pleased to report that our core hire revenues have
continued to recover post the first lockdown and in October were
within c.3.5% of the prior year; asset utilisation has improved and
at 31 October was 60.2% (2019: 57.9%).
Whilst trading conditions remain uncertain our relentless focus
on excellent customer service and cost manageme nt has allowed us
to grow our market share and become a more resilient business over
the period.
COVID-19 response
In the UK and Ireland, the Group has continued to serve
customers during the pandemic whilst operating from a reduced depot
footprint, with up to two thirds of depots closed and up to 50% of
staff on furlough whilst in the first lockdown. Subsequently, and
following a detailed operational review, 13 depots have been closed
with revenue being transferred to adjoining depots or transitioned
to our digital channels. We are in the process of cons olidating
further depots into larger locations. No colleagues remained on
furlough beyond 30 September, although a number were regrettably
made redundant during the period. We have continued to support our
customers with colleagues working in depots throughout the pandemic
and currently have a significant proportion of staff working from
home. The welfare of colleagues is of paramount importance and we
have implemented revised health and safety processes and social
distancing guidelines to protect colleagues and customers during
this period.
Our revenues declined initially, falling by 35% in April, but
recovered strongly following the first lockdown as existing
customers returned to work and we secured new customers.
Infrastructure spending has been resilient and we have strong
opportunities in both the rail sector and with HS2 where we are the
first company to be awarded DVSA earned recognition for our
commitment to transport compliance, safety and sustainability. Our
SME customer base has continued to grow, with revenue up 12% on the
prior year for September; we are exploring further opportunities to
grow in this sector. We have managed our cost base through salary
and rent reductions and the use of government schemes, as well as
reducing capital expenditure to the level which was necessary to
meet customer demand. This has benefited asset utilisation which is
now above the prior year level.
Strategy and operational review
Customer service is our top priority and during the period we
launched a new customer survey programme covering order, delivery
and collection. We are pleased to report that the average scores to
date show a 94% satisfaction rate. We relaunched our capital
commitment service promise to all customers on 1 September having
reserved this exclusively for the NHS during the pandemic. The
offering has been expanded to cover our 350 most popular hire
products with a promise that any of these will be delivered
nationally to customers within four hours. The success of our
customer service ethos and capital commitment promise is evidenced
through customer renewals and market share gains.
Services revenue fell in line with hire revenue at c.20% due to
the disruption caused by the pandemic. Our rehire business however
performed particularly well, with September revenues ahead of the
prior year as we experienced strong demand for a range of products,
particularly accommodation. Our consumables business benefitted
from sales of protective personal equipment, and our Lloyds British
testing business performed ahead of expectations. Our training
business, Geason, was impacted by market conditions and social
distancing requirements. Geason, which was acquired in December
2018, was subject to an assurance visit from a funding agency in
early 2020, and a subsequent claim for amounts overpaid. The claim
was settled in October 2020, within the provision held. The Group
continues to pursue initiatives to improve its financial
position.
Artificial Intelligence is integral to the management of our
hire fleet and the targeting of customer accounts. We are
continually improving the process which has proved more challenging
during the pandemic as demand levels have been difficult to
predict. Utilisation rates have however increased significantly as
we withheld capital expenditure and proactively managed our repair
and logistics activities. Utilisation rates have recovered from a
low point of 45% in April to be in excess of 60% at the end of
October.
We have invested further in developing our digital capabilities
and refreshed our MySpeedy customer management portal, adding
customer dashboards and a greater depth of information to support
effective management of assets on hire by our customers. We have
added functionality to our transactional website and App including
delivery and collection tracking, increased asset purchasing
parameters (Hand Arm Vibration, Eco products), online availability,
and cash customer transaction capability to improve and expand the
digital customer journey. The digitisation of our business has
served us well in the period. Our internal digital support has
enabled remote working throughout COVID-19; better collaboration
and communication tools have increased the effectiveness of our
teams and supported the digital transformation.
Our Energise initiative was launched in October 2019 and set
challenging targets for improving our ESG performance. A new HR and
Transformation Director has been appointed, with a focus on
wellbeing and prioritising equality, diversity and inclusion within
the workplace. We have made good progress on our objectives
particularly on improving the carbon output of our hire and vehicle
fleet through the use of solar, hybrid and electric technology,
with sustainable products now generating c.20% of our revenue. We
are proud to be trialling a commercial version of an electric taxi
in London for carbon free deliveries. Over the remainder of this
year we will be updating our company car fleet to include more
electric and hybrid options.
The International business has performed in line with
expectations under challenging conditions for colleagues offshore,
with our major contracts in Abu Dhabi being renewed until February
2021. We continue to discuss long term opportunities with our major
customer, as well as looking to diversify the customer base,
although the latter has been impacted in the short term by COVID-19
and the weak oil price. The results of the Kazakhstan JV are below
the prior period due to cyclical shutdown activity in the prior
year and the effect of COVID-19 on our workload.
Group financial performance
Revenue (excluding disposals) for the period to 30 September
2020 decreased by 20.5% to GBP162.3m (2019: GBP204.2m), following a
reduction in activity levels during the first COVID-19 lockdown in
the UK and Ireland. Revenue from disposals was GBP1.5m (2019:
GBP1.5m); total revenue for the period decreased by 20.4% to
GBP163.8m (2019: GBP205.7m).
Gross profit was GBP85.1m (2019: GBP113.6 m), a decrease of
25.1%. The gross margin decreased to 52.0% (2019: 55.2%),
reflecting the reduction in core hire revenue with largely fixed
depreciation costs.
EBITDA(1) decreased by 22.2% to GBP41.0m (2019: GBP52.7m).
EBITA(1) decreased by 55.9% to GBP8.2m (2019: GBP18.6m), and profit
before taxation, amortisation and exceptional costs decreased to
GBP5.9m (2019: GBP16.4m). The Group recognised exceptional
administrative expenses of GBP4.1m (2019: GBPnil) relating to
restructuring expenses.
After taxation, amortisation and exceptional items, the Group
made a profit of GBP0.8m, compared to a profit of GBP13.4m in
2019.
Segmental analysis
The Group's segmental reporting is split into UK and Ireland,
and International. The figures in the tables below are presented
before corporate costs of GBP2.4m (2019: GBP2.3m).
6 months ended 6 months ended Movement
30 September 30 September
UK and Ireland 2020 2019
GBPm GBPm %
Revenue (excluding
disposals) 145.6 186.5 (21.9)
EBITDA(1) 39.9 50.8 (21.5)
EBITA(1) 8.8 18.4 (52.2)
Hire revenues fell by 21.5%, reflecting an initial fall of c.40%
in April during the first lockdown, which recovered as customers
returned to work, supporting a recovery to only c.7% below the
prior year in September. Major customer revenue has returned to
almost pre-pandemic levels and SME customers showed c.12% year on
year growth for September, although the Regional market faced
stronger competitive pressures. This resilient and recovering
revenue profile was the result of excellent customer service in a
challenging environment, supported by Speedy's national depot
coverage, the renewed 4-hour delivery service promise, and
contactless interaction with customers via the App. A number of new
and renewed contracts with key customers have been secured in the
period, including Morgan Sindall, Murphy, Osborne, Horbury, and
Network Plus, which reflects the strength of our market
position.
Services revenues fell by 22.7%, with the COVID-19 impact offset
in part by strong performance from the rehire, testing and
consumables businesses, which reacted quickly to changing customer
demands.
Gross margins fell from 57.7% to 55.1%. Hire margin fell to
74.8% (2019: 77.0%), with the impact from reduced revenue mitigated
by reduced capex spend, depreciation and tight control of other
direct costs. Services margin were similarly impacted, falling to
22.9% (2019: 27.2%).
Overheads remain under tight control, and benefited from
furlough savings and additional actions taken to manage costs
including staff redundancies, rent holidays and rates relief. No
staff remain on furlough, and there is no intention of further
utilising COVID-19 support schemes. Improvements are well underway
to simplify and standardise our operating model.
Following the application of strict processes to manage capital
expenditure through the period, asset utilisation at the end of
September 2020 returned to pre COVID-19 levels of 55.5% (September
2019: 55.3%).
6 months ended 6 months ended Movement
30 September 30 September
International 2020 2019
GBPm GBPm %
Revenue 16.7 17.7 (5.6)
EBITDA(1) 3.1 3.8 (18.4)
EBITA(1) 1.8 2.5 (28.0)
International revenue in the United Arab Emirates fell by 5.6%.
This slowdown in growth from previous periods was anticipated due
to lower rehire and consumable sales. Contract extensions with our
principal customer, Abu Dhabi National Oil Company, have now been
confirmed through to February 2021; discussions are ongoing in
relation to longer term opportunities. The full year effect of the
contract renegotiation in the prior year and reduced activity
levels due to COVID-19 have contributed to the decrease in EBITA(1)
, which fell by 28.0%.
Our share of profit from the joint venture in Kazakhstan fell to
GBP0.6m (2019: GBP1.5m) having benefited from significant cyclical
shutdown activity in the previous period.
Exceptional items
Action has been taken to manage the Group's cost base as a
result of the COVID-19 pandemic, and consequently the network has
been restructured, with a number of depot closures. As a result,
GBP2.5m of property provisions and GBP1.6m redundancy costs have
been incurred during the period.
Interest
The Group's net financial expense before exceptional items
reduced to GBP2.9m (2019: GBP3.7m).
Borrowings under the Group's bank facility are priced on the
basis of LIBOR plus a variable margin, while any unutilised
commitment is charged at 35% of the applicable margin. During the
period, the margin payable over LIBOR on the outstanding debt
fluctuated between 1.50% and 2.00% dependent on the Group's
performance in relation to leverage and the weighting of borrowings
between receivables and plant and machinery. The effective average
margin in the period was 1.84% (2019: 1.84%).
The Group utilises interest rate hedges to manage fluctuations
in LIBOR. The fair value of these hedges was not material at 30
September 2020 and they have varying maturity dates to April
2022.
Interest on lease liabilities of GBP1.4m (2019: GBP1.7m) was
incurred during the period.
Taxation
The Group seeks to protect its reputation as a responsible
taxpayer, and adopts an appropriate attitude to arranging its tax
affairs, aiming to ensure effective, sustainable and active
management of tax matters in support of business performance.
The tax charge before exceptional items for the period was
GBP1.2m (2019: GBP3.0m), with an effective tax rate before
exceptional items and amortisation of 20.3% (2019: 18.3%).
Shares and earnings per share
At 30 September 2020, 522,573,916 Speedy Hire Plc ordinary
shares were outstanding, of which 4,434,814 were held in the
Employee Benefit Trust.
Adjusted earnings per share(2) was 0.88 pence (2019: 2.56
pence), a reduction of 65.6%. Basic earnings per share was 0.15
pence (2019: 2.58 pence).
Capital expenditure and disposals
The Group entered the pandemic with a young fleet, which allowed
for immediate cutback of discretionary spend. With the recovering
trend in the second quarter, capital expenditure has restarted
through August and September, aligned to the relaunch of the
expanded 4-hour delivery promise.
Total capital expenditure during the period amounted to GBP9.3m
(2019: GBP32.2m), of which GBP7.2m (2019: GBP27.4m) related to
equipment for hire, and GBP2.1m related to other property, plant
and equipment (2019: GBP4.8m).
Reduced capital expenditure has resulted in the average age of
the fleet increasing to 3.9 years from 3.4 years as at 31 March
2020.
ROCE (4) and balance sheet
The Group took swift and decisive action during the COVID-19
pandemic to preserve cash by implementing tight control over both
operating costs and capital expenditure. As a result, the Group
continues to have a strong balance sheet, and is well placed to
continue to pursue financial and strategic objectives as more
normal levels of trading return.
Net assets at 30 September 2020 were GBP210.1m (31 March 2020:
GBP209.9m), equivalent to 40.2 pence per share. ROCE(4) was 8.6%
(2019: 12.2%) for the period.
Net property, plant and equipment (excluding IFRS 16 right of
use assets) reduced to GBP239.6m at 30 September 2020 (31 March
2020: GBP257.6m), primarily due to tight control of capital
expenditure during the pandemic. The net book value of equipment
for hire has reduced from GBP227.1m to GBP212.0, representing 88.5%
(31 March 2020: 88.2%) of the total property, plant and equipment
balance; GBP9.9m of this is held by the International business (31
March 2020: GBP11.4m).
Intangible assets remained broadly flat at GBP22.8m (31 March
2020: GBP23.1m), with amortisation offset by investment in software
development.
Right of use assets of GBP58.9m (31 March 2020: GBP64.7m) and
corresponding lease liabilities of GBP66.8m (31 March 2020:
GBP72.9m) were recognised at 30 September 2020.
Gross trade receivables totalled GBP95.5m at 30 September 2020
(2019: GBP99.7m), benefiting from continued strong cash
collections. Bad debt and credit note provisions increased to
GBP7.4m at 30 September 2020 (2019: GBP4.2m), equivalent to 7.7% of
gross trade receivables (2019: 4.2%). Debtor days were 67.2 days
(2019: 68.2 days).
Trade payables and accruals were GBP84.5m (2019: GBP93.4m).
Creditor days were 103.7 days (2019: 100.5 days).
Cash flow and net debt
Cash generated from operations for the period was GBP37.1m
(2019: GBP38.7m). Free cash flow (before dividends and financing
activities) increased significantly to GBP33.6m (2019: GBP24.2m),
reflecting the reduced spend on hire equipment.
Net debt(3) decreased by GBP21.5m from GBP79.3m at the beginning
of the period to GBP57.8m at 30 September 2020 (31 March 2020:
GBP79.3m). Net debt(3) to EBITDA(1) (rolling 12 months basis) fell
to 0.9x (31 March 2020: 1.0x).
The Group's continued strong cash position resulted in cash and
facility headroom of GBP110.7m within the Group's committed bank
facility (31 March 2020: GBP99.0).
The Group's GBP180m asset based finance facility runs through to
October 2022. The additional uncommitted accordion of GBP220m
remains in place through to October 2022, should further funding
requirements be needed.
The facility includes quarterly leverage(5) and fixed charge
cover covenant tests which are only applied if headroom in the
facility falls below GBP18m. No test was required during the
period, and the Group maintained significant headroom against these
measures.
Dividend
The Group has accessed government support, including use of the
Coronavirus Job Retention Scheme, rates relief and the ability to
defer tax payments. In addition, substantial cost reduction
measures were implemented during the first half which affected
colleagues, landlords and other stakeholders. The Group has no
intention of further utilising COVID-19 support schemes, no staff
were on furlough post 30 September, and all tax deferrals were
repaid by 30 September. Nevertheless, given the disruption from
COVID-19 the Board has decided not to pay an interim dividend for
2020.
The dividend policy remains unchanged. Assuming current trading
continues, the Board intends to pay a dividend for the full year,
taking into account the results for the year as a whole.
Capital allocation policy
The Board intends to continue to invest in the business in order
to grow revenue, profit and ROCE(4) . This investment is expected
to include capital expenditure within existing operations, as well
as value enhancing acquisitions that fit with the Group's strategy
and are returns accretive.
The Board's objective is to maximise long term shareholder
returns through a disciplined deployment of cash generated, and it
has adopted the following capital allocation policy in support of
this:
- Organic growth: the Board will invest in capital equipment to
support demand in our chosen markets. This investment will be in
hire fleet and IT systems to better enable us to serve our
customers;
- Regular returns to shareholders when the current uncertainties
due to COVID-19 are resolved: the Board intends to pay a regular
dividend to shareholders, with a policy of growing dividends
through the business cycle, and a payment in the range of between
33% and 50% adjusted earnings per share(2) ;
- Acquisitions: the Board will continue to explore value
enhancing acquisition opportunities in markets adjacent to, and
consistent with its existing operations;
- Gearing and treatment of excess capital: the Board is
committed to maintaining an efficient balance sheet. The Board has
adopted a target gearing in the region of 1.5x net debt(3) to
EBITDA(1) through the business cycle, although it is prepared to
move outside this if circumstances warrant. The Board will continue
to review the Group's balance sheet in light of the policy, and
medium term investment requirements, and will return excess capital
to shareholders if and when appropriate.
Board and people
James Bunn joined the Board on 14 September as Chief Financial
Officer. He has a wealth of experience in acquisition integration
and digital applications and his experience is proving valuable as
we continue to optimise our digital solutions. Chris Morgan stepped
down from the Board on 31 July.
The Group's headcount at 30 September 2020 was 3,756 (31 March
2020: 4,064), a reduction of 8% due to the redundancy programme
instigated following a COVID-19 business review. In the UK and
Ireland headcount fell to 3,173 (31 March 2020: 3,464); headcount
in the International business fell slightly to 583 (31 March 2020:
600).
Summary and outlook
I am pleased with the resilient performance of our business
during this unprecedented period. Cash flow performance has been
excellent, due to actions taken quickly to control costs and
preserve cash, and our balance sheet remains strong.
This performance is testament to the strength of our model, hard
work of all my colleagues and strong operational delivery. Our
customer service focus and capital commitment promise have once
again delivered customer renewals and market share gains.
I am pleased to report ongoing positive trading momentum in
recent months. Moving into the second half, while conditions remain
uncertain due to COVID-19, utilisation has returned to 2019 levels
and the business is well positioned and invested to take advantage
as trading recovers to more normal levels. As a consequence full
year results are expected to be towards the top end of analysts'
expectations(6) .
Russell Down
Chief Executive
Interim condensed consolidated income statement
Six months ended Six months ended
30 September 2020 30 September 2019
---------------------------------- ----------------------------------
Before Before
Exceptional Exceptional Exceptional Exceptional
items items Total items items Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 4 163.8 - 163.8 205.7 - 205.7
Cost of sales (78.7) - (78.7) (92.1) - (92.1)
---------- ---------- ---------- ---------- ---------- ----------
Gross profit 85.1 - 85.1 113.6 - 113.6
Distribution and
administrative
costs (77.3) (4.1) (81.4) (95.7) - (95.7)
Analysis of
operating
profit
Operating profit
before
amortisation
and exceptional
items 8.2 - 8.2 18.6 - 18.6
Amortisation (0.4) - (0.4) (0.7) - (0.7)
Exceptional
items 3 - (4.1) (4.1) - - -
---------------- ---------------- ------------ ------------- ---------- ------------ ------------- ----------
Operating profit 7.8 (4.1) 3.7 17.9 - 17.9
Share of results
of joint
venture 0.6 - 0.6 1.5 - 1.5
---------- ---------- ---------- ---------- ---------- ----------
Profit from
operations 8.4 (4.1) 4.3 19.4 - 19.4
Financial
expense 5 (2.9) - (2.9) (3.7) 0.7 (3.0)
---------- ---------- ---------- ---------- ---------- ----------
Profit before
taxation 5.5 (4.1) 1.4 15.7 0.7 16.4
Taxation 6 (1.2) 0.6 (0.6) (3.0) - (3.0)
---------- ---------- ---------- ---------- ---------- ----------
Profit for the
financial
period 4.3 (3.5) 0.8 12.7 0.7 13.4
Earnings per
share
- Basic (pence) 7 0.15 2.58
- Diluted
(pence) 7 0.15 2.55
Non-GAAP
performance
measures
EBITDA before
exceptional
items 9 41.0 52.7
Profit before
tax,
amortisation
and exceptional
items 9 5.9 16.4
Adjusted
earnings per
share (pence) 7 0.88 2.56
Interim condensed consolidated income statement (continued)
Year ended
31 March 2020
----------------------------------
Note Before
Exceptional Exceptional
items items Total
GBPm GBPm GBPm
Revenue 4 406.7 - 406.7
Cost of sales (182.5) - (182.5)
---------- ---------- ----------
Gross profit 224.2 - 224.2
Distribution and administrative
costs (186.4) (23.8) (210.2)
Analysis of operating profit
Operating profit before amortisation
and exceptional items 39.1 - 39.1
Amortisation (1.3) - (1.3)
Exceptional items 3 - (23.8) (23.8)
Operating profit 37.8 (23.8) 14.0
Share of results of joint
venture 2.8 - 2.8
---------- ---------- ----------
Profit from operations 40.6 (23.8) 16.8
Net financial expense 5 (7.0) 10.9 3.9
---------- ---------- ----------
Profit before taxation 33.6 (12.9) 20.7
Taxation 6 (5.9) 2.0 (3.9)
---------- ---------- ----------
Profit for the financial
period 27.7 (10.9) 16.8
Earnings per share
* Basic (pence) 7 3.23
* Diluted (pence) 7 3.19
Non-GAAP performance measures
EBITDA before exceptional
items 9 107.4
Profit before tax, amortisation
and exceptional items 9 34.9
Adjusted earnings per share
(pence) 7 5.54
Interim condensed consolidated statement of comprehensive
income
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2020 2019 2020
GBPm GBPm GBPm
Profit for the financial period 0.8 13.4 16.8
---------- ---------- ----------
Other comprehensive income that may
be reclassified subsequently to the
Income Statement:
- Effective portion of change in
fair value of cash flow hedges (0.2) (0.2) (0.2)
- Exchange difference on retranslation
of foreign operations (0.8) 1.2 0.9
- Tax on items - 0.1 0.1
---------- ---------- ----------
Other comprehensive income, net of
tax (1.0) 1.1 0.8
---------- ---------- ----------
Total comprehensive (loss)/income
for the financial period (0.2) 14.5 17.6
Interim condensed consolidated balance sheet
30 September 30 September 31 March
2020 2019 2020
Restated(1)
Note GBPm GBPm GBPm
ASSETS
Non-current assets
Intangible assets(1) 22.8 41.1 23.1
Investment in joint venture 6.6 7.6 7.3
Property, plant and equipment
- Hire equipment 10 212.0 221.0 227.1
- Non-hire equipment 10 27.6 32.3 30.5
Right of use assets 11 58.9 66.4 64.7
Deferred tax assets 2.7 2.8 2.8
---------- ---------- ----------
330.6 371.2 355.5
---------- ---------- ----------
Current assets
Inventories 8.5 8.8 8.7
Trade and other receivables(1) 95.4 104.7 102.3
Cash 12 18.9 5.3 22.8
Current tax asset 0.4 - 1.5
---------- ---------- ----------
123.2 118.8 135.3
---------- ---------- ----------
Total assets 453.8 490.0 490.8
---------- ---------- ----------
LIABILITIES
Current liabilities
Borrowings 12 - - -
Lease liabilities (18.5) (20.1) (20.2)
Other financial liabilities (0.7) (0.5) (0.5)
Trade and other payables(1) (84.5) (93.4) (90.9)
Current tax liabilities(1) - (1.3) -
Provisions(1) (5.5) (1.9) (5.9)
---------- ---------- ----------
(109.2) (117.2) (117.5)
---------- ---------- ----------
Non-current liabilities
Borrowings 12 (76.7) (90.4) (102.1)
Lease liabilities (48.3) (55.0) (52.7)
Provisions (1.7) (10.7) (1.2)
Deferred tax liabilities (7.8) (7.0) (7.4)
---------- ---------- ----------
(134.5) (163.1) (163.4)
---------- ---------- ----------
Total liabilities (243.7) (280.3) (280.9)
---------- ---------- ----------
Net assets 210.1 209.7 209.9
EQUITY
Share capital 26.4 26.3 26.4
Share premium 0.9 0.4 0.8
Merger reserve 1.0 1.0 1.0
Hedging reserve (1.1) (0.9) (0.9)
Translation reserve (0.4) 0.7 0.4
Retained earnings 183.3 182.2 182.2
---------- ---------- ----------
210.1 209.7 209.9
(1) Restated for fair value adjustments relating to acquisitions
made in the prior year - see Note 1 (Basis of preparation)
Interim condensed consolidated statement of changes in
equity
Share Share Merger Hedging Translation Retained Total
capital premium reserve reserve reserve earnings equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 1 April 2019 26.3 0.4 1.0 (0.7) (0.5) 175.5 202.0
Total comprehensive income/
(loss) - - - (0.2) 1.2 13.5 14.5
Dividends - - - - - (7.3) (7.3)
Equity-settled share-based
payments - - - - - 0.4 0.4
Tax on items taken directly
to equity - - - - - 0.1 0.1
---------- ---------- ---------- ---------- ---------- ---------- ----------
At 30 September 2019 26.3 0.4 1.0 (0.9) 0.7 182.2 209.7
Total comprehensive income/
(loss) - - - - (0.3) 3.4 3.1
Dividends - - - - - (3.6) (3.6)
Tax on items taken directly
to equity - - - - - 0.1 0.1
Equity-settled share-based
payments - - - - - 0.1 0.1
Issue of shares under
the Sharesave Scheme 0.1 0.4 - - - - 0.5
---------- ---------- ---------- ---------- ---------- ---------- ----------
At 31 March 2020 26.4 0.8 1.0 (0.9) 0.4 182.2 209.9
Total comprehensive income/
(loss) - - - (0.2) (0.8) 0.8 (0.2)
Issue of shares under
the Sharesave Scheme - 0.1 - - - - 0.1
Equity-settled share-based
payments - - - - - 0.3 0.3
---------- ---------- ---------- ---------- ---------- ---------- ----------
At 30 September 2020 26.4 0.9 1.0 (1.1) (0.4) 183.3 210.1
Interim condensed consolidated statement of cash flows
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2020 2019 2020
GBPm GBPm GBPm
Cash generated from operating activities
Profit before tax 1.4 16.4 20.7
Finance expense 2.9 3.7 7.0
Exceptional intangible asset impairment - - 18.5
Exceptional financial (income)/expense - (0.7) (10.9)
Amortisation 0.4 0.7 1.3
Depreciation 32.8 34.1 68.3
Share of profit from joint venture (0.6) (1.5) (2.8)
Loss/(profit) on disposal of leases,
property, plant and equipment 1.2 (0.3) (6.0)
Decrease in working capital 5.4 5.6 5.2
Movement in provisions 0.1 (0.8) 4.6
Equity-settled share-based payments 0.3 0.5 0.5
---------- ---------- ----------
Cash generated from operations before
changes in hire fleet 43.9 57.7 106.4
Purchase of hire equipment, net of
sale proceeds (6.8) (19.0) (41.9)
---------- ---------- ----------
Cash generated from operations 37.1 38.7 64.5
Interest paid (2.6) (3.4) (6.5)
Tax received/(paid) 1.0 (6.3) (9.3)
---------- ---------- ----------
Net cash flow from operating activities 35.5 29.0 48.7
---------- ---------- ----------
Cash flow from investing activities
Purchase of other fixed assets, net
of sale proceeds (3.2) (4.8) (4.8)
Movement in investment in joint venture 1.3 - 1.3
---------- ---------- ----------
Net cash flow from investing activities (1.9) (4.8) (3.5)
---------- ---------- ----------
Net cash flow before financing activities 33.6 24.2 45.2
---------- ---------- ----------
Cash flow from financing activities
Payments for the principle element
of leases (12.0) (12.7) (24.5)
Net (repayment)/drawdown of loans (25.6) (9.3) 2.1
Proceeds from the issue of Sharesave
Scheme shares 0.1 - 0.5
Dividends paid - (7.3) (10.9)
---------- ---------- ----------
Net cash flow from financing activities (37.5) (29.3) (32.8)
---------- ---------- ----------
(Decrease)/increase in cash and cash
equivalents (3.9) (5.1) 12.4
Cash and cash equivalents at the start
of the period 22.8 10.4 10.4
---------- ---------- ----------
Cash and cash equivalents at the end
of the period 18.9 5.3 22.8
Analysis of cash and cash equivalents
Cash 12 18.9 5.3 22.8
Bank overdraft 12 - - -
---------- ---------- ----------
18.9 5.3 22.8
1 Basis of preparation
Speedy Hire Plc ('the Company') is a company incorporated and
domiciled in the United Kingdom. The interim condensed consolidated
financial statements of the Company as at and for the six months
ended 30 September 2020 comprise the Company and its subsidiaries
(together referred to as 'the Group').
The financial statements of the Group for the year ended 31
March 2020 are available from the Company's registered office, or
from the website: www.speedyservices.com .
The Group has a GBP180m asset based finance facility ('the
facility') which matures in October 2022 and has no prior scheduled
repayment requirements. Cash and facility headroom as at 30
September 2020 was GBP110.7m (31 March 2020: GBP99.0m) based on the
Group's eligible hire equipment and trade receivables.
The Group meets its day-to-day working capital requirements
through operating cash flows, supplemented as necessary by
borrowings. The Directors have prepared a going concern assessment
up to 30 November 2021, which confirms that the Group is capable of
continuing to operate within its existing loan facility and can
meet the covenant requirements set out within the facility. The key
assumptions on which the projections are based include an
assessment of the impact of future market conditions on projected
revenues and an assessment of the net capital investment required
to support the expected level of revenues, including the impact of
the recent increased economic uncertainty resulting from COVID-19.
The Group responded quickly to assess the potential impact on
revenues, costs and cash; actions implemented immediately included
restricting discretionary spend, consolidating the depot network,
temporarily closing sites and servicing customers from alternative
locations.
The Group's base case for the 12 months to 30 November 2021
assume a continued recovery towards prior year revenue levels by
the end of March 2021. The Board has considered various severe but
possible downturn scenarios including a further period of reduced
activity as a result of an additional six week lockdown during
December 2020 and January 2021, with revenues for those months
reduced by 40% and 20% respectively from the prior year. The four
week lockdown effective from 5 November 2020 is not anticipated to
have a material impact on headroom, as construction and
infrastructure markets continue to operate. Even with minimal
mitigating actions, and despite the severity of the assumptions
applied in these scenarios, the Group maintains significant
headroom against its available facility and covenant
requirements.
Whilst the Directors consider that there is a degree of
subjectivity involved in their assumptions, on the basis of the
above the Directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in operational
existence for a period of at least 12 months from the date of
approval of these interim condensed consolidated financial
statements. Accordingly, they continue to adopt the going concern
basis of accounting.
Statement of compliance
These interim condensed consolidated financial statements have
been prepared in accordance with IAS 34 Interim Financial Reporting
as adopted by the European Union (EU) and the Disclosure and
Transparency Rules (DTR) of the UK FCA. As required by the latter,
the interim condensed consolidated financial statements have been
prepared applying the accounting policies and presentation that
were applied in the Company's published consolidated financial
statements for the year ended 31 March 2020 except as described
below. They do not include all the information required for full
annual financial statements, and should be read in conjunction with
the Group's consolidated financial statements as at and for the
year ended 31 March 2020.
The comparative figures for the financial year ended 31 March
2020 are not the Company's statutory accounts for that financial
year. Those accounts which were prepared under IFRS as adopted by
the EU (adopted IFRS) have been reported on by the Company's
auditors and delivered to the Registrar of Companies. The report of
the auditors was (i) unqualified, (ii) did not include a reference
to any matters to which the auditors drew attention by way of
emphasis without qualifying their report, and (iii) did not contain
a statement under section 498(2) or (3) of the Companies Act
2006.
The interim report was approved by the Board of Directors on 17
November 2020.
1 Basis of preparation (continued)
Significant accounting policies
Fair value adjustments relating to prior year acquisitions
During the year ended 31 March 2020 the Group made adjustments
to the fair values of assets and liabilities acquired as part of
the November 2018 purchase of Geason Holdings Limited ("Geason").
The fair values disclosed as provisional in the 30 September 2019
balance sheet have been revised, comprising GBP1.4m of additional
intangible assets and a reduction in working capital of
GBP1.4m.
Government grants
During the period the Group utilised available government
support schemes relating to COVID-19. Income from such support
schemes is recognised as a credit against the underlying expense to
which it relates.
Other accounting policies
The accounting policies applied by the Group in these interim
condensed consolidated financial statements are otherwise the same
as those applied by the Group in its consolidated financial
statements as at and for the year ended 31 March 2020.
The International Accounting Standards Board (IASB) and
International Financial Reporting Interpretations Committee
('IFRIC') have not issued or endorsed any new standards or
interpretations since the date of the 31 March 2020 year end
financial statements.
Seasonality
In addition to economic factors, revenue is subject to a small
element of seasonal fluctuation. Whilst construction activity tends
to increase in the summer months, the equipment range helps to
mitigate the impact, specifically with heating, lighting and power
generation products being more in demand during the winter months.
Overall, the Directors do not feel that these factors have a
material effect on the performance of the Group when comparing
first half results to those achieved in the second half.
2 Changes in estimates
The preparation of interim condensed consolidated financial
statements requires management to make judgements, estimates, and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing the interim condensed consolidated financial
statements, the significant judgements made by management in
applying the Group's accounting policies and key sources of
estimation uncertainty for the consolidated financial statements
for the year ended 31 March 2020 continued to apply.
3 Exceptional items
During the period, exceptional administrative items of GBP4.1m
were incurred.
Action has been taken to manage the Group's cost base following
the COVID-19 pandemic, and consequently the network has been
restructured, with a number of depot closures. As a result, GBP2.5m
of property provisions and GBP1.6m redundancy costs have been
incurred during the period.
Prior period
During the period ended 30 September 2019, no exceptional
administrative items were incurred.
An exceptional financial item of GBP0.7m has been credited to
the Income Statement in relation to changes in the fair value of
contingent consideration during the period.
4 Segmental analysis
The segmental disclosure presented in the interim condensed
consolidated financial statements reflects the format of reports
reviewed by the Chief Operating Decision Maker (CODM). UK and
Ireland delivers asset management, with tailored services and a
continued commitment to relationship management. International
delivers major overseas projects and facilities management
contracts by providing a managed site support service.
For the six months ended 30 September 2020
UK and Ireland International Corporate Total
items
GBPm GBPm GBPm GBPm
Revenue 147.1 16.7 - 163.8
Segment result:
EBITDA before exceptional
items 39.9 3.1 (2.0) 41.0
Depreciation (31.1) (1.3) (0.4) (32.8)
---------- ---------- ---------- ----------
Operating profit/(costs)
before amortisation and
exceptional items 8.8 1.8 (2.4) 8.2
Amortisation (0.4) - - (0.4)
Exceptional items (4.1) - - (4.1)
---------- ---------- ---------- ----------
Operating profit/(costs) 4.3 1.8 (2.4) 3.7
Share of results of joint
venture - 0.6 - 0.6
---------- ---------- ---------- ----------
Trading profit/(costs) 4.3 2.4 (2.4) 4.3
Financial expense (2.9)
----------
Profit before tax 1.4
Taxation (0.6)
----------
Profit for the financial
period 0.8
Intangible assets 22.8 - - 22.8
Investment in joint venture - 6.6 - 6.6
Hire equipment 202.1 9.9 - 212.0
Non-hire equipment 25.8 1.8 - 27.6
Right of use assets 56.7 2.2 - 58.9
Taxation assets - - 3.1 3.1
Current assets 89.5 11.3 3.1 103.9
Cash - - 18.9 18.9
---------- ---------- ---------- ----------
Total assets 396.9 31.8 25.1 453.8
Lease liabilities (63.1) (3.7) - (66.8)
Other liabilities (78.6) (9.4) (4.4) (92.4)
Borrowings - - (76.7) (76.7)
Taxation liabilities - - (7.8) (7.8)
---------- ---------- ---------- ----------
Total liabilities (141.7) (13.1) (88.9) (243.7)
4 Segmental analysis (continued)
For the six months ended 30 September 2019
UK and Ireland International Corporate Total
items
Restated(1) Restated(1) Restated(1)
GBPm GBPm GBPm GBPm
Revenue 188.0 17.7 - 205.7
Segment result:
EBITDA before exceptional
items 50.8 3.8 (1.9) 52.7
Depreciation (32.4) (1.3) (0.4) (34.1)
---------- ---------- ---------- ----------
Operating profit/(costs)
before amortisation and
exceptional items 18.4 2.5 (2.3) 18.6
Amortisation (0.7) - - (0.7)
Exceptional (costs)/income - - - -
---------- ---------- ---------- ----------
Operating profit/(costs) 17.7 2.5 (2.3) 17.9
Share of results of jointly
controlled entity - 1.5 - 1.5
---------- ---------- ---------- ----------
Trading profit/(costs) 17.7 4.0 (2.3) 19.4
Financial expense (3.7)
Exceptional financial item 0.7
----------
Profit before tax 16.4
Taxation (3.0)
----------
Profit for the financial
period 13.4
Intangible assets(1) 41.1 - - 41.1
Investment in joint venture - 7.6 - 7.6
Hire equipment 212.4 8.6 - 221.0
Non-hire equipment 30.0 2.3 - 32.3
Right of use assets 63.7 2.7 - 66.4
Taxation assets - - 2.8 2.8
Current assets(1) 98.4 13.1 2.0 113.5
Cash - - 5.3 5.3
---------- ---------- ---------- ----------
Total assets 445.6 34.3 10.1 490.0
Lease liabilities (70.7) (4.4) - (75.1)
Other liabilities(1) (87.9) (14.1) (4.5) (106.5)
Borrowings - - (90.4) (90.4)
Taxation liabilities(1) - - (8.3) (8.3)
---------- ---------- ---------- ----------
Total liabilities (158.6) (18.5) (103.2) (280.3)
(1) Restated for fair value adjustments relating to acquisitions
made in the prior year - see Note 1 (Basis of preparation)
4 Segmental analysis (continued)
For the year ended 31 March 2020
UK and Ireland International Corporate Total
items
GBPm GBPm GBPm GBPm
Revenue 371.5 35.2 - 406.7
Segment result:
EBITDA before exceptional
items 102.7 8.2 (3.5) 107.4
Depreciation (65.4) (2.5) (0.4) (68.3)
---------- ---------- ---------- ----------
Operating profit/(costs)
before amortisation and
exceptional items 37.3 5.7 (3.9) 39.1
Amortisation (1.3) - - (1.3)
Exceptional (costs)/income (23.5) (0.3) - (23.8)
---------- ---------- ---------- ----------
Operating profit/(costs) 12.5 5.4 (3.9) 14.0
Share of results of jointly
controlled entity - 2.8 - 2.8
---------- ---------- ---------- ----------
Trading profit/(costs) 12.5 8.2 (3.9) 16.8
Financial expense (7.0)
Exceptional finance expense 10.9
----------
Profit before tax 20.7
Taxation (3.9)
----------
Profit for the financial
period 16.8
Intangible assets 21.9 - 1.2 23.1
Investment in joint venture - 7.3 - 7.3
Hire equipment 215.7 11.4 - 227.1
Non-hire equipment 28.4 2.1 - 30.5
Right of use assets 62.2 2.5 - 64.7
Taxation assets - - 4.3 4.3
Current assets 94.5 14.9 1.6 111.0
Cash - - 22.8 22.8
---------- ---------- ---------- ----------
Total assets 422.7 38.2 29.9 490.8
Lease liabilities (68.8) (4.1) - (72.9)
Other liabilities (82.4) (12.1) (4.0) (98.5)
Borrowings - - (102.1) (102.1)
Taxation liabilities - - (7.4) (7.4)
---------- ---------- ---------- ----------
Total liabilities (151.2) (16.2) (113.5) (280.9)
4 Segmental analysis (continued)
Corporate items comprise certain central activities and costs,
which are not directly related to the activities of the operating
segments.
The financing of the Group's activities is undertaken at head
office level and consequently net financing costs cannot be
analysed by segment. The unallocated net assets comprise
principally working capital balances held by the support services
function and are not directly attributable to the activities of the
operating segments, together with net corporate borrowings and
taxation.
Geographical information
In presenting geographical information, revenue is based on the
geographical location of customers. Assets are based on the
geographical location of the assets.
Six months ended Six months ended Year ended
30 September 30 September 31 March 2020
2020 2019
-------------------------- -------------------------- --------------------------
Total Total Total
Revenue assets Revenue Assets(1) Revenue assets
GBPm GBPm GBPm GBPm GBPm GBPm
UK 143.5 409.0 182.7 442.5 361.3 438.4
Ireland 3.6 13.0 5.3 13.2 10.2 14.2
United Arab Emirates 16.7 31.8 17.7 34.3 35.2 38.2
---------- ---------- ---------- ---------- ---------- ----------
163.8 453.8 205.7 490.0 406.7 490.8
(1) Restated for fair value adjustments relating to acquisitions
made in the prior year - see Note 1 (Basis of preparation)
Revenue by type
Revenue is attributed to the following activities:
Six months Six months
ended ended Year
30 September 30 September ended
2020 2019 31 March 2020
GBPm GBPm GBPm
Hire and related activities 95.2 120.4 240.5
Services 67.1 83.8 162.0
Disposals 1.5 1.5 4.2
---------- ---------- ----------
163.8 205.7 406.7
Major customer
No one customer represents more than 10% of revenue, reported
profit or combined assets of all reporting segments.
5 Financial expense
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2020 2019 2020
GBPm GBPm GBPm
Total interest on borrowings 1.4 2.0 3.8
Interest on lease liabilities 1.4 1.7 3.2
Other finance costs 0.1 - -
Exceptional financial items (see
note 3) - (0.7) (10.9)
---------- ---------- ----------
2.9 3.0 (3.9)
6 Taxation
The corporation tax charge for the six months ended 30 September
2020 is based on an effective rate of taxation of 20.3% before
exceptional items and amortisation (2019: 18.3%); and 42.9% (2019:
18.3%) after exceptional items and amortisation. This has been
calculated by reference to the projected charge for the full year
ending 31 March 2021, applying the applicable UK corporation tax
rate of 19% (2019: 19%). Deferred tax is provided using the tax
rates that are expected to apply to the period in which the
liability is settled, based on the tax rates that have been enacted
at the balance sheet date.
7 Earnings per share
The calculation of basic earnings per share is based on the
earnings attributable to equity holders of the Company of GBP0.8m
(2019: GBP13.4m) and the weighted average number of 5 pence
ordinary shares in issue and is calculated as follows:
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2020 2019 2020
Profit (GBPm)
Profit for the period after tax -
basic earnings(1) 0.8 13.4 16.8
Intangible amortisation charge (after
tax) 0.3 0.6 1.1
Exceptional items (after tax) 3.5 (0.7) 10.9
---------- ---------- ----------
Adjusted earnings (after tax) 4.6 13.3 28.8
Weighted average number of shares
in issue (m)
Number of shares at the beginning
of the period 521.3 519.5 519.5
Exercise of share options 0.3 - 0.3
Movement in shares owned by the Employee
Benefit Trust - 0.1 0.2
---------- ---------- ----------
Weighted average for the period -
basic number of shares 521.6 519.6 520.0
Share options 4.5 5.3 5.2
Employee share schemes 0.3 0.7 1.1
---------- ---------- ----------
Weighted average for the period -
diluted number of shares 526.4 525.6 526.3
Earnings per share (pence)
Basic earnings per share 0.15 2.58 3.23
Amortisation 0.06 0.11 0.21
Exceptional items 0.67 (0.13) 2.10
---------- ---------- ----------
Adjusted earnings per share 0.88 2.56 5.54
Basic earnings per share 0.15 2.58 3.23
Share options - (0.03) (0.04)
---------- ---------- ----------
Diluted earnings per share 0.15 2.55 3.19
Adjusted earnings per share 0.88 2.56 5.54
Share options (0.01) (0.03) (0.07)
---------- ---------- ----------
Adjusted diluted earnings per share 0.87 2.53 5.47
The total number of shares outstanding at 30 September 2020
amounted to 527,008,730, including 4,434,814 shares held in the
Employee Benefit Trust, which are excluded in calculating the
earnings per share.
8 Dividends
The aggregate amount of dividend comprises:
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2020 2019 2020
GBPm GBPm GBPm
2019 final dividend (1.40 pence on
525.3m ordinary shares) - 7.3 7.3
2020 interim dividend (0.70 pence
on 525.4m ordinary shares) - - 3.6
---------- ---------- ----------
- 7.3 10.9
Subsequent to the end of the period, the Directors have declared
no interim dividend payable (2020 interim dividend: 0.70 pence per
share).
9 Non-GAAP performance measures
The Group believes that the measures below provide valuable
additional information for users of the financial statements in
assessing the Group's performance. The Group uses these measures
for planning, budgeting and reporting purposes and for its internal
assessment of the operating performance of the individual divisions
within the Group.
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2020 2019 2020
GBPm GBPm GBPm
Operating profit 3.7 17.9 14.0
Add back: amortisation 0.4 0.7 1.3
Add back: exceptional items 4.1 - 23.8
---------- ---------- ----------
Operating profit before amortisation
and exceptional items (EBITA) 8.2 18.6 39.1
Add back: depreciation 32.8 34.1 68.3
---------- ---------- ----------
EBITDA before exceptional items 41.0 52.7 107.4
Profit before tax 1.4 16.4 20.7
Add back: amortisation 0.4 0.7 1.3
Add back: exceptional items 4.1 (0.7) 12.9
---------- ---------- ----------
Profit before tax, amortisation and
exceptional items 5.9 16.4 34.9
10 Property, plant and equipment
Hire Land and
equipment buildings Other Total
GBPm GBPm GBPm GBPm
Cost
At 1 April 2019 385.8 52.2 77.8 515.8
Foreign exchange 0.7 0.3 - 1.0
Additions 27.4 0.8 4.0 32.2
Disposals (12.5) - - (12.5)
Transfers to inventory (4.9) - - (4.9)
---------- ---------- ---------- ----------
At 30 September 2019 396.5 53.3 81.8 531.6
Foreign exchange - - - -
Additions 27.9 1.6 1.5 31.0
Disposals (9.1) (0.1) (0.2) (9.4)
Transfers to inventory (7.2) - - (7.2)
---------- ---------- ---------- ----------
At 31 March 2020 408.1 54.8 83.1 546.0
Foreign exchange (0.6) (0.3) 0.3 (0.6)
Additions 7.2 0.3 1.8 9.3
Disposals (10.4) (0.8) (0.5) (11.7)
Transfers to inventory (3.7) - - (3.7)
---------- ---------- ---------- ----------
At 30 September 2020 400.6 54.0 84.7 539.3
Depreciation
At 1 April 2019 168.9 33.1 64.7 266.7
Foreign exchange 0.1 0.4 - 0.5
Charged in period 17.8 1.7 2.9 22.4
Disposals (7.7) - - (7.7)
Transfers to inventory (3.6) - - (3.6)
---------- ---------- ---------- ----------
At 30 September 2019 175.5 35.2 67.6 278.3
Foreign exchange (0.1) (0.4) - (0.5)
Charged in period 17.1 1.7 3.3 22.1
Disposals (6.6) - - (6.6)
Transfers to inventory (4.9) - - (4.9)
---------- ---------- ---------- ----------
At 31 March 2020 181.0 36.5 70.9 288.4
Foreign exchange (0.3) (0.3) - (0.6)
Charged in period 17.1 1.8 2.6 21.5
Disposals (6.5) (0.3) (0.1) (6.9)
Transfers to inventory (2.7) - - (2.7)
---------- ---------- ---------- ----------
At 30 September 2020 188.6 37.7 73.4 299.7
Net book value
At 30 September 2020 212.0 16.3 11.3 239.6
At 31 March 2020 227.1 18.3 12.2 257.6
At 30 September 2019 221.0 18.1 14.2 253.3
11 Right of use assets
Land and
buildings Other Total
GBPm GBPm GBPm
Cost
At 1 April 2019 128.0 49.9 177.9
Foreign exchange 0.6 - 0.6
Additions 3.0 3.3 6.3
Disposals (5.7) (3.3) (9.0)
---------- ---------- ----------
At 30 September 2019 125.9 49.9 175.8
Foreign exchange (0.2) - (0.2)
Additions 6.5 5.2 11.7
Disposals (4.4) (3.2) (7.6)
---------- ---------- ----------
At 31 March 2020 127.8 51.9 179.7
Foreign exchange (0.2) - (0.2)
Additions 2.8 4.8 7.6
Disposals (2.5) (8.5) (11.0)
---------- ---------- ----------
At 30 September 2020 127.9 48.2 176.1
Depreciation
At 1 April 2019 77.2 28.5 105.7
Foreign exchange 0.4 - 0.4
Charged in period 5.9 5.8 11.7
Disposals (5.7) (2.7) (8.4)
---------- ---------- ----------
At 30 September 2019 77.8 31.6 109.4
Foreign exchange (0.2) - (0.2)
Charged in period 7.3 5.9 13.2
Disposals (4.3) (3.1) (7.4)
---------- ---------- ----------
At 31 March 2020 80.6 34.4 115.0
Foreign exchange - - -
Charged in period 6.5 5.7 12.2
Disposals (1.9) (8.1) (10.0)
---------- ---------- ----------
At 30 September 2020 85.2 32.0 117.2
Net book value
At 30 September 2020 42.7 16.2 58.9
At 31 March 2020 47.2 17.5 64.7
At 30 September 2019 48.1 18.3 66.4
Included within depreciation charged in the period on right of
use assets was GBP1.1m relating to exceptional items (see note
3).
12 Borrowings
30 September 30 September 31 March
2020 2019 2020
GBPm GBPm GBPm
Current borrowings
Bank overdraft - - -
Lease liabilities 18.5 20.1 20.2
---------- ---------- ----------
18.5 20.1 20.2
Non-current borrowings
Maturing between two and five years
- ABF facility 76.7 90.4 102.1
- Lease liabilities 48.3 55.0 52.7
---------- ---------- ----------
125.0 145.4 154.8
Total borrowings 143.5 165.5 175.0
Less: Cash (18.9) (5.3) (22.8)
Exclude lease liabilities (66.8) (75.1) (72.9)
---------- ---------- ----------
Net debt 57.8 85.1 79.3
The Group has a GBP180m asset based finance facility which is
sub divided into:
(a) A secured overdraft facility, provided by Barclays Bank Plc
which secures by cross guarantees and debentures the bank deposits
and overdrafts of the Company and certain subsidiary companies up
to a maximum of GBP5m.
(b) An asset based finance facility of up to GBP175m, based on
the Group's hire equipment and trade receivables balance. Cash and
facility headroom as at 30 September 2020 was GBP110.7m (31 March
2020: GBP99.0m) based on the Group's eligible hire equipment and
trade receivables.
The facility is for GBP180m, but is reduced to the extent that
any ancillary facilities are provided, and is repayable in October
2022, with no prior scheduled repayment requirements. An additional
uncommitted accordion of GBP220m remains in place through to
October 2022.
Interest on the facility is calculated by reference to the
London Inter Bank Offered Rate applicable to the period drawn, plus
a margin of 150 to 250 basis points, depending on leverage and on
the components of the borrowing base. During the period, the
effective margin was 1.84% (2019: 1.84%).
The facility is secured by fixed and floating charges over the
UK and Ireland assets.
13 Contingent liabilities
In the normal course of business, the Company and certain
subsidiaries have given performance bonds issued on behalf of Group
companies, and parental guarantees have been given in support of
the contractual obligations of Group companies on both a joint and
a several basis.
The D irectors do not consider any provision is necessary in
respect of guarantees and bonds.
14 Related party disclosures
There has been no significant change to the nature and size of
related party transactions, including the remuneration provided to
the key management, from that disclosed in the 2020 Annual
Report.
15 Principal risks and uncertainties
The principal risks and uncertainties which could have a
material impact upon the Group's performance over the remaining six
months of the 2021 financial year have not changed from those set
out on pages 40 to 49 of the Group's 2020 Annual Report, which is
available at www.speedyservices.com . These risks and uncertainties
include, but are not limited to the following:
-- COVID-19 pandemic;
-- Safety, health and environment;
-- Service;
-- Revenue and trading performance;
-- Project and change management;
-- People;
-- Partner and supplier service levels;
-- Operating costs;
-- Cyber security and data integrity;
-- Funding;
-- Economic vulnerability;
-- Corporate culture;
-- Business continuity; and
-- Asset holding and integrity.
16 Post balance sheet events
Geason, which was acquired in December 2018, was subject to an
assurance visit from a funding agency in early 2020, and a
subsequent claim for amounts overpaid. The claim was settled in
October 2020, within the provision held. The Group continues to
pursue initiatives to improve its financial position.
Directors' Responsibilities
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU;
-- the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact
on the condensed set of financial statements; and a description of
the principal risks and uncertainties for the remaining six months
of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related party transactions that have taken place in
the first six months of the current financial year and that have
materially affected the financial position or performance of the
entity during that period; and any changes in the related party
transactions described in the last Annual Report that could do
so.
James Bunn
Director
17 November 2020
Independent Review Report to Speedy Hire Plc
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2020 which comprises the interim
condensed consolidated statement of comprehensive income, interim
condensed consolidated balance sheet, interim condensed
consolidated cash flow statement, interim condensed consolidated
statement of changes in equity and the related explanatory
notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2020 is not prepared, in all material respects, in
accordance with IAS 34 Interim Financial Reporting as adopted by
the EU and the Disclosure Guidance and Transparency Rules ("the
DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. We read the other information contained in the
half-yearly financial report and consider whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with International Financial
Reporting Standards as adopted by the EU. The directors are
responsible for preparing the condensed set of financial statements
included in the half-yearly financial report in accordance with IAS
34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusions we have
reached.
Nick Plumb
for and on behalf of KPMG LLP
Chartered Accountants
1 St Peter's Square
Manchester
M2 3AE
17 November 2020
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR KKOBNKBDBODD
(END) Dow Jones Newswires
November 18, 2020 02:00 ET (07:00 GMT)
Speedy Hire (LSE:SDY)
Historical Stock Chart
From Mar 2024 to Apr 2024
Speedy Hire (LSE:SDY)
Historical Stock Chart
From Apr 2023 to Apr 2024