TIDMSDY

RNS Number : 6516Z

Speedy Hire PLC

25 May 2021

Speedy Hire Plc

("Speedy", "the Company" or "the Group")

Results for the year ended 31 March 2021

Strong performance; well positioned for sustainable growth

Speedy, the UK's leading tools, equipment and plant hire services company, operating across the construction, infrastructure and industrial markets, announces results for the year ended 31 March 2021.

Commenting on the results Russell Down, Chief Executive, said:

" I am pleased to report results that are ahead of our expectations in what has been an exceptionally challenging year for customers and colleagues alike. The resilient performance of our business during this unprecedented period is testament to the strength of our model, hard work of all my colleagues and strong operational delivery. Our excellent customer service, including our four-hour delivery commitment, has facilitated a strong recovery in the second half.

"We have had an encouraging start to FY2022 with revenue in April and May c.2% ahead of the equivalent period in 2019. Our strong balance sheet and the actions we have taken to develop our digital and ESG offerings give us confidence for the future."

Underlying results

 
                                  Year ended 31       Year ended   Change 
                                     March 2021    31 March 2020 
                                         (GBPm)           (GBPm)        % 
 Revenue (excluding disposals)            359.4            402.5   (10.7) 
                                 --------------  ---------------  ------- 
 Adjusted operating profit(1)              25.4             39.1   (35.0) 
                                 --------------  ---------------  ------- 
 Adjusted profit before tax(1)             20.7             34.9   (40.7) 
                                 --------------  ---------------  ------- 
 Adjusted earnings per share 
  (pence)(2)                               3.22             5.54   (41.9) 
                                 --------------  ---------------  ------- 
 

Statutory results

 
                             Year ended 31       Year ended   Change 
                                March 2021    31 March 2020 
                                    (GBPm)           (GBPm)        % 
 Revenue                             363.6            406.7   (10.6) 
                            --------------  ---------------  ------- 
 Operating profit                     17.0             14.0     21.4 
                            --------------  ---------------  ------- 
 Profit before tax                    12.3             20.7   (40.6) 
                            --------------  ---------------  ------- 
 Basic earnings per share             1.82             3.23   (43.7) 
                            --------------  ---------------  ------- 
 

Other measures

 
                                  Year ended 31       Year ended    Change 
                                     March 2021    31 March 2020 
                                         (GBPm)           (GBPm)         % 
 Net debt(3)                               33.2             79.3    (58.1) 
                                 --------------  ---------------  -------- 
 Return on Capital Employed(4)             7.6%            12.0%   (4.4)pp 
                                 --------------  ---------------  -------- 
 Dividend (pence per share)                1.40             0.70       100 
                                 --------------  ---------------  -------- 
 

Group highlights

   --      Progressive revenue recovery throughout the year: 

o Hire revenue up 4% on a like for like basis in Q4

o Improved utilisation in the second half at 58.8% (2020: 55.9%)

o Increased market share following significant new contract wins including Network Plus and MWH

o SME revenue has continued to grow, up 10% on the prior year in the second half

   --      Decisive and swift action taken to manage costs and preserve cash in response to COVID-19: 

o Prioritised customer and colleague wellbeing

o Utilised Government support schemes in the first half

o Capex managed tightly in the first half; fleet age remains young at 3.6 years (2020: 3.4 years)

o 13 depots closed and a further 22 being consolidated into six improved locations

o Following restructure headcount in UK and Ireland reduced to 3,303 (2020: 3,464)

   --      Disposal of Middle East assets to the principal customer on 1 March 2021 for $18m 
   --      Strong balance sheet and cash generation: 

o Business model provided strong cash generation and improved liquidity during the pandemic

o Middle East disposal generated $30m including working capital settled on 31 March 2021

o Net debt materially reduced to GBP33.2m (2020: GBP79.3m); leverage (5) of 0.5x (2020: 1.0x)

o Cash and facility headroom of GBP142.3m (2020: GBP99.0m)

o UK and Ireland debtor days reduced to 59 from 66

   --      Continued strategic and operational progress: 

o Extended our industry leading four-hour delivery promise to the top 350 products

o Entered B2C market through trial with B&Q

o Continuous improvements to the digital customer journey

o Commitment to reaching net zero emissions before 2050, setting science-based targets in FY2022 to provide a clearly defined pathway on how we will achieve this

o Significant investment in sustainable hybrid and electric equipment in support of our ESG strategy "Energise"

-- Dividend payments resumed with final dividend of 1.40p per share proposed which recognises the strong recovery in the second half

   --      Board strengthened and diversity enhanced following recent changes 

Enquiries:

 
 Speedy Hire Plc                        Tel: 01942 720 000 
  David Shearer, Chairman 
  Russell Down, Chief Executive 
  James Bunn, Chief Financial Officer 
 MHP Communications                     Tel: 0203 128 8147 
  Oliver Hughes 
  Andrew Jaques 
 

Notes:

Explanatory notes:

(1) See note 9

(2) See note 7

(3) See note 13

(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.

   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 c.200 fixed sites across the UK and Ireland together with a number of on-site facilities at client locations and through a joint venture in Kazakhstan.

Chairman's statement

Overview

I am pleased with these results which demonstrate a strong performance in the second half of the year following the challenges in the first half dealing with the impact of the pandemic. The Group has adapted well this year continuing to support customers and colleagues in what have been very challenging conditions. We close the year with both revenue and asset utilisation ahead of the corresponding period in 2019 and positioned strongly in both financial and operational terms to meet the needs of our customers as we move into a post COVID world.

COVID-19

The Group managed its cost base and cash resources throughout the COVID-19 pandemic, reducing staff costs through the use of Government support schemes. We froze all capital expenditure unless specifically needed to meet customer requirements and managed working capital tightly. As customers returned to work we resumed our capital expenditure to meet increasing customer demand, taking the opportunity to make significant investments in new sustainable hybrid and electric equipment. We initially closed two thirds of our network in April 2020, by September the network was operating once again at full capacity following a review of our depot footprint. This resulted in the permanent closure of 13 depots and the consolidation of a further 22 depots into larger scale units to meet our customer requirements.

Results

Group revenue, excluding disposals, fell to GBP359.4m (2020: GBP402.5m). Whilst revenue declined in the first half of the year, it recovered strongly in the second half as customers returned to work. We have secured new work and contract renewals from larger customers and are growing revenue in the SME market. We are trialling outlets in B&Q stores around the UK with the objective of increasing our exposure to the B2C market.

The Group sold its Middle East assets to our major customer ADNOC Logistics and Services LLC (ADNOC), for a consideration of $18m in March 2021, after successfully turning round that business over the last few years during which time it has been a positive contributor to Group profits. On conclusion of a Transitional Services Agreement (TSA) with ADNOC the Group's operations in the Middle East will be terminated. The Group continues to operate internationally through the Kazakhstan JV.

Our net debt position remains historically low with significant headroom against our committed banking facilities. The strength of our balance sheet and available financial resources will allow us to invest to meet increasing demand and capitalise on growth opportunities as activity levels continue to recover.

Dividend

As a result of the COVID-19 pandemic the Group utilised Government support schemes and implemented cost reduction measures across the business that affected colleagues and other stakeholders. As a consequence the Board resolved not to pay a final dividend for FY2020 nor an interim dividend for FY2021. Following the strong performance in the second half of the year and the robust balance sheet, the Board is recommending a final dividend of 1.40 pence per share for the year ended 31 March 2021. If approved at the forthcoming Annual General Meeting the dividend will be paid on 24 September 2021 to shareholders on the register at close of business on 13 August 2021.

Board and people

During the course of the last year we have made a number of changes to the Board which have enhanced its diversity, broadened its skill base and improved the average tenure of the Board to manage future succession.

Chris Morgan resigned from the Board on 31 July 2020 and we welcomed James Bunn as Chief Financial Officer with effect from 14 September 2020. James has extensive experience in senior finance positions with a particular focus on digital business.

Bob Contreras stepped down from the Board on 17 February 2021, to allow him to exclusively pursue his full-time executive role. On behalf of the Board I would like to express my thanks to both Chris and Bob for their contributions over the last few years and wish them every success in the future.

Shatish Dasani was appointed as a Non-Executive Director and Chairman of the Audit and Risk Committee and a member of the Nomination Committee on 1 February 2021. Shatish has significant experience in senior public company finance roles and will add to the Board's skillset as we implement the next stage of our growth strategy.

Carol Kavanagh will join the Board as a Non-Executive Director and member of the Remuneration Committee with effect from 1 June 2021. Carol has extensive experience in business transformation and people related matters across relevant sectors which will further strengthen the expertise of the Board and broaden its diversity. I am delighted to welcome both Shatish and Carol to the Board.

This year has proved challenging for all of my colleagues, including many who were on furlough leave for a period. I would like to take this opportunity to thank each and every one of the Speedy family for their hard work, dedication, support to the business and each other, and positive spirit throughout this challenging time.

Future

I am pleased that the business has responded well to the challenges of the past year. Through strong leadership, effective management, dedication and resilience the business is able to move forward from a position of strength to take advantage of opportunities as the UK emerges from the pandemic and markets continue to recover.

David Shearer

Chairman

Chief Executive's statement

Overview

I am pleased to report results that are ahead of our expectations in what has been an exceptionally challenging year for customers and colleagues alike. These results are testament to the hard work of all our colleagues in supporting us throughout this period whilst maintaining excellent service levels to our customers.

The Group continued to serve customers through the pandemic supporting the NHS and other essential services whilst prioritising the safety and wellbeing of all stakeholders. In April 2020 up to 50% of staff were placed on furlough leave and, whilst we maintained our national coverage, 66% of our depots were initially closed. Following a detailed operational review of trading during the first lockdown, 13 depots were permanently closed and a further 22 depots are being consolidated into six larger improved locations. No colleagues were on furlough beyond 30 September, although c.200 roles were regrettably made redundant during the year.

Our revenues declined initially, falling by 35% in April 2020, but recovered strongly following the first lockdown as existing customers returned to work and we secured work from new customers. In the fourth quarter UK and Ireland core hire revenue was 4% ahead of the prior year. In April and May 2021 core hire revenue was c.2% higher than the comparative period in 2019. The young age profile of the Group's hire fleet allowed us to significantly reduce capital expenditure in the first half year; asset utilisation for the second half year increased to 58.8% (2020: 55.9%).

Infrastructure spending has grown and prospects are strong, particularly on major projects including HS2; our investment in equipment and new colleagues in the rail sector resulted in revenues growing significantly. Our SME revenue has continued to grow, up 10% on the prior year in the second half. We have entered into a trial with B&Q to grow this segment further and are currently trading out of 16 B&Q stores with significant opportunities for growth. Revenue from regional customers has declined slightly, primarily due to pricing pressure in this competitive segment.

The Group sold its Middle East equipment fleet, stock and other fixed assets to its principal customer, ADNOC, on 1 March 2021 for $18m. Outstanding trade receivables of c.$12m were paid in full on 31 March 2021. The Group entered into a Transitional Services Agreement (TSA) with ADNOC, which will expire on 30 June 2021, to support the transfer of the assets, during which time it is anticipated that the Group's c.600 UAE-based employees' contracts will be terminated and all colleagues offered re-employment by ADNOC. The successful exit from the Middle East operations is an important strategic step for the Group leaving us well positioned to take advantage of the market opportunities in the UK and Ireland as activity levels continue to improve.

Financing and liquidity

Our business model provided strong cash generation and improved liquidity during the pandemic; operating cash flow of GBP72.9m was 13.0% ahead of prior year (2020: GBP64.5m). Net debt, excluding lease liabilities, as at 31 March 2021 reduced to GBP33.2m (2020: GBP79.3m), following the sale of our operations in the Middle East and excellent cash collections. The Group has significant headroom against its committed banking facilities totalling GBP180m; leverage at 31 March 2021 was 0.5 times.

Results

Group revenue fell by 10.6% to GBP363.6m (2020: GBP406.7m) reflecting the impact of the first lockdown in April and May 2020 and the recovery in activity levels thereafter. Group revenues, excluding disposals, fell by 10.7% to GBP359.4m (2020: GBP402.5m).

In the UK and Ireland core hire revenue fell by 11.0%, with first half revenues down 20.5%. In the second half core hire revenue was broadly flat. Services revenue fell by 10.2% reflecting a strong performance from our rehire business offset by lower training revenue due to COVID-19 restrictions.

Gross margin decreased to 53.0% (2020: 55.1%), primarily as a result of lower core hire revenues in the first half year and services mix. Overheads remained tightly controlled reducing in the year as a result of lower activity levels and Government support. EBITA decreased by 35.0% to GBP25.4m (2020: GBP39.1m). EBITDA decreased by 15.7% to GBP90.5m (2020: GBP107.4m).

There were GBP7.6m of net exceptional expenses incurred during the year (2020: GBP12.9m) principally in relation to the depot realignment programme and costs associated with Geason Training.

Adjusted profit before tax decreased to GBP20.7m (2019: GBP34.9m). Adjusted earnings per share decreased to 3.22 pence (2020: 5.54 pence).

The Group has a 45% share in a joint venture in Kazakhstan serving the oil and gas market. Share of profits fell to GBP1.2m (2020: GBP2.8m) reflecting reduced activity levels in the year due to COVID-19.

The net book value of the Group's hire fleet decreased to GBP207.2m (2020: GBP 227.1m). The reduction in the size of the fleet reflects the disposal of the Middle East equipment in March 2021 and lower capital expenditure in the first half year. The average fleet age remains low, increasing slightly to 3.6 years (2020: 3.4 years). Asset utilisation in the second half in the UK and Ireland was 58.8% (2020: 55.9%), reflecting continued use of artificial intelligence to manage stocking levels and lower capital expenditure in the first half year. The Group will continue to invest in sustainable products in line with its strategy to reduce the carbon output of the hire fleet through investment in solar, hybrid, electric and hydrogen technology.

Dividend

The Board is committed to a progressive dividend policy with a pay-out ratio of between 33% and 50% of underlying profit after tax.

The Group utilised Government support during the first half year including use of the Coronavirus Job Retention Scheme and the deferral of tax payments and has benefitted from rates relief. 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 Government COVID-19 support schemes, no staff were on furlough post 30 September 2020, and all tax deferrals were paid by 30 September 2020. Nevertheless the Board resolved not to pay a final dividend for FY2020 or an interim dividend for FY2021.

The Board is pleased with the recovery of the business post the initial lockdown and has therefore recommended a final dividend of 1.40 pence per share for the year ended 31 March 2021.

Strategy and operational review

Our vision is to be the best company in our sector to do business with and the best to work for. We have continued to win new customers and renew contracts with our existing customers over the past year which is testament to the excellent customer service we provide. We are constantly striving to improve the customer journey and further differentiate our service offering. We are actively listening and communicating with our people and enhancing the employee value proposition in order to attract and retain the best talent.

UK and Ireland

We serve approximately 50,000 customers in the UK and Ireland, including 86 of the UK's 100 largest contractors. Our customers include major infrastructure contractors, housebuilders, industrials and SMEs. More recently we have entered the B2C market through our partnership with B&Q where we are currently trading through 16 stores across the UK. During the year we have extended our contracts with Murphy, Osborne and Balfour Beatty, and won a number of significant new contracts including with Network Plus and MWH. We have also further grown our SME revenues by over 20% in the fourth quarter compared with the same period last year through continued growth in our Customer Relationship Centre (CRC) in South Wales. We have restructured our sales teams and their ways of working to better address customers' needs following the pandemic.

Our customers' key priority is the prompt availability of products for hire. We offer an industry leading unique four-hour delivery service on our most popular products, 'Capital Commitment'. This four-hour promise was originally launched within the M25 in November 2018, has subsequently been extended nationally and now covers our 350 most popular products. The success of Capital Commitment reflects our customer service culture, and the investment we have made in equipment, systems and processes. We will continue to evolve this service promise to ensure that we remain the best company in our sector to do business with.

Services revenues are less capital intensive, have greater visibility and are more recurring in nature than hire revenues. As a result, they are ROCE enhancing for the Group. Our Services categories consist of: rehire; training; testing, inspection and certification; product and consumable sales; and fuel management services. Services revenue has been less affected by the pandemic than our hire business primarily due to an increase in rehire of accommodation and consumable sales including of PPE. Geason Training has performed below expectations during the year due to lower than expected learner enrolments as a result of the pandemic. During the year we resolved the claim from the funding agency and implemented a number of management changes. We are reviewing further initiatives to improve the Group's financial position.

We have extended the use of artificial intelligence to optimise our asset holdings and now produce a dynamic forecast which is updated monthly. Optimal stocking levels are set to ensure we have the right assets, at the right locations, at the right time to satisfy customer demand in the most efficient way. Utilisation rates have consequently increased to record levels with specialist products yet to be added into the system. Our aim is to optimise all elements of the operational support process through data led intelligence.

During the year significant improvements were made to the digital customer journey including more accurate allocation of orders to locations, better online pricing capability, Hand Arm Vibration (HAV) product selector enhancements, online inspection, and the ability to place digital orders for collection from our B&Q locations (including at weekends). We also launched a new cross platform App which makes development quicker and provides a single code base to maintain. Functionality available on the App now includes a mini "MySpeedy" customer dashboard, the ability to view and download invoices, and pay through the App, off hire by scanning the barcode on the asset, and delivery and collection tracking capability.

We anticipate further increases in digital take up following the implementation of automated on-boarding for pay as you go customers (primarily SME and B2C customers) and order approval workflow for customers requiring transaction approvals (regional and major customers).

Our online capability is supported by an omni-channel approach to servicing customers. During the year we completed the rollout of VOIP telephony across our network which provides additional customer facing capability.

ESG

We are committed to reaching net zero emissions before 2050 and during the current financial year will set science-based targets to provide a clearly defined pathway on how we will achieve this. Our Energise programme, which was launched in October 2019, encompasses our objectives to reduce environmental impacts, improve social responsibility and operate robust governance programmes. A new ESG Director, and an Innovation Director were appointed in April 2021, both of whom are working alongside our HR Director who joined in October 2020 to progress our ESG strategy.

Our principal objective is to reduce the carbon output of our hire and vehicle fleet through the use of solar, hybrid, electric and hydrogen technology. We are working with equipment manufacturers to increase the volume of sustainable products within our hire fleet with this year's capital expenditure budget being weighted towards such products; sustainable products already generate more than 25% of our revenue. Our company car list now consists almost entirely of hybrid and electric vehicles and we are working closely with commercial vehicle manufacturers to introduce hybrid and electric vehicles as soon as practicable. We are already operating a number of electric delivery vehicles on a trial basis including two converted electric London taxis. The carbon output of our equipment fleet is affected by the use of fossil fuels. We are working closely with customers and suppliers to trial the use of hydrogenated vegetable oil (HVO) within our products as a substitute for diesel. Initial trials have shown carbon output to be reduced by up to 90% from the use of HVO and hence we are working with customers to further roll out this product within our network.

We are progressing the people agenda with a focus on wellbeing as well as prioritising equality, diversity and inclusion within the workplace. A significant investment is planned this financial year on graduates and apprentices and we are proud to have joined the 5% club; working towards having 5% of our employees on earn and learn programmes within 5 years.

People

The Group's headcount at 31 March 2021 was 3,843 (2020: 4,065). In the UK and Ireland underlying headcount reduced to 3,253 following c.200 redundancies in the first half year resulting from the operational review undertaken during the first lockdown (2020: 3,464); in addition a further 50 colleagues joined our B&Q instore offering during the year. Modest increases in colleague numbers are expected during the current year as revenue growth continues. The Middle East headcount at 31 March 2021 was 540; it is anticipated that all colleagues will be transferred to ADNOC by the conclusion of the TSA period on 30 June 2021.

We undertook a full survey of all colleagues in March and April 2021. I am pleased to report that once again our response rate (74%) and engagement scores (77%) were strong. Detailed action plans to address the results of the survey are being prepared and will be communicated to colleagues during May. Our web and App based communications tool, 'The Hub', was introduced following previous surveys and has proved invaluable for communicating with staff during the pandemic. Regional employee forums have been held during the year, with the Chairpersons meeting me and the HR Director in order to address any matters raised.

The Board is committed to ensuring there is regular communication with, and support for colleagues who are participating in the long-term success of the business. I would like to take this opportunity to thank all my colleagues for their ongoing support and dedication during this most challenging of years.

Summary and outlook

I am pleased to report results that are ahead of our expectations in what has been an exceptionally challenging year for customers and colleagues alike. The resilient performance of our business during this unprecedented period is testament to the strength of our model, hard work of all my colleagues and strong operational delivery. Our excellent customer service, including our four-hour commitment, has facilitated a strong recovery in the second half.

We have had an encouraging start to FY2022 with revenue in April and May c.2% ahead of the equivalent period in 2019. Our strong balance sheet and the actions we have taken to develop our digital and ESG offerings give us confidence for the future.

Russell Down

Chief Executive

Financial review

Overview

It has been a challenging year for the business as we responded to COVID-19. The financial results have been heavily impacted by the pandemic; however they are testament to the hard work of all our colleagues in supporting the business throughout this period. The start to the new financial year is encouraging; in April and May 2021 revenue is c.2% ahead of the comparative period (April 2019).

Revenues declined initially during the first lockdown, recovering strongly as our customers returned to work. Despite revenue falling by as much as 35% in April 2020, by the fourth quarter like for like core hire revenue was trading ahead of prior year by 4%. Activity recovered across our Major accounts and the mobilisations of recent contract wins including Network Plus, MWH and Horbury increased our market share. Our SME customer base has continued to grow, with revenue up 10% in the second half; we continue to explore further opportunities to grow in this sector which includes a trial with B&Q.

We proactively managed our cost base in the first half with decisive actions including a freeze on discretionary spend, the use of Government support schemes, as well as reducing capital expenditure to the level necessary to meet customer demand. Investment in hire fleet resumed as activity levels recovered during the second half. Following a detailed operational review during the first lockdown 13 depots have been permanently closed and c.200 roles made redundant.

The Group entered FY2021 with conservative debt levels. The cautious action taken to preserve cash, including reduced capex and no dividend payments combined with strong cash collections from customers, the Group has operated throughout the year well within existing banking facilities and without any covenant tests being triggered. The disposal of the Middle East assets on 1 March 2021 has further strengthened the Group's net debt position.

We continue to monitor the COVID-19 situation and will respond accordingly. The Group's strong balance sheet and the encouraging trading at the start of the new financial year allows us to take advantage of strategic opportunities as markets emerge from the pandemic.

Group financial performance

Revenue (excluding disposals) for the year to 31 March 2021 decreased by 10.7% to GBP359.4m (2020: GBP402.5m). Revenue from disposals was GBP4.2m (2020: GBP4.2m); total revenue for the period decreased by 10.6% to GBP363.6m (2020: GBP406.7m).

Gross profit was GBP192.6m (2020: GBP224.2m), a decrease of 14.1%. The gross margin fell to 53.0% (2020: 55.1%), reflecting reduced hire revenue with largely fixed depreciation charge, the mix impact from reductions in training revenues, and competitive price pressures.

EBITA(1) decreased by 35.0% to GBP25.4m (2020: GBP39.1m) and profit before taxation, amortisation and exceptional costs decreased to GBP20.7m (2020: GBP34.9m).

The share of profit from the joint venture in Kazakhstan decreased to GBP1.2m (2020: GBP2.8m) as result of COVID-19 related reductions in activity.

The Group incurred net exceptional expenses before taxation of GBP7.6m (2020: GBP12.9m). Further details are included below.

After taxation, amortisation and exceptional items, the Group made a profit of GBP9.5m, compared to a profit of GBP16.8m in 2020.

Segmental analysis

The Group's segmental reporting is split into continuing operations - UK and Ireland, and discontinued operations - International. The figures in the tables below are presented before corporate costs of GBP4.6m (2020: GBP3.9m), which have increased 17.9% due to management compensation payments and additional audit fees.

 
                       Year ended   Year ended   Change 
                         31 March     31 March 
 UK and Ireland              2021         2020 
                             GBPm         GBPm        % 
 
 Revenue (excluding 
  disposals)                328.1        367.3   (10.7) 
 
 EBITDA(1)                   89.5        102.7   (12.9) 
 
 EBITA(1)                    26.3         37.3   (29.5) 
 
 

Excluding disposals, revenue decreased by 10.7% to GBP328.1m (2020: GBP367.3m) with a fall across both Hire and Services.

Hire revenue decreased by 11.0%. Hire revenue was significantly impacted by the national lockdown imposed at the end of March 2020, initially falling by 35% in April. Activity levels then progressively recovered as the construction sector reopened with trading ahead of prior year by the fourth quarter. Major and Local sectors both now exceed prior year levels following contract renewals and new contract wins. The Regional sector remains challenging, with competitive pricing.

Services revenues declined by 10.2% in the year as all areas of the business were initially impacted by the first lockdown. A strong performance from the rehire, fuel and consumables businesses throughout the second half resulted in Services revenue for that period being ahead of prior year.

Our training business G eason has continued to perform below expectations during the year due to lower than expected learner enrolments as a result of the pandemic and social distancing impacting course delivery. During the year we resolved the claim from the funding agency and implemented a number of management changes. We are reviewing further initiatives to improve the Group's financial position.

Gross margins reduced from 57.7% to 55.6%. Hire margin decreased to 75.7% (2020: 77.0%) due to reduced activity in the first half with a largely fixed depreciation charge; margin in the first half was 74.8%, increasing to 76.4% in the second half. Expansion of our powered access fleet has improved the national offering to major customers and reduced reliance on lower margin rehire partners. Services margin was impacted by sales mix with strong revenue performance in lower margin services such as rehire and fuel reducing overall margin to 23.2% (2020: 26.0%).

Overheads have reduced due to the mitigating actions taken to manage the cost base in response to the COVID-19 pandemic including the permanent closure of 13 depots and c.200 roles being made redundant, temporary freezing of discretionary spend, alongside Government support received from furlough schemes in the first half (GBP8.9m) and rates relief (GBP4.8m). As a result of these actions, there has been an overall 10.0% reduction in overheads compared to the prior year.

Headcount has reduced to 3,303, compared to 3,464 at 31 March 2020 with redundancies from the operational restructure in the first half year and 50 colleagues joining our B&Q instore offering during the year.

Asset utilisation in the second half has increased to 58.8% (2020: 55.9%), as a result of continued use of artificial intelligence to connect customer demand with asset availability and lower capex in the first half. Utilisation rates for the core range of products have improved on prior year as the replenishment and asset rebalancing programme that uses machine learning was launched across the entire network during the first half. Our strategy to simplify and standardise processes within the depot network has enabled utilisation improvement and the expansion of our four-hour customer promise.

The business recovered well in the second half with EBITA for that period of GBP17.9m, 5.3% down on prior year. It continues to perform well into FY2022 in a competitive market despite the pandemic related disruptions associated with COVID-19.

 
                  Year ended   Year ended   Change 
                    31 March     31 March 
 International          2021         2020 
                        GBPm         GBPm        % 
 
 Revenue                31.3         35.2   (11.1) 
 
 EBITDA(1)               5.2          8.2   (36.6) 
 
 EBITA(1)                3.7          5.7   (35.1) 
 
 

The Group sold its equipment fleet, stock and other fixed assets relating to its Middle East business to its principal customer ADNOC Logistics and Services LLC (ADNOC), on 1 March 2021, for consideration of $18m. The consideration was paid in cash in full on completion with trade receivables from ADNOC of c.$12m subsequently paid on 31 March. The net proceeds, after working capital payments, have reduced Group borrowings. The transaction included the Group entering into a Transitional Services Agreement (TSA) with ADNOC to 30 June 2021, to support the transfer of the assets, during which time it is anticipated that the Group's c.600 UAE-based employees' contracts will be terminated and all colleagues offered re-employment by ADNOC. On conclusion of the TSA the Group intends to wind up its operations in the Middle East.

International revenue in the Middle East decreased by 11.1% due to the disposal of the assets, COVID-19 related disruptions and the full year effect of contract negotiations in the prior year. Consequently, EBITA fell by 35.1%.

Exceptional items

There were GBP7.6m net exceptional items incurred during the year (2020: GBP12.9m).

 
                                            Total 
                                   -------------- 
                                             GBPm 
 
Property related costs                      (5.6) 
Restructuring costs                         (1.9) 
Disposal of Middle East assets                0.8 
Training provision                          (0.9) 
                                       ---------- 
                                            (7.6) 
 
 

Action has been taken to manage the Group's cost base following the COVID-19 pandemic, and consequently the network has been restructured; 13 depots have been closed and further consolidation of 22 depots is underway to create six larger, customer focused service centres. As a result, GBP5.6m of property related costs and GBP1.9m redundancy costs have been incurred during the year.

As noted above, the Group sold its equipment fleet, stock and other fixed assets relating to its Middle East business to its principal customer ADNOC, for a consideration of $18m (GBP13.0m). The transaction resulted in a gain on disposal of GBP0.8m.

The training business, Geason, which was acquired in December 2018, was subject to an assurance visit from a funding agency in early 2020, and a subsequent claim was received for amounts overpaid. The claim was settled in October 2020, within the provision held at 31 March 2020. An additional provision has been made for GBP0.9m to cover legal and other costs associated with ongoing initiatives to improve the Group's financial position.

Interest

The Group's net financial expense, including interest on lease liabilities and before exceptional items, decreased to GBP5.9m (2020: GBP7.0m) reflecting lower average gross borrowings throughout the year.

Net debt, excluding lease liabilities, as at 31 March 2021 reduced to GBP33.2m (2020: GBP79.3m), following the sale of the Middle East assets and excellent cash collections. 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 year, 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 1.80% (2020: 1.84%).

The Group utilises interest rate hedges to manage fluctuations in LIBOR with varying maturity dates to October 2022. The fair value of these hedges was not material at 31 March 2021.

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 Group utilised Government deferral schemes for tax payments of GBP7.6m during the first half; all amounts deferred were paid prior to 30 September 2020.

The tax charge for the period was GBP2.8m (2020: GBP3.9m), with an effective tax rate of 22.7% (2020: 18.8%); the increase in the effective rate includes the impact of exceptional items in the year. The underlying effective tax rate for the continuing operations is 19.6% (2020: 19.7%).

Shares, earnings per share and dividends

At 31 March 2021, 528,180,280 Speedy Hire Plc ordinary shares were outstanding, of which 4,413,516 were held in the Employee Benefits Trust.

Adjusted earnings per share was 3.22 pence (2020: 5.54 pence), a decrease of 41.9%. Basic earnings per share was 1.82 pence (2020: 3.23 pence).

The decision to not pay a FY2020 final dividend reflected our priority at that time of preserving cash. No interim dividend was declared during FY2021 (2020: 0.70 pence). In light of the improvement in trading in the second half of the year, and in recognition of the strength of the balance sheet and cash position at the year end, the Board is recommending a 2021 final dividend of 1.40p per share. The cash cost of this dividend is expected to be c.GBP7.4m.

Capital expenditure and disposals

Total capital expenditure during the year amounted to GBP43.7m (2020: GBP63.2m), of which GBP36.0m (2020: GBP55.3m) related to equipment for hire, and GBP7.7m to other property, plant and equipment (2020: GBP7.9m).

The Group entered the pandemic with a young fleet age, which allowed for immediate cut-back on discretionary spend without impacting service delivery. Capital expenditure on hire fleet was reduced initially to GBP7.2m, a level necessary to meet customer demand. The investment in fleet increased to GBP28.8m in the second half in response to increases in customer activity. This expenditure reflects further investment in the core range ensuring the UK and Ireland business can continue to execute our four-hour delivery promise. Throughout the year the Group has continued to invest in sustainable products in line with its strategy to reduce the carbon output of the hire fleet through investment in solar, hybrid, electric and hydrogen technology.

Despite the capital expenditure constraints during the year, the average age of the fleet remains young in comparison to the industry; 3.6 years (2020: 3.4 years). Total disposal proceeds were GBP12.2m (2020: GBP11.7m). During the year we further optimised our stockholdings across the network, applying machine learning to inform decisions on returns and asset utilisation, which highlighted those areas requiring investment. The number of product lines has further reduced, and this has enabled us to continually improve the efficiency of our supply chain. This forward demand planning will help mitigate the potential risk from lead time delays and price inflation.

Balance sheet

The Group continues to have a strong balance sheet, which reflects the decisive action taken during COVID-19, proactive management of the asset fleet and effective control over working capital.

Net assets at 31 March 2021 were GBP219.2m (2020: GBP209.9m), equivalent to 41.5 pence per share.

Net property, plant and equipment (excluding IFRS 16 right of use assets) was GBP233.1m at 31 March 2021 (2020: GBP257.6m), of which equipment for hire represents 88.9% (2020: 88.2%). Following the disposal of the Middle East assets, the International hire fleet is GBPnil at 31 March 2021, (2020: GBP11.4m).

Intangibles increased to GBP24.7m (2020: GBP23.1m), due to increased IT development expenditure.

Right of use assets of GBP59.1m (2020: GBP64.7m) and corresponding lease liabilities of GBP65.8m (2020: GBP72.9m) are recognised at 31 March 2021 following the implementation of IFRS 16 in the prior year.

Throughout the year the business has had a clear focus on cash, in particular customer collections. The successful collaboration between sales and credit control functions, leveraging strong customer relationships, resulted in excellent cash collections. Gross trade receivables totaled GBP93.3m at 31 March 2021 (2020: GBP100.7m). Bad debt provisions were GBP3.5m at 31 March 2021 (2020: GBP3.9m), equivalent to 3.8% of gross trade receivables (2020: 3.9%). Debtor days were 58.9 (2020: 69.6), of which UK and Ireland were 59.4 (2020: 66.0). Overdue debt has reduced by 26% over the year.

Trade payables were GBP49.6m (2020: GBP52.3m). Creditor days were 86.6 (2020: 103.7).

Cash flow and net debt(3)

Cash generated from operations for the year was GBP72.9m (2020: GBP64.5m). Free cash flow (being net cash flow before financing activities) increased to GBP69.7m (2020: GBP45.2m).

Net debt decreased by GBP46.1m from GBP79.3m at the beginning of the year to GBP33.2m at 31 March 2021. Excluding the impact of IFRS 16, leverage reduced to 0.5x (2020: 1.0x).

The Group's strong cash position resulted in substantial headroom within the Group's bank facility throughout the year with cash and undrawn facility availability of GBP142.3m at 31 March 2021 (2020: GBP99.0m). Discussions with a syndicate of banks are at an advanced stage in relation to renewing the facility, which expires in October 2022, on largely similar terms.

Capital allocation policy

The Board intends to continue to invest in the business in order to grow revenue, profit and ROCE. This investment is expected to include capital expenditure within existing operations, as well as value enhancing acquisitions that fit with the Group's strategy and are returns accretive.

The Board's objective is to maximise long term shareholder returns through a disciplined deployment of cash generated, and it has adopted the following capital allocation policy in support of this:

- Organic growth: the Board will invest in capital equipment to support demand in our chosen markets. This investment will be in hire fleet and IT systems to better enable us to serve our customers;

- Regular returns to shareholders: the Board intends to pay a regular dividend to shareholders, with a policy of growing dividends through the business cycle, and a payment in the range of between 33% and 50% adjusted earnings per share;

- Acquisitions: the Board will continue to explore value enhancing acquisition opportunities in specialist hire and services businesses consistent with the Group's 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 to EBITDA 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.

The Group has a strong pipeline of organic growth and acquisition opportunities, which it continues to evaluate on an ongoing basis.

Capital structure and treasury

Speedy's long term funding is provided through a combination of shareholders' funds and bank debt.

The Group's GBP180m asset based finance facility and uncommitted accordion of GBP220m, expire in October 2022. Discussions with a syndicate of banks are at an advanced stage in relation to renewing the facility on largely similar terms.

The average gross borrowings under the facility during the year ended 31 March 2021 decreased to GBP79.5m (2020: GBP110.2m). The facility includes leverage and fixed charge cover covenant tests which are only applied if headroom in the facility falls below GBP18m. The Group had significant headroom against these tests throughout the year.

Return on capital

ROCE(4) is a key performance measure for the Group and decreased to 7.6% (2020: 12.0%) due to the impact of COVID-19 partially offset with lower levels of net debt. The strength of the balance sheet and available financial resources will allow us to invest in growth opportunities as markets continue to recover.

James Bunn

Chief Financial Officer

The responsibility statement below has been prepared in connection with the Group's full annual report for the year ended 31 March 2021. Certain parts of that report are not included within this announcement.

Directors' Responsibilities Statement

We confirm that to the best of our knowledge:

-- the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;

-- the Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

The names and functions of the Directors of the Company are:

   Name                             Function 
   David Shearer               Chairman 
   Russell Down                Chief Executive 
   James Bunn                  Chief Financial Officer 
   David Garman               Senior Independent Director 
   Rob Barclay                  Non-Executive Director 
   Rhian Bartlett                Non-Executive Director 
   Shatish Dasani              Non-Executive Director 

Principal risks and uncertainties

The business strategy in place and the nature of the industry in which we operate expose the Group to a number of risks. As part of the risk management framework in place, the Board considers on an ongoing basis the nature, likelihood and potential impact of each of the significant risks it is willing to accept in achieving its strategic objectives.

The Board has delegated to the Audit & Risk Committee responsibility for reviewing the effectiveness of the Group's internal controls, including the systems established to identify, assess, manage and monitor risks. These systems, which ensure that risk is managed at the appropriate level within the business, can only mitigate risk rather than eliminate it completely.

Direct ownership of risk management within the Group lies with the senior management teams. Each individual is responsible for maintaining a risk register for their area of the business and is required to update this on a regular basis. The key items are consolidated into a Group risk register which has been used by the Board to carry out a robust assessment of the principal risks.

The principal risks and mitigating controls in place are summarised below.

 
 Risk                                  Description and potential impact         Strategy for mitigation 
 COVID-19 pandemic                     Trading performance                      As a supplier to industries that have 
                                       The UK and Ireland lockdowns have        continued to operate, the Group has 
                                       reduced economic activity. The first     also continued to 
                                       of these in 2020 affected                trade. Entering the new financial year 
                                       Group revenues. Whilst the indications   a significant proportion of revenues 
                                       for the future are promising in the      have been retained, 
                                       UK, the uncertainty                      with trading through the Group's 
                                       leads to difficulty in forecasting.      digital platform and by telephone. 
                                       People                                   During the lockdown we 
                                       The COVID-19 pandemic may lead to        suspended hire charges for equipment 
                                       shortages in the workforce as a direct   not in use in order that the impact 
                                       result of illness,                       was minimised. 
                                       social shielding or isolation            We acted quickly to contain costs and 
                                       measures, along with depot closures.     preserve cash, including halting all 
                                       This may result in an inability          discretionary spend 
                                       to effectively service our customers'    and consolidating our depot network, 
                                       requirements.                            temporarily closing sites and 
                                       Supply chain                             servicing our clients from 
                                       The supply of goods, services and        alternative locations, thus ensuring 
                                       assets (including the availability of    we maintain a national coverage. 
                                       spares) may be disrupted.                We previously utilised the 
                                       This may also result in an inability     Government's coronavirus job retention 
                                       to effectively service our customers'    scheme, furloughing up to 
                                       requirements.                            50% of our workforce. 
                                                                                We continue to monitor Government 
                                                                                guidance and take action to ensure the 
                                                                                safety of our colleagues, 
                                                                                as we support customers continuing to 
                                                                                operate. 
                                                                                We have introduced COVID-19 safe ways 
                                                                                of working, restricting access to our 
                                                                                premises and maintaining 
                                                                                social distance. We have increased 
                                                                                opportunity for employees who can 
                                                                                perform duties from home 
                                                                                doing so and intend for this to be 
                                                                                offered as a flexible working option 
                                                                                where appropriate. 
                                                                                This involves the utilisation of our 
                                                                                secure and robust infrastructure and 
                                                                                technology platforms. 
                                                                                Speedy operates one of the youngest 
                                                                                hire fleets in the industry and is 
                                                                                well placed to provide 
                                                                                asset availability as a result of 
                                                                                better reliability. The age profile 
                                                                                also allows us to optimise 
                                                                                capital expenditure management during 
                                                                                this period, whilst maintaining 
                                                                                customer service. 
                                                                                Based on various revenue downturn 
                                                                                scenarios, and the measures outlined 
                                                                                above, the Board remains 
                                                                                confident that the Group can operate 
                                                                                within its existing debt facilities 
                                                                                and covenant tests 
                                                                                during a prolonged period of reduced 
                                                                                trading activity, including in the 
                                                                                event of a further 
                                                                                national lockdown. 
                                      ---------------------------------------  --------------------------------------- 
 Safety, health and environment        Serious injury or death                  The Group is recognised for its 
                                       Speedy operates, transports and          industry-leading position in promoting 
                                       provides for rental a wide range of      enhanced health and 
                                       machinery. Without rigorous              safety compliance, together with a 
                                       safety regimes in place there is a       commitment to product innovation. This 
                                       risk of injury or death to employees,    is achieved by the 
                                       customers or members                     Group's health, safety, and 
                                       of the public.                           environmental teams measuring and 
                                       Environmental hazard                     promoting employee understanding 
                                       The provision of such machinery          of, and compliance with, procedures 
                                       includes handling, transport and         that affect safety and protection of 
                                       dispensing of substances,                the environment. 
                                       including fuel, that are hazardous to    We maintain systems that enable us to 
                                       the environment in the event of          hold appropriate industry recognised 
                                       spillage.                                accreditations 
                                       Climate change                           which have been enhanced further this 
                                       There is a risk that Speedy will fail    year with the introduction of a 
                                       to meet climate change targets           specialist platform 
                                       generally which in turn                  for managing data and reporting in 
                                       may limit our ability to trade with      relation to Health, Safety and 
                                       some of our customers. Specifically,     Environment. 
                                       the delivery locations                   The Group has built on its strong 
                                       for many of our customers require        position by embracing the ESG agenda 
                                       Speedy to operate in designated low      with the creation of 
                                       emission zones.                          our Energise programme demonstrating 
                                                                                our firm commitment to our 
                                                                                responsibility in each of 
                                                                                these areas. Robust targets have been 
                                                                                set and a director has been appointed 
                                                                                to lead the programme, 
                                                                                reporting to the Chief Executive. 
                                                                                Speedy has incorporated hybrid and 
                                                                                fully electric vehicles into the 
                                                                                commercial fleet to ensure 
                                                                                we meet and in some cases exceed 
                                                                                emission requirements. 
                                                                                All operatives who handle hazardous 
                                                                                substances are trained and provided 
                                                                                with appropriate equipment 
                                                                                to manage small scale spills. In the 
                                                                                case of more serious accidents, we 
                                                                                have a contract with 
                                                                                a third party specialist who would 
                                                                                undertake any clean-up operation as 
                                                                                necessary. 
                                      ---------------------------------------  --------------------------------------- 
 Service                               Provision of equipment                   During the year we have successfully 
                                       Speedy's commitment is to provide well   extended our nationwide four-hour 
                                       maintained equipment to its customers    service promise under 
                                       on a consistent                          "Trust Speedy to Deliver" to cover a 
                                       and dependable basis.                    wider range of our assets 
                                       Back office services                     Our use of personal digital assistants 
                                       It is important that Speedy is able to   (PDAs) and online based customer 
                                       provide timely and accurate management   feedback system are 
                                       information                              fully embedded into our business and 
                                       to its customers, along with accurate    these are used to improve the on-site 
                                       invoices and supporting documentation.   customer experience. 
                                       In both cases, a failure to provide      Speedy liaises with its customer base 
                                       such service could lead to a failure     and takes into account feedback where 
                                       to attract or retain                     particular issues 
                                       customers, or to diminish the level of   are noted, to ensure that work on 
                                       business such customers undertake with   resolving those issues is prioritised 
                                       Speedy.                                  accordingly. We have 
                                                                                introduced a Net Promoter Score metric 
                                                                                into our business to drive improvement 
                                                                                through dashboard 
                                                                                reporting at depot level. 
                                                                                During the year we have actively 
                                                                                progressed our Enable project to 
                                                                                upgrade our AX12 ERP system 
                                                                                and plan to move to Microsoft's 
                                                                                Dynamics365. This will strengthen our 
                                                                                customer service functionality, 
                                                                                our back office services and also 
                                                                                provides a range of opportunities for 
                                                                                future enhancements. 
                                      ---------------------------------------  --------------------------------------- 
 Revenue and trading performance       Competitive pressure                     The Group monitors its competitive 
                                       The hire market is fragmented and        position closely, to ensure that it is 
                                       highly competitive. We are continuing    able to offer customers 
                                       to develop strategic                     the best solution. The Group provides 
                                       relationships with larger customers      a wide breadth of offerings, 
                                       and also working hard to grow our        supplemented by its rehire 
                                       local and regional accounts.             division for specialist equipment. The 
                                       There is a risk that the Group does      Group monitors the performance of its 
                                       not have an effective route to market    major accounts 
                                       for consumer rentals                     against forecasts, strength of client 
                                       and this could lead to a missed          future order books and individual 
                                       opportunity that is capitalised upon     expectations with 
                                       by our competition.                      a view to ensuring that the 
                                       Reliance on high value customers         opportunities for the Group are 
                                       There is a risk to future revenues       maximised. Market share is measured 
                                       should preferred supplier status with    and competitors' activities are 
                                       larger customers                         reported on and addressed where 
                                       be lost when such agreements may         appropriate. The Group's integrated 
                                       individually represent a material        services offering further mitigates 
                                       element of our revenues.                 against this risk as it demonstrates 
                                                                                value to our customers, 
                                                                                setting us apart from purely asset 
                                                                                hire companies. 
                                                                                No single customer currently accounts 
                                                                                for more than 10% of revenue or 
                                                                                receivables. We have 
                                                                                been successful in growing our SME 
                                                                                customer base, which also helps to 
                                                                                mitigate this risk. 
                                                                                We have entered a trial within B&Q 
                                                                                stores which allows the Group to 
                                                                                directly access a marketplace 
                                                                                that provides significant potential 
                                                                                for growth. The Group has restructured 
                                                                                its operational 
                                                                                management team to include a managing 
                                                                                director dedicated to retail based 
                                                                                routes to market. 
                                      ---------------------------------------  --------------------------------------- 
 Project and change management         Acquisitions                             The Group has a defined process for 
                                       Our strategy includes selective          monitoring and filtering potential 
                                       acquisitions that complement or extend   targets, with input 
                                       our existing business                    from advisors and other third parties. 
                                       in specialised markets. There is a       All potential business combinations 
                                       risk that suitable targets are not       are presented to the Board, with an 
                                       identified, that acquired                associated business 
                                       businesses do not perform to             case, for approval. 
                                       expectations or they are not             Once a decision in principle is made, 
                                       effectively integrated into the          a detailed due diligence process 
                                       existing Group.                          covering a range of 
                                                                                criteria is undertaken. Where 
                                                                                necessary, this includes the use of 
                                                                                specialist external support. 
                                                                                The results of due diligence are 
                                                                                presented to the Board prior to formal 
                                                                                approval being granted. 
                                                                                The use of a cross functional project 
                                                                                team ensures effective integration 
                                                                                into the Group. These 
                                                                                teams work with a blueprint plan, 
                                                                                modified as needed to specifically 
                                                                                address any risks identified 
                                                                                during the due diligence phase. 
                                                                                A Programme Management Office function 
                                                                                is established with clearly defined 
                                                                                governance in place 
                                                                                to oversee all change initiatives. 
                                      ---------------------------------------  --------------------------------------- 
 People                                Employee excellence                      Skill and resource requirements for 
                                       In order to achieve our strategic        meeting the Group's objectives are 
                                       objectives, it is imperative that we     actively monitored 
                                       are able to recruit,                     and action is taken to address 
                                       retain, develop and motivate employees   identified gaps. Succession planning 
                                       who possess the right skills for the     aims to identify talent 
                                       Group.                                   within the Group and is formally 
                                                                                reviewed on an annual basis by the 
                                                                                Nomination Committee, 
                                                                                focusing on both short and long-term 
                                                                                successors for the key roles within 
                                                                                the Group. 
                                                                                Programmes are in place for employee 
                                                                                induction, retention and career 
                                                                                development, which are 
                                                                                tailored to the requirements of the 
                                                                                various business units within the 
                                                                                Group. 
                                                                                The Group regularly reviews 
                                                                                remuneration packages and aims to 
                                                                                offer competitive reward and 
                                                                                benefit packages, including 
                                                                                appropriate short and long-term 
                                                                                incentive schemes. 
                                      ---------------------------------------  --------------------------------------- 
 Partner and supplier service levels   Supply chain                             A dedicated and experienced supply 
                                       Speedy procures assets and services      chain function is in place to 
                                       from a wide range of sources, both UK    negotiate all contracts and 
                                       and internationally                      maximise the Group's commercial 
                                       based. Within the supply chain there     position. Supplier accreditations are 
                                       are risks of non-fulfilment.             recorded and tracked 
                                       Partner reputation                       centrally through a supplier portal 
                                       A significant amount of our revenues     where relevant and set service related 
                                       come from our rehire offering, where     KPIs are included 
                                       the delivery or                          within standard contract terms. 
                                       performance is effected through a        Regular reviews take place with all 
                                       third party partner.                     supply chain partners. 
                                       Speedy's ability to supply assets with   Where practical, agreements with 
                                       the expected customer service is         alternative suppliers are in place for 
                                       therefore reliant                        key ranges, diluting 
                                       on the performance of others with the    reliance on individual suppliers. 
                                       risk that if this is not effectively 
                                       managed, the reputation 
                                       of Speedy and hence future revenues 
                                       may be adversely impacted. 
                                      ---------------------------------------  --------------------------------------- 
 Operating costs                       Fixed cost base                          The Group has a purchasing policy in 
                                       Speedy has a fixed cost base including   place to negotiate supply contracts 
                                       people, transport and property. When     that, wherever possible, 
                                       revenues fluctuate                       determine fixed prices for a period of 
                                       this can have a disproportionate         time. In most cases, multiple sources 
                                       effect on the Group's financial          exist for each 
                                       results.                                 supply, decreasing the risk of 
                                                                                supplier dependency and creating a 
                                                                                competitive supply-side 
                                                                                environment. All significant purchase 
                                                                                decisions are overseen by a dedicated 
                                                                                supply chain team 
                                                                                with structured supplier selection 
                                                                                procedures in place. Property costs 
                                                                                are managed by an in-house 
                                                                                team of specialists who manage the 
                                                                                estate. 
                                                                                We operate a dedicated fleet of 
                                                                                commercial vehicles that are 
                                                                                maintained to support our brand 
                                                                                image. Fuel is purchased through 
                                                                                agreements controlled by our supply 
                                                                                chain processes. 
                                                                                The growth of our services offering 
                                                                                will help to mitigate this risk as 
                                                                                these activities have 
                                                                                overheads that are more flexible. 
                                      ---------------------------------------  --------------------------------------- 
 Cyber Security and data integrity     IT system availability                   Annual and medium-term planning 
                                       Speedy is increasingly reliant on IT     processes are in place to provide 
                                       systems to support our business          visibility as to the level 
                                       activities. Interruption                 and type of IT infrastructure and 
                                       in availability or a failure to          services required to support the 
                                       innovate will reduce current and         business strategy. Business 
                                       future trading opportunities             cases are prepared for any 
                                       respectively.                            new/upgraded systems, and require 
                                       Data accuracy                            formal approval. 
                                       The quality of data held has a direct    Our planned move to Microsoft's 
                                       impact on how both strategic and         Dynamics 365 cloud based platform 
                                       operational decisions                    reduces the likelihood of 
                                       are made. If decisions are made based    system unavailability and will also 
                                       on erroneous data there could be a       improve system performance levels. 
                                       direct impact on                         Management information is provided in 
                                       the performance of the Group.            all key areas from dashboards that are 
                                       Data security                            based on real 
                                       Speedy, as with any organisation,        time data drawn from central systems. 
                                       holds data that is commercially          We have a dedicated data management 
                                       sensitive and in some cases              team which is responsible 
                                       personal in nature. There is a risk      for putting in place procedures to 
                                       that disclosure or loss of such data     maintain accuracy of the information 
                                       is detrimental to                        provided by data owners 
                                       the business, either as a reduction in   across the business. 
                                       competitive advantage or as a breach     Mitigations for IT data recovery are 
                                       of law or regulation.                    described below under business 
                                                                                continuity as these risks 
                                                                                are linked. 
                                                                                We have formed a data security 
                                                                                governance committee which meets 
                                                                                regularly to monitor our control 
                                                                                framework and reports on a routine 
                                                                                basis to the Audit & Risk Committee. 
                                                                                Speedy's IT systems are protected 
                                                                                against external unauthorised access. 
                                                                                These protections 
                                                                                are tested regularly by an independent 
                                                                                provider. All mobile devices have 
                                                                                access restrictions 
                                                                                and, where appropriate, data 
                                                                                encryption is applied. 
                                      ---------------------------------------  --------------------------------------- 
 Funding                               Sufficient capital                       The Board has established a treasury 
                                       Should the Group not be able to obtain   policy regarding the nature, amount 
                                       sufficient capital in the future, it     and maturity of committed 
                                       might not be able                        funding facilities that should be in 
                                       to take advantage of strategic           place to support the Group's 
                                       opportunities or it might be required    activities. 
                                       to reduce or delay expenditure,          The GBP180m asset based finance 
                                       resulting in the ageing of the fleet     facility including an additional 
                                       and/or non-availability. This could      uncommitted accordion of 
                                       disadvantage the                         GBP220m, is available through to 
                                       Group relative to its competitors and    October 2022. Discussions with a 
                                       might adversely impact its ability to    syndicate of banks are at 
                                       command acceptable                       an advanced stage in relation to 
                                       levels of pricing.                       renewing the facility on largely 
                                                                                similar terms. 
                                                                                In line with the treasury policy, the 
                                                                                Group's capital requirements, forecast 
                                                                                and actual financial 
                                                                                performance and potential sources of 
                                                                                finance are reviewed at Board level on 
                                                                                a regular basis 
                                                                                in order that its requirements can be 
                                                                                managed with appropriate levels of 
                                                                                spare capacity. 
                                      ---------------------------------------  --------------------------------------- 
 Economic vulnerability                Economy                                  The Group assesses changes in both 
                                       Any changes in construction/industrial   Government and private sector spending 
                                       market conditions could affect           as part of its wider 
                                       activity levels and                      market analysis. The impact on the 
                                       consequently the prices that the Group   Group of any such change is assessed 
                                       can charge for its services. Any         as part of the ongoing 
                                       reduction in Government                  financial and operational budgeting 
                                       expenditure which is not offset by an    and forecasting process. 
                                       increase in private sector expenditure   Our strategy is to develop a 
                                       could adversely                          differentiated proposition in our 
                                       affect the Group.                        chosen markets and to ensure 
                                                                                that we are well positioned with 
                                                                                clients and contractors who are likely 
                                                                                to benefit from those 
                                                                                areas in which increased activity is 
                                                                                forecast. We consistently monitor our 
                                                                                share in each market 
                                                                                segment and seek to balance our risk 
                                                                                between cyclical areas and those which 
                                                                                are more predictable. 
                                      ---------------------------------------  --------------------------------------- 
 Business continuity                   Business interruption                    As described in the paragraph above, 
                                       Any significant interruption to          the Group has continued to operate 
                                       Speedy's operational capability,         effectively throughout 
                                       whether IT systems, physical             the COVID-19 pandemic. Management 
                                       restrictions or personnel, could         acted promptly in line with our 
                                       adversely impact current and future      documented plan to establish 
                                       trading as customers                     a crisis management team which 
                                       could readily migrate to competitors.    co-ordinated the activities required 
                                       This could range from short-term         in a rapidly changing 
                                       impact in processing of invoices that    environment. 
                                       would affect cash flows                  Preventative controls, back-up and 
                                       to the loss of a major site.             recovery procedures are in place for 
                                                                                key IT systems. Changes 
                                                                                to Group systems are considered as 
                                                                                part of wider change management 
                                                                                programmes and implemented 
                                                                                in phases wherever possible. The Group 
                                                                                has critical incident plans in place 
                                                                                for all its sites. 
                                                                                Insurance cover is reviewed at regular 
                                                                                intervals to ensure appropriate 
                                                                                coverage in the event 
                                                                                of a business continuity issue. 
                                      ---------------------------------------  --------------------------------------- 
 Asset holding and integrity           Asset range and availability             Our understanding of customer 
                                       Speedy's business model relies on        expectation of the relative timescales 
                                       providing assets for hire to             for delivery across our 
                                       customers, when they want to             range of assets allows us to reduce 
                                       hire them. In order to maximise          holdings of less time critical assets 
                                       profitability and returns on deployed    by centralising 
                                       capital, demand is balanced              the storage locations, whilst at the 
                                       with the requirement to hold a range     same time increasing the breadth of 
                                       of assets that is optimally utilised.    holding across our 
                                                                                customer trading locations of those 
                                                                                assets most likely to be required on a 
                                                                                short notice basis. 
                                                                                We regularly monitor our asset status 
                                                                                information and use this to optimise 
                                                                                our asset holdings. 
                                                                                We constantly review our range of 
                                                                                assets and introduce innovative 
                                                                                solutions to our customers 
                                                                                as new products come to market, under 
                                                                                our Energise programme. 
                                      ---------------------------------------  --------------------------------------- 
 

Viability Statement

The Group operates an annual planning process which includes a five year strategic plan and a one year financial budget. These plans, and risks to their achievement, are reviewed by the Board as part of its strategy review and budget approval processes. The Board has considered the impact of the principal risks to the Group's business model, performance, solvency and liquidity as set out above.

The Directors have determined that three years is an appropriate period over which to assess the Viability statement. The projections for the first three years of the strategic plan are based on detailed action plans developed by the Group with specific initiatives and accountabilities. There is inherently less certainty in the projections for years four and five. The Group has a GBP180m asset-based finance facility in place through to October 2022. The Strategic Plan makes certain assumptions about the adequacy of facilities and expected renewal on broadly similar terms to meet the Group's capital investment and acquisition strategies.

In making this statement, the Directors have considered the resilience of the Group, its current position, the principal risks facing the business in distressed but reasonable scenarios, including various risks associated with additional global pandemics as set out above, and the effectiveness of any mitigating actions.

Based on this assessment, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period to March 2024.

The going concern statement and further information can be found in Note 1 of the financial statements.

Consolidated Income Statement

for the year ended 31 March 2021

 
                                       Year ended March 2021                             Year ended March 2020 
                           ----------------------------------------------      ------------------------------------------ 
                            Continuing   Discontinued                            Continuing    Discontinued 
                            operations     operations                 Total      operations      operations           Total 
                   Note           GBPm           GBPm                  GBPm            GBPm            GBPm            GBPm 
 
  Revenue             2          332.3           31.3                 363.6           371.5            35.2           406.7 
 
  Cost of sales                (147.4)         (23.6)               (171.0)         (157.2)          (25.3)         (182.5) 
                            ----------     ----------            ----------      ----------      ----------      ---------- 
  Gross profit                   184.9            7.7                 192.6           214.3             9.9           224.2 
 
  Distribution 
   and 
   administrative 
   costs                       (172.4)          (3.2)               (175.6)         (205.7)           (4.5)         (210.2) 
 
  Analysis of 
  operating 
  profit 
  Operating 
   profit 
   before 
   amortisation 
   and 
   exceptional 
   items                          21.7            3.7                  25.4            33.4             5.7            39.1 
  Amortisation       10          (0.8)              -                 (0.8)           (1.3)               -           (1.3) 
  Exceptional 
   items              4          (8.4)            0.8                 (7.6)          (23.5)           (0.3)          (23.8) 
-----------------  ----  -------------  -------------  --------------------  --------------  --------------  -------------- 
 
  Operating 
   profit                         12.5            4.5                  17.0             8.6             5.4            14.0 
 
  Share of 
   results 
   of joint 
   venture                         1.2              -                   1.2             2.8               -             2.8 
                            ----------     ----------            ----------      ----------      ----------      ---------- 
  Profit from 
   operations                     13.7            4.5                  18.2            11.4             5.4            16.8 
 
 
  Net financial 
   expense            5          (5.4)          (0.5)                 (5.9)           (6.2)           (0.8)           (7.0) 
  Exceptional 
   financial 
   income             5              -              -                     -            10.9               -            10.9 
                            ----------     ----------            ----------      ----------      ----------      ---------- 
  Profit before 
   taxation                        8.3            4.0                  12.3            16.1             4.6            20.7 
 
  Taxation            6          (2.2)          (0.6)                 (2.8)           (3.9)               -           (3.9) 
                            ----------     ----------            ----------      ----------      ----------      ---------- 
  Profit for the 
   financial year                  6.1            3.4                   9.5            12.2             4.6            16.8 
 
 
  Earnings per 
  share 
  - Basic (pence)     7           1.17           0.65                  1.82            2.35            0.88            3.23 
 
  - Diluted 
   (pence)            7           1.15           0.64                  1.79            2.32            0.87            3.19 
 
 
  Non-GAAP 
   performance 
   measures           9           85.3            5.2                  90.5            99.2             8.2           107.4 
 
 
    Adjusted 
    profit 
    before tax        9           17.5            3.2                  20.7            30.0             4.9            34.9 
 
  Adjusted 
   earnings 
   per share 
   (pence)            7           2.68           0.54                  3.22            4.60            0.94            5.54 
 
 
 

Consolidated Statement of Comprehensive Income

for the year ended 31 March 2021

 
                                                 Year ended  Year ended 
                                                   31 March    31 March 
                                                       2021        2020 
                                                       GBPm        GBPm 
 
Profit for the financial year                           9.5        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) 
 - Exchange difference on translation 
  of foreign operations                               (1.4)         0.9 
 - Tax on items                                           -         0.1 
                                                 ----------  ---------- 
Other comprehensive income, net of tax                (1.2)         0.8 
                                                 ----------  ---------- 
Total comprehensive income for the financial 
 year                                                   8.3        17.6 
 
 

Consolidated Balance Sheet

at 31 March 2021

 
                                Note    31 March    31 March 
                                            2021        2020 
                                            GBPm        GBPm 
ASSETS 
Non-current assets 
Intangible assets                 10        24.7        23.1 
Investment in joint venture                  6.2         7.3 
Property, plant and equipment 
   Hire equipment                 11       207.2       227.1 
   Non-hire equipment             11        25.9        30.5 
Right of use assets               12        59.1        64.7 
Deferred tax asset                           2.5         2.8 
                                      ----------  ---------- 
                                           325.6       355.5 
                                      ----------  ---------- 
Current assets 
Inventories                                  8.2         8.7 
Trade and other receivables                 93.3       102.3 
Cash                              13        11.7        22.8 
Current tax asset                            1.1         1.5 
                                      ----------  ---------- 
                                           114.3       135.3 
                                      ----------  ---------- 
Total assets                               439.9       490.8 
                                      ----------  ---------- 
LIABILITIES 
Current liabilities 
Borrowings                        13       (0.5)           - 
Lease liabilities                 14      (19.3)      (20.2) 
Other financial liabilities                (0.4)       (0.5) 
Trade and other payables                  (94.8)      (90.9) 
Provisions                        15       (3.1)       (5.9) 
                                      ----------  ---------- 
                                         (118.1)     (117.5) 
                                      ----------  ---------- 
Non-current liabilities 
Borrowings                        13      (44.4)     (102.1) 
Lease liabilities                 14      (46.5)      (52.7) 
Provisions                        15       (2.9)       (1.2) 
Deferred tax liability                     (8.8)       (7.4) 
                                      ----------  ---------- 
                                         (102.6)     (163.4) 
                                      ----------  ---------- 
Total liabilities                        (220.7)     (280.9) 
                                      ----------  ---------- 
Net assets                                 219.2       209.9 
 
EQUITY 
Share capital                               26.4        26.4 
Share premium                                1.3         0.8 
Merger reserve                               1.0         1.0 
Hedging reserve                            (0.7)       (0.9) 
Translation reserve                        (1.0)         0.4 
Retained earnings                          192.2       182.2 
                                      ----------  ---------- 
Total equity                               219.2       209.9 
 
 

Consolidated Statement of Changes in Equity

for the year ended 31 March 2021

 
 
                                      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                                   -           -           -       (0.2)            0.9        16.9        17.6 
Dividends                                 -           -           -           -              -      (10.9)      (10.9) 
Tax on items taken 
 directly 
 to equity                                -           -           -           -              -         0.2         0.2 
Equity-settled 
 share-based 
 payments                                 -           -           -           -              -         0.5         0.5 
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                                   -           -           -         0.2          (1.4)         9.5         8.3 
Equity-settled 
 share-based 
 payments                                 -           -           -           -              -         0.5         0.5 
Issue of shares under 
 the Sharesave Scheme                     -         0.5           -           -              -           -         0.5 
                                 ----------  ----------  ----------  ----------     ----------  ----------  ---------- 
At 31 March 2021                       26.4         1.3         1.0       (0.7)          (1.0)       192.2       219.2 
 
 

Consolidated Cash Flow Statement

for the year ended 31 March 2021

 
                                              Note  Year ended  Year ended 
                                                      31 March    31 March 
                                                          2021        2020 
                                                          GBPm        GBPm 
Cash generated from operating activities 
Profit before tax                                         12.3        20.7 
Financial expense                                          5.9         7.0 
Exceptional intangible asset impairment                      -        18.5 
Exceptional financial income                                 -      (10.9) 
Amortisation                                               0.8         1.3 
Depreciation                                              68.1        69.4 
Share of profit from joint venture                       (1.2)       (2.8) 
Termination of lease contracts                           (4.1)       (2.4) 
Loss/(Profit) on disposal of hire equipment                1.0       (0.8) 
Loss/(Profit) on disposal of non-hire 
 equipment                                                 0.5       (3.9) 
Decrease in inventories                                    0.5         0.4 
Decrease /(increase)in trade and other 
 receivables                                               9.3       (0.6) 
Increase in trade and other payables                       3.6         5.4 
Movement in provisions                                   (1.1)         4.6 
Translation reserve recycled on disposal 
 of Middle East assets                                     1.0           - 
Equity-settled share-based payments                        0.5         0.5 
                                                    ----------  ---------- 
Cash generated from operations before 
 changes in hire fleet                                    97.1       106.4 
Purchase of hire equipment                              (36.4)      (53.6) 
Proceeds from sale of hire equipment                      12.2        11.7 
                                                    ----------  ---------- 
Cash generated from operations                            72.9        64.5 
Interest paid                                            (6.0)       (6.5) 
Tax paid                                                 (0.8)       (9.3) 
                                                    ----------  ---------- 
Net cash flow from operating activities                   66.1        48.7 
 
Cash flow from investing activities 
Purchase of non-hire property, plant 
 and equipment and IT development                       (11.2)       (9.0) 
Proceeds from sale of non-hire property, 
 plant and equipment                                       0.8         4.2 
Proceeds from disposal of Middle East 
 assets                                                   13.0           - 
Investment in joint venture                                1.0         1.3 
                                                    ----------  ---------- 
Net cash flow from investing activities                    3.6       (3.5) 
                                                    ----------  ---------- 
Net cash flow before financing activities                 69.7        45.2 
                                                    ----------  ---------- 
Cash flow from financing activities 
Payments for the principle element of 
 leases                                                 (23.6)      (24.5) 
Net loan (repayment)/drawdown                           (58.2)         2.1 
Proceeds from the issue of Sharesave 
 Scheme shares                                             0.5         0.5 
Dividends paid                                               -      (10.9) 
                                                    ----------  ---------- 
Net cash flow from financing activities                 (81.3)      (32.8) 
                                                    ----------  ---------- 
(Decrease)/increase in cash and cash 
 equivalents                                            (11.6)        12.4 
 
Net cash at the start of the financial 
 year                                                     22.8        10.4 
                                                    ----------  ---------- 
Net cash at the end of the financial 
 year                                                     11.2        22.8 
 
Analysis of cash and cash equivalents 
Cash                                            13        11.7        22.8 
Bank overdraft                                  13       (0.5)           - 
                                                    ----------  ---------- 
                                                          11.2        22.8 
 
 
 

Notes to the Financial Statements

   1             Accounting policies 

Speedy Hire Plc is a company incorporated and domiciled in the United Kingdom. The consolidated Financial Statements of the Company for the year ended 31 March 2021 comprise the Company and its subsidiaries (together referred to as the 'Group').

The Group and Parent Company Financial Statements were approved by the Board of Directors on 24 May 2021.

The accounting policies set out in the audited Financial Statements for the year ended 31 March 2021 have, unless otherwise stated, been applied consistently to all periods presented in these consolidated Financial Statements. In accordance with IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations', the comparative income statement has been re-presented for the disclosures of discontinued operations relating to all operations that have been discontinued by the balance sheet date (see Note 3).

Discontinued operations

A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative income statement is restated as if the operation has been discontinued from the start of the comparative period.

Basis of preparation

The Directors consider the going concern basis of preparation for the Group and Company to be appropriate for the following reasons.

The Group has a GBP180m asset based finance facility ('the facility') which expires in October 2022 and has no prior scheduled repayment requirements. The total cash and undrawn availability on the facility as at 31 March 2021 was GBP142.3m (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 31 May 2022, 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 a continuation of the impact of the increased economic uncertainty resulting from COVID-19.

The Board has considered various possible downside scenarios to the base case, which result in reduced levels of revenue across the Group, whilst maintaining the same cost base. Mitigations applied in these downturn scenarios include a reduction in planned capital expenditure. Despite the significant impact of the assumptions applied in these scenarios, the Group maintains sufficient headroom against its available facility and covenant requirements.

Whilst the Directors consider that there is a degree of subjectivity involved in their assumptions, on the basis of the above the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of these Financial Statements. Accordingly, they continue to adopt the going concern basis of accounting in preparing the Financial Statements.

The financial information set out in this final results announcement does not constitute the Group's statutory accounts for the year ended 31 March 2021 or 31 March 2020 but is derived from those accounts. Statutory accounts for Speedy Hire Plc for the year ended 31 March 2020 have been delivered to the Registrar of Companies, and those for the year ended 31 March 2021 will be delivered in due course. The auditor has reported on those accounts; their report 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.

Copies of full accounts will be available on the Group's corporate website in due course. Additional copies will be available on request from Speedy Hire Plc, 16 The Parks, Newton-le-Willows, Merseyside, WA12 0JQ.

   2              Segmental analysis 

The segmental disclosure presented in the Financial Statements reflects the format of reports reviewed by the 'chief operating decision-maker'. UK and Ireland delivers asset management, with tailored services and a continued commitment to relationship management. International principally delivers projects and facilities management contracts by providing a managed site support service. During the year, the Middle East assets which were previously classified as part of the international segment have been disposed of (see Note 3) and are now shown as discontinued operations. As a consequence of this change, the results from the joint venture in Kazakhstan have been reallocated to 'Corporate items'. The comparative period has been restated to reflect this change.

For the year ended 31 March 2021

 
                                                                       Total - 
                                                        Corporate   continuing  Discontinued 
                                       UK and Ireland       items   operations    operations       Total 
                                                 GBPm        GBPm         GBPm          GBPm        GBPm 
 
Revenue                                         332.3           -        332.3          31.3       363.6 
 
Segment result: 
EBITDA before exceptional 
 items                                           89.5       (4.2)         85.3           5.2        90.5 
Depreciation                                   (63.2)       (0.4)       (63.6)         (1.5)      (65.1) 
                                           ----------  ----------   ----------    ----------  ---------- 
Operating profit/(costs) 
 before amortisation and exceptional 
 items                                           26.3       (4.6)         21.7           3.7        25.4 
Amortisation                                    (0.8)           -        (0.8)             -       (0.8) 
Exceptional items                               (8.4)           -        (8.4)           0.8       (7.6) 
                                           ----------  ----------   ----------    ----------  ---------- 
Operating profit/(costs)                         17.1       (4.6)         12.5           4.5        17.0 
Share of results of joint 
 venture                                            -         1.2          1.2             -         1.2 
                                           ----------  ----------   ----------    ----------  ---------- 
Trading profit/(costs)                           17.1       (3.4)         13.7           4.5        18.2 
 
Financial expense                                                        (5.4)         (0.5)       (5.9) 
                                                                    ----------    ----------  ---------- 
Profit before tax                                                          8.3           4.0        12.3 
Taxation                                                                 (2.2)         (0.6)       (2.8) 
                                                                    ----------    ----------  ---------- 
Profit for the financial 
 year                                                                      6.1           3.4         9.5 
 
 
 
Intangible assets                                20.1         4.6         24.7             -        24.7 
Investment in joint venture                         -         6.2          6.2             -         6.2 
Hire equipment                                  206.4         0.8        207.2             -       207.2 
Non-hire equipment                               25.9           -         25.9             -        25.9 
Right of use assets                              59.1           -         59.1             -        59.1 
Taxation assets                                     -         3.6          3.6             -         3.6 
Current assets                                   96.5         2.2         98.7           2.8       101.5 
Cash                                                -        11.7         11.7             -        11.7 
                                           ----------  ----------   ----------    ----------  ---------- 
Total assets                                    408.0        29.1        437.1           2.8       439.9 
 
Lease liabilities                              (65.8)           -       (65.8)             -      (65.8) 
Other liabilities                              (83.9)       (8.8)       (92.7)         (8.5)     (101.2) 
Borrowings                                          -      (44.9)       (44.9)             -      (44.9) 
Taxation liabilities                                -       (8.8)        (8.8)             -       (8.8) 
                                           ----------  ----------   ----------    ----------  ---------- 
Total liabilities                             (149.7)      (62.5)      (212.2)         (8.5)     (220.7) 
 
 
 

Corporate items comprise certain central activities and costs that 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 that are not directly attributable to the activities of the operating segments, together with net corporate borrowings and taxation.

For the year ended 31 March 2020

 
                                                                    Total - 
                                                     Corporate   continuing  Discontinued 
                                    UK and Ireland       items   operations    operations       Total 
                                              GBPm        GBPm         GBPm          GBPm        GBPm 
 
Revenue                                      371.5           -        371.5          35.2       406.7 
 
Segment result: 
EBITDA before exceptional items              102.7       (3.5)         99.2           8.2       107.4 
Depreciation                                (65.4)       (0.4)       (65.8)         (2.5)      (68.3) 
                                        ----------  ----------   ----------    ----------  ---------- 
Operating profit/(costs) before 
 amortisation and exceptional 
 items                                        37.3       (3.9)         33.4           5.7        39.1 
Amortisation                                 (1.3)           -        (1.3)             -       (1.3) 
Exceptional items                           (23.5)           -       (23.5)         (0.3)      (23.8) 
                                        ----------  ----------   ----------    ----------  ---------- 
Operating profit/(costs)                      12.5       (3.9)          8.6           5.4        14.0 
Share of results of joint venture                -         2.8          2.8             -         2.8 
                                        ----------  ----------   ----------    ----------  ---------- 
Trading profit/(costs)                        12.5       (1.1)         11.4           5.4        16.8 
 
Financial expense                                                     (6.2)         (0.8)       (7.0) 
Exceptional financial income                                           10.9             -        10.9 
                                                                 ----------    ----------  ---------- 
Profit before tax                                                      16.1           4.6        20.7 
Taxation                                                              (3.9)             -       (3.9) 
                                                                 ----------    ----------  ---------- 
Profit for the financial year                                          12.2           4.6        16.8 
 
 
 
Intangible assets                             21.9         1.2         23.1             -        23.1 
Investment in joint venture                      -         7.3          7.3             -         7.3 
Hire equipment                               215.7           -        215.7          11.4       227.1 
Non-hire equipment                            28.4           -         28.4           2.1        30.5 
Right of use assets                           62.2           -         62.2           2.5        64.7 
Taxation assets                                  -         4.3          4.3             -         4.3 
Current assets                                94.5         1.6         96.1          14.9       111.0 
Cash                                             -        22.8         22.8             -        22.8 
                                        ----------  ----------   ----------    ----------  ---------- 
Total assets                                 422.7        37.2        459.9          30.9       490.8 
 
Lease liabilities                           (68.8)           -       (68.8)         (4.1)      (72.9) 
Other liabilities                           (82.4)       (4.0)       (86.4)        (12.1)      (98.5) 
Borrowings                                       -     (102.1)      (102.1)             -     (102.1) 
Taxation liabilities                             -       (7.4)        (7.4)             -       (7.4) 
                                        ----------  ----------   ----------    ----------  ---------- 
Total liabilities                          (151.2)     (113.5)      (264.7)        (16.2)     (280.9) 
 
 

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.

 
                                                   Year ended 31 March                         Year ended 31 March 
                                                                  2021                                        2020 
                              ----------------------------------------    ---------------------------------------- 
                                                                 Total                                       Total 
                                         Revenue                assets               Revenue                assets 
                                            GBPm                  GBPm                  GBPm                  GBPm 
 
UK                                         323.6                 423.7                 361.3                 438.4 
Ireland                                      8.7                  13.4                  10.2                  14.2 
Discontinued operations - 
 Middle East                                31.3                   2.8                  35.2                  38.2 
                                      ----------            ----------            ----------            ---------- 
                                           363.6                 439.9                 406.7                 490.8 
 
 

Revenue by type

Revenue is attributed to the following activities:

 
                                  Year ended      Year ended 
                                    31 March        31 March 
                                        2021            2020 
                              --------------  -------------- 
                                        GBPm            GBPm 
 
Hire and related activities            213.3           240.5 
Services                               146.1           162.0 
Disposals                                4.2             4.2 
                                  ----------      ---------- 
                                       363.6           406.7 
 
 

Major customers

No one customer represents more than 10% of revenue, reported profit or combined assets of the Group.

   3              Discontinued operations 

On 1 March 2021, the Group sold the assets relating to its Middle East operations. The transaction comprised of the disposal of its equipment fleet, stock and other fixed assets relating to its Middle East business to its principal customer ADNOC Logistics and Services LLC (ADNOC), for a consideration of $18m. At the date of sale, this translated to proceeds of GBP13.0m, on which a pre-tax gain of GBP0.8m was recognised. The attributable tax was GBP0.2m, resulting in a gain after tax of GBP0.6m.

Cash flows from/(used in) discontinued operations

 
                                                   2021   2020 
                                                   GBPm   GBPm 
 
Net cash from/(used in) operating activities       13.8  (0.2) 
Net cash from investing activities                 13.0      - 
Net cash used in financing activities             (0.8)  (0.7) 
 
Net cash from/(used in) discontinued operations    26.0  (0.9) 
 
 
   4              Exceptional items 

For the year ended 31 March 2021

 
                                       Continuing  Discontinued 
                                       operations    operations       Total 
                                             GBPm          GBPm        GBPm 
 
Property related costs                        5.6             -         5.6 
Restructuring costs                           1.9             -         1.9 
Disposal of Middle East assets (see 
 Note 3)                                        -         (0.8)       (0.8) 
Training provision                            0.9             -         0.9 
                                       ----------    ----------  ---------- 
                                              8.4         (0.8)         7.6 
 
 

During the year, exceptional administrative items of GBP7.6m 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. A number of depots have been closed and further consolidation of depots is underway to create larger, customer focused service centres. As a result, GBP5.6m of property related costs and GBP1.9m of redundancy costs have been incurred during the year.

On 1 March 2021 the Group sold its equipment fleet, stock and other fixed assets relating to its Middle East business to its principal customer ADNOC, for a consideration of $18m. The transaction results in a gain on disposal of GBP0.8m.

The training business, Geason, which was acquired in December 2018, was subject to an assurance visit from a funding agency in early 2020, and a subsequent claim was received for amounts overpaid. The claim was settled in October 2020, within the provision held at 31 March 2020. An additional provision has been made for GBP0.9m to cover legal and other costs associated with the ongoing initiatives to improve the Group's financial position

For the year ended 31 March 2020

 
                                               Recognised      Recognised 
                                          in distribution              in 
                                                and admin   net financial 
                                                 expenses        expenses       Total 
                                                     GBPm            GBPm        GBPm 
 
Changes to fair value of contingent 
 consideration                                          -          (10.9)      (10.9) 
Impairment of Training CGU                           20.1               -        20.1 
Training provision                                    3.0               -         3.0 
                                               ----------      ----------  ---------- 
Exceptional items relating to Training               23.1          (10.9)        12.2 
 
Sale of surplus land                                (3.9)               -       (3.9) 
Acquisition integration costs                         1.7               -         1.7 
Property related costs                                2.0               -         2.0 
COVID-19 related costs                                0.6               -         0.6 
International contract costs                          0.3               -         0.3 
                                               ----------      ----------  ---------- 
                                                     23.8          (10.9)        12.9 
 
 

Exceptional items of GBP12.6m relate to continuing operations with GBP0.3m relating to discontinued operations.

In the year ended 31 March 2020, an exceptional financial credit of GBP10.9m had been recognised in relation to changes in the fair value of contingent consideration no longer expected to be paid in respect of Geason Training. An exceptional impairment charge of GBP20.1m for the Speedy Training cash generating unit had also been recognised

In April 2020 Speedy were notified that a funding agency was suspending payments, and seeking repayment of funding from Geason Training; GBP3.0 million was provided as an exceptional charge including legal and verification costs. As referred to above, the claim was settled within the amount provided. Further detail is provided in Note 15.

On 29 October 2019, the Group sold a plot of surplus land. Consideration of GBP4.0m was paid in cash in full at completion. The land had a book value GBP0.1m and the resultant profit of GBP3.9m was recognised as an exceptional item.

Following the acquisitions of Geason Training and Lifterzin the year ended 31 March 2019, integration expenses of GBP1.7m were incurred in the year ended 31 March 2020, relating to property provisions, redundancy and project management costs. An exceptional provision of GBP2.0m was made for specific non-recurring identified repairs required to properties within the depot network as a result of potential landlord claims. Exceptional costs of GBP0.6m related to COVID-19, including bad debt and staff related costs were provided for at 31 March 2020. Exceptional costs of GBP0.3m incurred relating to the extension of the major contract in the International division were also recognised in the prior year.

   5              Financial expense 
 
                                                                   2021        2020 
                                                                   GBPm        GBPm 
 
Interest on bank loans and overdrafts                               2.9         3.4 
Amortisation of issue costs                                         0.4         0.4 
                                                             ----------  ---------- 
Total interest on borrowings                                        3.3         3.8 
 
Interest on lease liabilities                                       2.6         3.2 
Hedge interest payable                                                -         0.1 
Other finance income                                                  -       (0.1) 
                                                             ----------  ---------- 
Net financial expense before exceptional items                      5.9         7.0 
Exceptional financial income (see Note 4)                             -      (10.9) 
                                                             ----------  ---------- 
Net financial expense                                               5.9       (3.9) 
 
 
   6              Taxation 

The adjusted tax rate of 18.9% (2020: 17.2%) is lower (FY20: lower) than the standard rate of UK corporation tax of 19% (2020: 19%). The tax charge in the Income Statement for the year of 22.8% is higher (2020: lower) than the standard rate of corporation tax in the UK of 19% (2020: 19%) and is explained as follows:

 
                                                          2021        2020 
                                                          GBPm        GBPm 
 
Profit before tax                                         12.3        20.7 
                                                    ----------  ---------- 
Accounting profit multiplied by the standard rate 
 of corporation tax at 19% (2020: 19%)                     2.3         3.9 
Expenses not deductible for tax purposes                   0.7         0.9 
Share-based payments                                         -         0.1 
Overseas profits not subject to tax                          -       (0.6) 
Share of joint venture income already taxed              (0.2)       (0.5) 
Change in deferred tax rates                                 -         0.5 
Adjustment to tax in respect of prior years                  -       (0.4) 
                                                    ----------  ---------- 
Tax charge for the year reported in the Income 
 Statement                                                 2.8         3.9 
 
Tax (credited)/charged in equity 
Current tax                                                  -       (0.2) 
Deferred tax                                                 -         0.1 
                                                    ----------  ---------- 
Tax credited to equity                                       -       (0.1) 
 
 

In the March 2021 Budget it was announced that the UK tax rate will increase to 25% from 1 April 2023. This will have a consequential effect on the Group's future tax charge. If this rate change had been substantively enacted at the current balance sheet date the deferred tax liability would have increased by GBP2.0m.

   7              Earnings per share 

The calculation of basic earnings per share is based on the profit for the financial year of GBP9.5m (2020: GBP16.8m) and the weighted average number of 5 pence ordinary shares in issue, and is calculated as follows:

 
                                                                          2021                          2020 
Weighted average number of shares in issue (m) 
Number of shares at the beginning of the year                            521.3                         519.5 
Exercise of share options                                                  0.3                           0.3 
Movement in shares owned by the Employee Benefit 
 Trust                                                                     0.8                           0.2 
                                                                    ----------                    ---------- 
Weighted average for the year - basic number of 
 shares                                                                  522.4                         520.0 
Share options                                                              6.5                           5.2 
Employee share scheme                                                      0.6                           1.1 
                                                                    ----------                    ---------- 
Weighted average for the year - diluted number 
 of shares                                                               529.5                         526.3 
 
                                           2021                                      2020 
                          Continuing   Discontinued                 Continuing   Discontinued 
                          operations     operations        Total    operations     operations        Total 
                                GBPm           GBPm         GBPm          GBPm           GBPm         GBPm 
 Profit for the year 
 after tax                       6.1            3.4          9.5          12.2            4.6         16.8 
 Amortisation charge 
 (after tax)                     0.6              -          0.6           1.1              -          1.1 
 Exceptional items 
  (after tax)                    7.3          (0.6)          6.7          10.6            0.3         10.9 
                          ----------     ----------   ----------    ----------     ----------   ---------- 
 Adjusted earnings 
  (after tax)                   14.0            2.8         16.8          23.9            4.9         28.8 
 
                               Pence          Pence        Pence         Pence          Pence        Pence 
 Basic earnings per 
  share                         1.17           0.65         1.82          2.35           0.88         3.23 
 Dilutive options 
  and shares                  (0.02)         (0.01)       (0.03)        (0.03)         (0.01)       (0.04) 
                          ----------     ----------   ----------    ----------     ----------   ---------- 
 Diluted earnings 
  per share                     1.15           0.64         1.79          2.32           0.87         3.19 
 
 Adjusted earnings 
  per share                     2.68           0.54         3.22          4.60           0.94         5.54 
 Dilutive options 
  and shares                  (0.03)         (0.01)       (0.04)        (0.06)         (0.01)       (0.07) 
                          ----------     ----------   ----------    ----------     ----------   ---------- 
 Diluted adjusted 
 earnings per share             2.65           0.53         3.18          4.54           0.93         5.47 
 
 
 

Total number of shares outstanding at 31 March 2021 amounted to 528,180,280 (2020: 526,773,177), including 4,413,516 (2020: 5,472,206) shares held in the Employee Benefit Trust, which are excluded in calculating earnings per share.

   8              Dividends 

The aggregate amount of dividend comprises:

 
                                                            2021        2020 
                                                            GBPm        GBPm 
 
2019 final dividend (1.40 pence on 525.3m shares)              -         7.3 
2020 interim dividend (0.70 pence on 525.4m shares)            -         3.6 
                                                      ----------  ---------- 
                                                               -        10.9 
 
 

Subsequent to the end of the year and not included in the results for the year, the Directors recommended a final dividend of 1.40 pence (2020: nil pence) per share, bringing the total amount payable in respect of the 2021 year to 1.40 pence (2020: 0.70 pence), to be paid on 24 September 2021 to shareholders on the register on 13 August 2021.

The Employee Benefit Trust, established to hold shares for the Performance Share Plan and other employee benefits, waived its right to the interim dividend. At 31 March 2021, the Trust held 4,413,516 ordinary shares (2020: 5,472,206).

   9              Non-GAAP performance measures 

The Group believes that the measures below provide valuable additional information for users of the Financial Statements in assessing the Group's performance by adjusting for the effect of exceptional items and significant non-cash depreciation and amortisation. The Group uses these measures for planning, budgeting and reporting purposes and for its internal assessment of the operating performance of the individual divisions within the Group.

 
 
                                                      2021                                   2020 
                                  Continuing  Discontinued       Total   Continuing  Discontinued       Total 
                                  operations    operations        GBPm   operations    operations        GBPm 
                                        GBPm          GBPm                     GBPm          GBPm 
Operating profit                        12.5           4.5        17.0          8.6           5.4        14.0 
Add back: amortisation                   0.8             -         0.8          1.3             -         1.3 
Add back/(deduct): exceptional 
 items                                   8.4         (0.8)         7.6         23.5           0.3        23.8 
                                  ----------    ----------  ----------   ----------    ----------  ---------- 
Adjusted operating profit 
 ('EBITA')                              21.7           3.7        25.4         33.4           5.7        39.1 
Add back: depreciation                  63.6           1.5        65.1         65.8           2.5        68.3 
                                  ----------    ----------  ----------   ----------    ----------  ---------- 
EBITDA before exceptional 
 items                                  85.3           5.2        90.5         99.2           8.2       107.4 
 
Profit before tax                        8.3           4.0        12.3         16.1           4.6        20.7 
Add back: amortisation                   0.8             -         0.8          1.3             -         1.3 
Add back/(deduct): exceptional 
 items                                   8.4         (0.8)         7.6         12.6           0.3        12.9 
                                  ----------    ----------  ----------   ----------    ----------  ---------- 
Adjusted profit before 
 tax                                    17.5           3.2        20.7         30.0           4.9        34.9 
 
 
   10           Intangible fixed assets 
 
                                 Customer 
                     Goodwill       lists      Brands  IT development       Total 
                         GBPm        GBPm        GBPm            GBPm        GBPm 
Cost 
At 1 April 2019         126.3        45.1         7.0               -       178.4 
Additions                   -           -           -             1.2         1.2 
                   ----------  ----------  ----------      ----------  ---------- 
At 31 March 2020        126.3        45.1         7.0             1.2       179.6 
Additions                   -           -           -             3.5         3.5 
                   ----------  ----------  ----------      ----------  ---------- 
At 31 March 2021        126.3        45.1         7.0             4.7       183.1 
 
Amortisation 
At 1 April 2019          95.1        37.2         4.4               -       136.7 
Charged in year             -         0.9         0.4               -         1.3 
Impairment               13.7         3.7         1.1               -        18.5 
                   ----------  ----------  ----------      ----------  ---------- 
At 31 March 2020        108.8        41.8         5.9               -       156.5 
Charged in year             -         0.4         0.4               -         0.8 
Impairment                  -         1.1           -               -         1.1 
                   ----------  ----------  ----------      ----------  ---------- 
At 31 March 2021        108.8        43.3         6.3               -       158.4 
 
Net book value 
At 31 March 2021         17.5         1.8         0.7             4.7        24.7 
 
At 31 March 2020         17.5         3.3         1.1             1.2        23.1 
 
At 31 March 2019         31.2         7.9         2.6               -        41.7 
 
 

The amount of goodwill that is tax-deductible is GBPnil (2020: GBPnil).

All goodwill has arisen from business combinations. On transition to IFRS, the balance of goodwill as measured under UK GAAP was allocated to cash-generating units (CGUs). These are independent sources of income streams, and represent the lowest level within the Group at which the associated goodwill is monitored for management purposes. The Group's reportable CGUs comprise UK and Ireland (excluding Training) and Training. All intangible assets are held in the UK. Goodwill arising on business combinations after 1 April 2004 has been allocated to the CGU that is expected to benefit from those business combinations. The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. No impairment test has been performed in respect of the International CGU as there are no intangible assets allocated to the CGU.

The recoverable amounts of the assets allocated to the UK and Ireland (excluding Training) and Training CGUs are determined by a value-in-use calculation. The value-in-use calculation uses cash flow projections based on five-year financial forecasts approved by management. The key assumptions for these forecasts are those regarding revenue growth and discount rate, which management estimates based on past experience adjusted for current market trends and expectations of future changes in the market. To prepare the value-in-use calculation, the Group uses cash flow projections from the FY2022 budget, and a subsequent four-year period using the Group's business plan, together with a terminal value using long-term growth rates. The resulting forecast cash flows are discounted back to present value, using an estimate of the Group's weighted average cost of capital, adjusted for risk factors associated with each individual CGU and market-specific risks.

The Training CGU performed below expectations during the year ended 31 March 2020 due to lower than expected learner enrolments, the setup of a number of regional training centres which had yet to reach critical mass and compliance related issues. During the year, the business has been further affected by market conditions due to COVID-19 and the impact social distancing has had on the delivery of courses. The recoverable amount of the CGU is considered GBPnil and the goodwill and intangible assets associated with the training business have been fully impaired, which resulted in an impairment of GBP1.1m in the year.

The pre-tax discount rates and terminal growth rates applied are as follows:

 
                                          31 March 2021                               31 March 2020 
                              ----------------------------------------    ---------------------------------------- 
                                       Pre-tax                Terminal             Pre-tax                Terminal 
                                      discount                   value            discount                   value 
                                          rate             growth rate                rate             growth rate 
 
UK and Ireland (excluding 
 Training)                               12.3%                    2.5%                9.2%                    2.5% 
 
 
 

Impairment calculations are sensitive to changes in key assumptions of revenue growth and discount rate. At 31 March 2021, the headroom between value in use and carrying value of related assets for the UK and Ireland was GBP27.6m (2020: GBP45.1m). The reduction in headroom is due to the rise in discount rate at 31 March 2021 compared with previous years. There are no reasonable variations in these assumptions that would result in an impairment.

   11           Property, plant and equipment 
 
                           Land and        Hire 
                          buildings   equipment       Other       Total 
                               GBPm        GBPm        GBPm        GBPm 
Cost 
At 1 April 2019                52.2       385.8        77.8       515.8 
Foreign exchange                0.3         0.7           -         1.0 
Additions                       2.4        55.3         5.5        63.2 
Disposals                     (0.1)      (21.6)       (0.2)      (21.9) 
Transfers to inventory            -      (12.1)           -      (12.1) 
                         ----------  ----------  ----------  ---------- 
At 31 March 2020               54.8       408.1        83.1       546.0 
Foreign exchange              (0.5)       (1.1)         0.6       (1.0) 
Additions                       1.7        36.0         6.0        43.7 
Disposals                     (5.4)      (46.0)       (1.2)      (52.6) 
Transfers to inventory            -      (10.4)           -      (10.4) 
                         ----------  ----------  ----------  ---------- 
At 31 March 2021               50.6       386.6        88.5       525.7 
 
Depreciation 
At 1 April 2019                33.1       168.9        64.7       266.7 
Charged in year                 3.4        34.9         6.2        44.5 
Disposals                         -      (14.3)           -      (14.3) 
Transfers to inventory            -       (8.5)           -       (8.5) 
                         ----------  ----------  ----------  ---------- 
At 31 March 2020               36.5       181.0        70.9       288.4 
Foreign exchange              (0.3)       (0.6)           -       (0.9) 
Charged in year                 3.6        33.7         6.1        43.4 
Disposals                     (3.2)      (27.4)       (0.4)      (31.0) 
Transfers to inventory            -       (7.3)           -       (7.3) 
                         ----------  ----------  ----------  ---------- 
At 31 March 2021               36.6       179.4        76.6       292.6 
 
Net book value 
At 31 March 2021               14.0       207.2        11.9       233.1 
 
At 31 March 2020               18.3       227.1        12.2       257.6 
 
At 31 March 2019               19.1       216.9        13.1       249.1 
 
 
 

The net book value of land and buildings comprises freehold properties of GBPnil (2020: GBPnil) and improvements to short leasehold properties of GBP14.0m (2020: GBP18.3m).

Included within depreciation charged in the year is GBP1.0m relating to exceptional impairments (see Note 4).

An impairment review has been completed during the year on the basis set out in Note 10.

   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          0.4           -         0.4 
Additions                 9.5         8.5        18.0 
Disposals              (10.1)       (6.5)      (16.6) 
                   ----------  ----------  ---------- 
At 31 March 2020        127.8        51.9       179.7 
Foreign exchange        (0.6)           -       (0.6) 
Additions                13.7         8.9        22.6 
Disposals               (9.6)      (12.6)      (22.2) 
                   ----------  ----------  ---------- 
At 31 March 2021        131.3        48.2       179.5 
 
Depreciation 
At 1 April 2019          77.2        28.5       105.7 
Foreign exchange          0.2           -         0.2 
Charged in year          13.2        11.7        24.9 
Disposals              (10.0)       (5.8)      (15.8) 
                   ----------  ----------  ---------- 
At 31 March 2020         80.6        34.4       115.0 
Foreign exchange        (0.4)           -       (0.4) 
Charged in year          13.3        11.4        24.7 
Disposals               (6.9)      (12.0)      (18.9) 
                   ----------  ----------  ---------- 
At 31 March 2021         86.6        33.8       120.4 
 
Net book value 
At 31 March 2021         44.7        14.4        59.1 
 
At 31 March 2020         47.2        17.5        64.7 
 
At 31 March 2019         50.8        21.4        72.2 
 
 

Included within depreciation charged in the year is GBP2.0m relating to exceptional impairments (see Note 4).

   13           Borrowings 
 
                                                             2021        2020 
                                                             GBPm        GBPm 
Current borrowings 
Bank overdraft                                                0.5           - 
Lease liabilities                                            19.3        20.2 
                                                       ----------  ---------- 
                                                             19.8        20.2 
 
Non-current borrowings (excluding lease liabilities) 
Maturing between two and five years 
- Asset based finance facility                               44.4       102.1 
- Lease liabilities                                          46.5        52.7 
                                                       ----------  ---------- 
Total non-current borrowings                                 90.9       154.8 
                                                       ----------  ---------- 
Total borrowings                                            110.7       175.0 
Less: cash                                                 (11.7)      (22.8) 
Exclude lease liabilities                                  (65.8)      (72.9) 
                                                       ----------  ---------- 
Net debt                                                     33.2        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. The cash and undrawn availability of this facility as at 31 March 2021 was GBP142.3m (2020: GBP99.0m), based on the Group's eligible hire equipment and trade receivables.

The facility amounts to GBP180m and is based on the Group's hire equipment and trade receivables balance, 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 LIBOR 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 year, the effective margin was 1.81% (2020: 1.84%).

The facility is secured by fixed and floating charges over the UK and Ireland assets.

Analysis of consolidated net debt

 
                     31 March    Non-cash   Cash flow    31 March 
                         2020    movement                    2021 
                         GBPm        GBPm        GBPm        GBPm 
 
Cash at bank and 
 in hand                 22.8           -      (11.1)        11.7 
Bank overdraft              -           -       (0.5)       (0.5) 
Bank borrowings       (102.1)         0.6        57.1      (44.4) 
                   ----------  ----------  ----------  ---------- 
                       (79.3)         0.6        45.5      (33.2) 
 
 
   14           Lease liabilities 
 
                               Land and 
                              buildings       Other       Total 
                                   GBPm        GBPm        GBPm 
 
At 1 April 2019                    60.8        21.6        82.4 
Foreign exchange                    0.2           -         0.2 
Additions                           9.5         8.4        17.9 
Repayments                       (15.1)      (12.6)      (27.7) 
Unwinding of discount rate          2.4         0.8         3.2 
Terminations                      (2.5)       (0.6)       (3.1) 
                             ----------  ----------  ---------- 
At 31 March 2020                   55.3        17.6        72.9 
Foreign exchange                  (0.1)           -       (0.1) 
Additions                          12.7         8.9        21.6 
Repayments                       (14.2)      (12.0)      (26.2) 
Unwinding of discount rate          2.0         0.6         2.6 
Terminations                      (4.3)       (0.7)       (5.0) 
                             ----------  ----------  ---------- 
At 31 March 2021                   51.4        14.4        65.8 
 
 

Included within terminations in the year is GBP3.7m (2020: GBP0.7m) relating to exceptional terminations of property leases (see Note 4).

Amounts payable for lease liabilities (discounted at the incremental borrowing rate of each lease) fall due as follows:

 
                                      2021        2020 
                                      GBPm        GBPm 
 
Payable within one year               19.3        20.2 
Payable in more than one year         46.5        52.7 
                                ----------  ---------- 
At 31 March                           65.8        72.9 
 
 
   15           Provisions 
 
                                          Contingent    Training 
                       Dilapidations   consideration   provision       Total 
                                GBPm            GBPm        GBPm        GBPm 
 
At 1 April 2019                  2.5            10.9           -        13.4 
Created in the year              3.1               -         3.0         6.1 
Provision utilised 
 in the year                   (1.5)               -           -       (1.5) 
Net changes in fair 
 value                             -          (10.9)           -      (10.9) 
                          ----------      ----------  ----------  ---------- 
At 31 March 2020                 4.1               -         3.0         7.1 
Created in the year              3.2               -         0.9         4.1 
Provision utilised 
 in the year                   (2.5)               -       (2.7)       (5.2) 
                          ----------      ----------  ----------  ---------- 
At 31 March 2021                 4.8               -         1.2         6.0 
 
 

Of the GBP6.0m provision at 31 March 2021, GBP3.1m (2020: GBP5.9m) is due within one year and GBP2.9m (2020: GBP1.2m) is due after one year. The dilapidations provision is calculated based on estimated dilapidations at current market rates. The total liability is discounted to current values.

In April 2020 Speedy were notified that a funding agency was suspending payments, and seeking repayment of GBP2.6m from Geason Training, based on an extrapolation of errors found in a small sample of learner documentation over a three year period from August 2017. In the year ended 31 March 2020, GBP3.0 million was provided as an exceptional charge. The claim was settled in October 2020 within the provision held. An additional provision has been recognised for GBP0.9m in relation to legal and other costs associated with ongoing initiatives to improve the Group's financial position.

Contingent consideration of between GBPnil and GBP26.0m may be payable by the Group in relation to the acquisition of Geason Training. The consideration depends on the combined performance of the acquired business and the Group's training business in the three years post acquisition. The fair value of contingent consideration as at year end is GBPnil.

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

FR DKQBKFBKDKPB

(END) Dow Jones Newswires

May 25, 2021 02:00 ET (06:00 GMT)

Speedy Hire (LSE:SDY)
Historical Stock Chart
From Aug 2021 to Sep 2021 Click Here for more Speedy Hire Charts.
Speedy Hire (LSE:SDY)
Historical Stock Chart
From Sep 2020 to Sep 2021 Click Here for more Speedy Hire Charts.