REG - Ashtead Tech Hldgs - Unaudited Half Year Results 2024
02/09/2024 07:00
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RNS Number : 4544C Ashtead Technology Holdings plc 02 September 2024
2 September 2024
Ashtead Technology Holdings plc
("Ashtead Technology" or the "Group")
Unaudited Half Year Results for the Six-Months Ended 30 June 2024
Another record trading performance with positive outlook unchanged
Ashtead Technology Holdings plc (AIM: AT.), a leading subsea equipment rental
and solutions provider for the global offshore energy sector, announces its
unaudited results for the six months ended 30 June 2024 ("HY24" or "the
period").
Financial Performance (£'m)
HY24 HY23 (restated)* % Movement
Revenue 80.5 49.8 61.4%
Gross profit 61.0 39.3 55.3%
Gross profit % 75.8% 78.8% (299)bps
Adjusted EBITDA(1) 31.4 21.1 48.6%
Adjusted EBITDA % 39.1% 42.4% (336)bps
Adjusted EBITA(2) 22.6 15.5 45.6%
Adjusted EBITA % 28.1% 31.1% (304)bps
Adjusted profit before tax(3) 19.6 14.1 38.6%
Adjusted basic earnings per share 19.1p 14.0p 36.3%
Return on Invested Capital (ROIC)(4) 25.3% 25.4% (3)bps
Leverage(5) 1.2 0.7
Additional Statutory Accounting Measures (£'m)
HY24 HY23 % Movement
(restated)*
Operating profit 20.6 15.1 36.4%
Profit before tax 17.6 13.2 33.3%
Basic earnings per share 16.7p 13.1p 27.5%
· Strong year-on-year increase in revenue (61.4%) driven
by continued high demand across both offshore renewables and offshore oil and
gas
o 16% organic growth, outperforming underlying markets, and 47% growth from
the acquisition of ACE Winches that was completed during H2 2023, with the
delta due to FX headwind
o Offshore renewables revenue increased by 41.9% to £23.1m (HY23: £16.3m)
o Offshore oil and gas revenue increased by 70.9% to £57.3m (HY23: £33.5m)
· Adjusted EBITA increased by 45.6% to £22.6m (HY23:
£15.5m) driven by top line growth with an adjusted EBITA margin of 28.1%
(HY23: 31.1%) in line with expectations
· Increased adjusted basic earnings per share of 19.1p
(HY23: 14.0p)
· Delivered ROIC of 25.3% (HY23: 25.4%), well in excess
of our cost of capital
· Robust balance sheet with net debt of £72.0m (HY23:
£26.4m) representing leverage of 1.2x (1.0x proforma)
Operational Highlights and Outlook
· Year to date investment of £16.4m in rental fleet
capital expenditure (HY23: £8.0m) with full year forecast of £30m. Organic
growth remains a key priority as we continue to expand our capabilities and
international reach
· Promoted Brett Lestrange into the newly created role of
Chief Operating Officer as we continue to strengthen the team at all levels
through the organisation. Head count increased from 527 to 559 through HY24
· ACE Winches acquisition completed in November 2023,
integration progressing well with strengthening sales pipeline into 2025 and
beyond
· M&A continues to be a key element of the strategy
as we focus on broadening both our product and services offering, and our
geographic exposure to build a platform to sustain medium term double digit
organic revenue growth
· The Board is encouraged by the Group's performance in
HY24 which gives us increased confidence on our full year 2024 outturn and our
expectations remain unchanged
Allan Pirie, Chief Executive Officer, said:
"I am extremely pleased to deliver another record trading performance as we
build on the strong momentum seen through 2023. We have continued to execute
on our strategy to expand the breadth and depth of our offering through both
organic and inorganic investment, increasing the resilience and differentiated
nature of our business model.
The outlook for our business remains positive given the strength of the global
offshore energy market and our continued investment to support longer term
growth. The Board is encouraged by the Group's performance in HY24 which
gives us increased confidence on our full year 2024 outturn and our
expectations remain unchanged."
For further information, please contact:
Ashtead Technology (via Vigo Consulting)
Allan Pirie, Chief Executive Officer
Ingrid Stewart, Chief Financial Officer
Vigo Consulting (Financial PR) Tel: +44 (0)20 7390 0230
Patrick d'Ancona ashteadtechnology@vigoconsulting.com
Finlay Thomson
Verity Snow
Numis Securities Limited (Nomad and Broker) Tel: +44 (0)20 7260 1000
Julian Cater
George Price
Kevin Cruickshank (QE)
*See Note 1 for an explanation of the prior period restatement. Negative
impact on Adjusted EBITDA and Adjusted EBITA in HY23 is £0.2m
(1)Adjusted EBITDA is defined as operating profit adjusted to add back
depreciation, amortisation, foreign exchange movements and non-trading items
as shown in Note 18 of the HY24 accounts
(2)Adjusted EBITA is defined as operating profit adjusted to add back
amortisation, foreign exchange movements and non-trading items as shown in
Note 18 of the HY24 accounts
(3)Adjusted profit before tax is defined as profit before tax adjusted to add
back amortisation, foreign exchange movements and non-trading items as shown
in Note 18 of the HY24 accounts
(4)Return on Invested Capital (ROIC) is defined as LTM(6) Adjusted EBITA
divided by Invested Capital. Invested capital is defined as average net debt
plus average equity
(5)Leverage is defined as net debt divided by LTM Adjusted EBITDA
(6)LTM is defined as latest twelve months to 30 June 2024
Notes to editors:
Ashtead Technology is a leading subsea equipment rental and solutions provider
for the global offshore energy sector. Ashtead Technology's specialist
equipment, advanced-technologies and support services enable its customers to
understand the subsea environment and manage offshore energy production
infrastructure.
The Company's service offering is applicable across the lifecycle of offshore
wind farms and offshore oil and gas infrastructure.
In the fast-growing offshore wind sector, Ashtead Technology's specialist
equipment and services are essential through the project development,
construction and installation phases. Once wind farms are operational, Ashtead
Technology supports customers with inspection, maintenance and repair ("IMR")
equipment and services. In the more mature oil and gas sector, Ashtead
Technology's focus is on IMR and decommissioning.
Headquartered in the UK, the Group operates globally, servicing customers from
its twelve facilities located in key offshore energy hubs.
Cautionary Statement
This announcement contains certain forward-looking statements, including with
respect to the Group's current targets, expectations and projections about
future performance, anticipated events or trends and other matters that are
not historical facts. These forward-looking statements, which sometimes use
words such as "aim", "anticipate", "believe", "intend", "plan", "estimate",
"expect" and words of similar meaning, include all matters that are not
historical facts and reflect the directors' beliefs and expectations, made in
good faith and based on the information available to them at the time of the
announcement. Such statements involve a number of risks, uncertainties and
assumptions that could cause actual results and performance to differ
materially from any expected future results or performance expressed or
implied by the forward-looking statement and should be treated with caution.
Any forward-looking statements made in this announcement by or on behalf of
Ashtead Technology speak only as of the date they are made. Except as
required by applicable law or regulation, Ashtead Technology expressly
disclaims any obligation or undertaking to publish any updates or revisions to
any forward-looking statements contained in this announcement to reflect any
changes in its expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is based.
CEO STATEMENT
Ashtead Technology delivered another record trading performance for the first
six months of the financial year, maintaining the strong momentum seen through
2023. We have continued to execute on our strategy to expand the breadth and
depth of our offering through both organic and inorganic investment,
increasing the resilience and differentiated nature of our business model.
Revenue growth of 61% on the prior year is split 16% organic growth and 47%
from the ACE Winches acquisition completed during H2 2023, offset by a FX
headwind. EBITDA and EBITA margins of 39% and 28% respectively are in line
with expectations and we have delivered an EPS increase of 36% over the past
12 months.
Our markets
Market dynamics remain strong with continued evidence of long-term structural
growth. Rystad's latest market forecast remains unchanged at 11% CAGR from
2023 through to 2027 with the total addressable market expected to reach close
to $3.5bn by 2027.
Ashtead Technology's customers continue to increase the size and quality of
their backlogs which are extending in duration to 2026 and beyond as evidenced
by published backlogs from our larger listed customers. This creates a
multi-year growth runway for the business.
As the offshore energy market evolves, Ashtead Technology's expanding
geographical footprint, fungible equipment fleet (>85% fungible across oil
and gas and renewables), own technology development credentials, and
increasing services capability, all position the business well to support the
growing international market.
Within oil and gas, the global market remains very buoyant with global
offshore greenfield committed capex increasing by 65% in 2023 compared to the
average of the previous eight years. Overall, Rystad forecasts a 8% CAGR in
oil and gas markets with a 5% CAGR in decommissioning spend from 2023 through
2027.
Within offshore wind, activity remains high with Rystad forecasting a 23% CAGR
market growth in the period 2023 through to 2027. The sector shows
significant promise with 2023 final investment decision (FID) activity
reaching record breaking capacity levels in Europe at 8.6GW, up from an
average 4.3GW in the previous three years despite cost inflation and higher
interest rates. Globally, excluding China, 2024 auction activity is forecast
to hit a record 64.6GW, the majority of which is in Europe. This provides
Ashtead Technology with significant confidence in the scale of the future
opportunity given our ability to provide support across the lifecycle of
offshore wind infrastructure.
Continuing organic growth investment
Our primary focus remains on organic investment which continues to deliver
strong revenue growth.
The expansion of our new survey and ROV tooling equipment operations in Norway
during 2024 to complement the acquired ACE Winches Norway operation is
progressing well with the recruitment of a local survey & robotics and ROV
tooling team to service the increasing opportunities in country.
Brett Lestrange, who has been with the business since 2017, was appointed to
the new role of Chief Operating Officer in July as we continue to strengthen
the team at all levels through the organisation. Brett joined Ashtead
Technology seven years ago and has extensive experience and a proven track
record in subsea technology. During H1 2024 we have further increased global
headcount by 6% to 559, enhancing sales and technical capability to support
future top line growth. We have also expanded our in-house learning and
development team to further invest in our people through training and
competency development.
On capital expenditure, we have invested £16.4m (HY23 £7.8m) during HY24 to
increase our rental fleet, and FY24 capital expenditure is still anticipated
to be £30m. Our acquisition of ACE Winches has significantly enhanced our
in-house design, engineering and manufacturing capability which has enabled us
to accelerate our mechanical solutions in-house capex build programme.
We continue to broaden our range of complementary equipment and services
through both in-house equipment design and supply chain partnerships,
increasing our offering to our customers and ensuring that we maintain our
market leading position.
M&A
M&A is also a key element of the strategy as we focus on broadening our
product and services offering, and geographic exposure to build a platform to
sustain medium term double digit organic revenue growth.
The ACE Winches acquisition, completed in November 2023, added critical
lifting, pulling and deployment capability to our expanding service offering.
Integration is on track, and, with the benefit of a broadened fleet our sales
teams are already seeing increasing traction with customers as we seek to
expand our packaged service offering to them.
Sustainability
At the heart of our strategy is maintaining our relevance in a changing
offshore energy market and ensuring that we support our customers, and the
wider energy sector, in achieving its energy transition targets. Offshore
renewables represented 29% of our revenues in HY24 with 42% growth on HY23
revenues. A key part of our strategy is to acquire businesses that have
traditionally serviced the oil and gas market and reposition them into
offshore renewables leveraging Ashtead Technology's customer network. ACE
Winches revenues were predominantly derived from oil and gas on acquisition
and we are already seeing an increase in renewables opportunities in the first
nine months of owning the business.
Outlook
The outlook for our business remains positive given the strength of the global
offshore energy market, our continued investment to support organic growth and
the building of our M&A pipeline. The Board is encouraged by the Group's
performance in HY24 which gives us increased confidence on our full year 2024
outturn and our expectations remain unchanged.
Allan Pirie
Chief Executive Officer
CFO STATEMENT
The Group has continued to deliver strong financial performance through HY24
with revenue growth of 61%, split 47% growth from acquisitions and 16% organic
growth, offset by a small negative impact from FX. An EBITDA margin of 39%
and EBITA margin of 28% are in line with expectations.
We grew our revenues from both renewables and oil and gas with renewables
representing 29% of our business in HY24. Renewables revenue was 42% up on
HY23, while oil and gas growth was 71%. We continue our focus on achieving
50% of our revenues from renewables within the medium term, supported by the
fungibility of our fleet and the expansion of the ACE Winches offering into
renewables, a market it has not traditionally focussed on.
Organically, we saw our European operations grow 9% compared to HY23 with
Americas growing at 12%, APAC at 19%, and Middle East significantly
outperforming at 75% revenue growth driven largely by an increase in market
activity in the region. All regions grew profits as we continue to invest in
broadening out our capability across all of our international footprint.
Gross profit
The Group achieved gross profit of £61.0m (HY23: £39.3m) and a gross profit
margin of 75.8% (HY23: 78.8%). The gross margin was in line with
expectations and the reduction primarily driven by revenue mix. Our average
annualised cost utilisation decreased slightly to 44% (HY23: 45%).
Administration costs
Administration costs (excluding depreciation, amortisation and exchange
gain/loss) for HY24 were £30.5m (HY23: £18.8m), a £11.7m increase on HY23
of which £8.4m was due to the addition of ACE Winches. Excluding ACE
Winches, the largest increase resulted from payroll as we continue to scale
the business for further growth. Our headcount at June 2024 was 559 (HY23:
289), up 270 on June 2023 of which 203 were added through the ACE Winches
acquisition.
Profitability
Adjusted EBITA of £22.6m (HY23: £15.5m) represents an EBITA margin of 28.1%
compared to 31.1% in HY23. The EBITA margin is in line with expectations
with the decrease on HY23 primarily driven by revenue mix. ROIC remains
significantly ahead of our cost of capital at 25.3%.
Finance costs of £3m (net) compares to £1.9m in HY23. HY23 costs included
a £0.5m write-off of deferred finance costs due to the refinancing which
completed in April 2023. The increase in financing costs was due to the ACE
Winches acquisition which was funded entirely through RCF draw.
Profit Before Tax of £17.6m compares to £13.2m in HY23, an increase of 33%.
The tax provision for the period was £4.3m (HY22: £2.8m) representing an
effective tax rate of 24.2% (HY23: 21.2%).
Adjusting for amortisation and exceptional costs results in an Adjusted basic
earnings per share of 19.1p which compares to 14.2p in HY23.
Cash flow and balance sheet
Net cash generated from operating activities was £9.7m, down from £12.9m in
HY23 due to working capital. Working capital represented 14% of trailing
twelve months revenues compared to 9% at June 2023. We expect working
capital to be back in line with the long term target of 10% of TTM revenues by
year end.
With the business continuing to invest in organic growth and as a result of
the final completion accounts payment for ACE Winches, there was a net
decrease in cash of £5m in HY24. Overall net debt of £72m represents
leverage of 1.2x (1.0x proforma).
Continued investment in our equipment rental fleet has resulted in an increase
in fixed asset net book value (NBV) from £69m at FY23 to £76m. Overall net
assets increased to £110.6m, up £26.2m on HY23.
Our full year dividend for 2023 was paid in May and in line with previous
periods and as the business continues its investment in growth, the Board has
not recommended an interim dividend for HY24. In line with previous guidance
the Board intends to continue its small, progressive dividend policy as part
of its full year reporting.
Prior year restatement
As noted in our FY23 annual report and accounts, the Group identified an error
in application of IAS 38 "Intangible Assets". The correction of this error has
resulted in a negligible change (<£0.1m) to HY23 profit after tax but
results in a £1.4m reduction in intangible assets in our balance sheet at
HY23. Comparatives in the HY24 accounts have been restated and further
details are given in Note 1 of the accounts.
Ingrid Stewart
Chief Financial Officer
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE
HALF-YEARLY FINANCIAL REPORT
The Directors of Ashtead Technology Holdings plc (set out on page 36 and 37 of
the latest Annual Report and Accounts) confirm that to the best of their
knowledge:
• the condensed consolidated set of financial statements
have been prepared in accordance with IAS 34 Interim Financial Reporting as
adopted for use in the UK;
• the interim management report includes a fair review of
the information required by:
(i) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
consolidated set of financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the year; and
(ii) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first six months
of the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
By order of the Board of Directors
Allan Pirie Ingrid Stewart
Chief Executive Officer Chief Financial Officer
1 September 2024 1 September 2024
Consolidated income statement
for the six-month period ended 30 June 2024
Unaudited Unaudited Audited
six months to 30 June 2024 six months to 30 June 2023 year ended 31 December 2023
(restated)*
Notes £000 £000 £000
Revenue 2 80,452 49,846 110,466
Cost of sales 2 (19,470) (10,573) (24,168)
Gross profit 2 60,982 39,273 86,298
Administrative expenses 2 (41,167) (24,339) (55,291)
Impairment loss on trade receivables 2 − (320) (501)
Other operating income 2 808 508 704
Operating profit 2 20,623 15,122 31,210
Finance income 3 83 50 283
Finance costs 3 (3,074) (1,949) (4,000)
Profit before taxation 17,632 13,223 27,493
Taxation charge 4 (4,271) (2,799) (5,914)
Profit for the financial period 13,361 10,424 21,579
Profit attributable to:
Equity shareholders of the Company 13,361 10,424 21,579
Earnings per share
Basic 5 16.7 13.1 27.0
Diluted 5 16.5 12.9 26.7
The below financial measures are Alternative Performance Measures used by
management and are not an IFRS disclosure:
Adjusted EBITDA^ 18 31,418 21,143 48,253
Adjusted EBITA^^ 18 22,579 15,506 36,224
Adjusted Profit After Tax^^^ 18 15,292 11,181 26,664
* See Note 1 for an explanation of the prior
period restatement.
^ Adjusted EBITDA is calculated as earnings before
interest, tax, depreciation, amortisation and items not considered part of
underlying trading including foreign exchange gains and losses, is an
Alternative Profit Measure used by management and is not an IFRS disclosure.
See Note 18 to the condensed consolidated interim financial statements for
calculations.
^^ Adjusted EBITA is calculated as earnings before
interest, tax, amortisation and items not considered part of underlying
trading including foreign exchange gains and losses, is an Alternative Profit
Measure used by management and is not an IFRS disclosure. See Note 18 to the
condensed consolidated interim financial statements for calculations.
^^^ Adjusted Profit After Tax is calculated as profit after
tax adjusted for amortisation and items not considered part of underlying
trading including foreign exchange gains and losses, all adjusted for tax, is
an Alternative Profit Measure used by management and is not an IFRS
disclosure. See Note 18 to the condensed consolidated interim financial
statements for calculations.
All results derive from continuing operations.
Consolidated statement of comprehensive income
for the six-month period ended 30 June 2024
Unaudited Unaudited Audited
six months to 30 June 2024 Six months to 30 June 2023 year ended
(restated)* 31 December 2023
£000 £000 £000
Profit for the period 13,361 10,424 21,579
Other comprehensive (loss)/income:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations (118) (1,098) (554)
Other comprehensive (loss)/income for the period, net of tax (118) (1,098) (554)
Total comprehensive income 13,243 9,326 21,025
Total comprehensive income attributable to:
Equity shareholders of the Company 13,243 9,326 21,025
* See Note 1 for an explanation of the prior
period restatement.
Consolidated balance sheet
at 30 June 2024
Unaudited Unaudited Audited
as at as at as at
30 June 2024 30 June 2023 31 December 2023
(restated)*
Notes £000 £000 £000
Non-current assets
Property, plant and equipment 6 76,499 34,193 68,707
Goodwill 7 77,697 65,796 77,739
Intangible assets 7 15,886 3,985 17,709
Right-of-use assets 13 2,128 2,342 2,584
Deferred tax asset 52 − 52
172,262 106,316 166,791
Current assets
Inventories 8 4,630 2,679 4,064
Trade and other receivables 9 44,925 24,616 32,015
Income tax recoverable 223 − −
Cash and cash equivalents 6,256 6,492 10,824
56,034 33,787 46,903
228,296 140,103 213,694
Total assets
Current liabilities
Trade and other payables 10 29,815 18,779 32,021
Income tax payable − 1,827 2,207
Loans and borrowings 11 20 − 23
Lease liabilities 13 970 797 1,154
30,805 21,403 35,405
Non-current liabilities
Loans and borrowings 11 75,909 30,347 69,673
Lease liabilities 13 1,313 1,723 1,656
Deferred tax liability 9,198 2,076 9,018
Provisions for liabilities 642 135 356
87,062 34,281 80,703
Total liabilities 117,867 55,684 116,108
Equity
Share capital 16 4,016 3,997 3,997
Share premium 16 14,115 14,115 14,115
Merger reserve 16 9,435 9,435 9,435
Share based payment reserve 16 3,230 1,780 2,538
Foreign currency translation reserve 16 (783) (1,209) (665)
Retained earnings 16 80,416 56,301 68,166
Total equity 110,429 84,419 97,586
228,296 140,103 213,694
Total equity and liabilities
* See Note 1 for an explanation of the prior
period restatement.
Consolidated statement of changes in equity
for the six-month period ended 30 June 2024
Share capital Share premium Merger reserve Share based payment reserve Foreign currency translation reserve Retained earnings Total
£000 £000 £000 £000 £000 £000 £000
At 1 January 2023 audited originally presented 3,979 14,115 9,435 827 (111) 47,558 75,803
Correction of error − − − − − (867) (867)
Restated balance at 1 January 2023 audited* 3,979 14,115 9,435 827 (111) 46,691 74,936
Profit for the period − − − − − 10,424 10,424
Other comprehensive loss − − − − (1,098) − (1,098)
Total comprehensive income − − − − (1,098) 10,424 9,326
Share based payment charge − − − 953 − − 953
Issue of shares 18 − − − − (18) −
Dividends paid − − − − − (796) (796)
Restated balance at 30 June 2023 unaudited* 3,997 14,115 9,435 1,780 (1,209) 56,301 84,419
Profit for the period − − − − − 11,155 11,155
Other comprehensive income − − − − 544 − 544
Total comprehensive income − − − − 544 11,155 11,699
Share based payment charge − − − 758 − − 758
Tax on share based payment charge − − − − − 710 710
At 31 December 2023 audited 3,997 14,115 9,435 2,538 (665) 68,166 97,586
Profit for the period − − − − − 13,361
13,361
Other comprehensive loss − − − − (118) − (118)
Total comprehensive income − − − − (118) 13,361 13,243
Share based payment charge − − − 692 − − 692
Tax on share based payment charge − − − − − (209) (209)
Issue of shares 19 − − − − (19) −
Dividends paid − − − − − (883) (883)
At 30 June 2024 unaudited 4,016 14,115 9,435 3,230 (783) 80,416 110,429
* See Note 1 for an explanation of the prior
period restatement.
Consolidated cash flow statement
for the six-month period ended 30 June 2024
Unaudited Unaudited Audited
six months to 30 June 2024 six months to 30 June 2023 year ended
(restated)* 31 December 2023
Notes £000 £000 £000
Cash generated from operating activities
Profit before taxation 17,632 13,223 27,493
Adjustments to reconcile profit before taxation to net cash from operating
activities
Finance income 3 (83) (50) (283)
Finance costs 3 3,074 1,949 4,000
Depreciation 6, 13 8,839 5,637 12,029
Amortisation 7 1,823 597 1,431
Gain on sale of property, plant and equipment (807) (508) (704)
Share based payment charges 961 1,281 2,496
Provision for bad debts movement − − 514
Provision for liabilities 287 24 48
Cash generated before changes in working capital 31,726 22,153 47,024
Increase in inventories (571) (848) (157)
Increase in trade and other receivables (13,096) (5,398) (2,120)
Increase in trade and other payables 909 818 4,082
Cash inflow from operations 18,968 16,725 48,829
Interest paid (2,837) (1,257) (3,064)
Tax paid (6,410) (2,535) (6,717)
Net cash generated from operating activities 9,721 12,933 39,048
Cash flow used in investing activities
Purchase of property, plant and equipment (16,611) (7,780) (19,459)
Proceeds from customer loss/damage of assets held for rental 1,227 818 1,428
Acquisition of subsidiary undertakings net of cash acquired (3,897) (1,674) (51,183)
Interest received 83 50 283
Net cash used in investing activities (19,198) (8,586) (68,931)
Cash flow generated from/(used in) financing activities
Loans received 11,300 2,014 62,014
Transaction fees on loans received (189) (1,241) (1,241)
Repayment of bank loans (5,000) (5,628) (26,587)
Payment of lease liability (772) (628) (1,199)
Payment of finance lease liability (11) − (2)
Dividends paid (883) (796) (796)
Net cash generated from/(used in) financing activities 4,445 (6,279) 32,189
Net (decrease)/increase in cash and cash equivalents (5,032) (1,932) 2,306
Cash and cash equivalents at beginning of the period 10,824 9,037 9,037
Net foreign exchange difference 464 (613) (519)
Cash and cash equivalents at end of the period 6,256 6,492 10,824
* See Note 1 for an explanation of the prior
period restatement.
Notes to the consolidated interim financial statements
1. General information
Background
Ashtead Technology Holdings plc (the "Company") is a public limited company
incorporated in the United Kingdom under the Companies Act 2006, whose shares
are traded on AIM. The condensed consolidated interim financial statements
of the Company for the six-month period ended 30 June 2024 comprise the
Company and its interest in subsidiaries (together referred to as the
"Group"). The Company is domiciled in the United Kingdom and its registered
address is 1 Gateshead Close, Sunderland Road, Sandy, Bedfordshire, SG19 1RS,
United Kingdom. The Company registration number is 13424040.
Basis of preparation
The annual consolidated financial statements of Ashtead Technology Holdings
plc will be prepared in accordance with UK-adopted International Accounting
Standards. These condensed consolidated interim financial statements for the
six-month period ended 30 June 2024 have been prepared in accordance with UK
adopted International Accounting Standard ("IAS") 34, 'Interim Financial
Reporting' and the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
The financial information for the six-month period ended 30 June 2024 is
unaudited. It does not constitute statutory financial statements within the
meaning of Section 434 of the Companies Act 2006. This report should be read
in conjunction with the Group's Annual Report and Accounts as at and for the
year ended 31 December 2023 ("last Annual Report and Accounts"), which were
prepared in accordance with UK-adopted International Accounting Standards.
The last Annual Report and Accounts have been filed with the Registrar of
Companies and are available from the Group's website
(www.ashtead-technology.com (http://www.ashtead-technology.com) ). The
auditors' report on those accounts was unqualified, did not draw attention to
any matters by way of emphasis, and did not contain a statement under 498(2)
or 498(3) of the Companies Act 2006.
The condensed consolidated interim financial statements unless otherwise
stated are presented in sterling, to the nearest thousand. The functional
currency of the Group is sterling.
The condensed consolidated interim financial statements were approved by the
Board of Directors on 1 September 2024.
Prior period adjustment
During 2023, management has re-evaluated the impact of the IFRIC guidance
released during the prior year relating to accounting for cloud-based Software
as a Service ("SaaS") arrangements. This guidance was incorrectly applied in
2022, resulting in costs associated with a cloud-based SaaS being capitalised
and not expensed as incurred in the consolidated income statement.
During the first half of 2023, £269,000 was capitalised and amortisation of
£263,000 was charged. The H1 2023 Consolidated Income Statement and the
Consolidated Cash Flow Statement have been restated to recognise the impact of
£269,000 SaaS costs being recognised as an operating expense and the reversal
of £263,000 amortisation. The H1 2023 Consolidated Balance Sheet has been
restated to derecognise the impact of previously capitalised SaaS costs. A
summary of the impact, including taxation, is included in the following table:
H1 2023 (previously reported) Restatement H1 2023 Restated
£000 £000 £000
Consolidated income statement
Administrative expenses (24,323) (16) (24,339)
Operating profit 15,138 (16) 15,122
Profit before taxation 13,239 (16) 13,223
Taxation charge (2,799) - (2,799)
Profit for the financial year 10,440 (16) 10,424
Basic earnings per share (pence) 13.1 - 13.1
Diluted earnings per share (pence) 12.9 - 12.9
Consolidated balance sheet
Intangible assets 5,387 (1,402) 3,985
Trade and other receivables 24,298 318 24,616
Total assets 141,187 (1,084) 140,103
Income tax payable 1,863 (36) 1,827
Deferred tax liability 2,241 (165) 2,076
Total liabilities 55,885 (201) 55,684
Retained earnings 57,184 (883) 56,301
Total equity 85,302 (883) 84,419
Total equity and liabilities 141,187 (1,084) 140,103
Consolidated cash flow statement
Profit before taxation 13,239 (16) 13,223
Amortisation 860 (263) 597
Cash generated before changes in working capital 22,432 (279) 22,153
Increase in trade and other receivables (5,408) 10 (5,398)
Cash inflow from operations 16,994 (269) 16,725
Net cash generated from operating activities 13,202 (269) 12,933
Purchase of computer software (269) 269 -
Net cash used in investing activities (8,855) 269 (8,586)
Accounting policies
The condensed consolidated interim financial statements have been prepared in
accordance with the accounting policies set out on pages 69-77 of the last
Annual Report and Accounts.
Taxation
Tax on income in the interim periods are accrued using management's best
estimate of the weighted average annual tax rate that would be applicable to
expected total annual earnings.
Critical accounting judgements and estimates
In preparing these condensed consolidated interim financial statements,
management has made judgements, estimates and assumptions that affect the
application of the accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to estimates are recognised prospectively.
The area of judgement and estimate which has the greatest potential effect on
the amounts recognised in these financial statements is the provision for bad
debts. This is consistent with matters disclosed on page 77 of the last
Annual Report and Accounts.
Standards, amendments, and interpretations not yet effective
A number of amendments and interpretations have been issued which are not
expected to have any significant impact on the accounting policies and
reporting.
Standards and amendments effective for the period
There are no new or amended standards or interpretations from 1 January 2024
onwards that have a significant impact on the accounting policies and
reporting.
Going concern
These condensed consolidated financial statements of the Group are prepared on
a going concern basis. The Directors of the Group assert that the
preparation of the condensed consolidated financial statements on a going
concern basis is appropriate, which is based upon a review of the future
forecast performance of the Group for an eighteen-month period ending 31
December 2025.
During the six months ended 30 June 2024 the Group has continued to generate
positive cash flow from operating activities, has a cash and cash equivalents
balance of £6,256,000 at 30 June 2024 (31 December 2023: £10,824,000) and
access to a multi currency RCF with total commitments of £100,000,000. In
addition, the Group has the ability to call upon an additional accordion
facility of £50,000,000 subject to credit approval. The RCF and accordion
facility expire in April 2028. As at 30 June 2024 the RCF had an undrawn
balance of £23,063,000 and the £50,000,000 accordion facility was undrawn.
The Facility Agreement is subject to a leverage covenant of 3.0x and an
interest cover covenant of 4:1, which are both to be tested on a quarterly
basis. The Group has complied with all covenants from entering the Facility
Agreement until the date of these financial statements.
The Group monitors its funding and liquidity position throughout the period to
ensure it has sufficient funds to meet its ongoing cash requirements. Cash
forecasts are produced based on a number of inputs such as estimated revenues,
margins, overheads, collection and payment terms, capex requirements and the
payment of interest and capital on its existing debt facilities.
Consideration is also given to the availability of bank facilities. In
preparing these forecasts, the Directors have considered the principal risks
and uncertainties to which the business is exposed.
Taking account of reasonable changes in trading performance and bank
facilities available, the application of severe but plausible downside
scenarios to the forecasts, the cash forecasts prepared by management and
reviewed by the Directors indicate that the Group is cash generative and has
adequate financial resources to continue to trade for the foreseeable future
and to meet its obligations as they fall due.
2. Segmental analysis
The Chief Operating Decision Maker (CODM) is determined as the Group's Board
of Directors. The Group's Board of Directors reviews the internal management
reports of each geographic region monthly as part of the monthly management
reporting. The operations within each of the regional segments display
similar economic characteristics. There are no reportable segments which
have been aggregated for the purpose of the disclosure of segment information.
The Group operates in the following four geographic regions, which have been
determined as the Group's reportable segments. The operations of each
geographic region are similar.
· Europe
· Americas
· Asia-Pacific
· Middle East
Unaudited for the six-month period ended 30 June 2024
Europe Americas Asia Middle Head
Pacific East Office Total
£000 £000 £000 £000 £000 £000
Total revenue 55,969 12,256 6,831 5,396 - 80,452
Cost of sales (12,806) (3,841) (1,402) (1,421) - (19,470)
-------- -------- -------- -------- -------- --------
Gross profit 43,163 8,415 5,429 3,975 - 60,982
Administrative expenses (18,482) (3,786) (1,636) (1,106) (5,465) (30,475)
Other operating income** 482 177 70 79 - 808
-------- -------- -------- -------- -------- --------
Operating profit before depreciation, amortisation and foreign exchange 25,163 4,806 3,863 2,948 (5,465) 31,315
gain/(loss)
Foreign exchange loss (30)
Depreciation (8,839)
Amortisation (1,823)
--------
Operating profit 20,623
Finance income 83
Finance costs (3,074)
--------
Profit before taxation 17,632
Taxation charge
(4,271)
--------
Profit for the financial period 13,361
--------
176,080 21,842 12,347 10,507 7,520 228,296
Total assets
27,535 4,897 1,722 1,071 82,642 117,867
Total liabilities
Unaudited for the six-month period ended 30 June 2023
Europe Americas Asia Middle Head Office Total
Pacific East (restated)* (restated)*
£000 £000 £000 £000 £000 £000
Total revenue 32,675 8,775 5,314 3,082 - 49,846
Cost of sales (6,191) (2,846) (945) (591) - (10,573)
-------- -------- -------- -------- -------- --------
Gross profit 26,484 5,929 4,369 2,491 - 39,273
Administrative expenses (8,624) (2,781) (1,805) (751) (4,831) (18,792)
Other operating income** 313 51 126 18 - 508
-------- -------- -------- -------- -------- --------
Operating profit before depreciation, amortisation and foreign exchange 18,173 3,199 2,690 1,758 (4,831) 20,989
gain/(loss)
Foreign exchange gain 367
Depreciation (5,637)
Amortisation (597)
--------
Operating profit 15,122
Finance income 50
Finance costs (1,949)
--------
Profit before taxation 13,223
Taxation charge
(2,799)
--------
Profit for the financial period 10,424
--------
100,084 16,392 10,233 5,601 7,793 140,103
Total assets
17,678 4,662 2,038 837 30,469 55,684
Total liabilities
* See Note 1 for an explanation of the prior
period restatement.
** Other operating income relates to the gain on sale of
property, plant and equipment and arises from compensation from third parties
for items of property, plant and equipment that were lost, given up or damaged
beyond repair by customers. The gross compensation proceeds are disclosed in
the consolidated cash flow statement.
Audited for the year ended 31 December 2023
Asia Middle Head Office
Europe Americas Pacific East Total
£000 £000 £000 £000 £000 £000
Total revenue 71,601 19,343 11,186 8,336 - 110,466
Cost of sales (13,730) (5,646) (2,140) (2,652) - (24,168)
-------- -------- -------- -------- -------- --------
Gross profit 57,871 13,697 9,046 5,684 - 86,298
Administrative expenses (18,909) (6,516) (3,950) (1,978) (11,208) (42,561)
Other operating income** 374 53 208 69 - 704
-------- -------- -------- -------- -------- --------
Operating profit before depreciation, amortisation and foreign exchange 39,336 7,234 5,304 3,775 (11,208) 44,441
gain/(loss)
Foreign exchange gain 229
Depreciation (12,029)
Amortisation (1,431)
--------
Operating profit 31,210
Finance income 283
(4,000)
Finance costs
--------
Profit before taxation 27,493
Taxation charge (5,914)
--------
Profit for the financial period 21,579
--------
167,063 17,293 9,991 7,012 12,335 213,694
Total assets
30,051 5,966 2,413 1,853 75,825 116,108
Total liabilities
Central administrative expenses represent expenditures which are not directly
attributable to any single operating segment. The expenditure has not been
allocated to individual operating segments.
The revenues generated by each geographic segment almost entirely comprise
revenues generated in a single country. Revenues in the Europe, Americas, Asia
Pacific and Middle East segments are almost entirely generated in the UK, USA,
Singapore and UAE respectively. Revenues generated outside of these
jurisdictions are not material to the Group. The basis for the allocation of
revenues to individual countries is dependent upon the facility from which the
equipment is provided.
No single customer or group of customers under common control account for 15%
or more of Group revenue.
The carrying value of non-current assets, other than deferred tax assets,
split by the country in which the assets are held is as follows:
Unaudited Unaudited
as at 30 June as at 30 June Audited
2024 2023 as at 31 December
(restated)* 2023
£000 £000 £000
UK 142,128 82,855 141,745
USA 14,596 11,456 13,111
Singapore 8,664 7,932 7,665
UAE 6,822 4,073 4,218
* See Note 1 for an explanation of the prior
period restatement.
** Other operating income relates to the gain on sale of
property, plant and equipment and arises from compensation from third parties
for items of property, plant and equipment that were lost, given up or damaged
beyond repair by customers. The gross compensation proceeds are disclosed in
the consolidated cash flow statement.
3. Finance income and costs
Unaudited Unaudited Audited
six months to 30 June 2024 six months to 30 June 2023 year ended
31 December 2023
Finance income £000 £000 £000
Bank interest receivable 83 50 283
Unaudited Unaudited Audited
six months to 30 June 2024 six months to 30 June 2023 year ended
31 December 2023
Finance costs £000 £000 £000
Interest on bank loans (held at amortised cost) 2,788 1,236 3,069
Amortisation of deferred finance costs 171 650 805
Interest expense on lease liability (Note 13) 60 63 124
Other interest and charges 55 - 2
3,074 1,949 4,000
4. Tax
The tax expense for the six-month period ended 30 June 2024 is based upon
management's best estimate of the weighted average annual tax rate expected
for each jurisdiction for the full year ending 31 December 2024 applied to the
profit before tax for the interim period. The effective tax rate for the
six-month period ended 30 June 2024 is 24.2% and the income tax expense is
lower than the standard UK rate of 25% for the period due to lower tax rates
in overseas jurisdictions. The effective tax rate for the year ended 31
December 2023 was 21.5% and the income tax expense was lower than the standard
UK rate of 23.5% during 2023 (19% to 31 March 2023 increasing to 25% from 1
April 2023) due to lower tax rates in overseas jurisdictions.
5. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of Ordinary Shares in
issue during the period.
Diluted earnings per share
For diluted earnings per share, the weighted average number of Ordinary Shares
in issue is adjusted to assume conversion of all potentially dilutive Ordinary
Shares. The Group has potentially dilutive Ordinary Shares arising from
share options granted to employees under the share schemes as detailed in Note
15 of these condensed consolidated interim financial statements.
Adjusted earnings per share
Earnings attributable to ordinary shareholders of the Group for the period,
adjusted to remove the impact of adjusting items and the tax impact of these,
divided by the weighted average number of Ordinary Shares outstanding during
the period.
Unaudited Unaudited Unaudited Unaudited Audited Audited
Adjusted Statutory Adjusted Statutory Adjusted Statutory
Six months Six months to 30 June 2024 Six months Six months to 30 June 2023 Year ended 31 December 2023 Year ended
to 30 June 2024 to 30 June 2023 (restated)* 31 December 2023
(restated)*
Earnings attributable to equity shareholders of the Group:
Profit for the period (£000) 15,292** 13,361 11,181** 10,424 26,664** 21,579
Number of shares:
Weighted average number of Ordinary Shares at period end 80,098,710 80,098,710 79,798,317 79,798,317 79,873,733 79,873,733
Add dilutive effect of share based payment plans 1,112,794 1,112,794 1,019,564 1,019,564 1,095,629 1,095,629
Weighted average number of Ordinary Shares for calculating diluted earnings 81,211,504 81,211,504 80,817,881 80,817,881 80,969,362 80,969,362
per share at period end
Earnings per share attributable to equity holders of the Group - continuing
operations:
Basic earnings per share (pence) 19.1 16.7 14.0 13.1 33.4 27.0
Diluted earnings per share (pence) 18.8 16.5 13.8 12.9 32.9 26.7
* See Note 1 for an explanation of the prior
period restatement.
** Refer to Note 18 for the reconciliation of
Alternative Performance Measures.
6. Property, plant and equipment
Assets held for rental Assets Leasehold improvements Freehold property Fixtures and fittings Motor vehicles Total
under construction
£000 £000 £000 £000 £000 £000 £000
Cost:
At 1 January 2023 audited 129,073 - 2,365 197 4,531 339 136,505
Additions 8,033 - 24 - 192 - 8,249
Disposals (4,487) - - - (6) - (4,493)
Foreign exchange movements (2,347) - (43) - (78) (1) (2,469)
At 30 June 2023 unaudited 130,272 - 2,346 197 4,639 338 137,792
Acquisitions 25,870 1,356 − 3,432 446 61 31,165
Fair value adjustment on acquisitions (798) - (486) 365 (16) (1,844)
(909)
Additions 11,104 59 18 - 194 - 11,375
Disposals (6,225) - (196) - (199) (9) (6,629)
Foreign exchange movements 439 - 12 1 22 2 476
At 31 December 2023 audited 160,662 506 2,180 3,144 5,467 376 172,335
Additions 15,201 1,168 − 249 246 − 16,864
Disposals (2,150) - − − (102) (21) (2,273)
Foreign exchange movements (1,357) - (14) 114 (1) (10) (1,268)
At 30 June 2024 unaudited 172,356 1,674 2,166 3,507 5,610 345 185,658
Accumulated depreciation:
At 1 January 2023 audited (98,956) - (1,829) (76) (3,597) (235) (104,693)
Charge for the period (4,799) - (114) (4) (179) (18) (5,114)
Disposals 4,178 - - - 5 - 4,183
Foreign exchange movements 1,929 - 36 1 61 (2) 2,025
At 30 June 2023 unaudited (97,648) - (1,907) (79) (3,710) (255) (103,599)
Charge for the period (5,475) - (110) (22) (199) (19) (5,825)
Disposals 5,811 - 196 - 163 8 6,178
Foreign exchange movements (344) - (10) - (27) (1) (382)
At 31 December 2023 audited (97,656) - (1,831) (101) (3,773) (267) (103,628)
Charge for the period (7,563) - (79) (20) (510) (23) (8,195)
Disposals 1,849 - - - 97 21 1,967
Foreign exchange movements 666 - 12 17 (1) 3 697
At 30 June 2024 unaudited (102,704) - (1,898) (104) (4,187) (266) (109,159)
Net book value:
At 31 December 2022 audited 30,117 - 536 121 934 104 31,812
At 30 June 2023 unaudited 32,624 - 439 118 929 83 34,193
At 31 December 2023 audited 63,006 506 349 3,043 1,694 109 68,707
At 30 June 2024 unaudited 69,652 1,674 268 3,403 1,423 79 76,499
7. Goodwill and intangible assets
Goodwill Customer relationships Trade name Non-compete arrangements Documented processes Computer software Total
£000 £000 £000 £000 £000 (restated)* £000
£000
Cost: 66,043 8,863 − 482 − 2,647 78,035
Restated at 1 January 2023 audited*
Additions − − − − − − −
Foreign exchange movements (247) − − − − − (247)
At 30 June 2023 unaudited 65,796 8,863 482 − 2,647 77,788
−
Acquisitions 11,900 8,503 544 4,134 1,377 − 26,458
Additions − − − − − − −
Foreign exchange movements 43 − − − − − 43
At 31 December 2023 audited 77,739 17,366 4,616 1,377 2,647 104,289
544
Additions − − − − − − −
Foreign exchange movements (42) − − − − − (42)
At 30 June 2024 unaudited 77,697 17,366 544 4,616 1,377 2,647 104,247
Amortisation:
Restated at 1 January 2023 audited* − (4,548) − (215) − (2,647) (7,410)
Charge for the period − (549) − (48) − − (597)
Foreign exchange movements − − − − − − −
At 30 June 2023 unaudited − (5,097) − (263) − (2,647) (8,007)
Charge for the period − (687) (23) (113) (11) − (834)
Foreign exchange movements − − − − − − −
At 31 December 2023 audited − (5,784) (23) (376) (11) (2,647) (8,841)
Charge for the period − (1,159) (136) (459) (69) − (1,823)
Foreign exchange movements − − − − − − −
At 30 June 2024 unaudited − (6,943) (159) (835) (80) (2,647) (10,664)
Net book value:
Restated at 31 December 2022 audited* 66,043 4,315 − 267 − − 70,625
Restated at 30 June 2023 unaudited* 65,796 3,766 − 219 − − 69,781
At 31 December 2023 audited 77,739 11,582 521 4,240 1,366 − 95,448
At 30 June 2024 unaudited 77,697 10,423 385 3,781 1,297 − 93,583
* See Note 1 for an explanation of the prior
period restatement.
Goodwill has arisen on the acquisition of the following subsidiaries: Amazon
Group Limited (the parent company of the existing Ashtead Technology Group at
the time of acquisition in April 2016), TES Survey Equipment Services LLC,
Welaptega Marine Limited, Aqua-Tech Solutions LLC and its subsidiary Alpha
Subsea LLC, Underwater Cutting Solutions Limited, WeSubsea AS and its
subsidiary WeSubsea UK Limited, Hiretech Limited and Rathmay Limited and its
subsidiaries Alfred Cheyne Engineering Limited, ACE Winches Inc, ACE Winches
DMCC and ACE Winches Norge AS, as well as the acquisition of the trade and
assets of Forum Subsea Rentals, a division of Forum Energy Technologies (UK)
Limited, Forum Energy Asia Pacific PTE Ltd and Forum US, Inc.
The Group tests annually for impairment, or more frequently if there are
indicators that goodwill might be impaired.
For each of the operating segments to which goodwill has been allocated, the
recoverable amount has been determined on the basis of a value in use
calculation. In each case, the value in use was found to be greater than the
carrying amount of the group of CGUs to which the goodwill has been
allocated. Accordingly, no impairment to goodwill has been recognised. The
value in use has been determined by discounting future cash flows forecast to
be generated by the relevant regional segment. The key assumptions on which
management has based its cash flow projections are the same as those used in
the last Annual Report and Accounts.
8. Inventories
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
£000 £000 £000
Raw materials and consumables 4,630 2,679 4,064
The cost of inventories recognised as an expense and included in cost of sales
during the period was £4,657,000 (H1 2023: £3,282,000). The impairment
gain recognised as an expense during the period was £3,000 (H1 2023:
£54,000 loss).
9. Trade and other receivables
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
(restated)*
£000 £000 £000
Trade receivables 31,758 21,959 23,139
Prepayments 4,048 1,704 2,815
Contract assets − − 473
Accrued income 9,119 953 5,588
44,925 24,616 32,015
* See Note 1 for an explanation of the prior
period restatement.
The Directors consider that the carrying amount of trade receivable and
accrued income approximates to fair value. The impairment gain recognised as
an expense during the period was £14,000 (H1 2023: £320,000 loss).
10. Trade and other payables
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
£000 £000 £000
Trade payables 10,258 4,990 9,721
Accruals 19,557 13,789 22,300
29,815 18,779 32,021
The Directors consider that the carrying amount of trade and other payables
equates to fair value. The amounts due to related parties bear no interest
and are due on demand.
11. Loans and borrowings
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
Current £000 £000 £000
Bank loans (held at amortised cost) − − −
Finance lease liability 20 − 23
20 − 23
Non-current
Bank loans (held at amortised cost) 75,909 30,347 69,665
Finance lease liability − − 8
75,909 30,347 69,673
At 30 June 2024 the bank loans comprise a revolving credit facility of
£76,937,000 (H1 2023: £31,512,000) (of which (£3,937,000 is denominated in
USD (H1 2023: £5,512,000)) which during the period carried interest at SONIA
plus 2.25%. The interest margin fluctuates between 2.25% and 3.25% depending
on leverage. The lenders are ABN AMRO Bank N.V., Citibank N.A., Clydesdale
Bank plc and HSBC Bank plc. The Facility Agreement is subject to a leverage
covenant of 3.0x and an interest cover covenant of 4:1. The total
commitments are £100,000,000 for the RCF with an additional £50,000,000
accordion facility available subject to credit approval. As at 30 June 2024
the RCF had an undrawn balance of £23,063,000 (H1 2023: £68,488,000) and the
£50,000,000 accordion facility was undrawn (H1 2023: £50,000,000). A
non-utilisation fee representing 35% of the applicable margin (being 0.7875%
during the period) is charged on the non-utilised element of the RCF
facility. The revolving credit facility is fully repayable by April 2028.
Certain companies within the Group are party to cross guarantees with respect
to bank loans totalling £76,937,000 (H1 2023: £31,512,000) advanced to
Ashtead Technology Limited and Ashtead Technology Offshore Inc. The lenders
have a floating charge over the assets of certain entities within the Group.
At 30 June 2024 the finance lease liability of £20,000 (H1 2023: £nil)
relates to the financing of certain IT equipment and carried interest at a
fixed rate of 6.67%. The lender is Wesleyan Bank and will be repaid in full
by May 2025.
Bank loans are repayable as follows:
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
£000 £000 £000
Within one year − − −
Within one to two years − − −
Within two to three years − − −
Within three to four years 76,937 31,512 −
Within four to five years − − 70,675
76,937 31,512 70,675
Deferred finance costs (1,028) (1,165) (1,010)
75,909 30,347 69,665
Finance lease liability is repayable as follows:
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
£000 £000 £000
Within one year 20 − 23
Within one to two years − − 8
20 − 31
12. Financing liabilities reconciliation
Audited Cash flows Interest (paid) / received Other Changes in exchange rates Unaudited
1 January 2023 non-cash changes 30 June 2023
£000 £000 £000 £000 £000 £000
Cash at bank and in hand 9,037 (1,933) − − (612) 6,492
(34,865) 4,855 − (650) 313 (30,347)
Bank loans
(2,856) 628 63 (171) (184) (2,520)
Lease liabilities
Net debt (28,684) 3,550 63 (821) (483) (26,375)
The non-cash movement relates to the amortisation of deferred finance costs,
accrual of finance costs on lease liability and the addition of new leases
during the period.
Unaudited Cash flows Acquisitions Interest (paid) / received Other Changes in exchange rates Audited
30 June 2023 non-cash changes 31 December 2023
£000 £000 £000 £000 £000 £000 £000
Cash at bank and in hand 6,492 (5,826) 10,065 283 (283) 93 10,824
(30,347) (39,041) − (3,062) 2,907 (122) (69,665)
Bank loans
Lease liabilities (2,520) 571 (220) (63) (775) 197 (2,810)
- 2 (33) (2) 2 - (31)
Finance lease liability
Net debt (26,375) (44,294) 9,812 (2,844) 1,851 168 (61,682)
The non-cash movement relates to the amortisation of deferred finance costs,
accrual of finance costs on lease liability and the addition of new leases
during the period.
Audited Cash flows Interest (paid) / received Other Changes in exchange rates Unaudited
31 December 2023 non-cash changes 30 June 2024
£000 £000 £000 £000 £000 £000
Cash at bank and in hand 10,824 (5,033) 29 (29) 465 6,256
(69,665) (6,111) (2,782) 2,611 38 (75,909)
Bank loans
(2,810) 772 − (262) 17 (2,283)
Lease liabilities
(31) 11 (1) 1 - (20)
Finance lease liability
Net debt (61,682) (10,361) (2,754) 2,321 520 (71,956)
The non-cash movement relates to the amortisation of deferred finance costs,
accrual of finance costs on lease liability and the addition of new leases
during the period.
13. Leases
Leases as lessee
The Group leases warehouses, offices, and other facilities in different
locations (UK, UAE, Singapore, Canada, USA, Norway). The lease terms range
from 2 to 15 years with an option to renew available for some of the leases.
The Group has elected not to recognise right-of-use assets and lease
liabilities for leases that are short-term and/or of low-value items. The
Group recognises the lease payments associated with these leases as an expense
on a straight-line basis over the lease term.
Further information about leases is presented below:
a) Amounts recognised in consolidated balance sheet
Right-of-use assets £000
Balance at 1 January 2023 audited 2,631
Additions to right-of-use assets 108
Depreciation charge for the period (523)
Effects of movements in exchange rates 126
------
Balance at 30 June 2023 unaudited 2,342
------
Additions to right-of-use assets 962
Depreciation charge for the period (567)
Effects of movements in exchange rates (153)
------
Balance at 31 December 2023 audited 2,584
------
Additions to right-of-use assets 202
Depreciation charge for the period (644)
Effects of movements in exchange rates (14)
------
Balance at 30 June 2024 unaudited 2,128
------
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
Lease liabilities: £000 £000 £000
Current 970 797 1,154
Non-current 1,313 1,723 1,656
Total lease liabilities 2,283 2,520 2,810
b) Amounts recognised in the income statement
Unaudited Unaudited Audited
six months to 30 June 2024 six months to 30 June 2023 year ended
31 December 2023
£000 £000 £000
Depreciation charge 644 523 1,090
Interest expense on lease liability 60 63 124
Expenses relating to short-term leases 154 119 254
Total amount recognised in the income statement 858 705 1,468
c) Amounts recognised in the cash flow statement
Unaudited Unaudited Audited
six months to 30 June 2024 six months to 30 June 2023 year ended
31 December 2023
£000 £000 £000
Total cash payments for leases 832 691 1,323
14. Capital commitments
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
£000 £000 £000
Capital expenditure contracted for but not provided 11,806 9,364 4,307
15. Share based payments
IPO LTIP Awards
The IPO LTIP awards were granted on 5 September 2022 and comprise three equal
tranches, with the first tranche vested on the publication of the annual
report for the year ended 31 December 2022, the second tranche vested on the
publication of the annual report for the year ended 31 December 2023 and the
third tranche vesting on the publication of the annual report for the year
ended 31 December 2024. Certain senior managers from various Group companies
are eligible for nil cost share option awards with Ashtead Technology Holdings
plc granting the awards. On exercise, the awards will be equity settled with
Ordinary Shares in Ashtead Technology Holdings plc. The IPO LTIP share
awards vesting is subject to the achievement of a target annual Adjusted EPS
and participants remaining employed by the Group over the vesting period.
The outstanding number of IPO LTIP awards at 30 June 2024 is 378,279 (30 June
2023: 1,011,329).
Share based payments Tranche 1 Tranche 2 Tranche 3
Valuation model Black-Scholes Black-Scholes Black-Scholes
Weighted average share price (pence) 260.5 260.5 260.5
Exercise price (pence) 0 0 0
Expected dividend yield 0.76% 0.81% 0.85%
Expected volatility 41.93% 41.93% 41.93%
Risk-free interest rate 2.79% 3.14% 3.04%
Expected term (years) 0.67 1.67 2.67
Weighted average fair value (pence) 259.2 257.0 254.7
Attrition 5% 5% 5%
Weighted average remaining contractual life (years) 8.17 8.17 8.17
The expected volatility has been calculated using the Group's historical
market data history since IPO in 2021.
Share based payments Number of shares Weighted average exercise price (£)
Outstanding at beginning of the period 1,011,329 −
Granted − −
Exercised (633,070) £7.595
Forfeited − −
Outstanding at the end of the period 378,259 −
Exercisable at the end of the period 12,346 −
Share-based payments expense recognised in the consolidated income statement
during the period was £488,000 (H1 2023: £1,185,000), inclusive of
employer's national insurance contributions of £123,000 (H1 2023:
£214,000).
2023 LTIP Awards
The first 2023 LTIP scheme awards were granted on 4 May 2023, with vesting on
the announcement of the annual results for the year ended 31 December 2025.
Certain senior managers from various Group companies are eligible for nil cost
share option awards with Ashtead Technology Holdings plc granting the awards
and on exercise, the awards will be equity settled with Ordinary Shares in
Ashtead Technology Holdings plc. The share awards vesting is subject to the
achievement of agreed Adjusted EPS, ROIC and Total Shareholder Return ("TSR")
targets and participants remaining employed by the Group over the vesting
period. On 16 April 2024 new awards were granted under the 2023 LTIP scheme
and will vest on the announcement of the annual results for the year ended 31
December 2026.
The outstanding number of awards at 30 June 2024 is 664,605 (30 June 2023:
438,622).
Share based payments EPS ROIC TSR
Valuation model Black-Scholes Black-Scholes Monte Carlo
Weighted average share price (pence) 379.0 / 687.0 379.0 / 687.0 379.0 / 687.0
Exercise price (pence) 0 0 0
Expected dividend yield 0.0% 0.0% 0.0%
Expected volatility 40.17% / 39.01% 40.17% / 39.01% 40.17% / 39.01%
Risk-free interest rate 3.71% / 4.31% 3.71% / 4.31% 3.71% / 4.31%
Expected term (years) 3.02 / 3.06 3.02 / 3.06 3.02 / 3.06
Weighted average fair value (pence) 379.0 / 687.0 379.0 / 687.0 298.0 / 544.0
Attrition 5% 5% 5%
Weighted average remaining contractual life (years) 8.84 / 9.79 8.84 / 9.79 8.84 / 9.79
The expected volatility has been calculated using the Group's historical
market data history since IPO in 2021.
Share based payments Number of shares Weighted average exercise price (£)
Outstanding at beginning of the period 438,622 −
Granted 225,983 −
Exercised − −
Forfeited − −
Outstanding at the end of the period 664,605 −
Exercisable at the end of the period − −
Share-based payments expense recognised in the consolidated income statement
during the period was £473,000 (H1 2023: £94,000), inclusive of employer's
national insurance contributions of £115,000 (H1 2023: £13,000).
16. Share capital and reserves
The Group considers its capital to comprise its called up share capital, share
premium, merger reserve, share based payment reserve, retained earnings and
foreign exchange translation reserve. Quantitative detail is shown in the
consolidated statement of changes in equity. The Directors' objective when
managing capital is to safeguard the Group's ability to continue as a going
concern in order to provide returns for the shareholders and benefits for
other stakeholders.
Called up share capital Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
Allotted, called up and fully paid No. £000 No. £000 No. £000
Ordinary shares of £0.05 each 80,313,838 4,016 79,947,919 3,997 79,947,919 3,997
4,016 3,997 3,997
Ordinary share capital represents the number of shares in issue at their
nominal value. The holders of Ordinary Shares are entitled to receive
dividends as declared from time to time and are entitled to one vote per share
at meetings of the Company.
On 16 April 2024, the Company issued 365,919 newly authorised shares at a
subscription price of £0.05 (being the nominal value) to the Employee Benefit
Trust in anticipation of the vesting of the second tranche of IPO LTIP share
options. The shares are held by the Employee Benefit Trust on the behalf of
certain option holders and are non-voting until each of the option holders
choose to exercise their options at which point they are transferred to the
option holder and become voting shares. As of 30 June 2024, 12,346 shares
(H1 2023: 279,497) were held by the Company's Employee Benefit Trust.
Share premium
Share premium represents the amount over the par value which was received by
the Group upon the sale of the Ordinary Shares.
Merger reserve
The merger reserve was created as a result of the share for share exchange
under which Ashtead Technology Holdings plc became the parent undertaking
prior to the IPO. Under merger accounting principles, the assets and
liabilities of the subsidiaries were consolidated at book value in the Group
financial statements and the consolidated reserves of the Group were adjusted
to reflect the statutory share capital, share premium and other reserves of
the Company as if it had always existed, with the difference presented as the
merger reserve.
Share based payment reserve
The share based payment reserve is built up of charges in relation to equity
settled share based payment arrangements which have been recognised within the
consolidated income statement.
Foreign currency translation reserve
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on consolidation, are translated to the Group's
presentational currency, sterling, at foreign exchange rates ruling at the
balance sheet date. The revenues and expenses of foreign operations are
translated at an average rate for each month where this rate approximates to
the foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign operations are
reported as an item of other comprehensive income and accumulated in the
translation reserve, within invested capital. When a foreign operation is
disposed of, such that control, joint control or significant influence (as the
case may be) is lost, the entire accumulated amount in the foreign currency
translation reserve is recycled to the income statement as part of the gain or
loss on disposal.
Retained earnings
The movement in retained earnings is as set out in the consolidated statement
of changes in equity. Retained earnings represent cumulative profits or
losses, net of dividends and other adjustments.
17. Related parties
There were no transactions with related parties, other than key management
personnel, in the six-month period ended 30 June 2024.
Compensation of key management personnel: Unaudited Unaudited Audited
six months six months year ended
to 30 June 2024 to 30 June 2023 31 December 2023
£000 £000 £000
Salaries and fees 479 428 856
Bonus 578 530 530
Other benefits 46 38 77
Share based payment charges (Note 15) 533 756 1,369
Total 1,636 1,752 2,832
18. Reconciliation of Alternative Performance Measures
Reconciliation of Adjusted EBITDA Unaudited Unaudited Audited
six months to 30 June 2024 six months to year ended
30 June 2023 31 December 2023
(restated)*
Notes £000 £000 £000
Adjusted EBITDA 31,418 21,143 48,253
Cost associated with M&A - - (2,533)
Restructuring costs (103) (20) (216)
Software development costs - (134) (683)
Other exceptional costs - - (380)
-------- ------- --------
Operating profit before depreciation, amortisation and foreign exchange
gain/(loss)
31,315 20,989 44,441
Depreciation on property, plant and equipment 6 (8,195) (5,114) (10,939)
Depreciation on right-of-use asset 13 (644) (523) (1,090)
-------- -------- --------
Operating profit before amortisation and foreign exchange gain/(loss)
22,476 15,352 32,412
Amortisation of intangible assets 7 (1,823) (597) (1,431)
Foreign exchange (loss)/gain (30) 367 229
-------- ------- --------
Operating profit 20,623 15,122 31,210
Reconciliation of Adjusted EBITA Unaudited Unaudited Audited
six months to 30 June 2024 six months to 30 June 2023 year ended 31 December 2023
(restated)*
Notes £000 £000 £000
Adjusted EBITA 22,579 15,506 36,224
Cost associated with M&A - - (2,533)
Restructuring costs (103) (20) (216)
Software development costs - (134) (683)
Other exceptional costs - - (380)
Amortisation of intangible assets 7 (1,823) (597) (1,431)
Foreign exchange (loss)/gain (30) 367 229
-------- ------- --------
Operating profit 20,623 15,122 31,210
18. Reconciliation of Alternative Performance Measures (continued)
Reconciliation of Adjusted Profit Before Tax Unaudited Unaudited Audited
six months to six months to 30 June 2023 (restated)* year ended
30 June 2024 31 December 2023
Notes £000 £000 £000
Adjusted Profit Before Tax 19,588 14,129 33,029
Cost associated with M&A - - (2,533)
Restructuring costs (103) (20) (216)
Software development costs - (134) (683)
Deferred finance costs write off - (522) (522)
Other exceptional costs - - (380)
Foreign exchange (loss)/gain (30) 367 229
Amortisation of intangible assets 7 (1,823) (597) (1,431)
-------- -------- --------
Profit before taxation 17,632 13,223 27,493
Reconciliation of Adjusted Profit After Tax Unaudited Unaudited
six months to six months to 30 June 2023 Audited
30 June 2024 (restated)* year ended
31 December 2023
Notes £000 £000 £000
Adjusted Profit After Tax 15,292 11,181 26,664
Cost associated with M&A - - (2,533)
Restructuring costs (103) (20) (216)
Software development costs - (134) (683)
Deferred finance cost write off - (522) (522)
Other exceptional costs - - (380)
Foreign exchange (loss)/gain (30) 367 229
Amortisation of intangible assets 7 (1,823) (597) (1,431)
Tax impact of the adjustments above 25 149 451
-------- -------- ------
Profit for the financial period 13,361 10,424 21,579
Adjusted Profit After Tax is used to calculate the Adjusted earnings per share
in Note 5.
* See Note 1 for an explanation of the prior
period restatement.
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