REG - Speedy Hire PLC - Final Results
19/06/2024 07:00
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RNS Number : 9586S Speedy Hire PLC 19 June 2024
Speedy Hire Plc
("Speedy Hire", "the Company" or "the Group")
19 June 2024
Audited results for the year ended 31 March 2024
Transforming to drive sustainable growth
Speedy Hire Plc, the UK and Ireland's leading provider of tools, specialist
equipment and services, announces its audited preliminary results for the year
ended 31 March 2024.
Financial Highlights
Year ended Year ended Change
31 March 2024 31 March 2023 %
(£m) (£m)
Revenue 421.5 440.6 (4.3)
Adjusted EBITDA(1 2) 96.8 103.9 (6.8)
Adjusted profit before tax(1 2) 14.7 30.7 (52.1)
Adjusted earnings per share (pence)(2 3) 2.35 4.96 (52.6)
Operating profit 14.9 3.8 292.1
Profit before tax 5.1 1.8 183.3
Basic earnings per share (pence)(2 3) 0.59 0.25 136.0
Free cash flow(4) 23.5 10.6 121.9
Net debt(5) 101.3 92.4 9.6
Dividend per share 2.60 2.60 -
· Revenue of £421.5m, down 4.3% against a challenging market
backdrop;
o Resilient UK Hire performance, down 1.7% versus FY2023
§ Significant contract wins and renewals including a promising pipeline of
further opportunities
§ Positive performance with our National customers, mitigating softening with
Regional customers
o Service revenue (excl. Fuel) down 1.6% versus FY2023
§ Strong performance in Customer Solutions
§ The decline in the wholesale price of fuel impacted our pass through
revenues, however margin improved
· Adjusted EBITDA(1) was down 6.8% versus PY but margin held
broadly flat, the result of tight cost control and pricing discipline
mitigating the revenue shortfall
· Adjusted PBT(1) down 52.1%;
o Impacted by high operational gearing
o Increased interest costs
o Normalised performance of our Kazakhstan JV, following a record FY2023.
· EPS(3) impacted by the decline in profit before tax
· Significant free cash flow(4) generation of £23.5m, more than
double FY2023 (£10.6m).
· Net debt(5) at £101.3m, increased by £8.9m, due to the
acquisition of Green Power Hire Limited ('GPH'), funded in part by £23.5m of
free cash flow(4); leverage(6) of 1.5x
· Proposed final dividend of 1.80pps, resulting in full year
dividend of 2.60pps (FY2023: 2.60pps)
Executing well on our Velocity transformation and growth strategy
· Continued investment in transformation of the business despite
challenging market
· Investing in specialist business growth engines, supporting clean
energy transition and commercial sustainability for our customers:
o £2.5m in hydrogen electric powered access with NiftyLift
o Acquisition of GPH, trading well with a strong pipeline of future
opportunities
o Formation of Speedy Hydrogen Solutions Limited ('SHS') joint venture,
showcasing the first H-Power Generator at our Speedy Hire Live Expo in March
· Launched our low cost-to-serve online home delivery tool hire
proposition on DIY.com and Trade-point.co.uk
· Advanced our People First initiatives and invested £7.2m into
base pay for our people
Outlook
· The new financial year has started well and is marginally ahead
of last year
· Overall performance in line with Board expectations
· Operational efficiencies and supply chain optimisation expected
to deliver further benefit in FY2025
· The Group expects a second half weighting to its revenues and
profits as we mobilise the significant contracts won in FY2024
· Contract wins and extensions, alongside key sector opportunities,
give us confidence for FY2025.
Commenting on the results Dan Evans, Chief Executive, said:
"Speedy delivered a resilient financial performance, making positive strategic
progress over the year, despite the challenging macro-economic environment.
We continue to improve our customer proposition, investing in technology and
AI capabilities, sustainable products and our people, to position the Group
strongly for profitable growth. I am particularly pleased with our progress
building the foundations for growth, executing the 'Enable' phase of our
Velocity strategy, which is focused on transformation and operational
efficiency.
The new financial year has started well with performance in line with Board
expectations and I am pleased that since the year end, we have also secured
further contract wins and renewals with key customers."
Enquiries:
Speedy Hire
Plc
Tel: 01942 720 000
Dan Evans, Chief Executive
Paul Rayner, Chief Financial Officer
MHP
Tel: 0203 128 8540
Oliver Hughes
Katie Hunt
Notes:
Explanatory notes:
The Group believes that the non-GAAP performance measures presented in this
announcement provide valuable additional information
for readers. Further details can be found in notes 7, 9 and 13.
(1) See note 9.
(2) Revised, see note 17.
(3) See note 7.
(4) Free cash flow: Net cash flow before movement in loan balances and returns
to shareholders.
(5) See note 13. This metric excludes lease liabilities.
(6) Leverage: Net debt(5) covered by EBITDA(1). This metric excludes the
impact of IFRS 16.
(7) From underlying performance; excludes non-underlying items.
(8) Return on Capital Employed: Profit before tax, interest, amortisation and
non-underlying items divided by the average capital employed (where capital
employed equals total equity and net debt(3)), for the last 12 months. See
note 9.
Inside Information: This announcement 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 Hire is the UK's leading provider of
tools and equipment hire services to a wide range of customers in the
construction, infrastructure, industrial, and support services markets, as
well as to local trade, and retail. 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 ISO45001. The Group operates from c.180 fixed sites and
selected B&Q stores 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
The results we are reporting today demonstrate the resilience of our business
model during a challenging macro-economic climate faced by many businesses at
this time. We remain a strong business with a clear multi-year strategy for
sustainable, profitable growth, with a robust balance sheet which will enable
us to future-proof the business by investing in the innovative, market-leading
sustainable products that our customers increasingly demand.
Results
Group revenue decreased by 4.3% to £421.5m (FY2023: £440.6m), in part due to
a softening in Regional customer markets, resulting in lower adjusted
profit(1) of £14.7m (FY2023: £30.7(2)), impacted by high operational
gearing. Despite this, we have continued to invest in our people and made a
significant commitment to transformation as part of our Velocity strategy
launched in July 2023.
During the year we secured over £40.0m of annualised revenue from new
multi-year contracts and subsequent to the year-end we have secured further
renewals and extensions. These wins and renewals are a reflection of our
market leading customer service proposition. The contracts won in FY2024 have
taken longer to mobilise, due to contract specific delays and we anticipate
these new contract revenues taking full effect during the course of FY2025. In
all cases we are working closely with our customers to streamline the process
for taking on and mobilising new work, to minimise future delays. Our
partnership with B&Q was changed from an in-store concession model to a
digital model with the launch of tool hire on both DIY.com and
Trade-point.co.uk, providing in-store digital home delivery tool hire from
c.300 B&Q stores nationwide to a wide-ranging Trade and Retail customer
base.
The Group continue to operate internationally through a joint venture in
Kazakhstan. The share of profits decreased to £2.9m (FY2023: £6.6m)
following a reduction in scale of the significant temporary power contract
that gave rise to a record performance in FY2023.
We have invested c.£42.5m in our hire fleet, using data and analytics to
target products that our customers need. 63% of that investment was in
sustainable products to meet the increasing demand from customers for such
items.
We have an industry-leading ESG roadmap whereby we have committed to becoming
a net zero carbon business by 2040, ten years ahead of the Government's
target. Our ESG strategy 'The Decade to Deliver' is accelerating the
reduction of our carbon footprint, while enabling our customers to make
choices that reduce their environmental impact. By increasing our percentage
of sustainable products for hire, as well as our offering of sustainability
related services, we are providing customers the tools they need to achieve
this.
Dividend
The Board is recommending payment of a final dividend of 1.80 pence per share
making a total dividend of 2.60 pence per share which is at the same level as
last year. Whilst this dividend is outside our policy guideline given the
weaker profit performance in FY2024, the strong cash generating performance in
the business and the confidence in the future based on the recent contract
wins supports this proposal. The Board also recognises the importance of
regular returns to shareholders.
Board and people
Having been appointed as Interim CFO on 1 November 2022, Paul Rayner was
appointed permanently as Chief Financial Officer on 1 July 2023. This
appointment followed a comprehensive recruitment process supported by external
consultants. Paul is a Fellow of The Institute of Chartered Accountants with
over 25 years' experience in senior financial roles including interim and
permanent roles respectively on the main board of FTSE listed companies Avon
Protection Plc and Chemring Group Plc. In addition we have taken steps as part
of our transformation programme to add additional bench strength to the senior
management team as we roll out the Velocity Strategy.
During the year we made a number of changes to our reward strategy for all of
our people recognising labour market challenges and the need to support our
front-line workforce. This investment in our people is an important leg of our
strategy going forward.
On behalf of the Board and personally, I would like to take this opportunity
to thank each and every one of my colleagues for their continuing commitment
and dedication to supporting the business.
Future
We have a resilient business with an ambitious sustainable growth strategy
which has been embedded into our business by our experienced senior management
team. As the Velocity strategy rolls out, it puts us in a strong position to
meet customer needs and accelerate sustainable profitable growth despite any
macro-economic challenges. Having committed to this multi-year strategy, the
Board looks forward with confidence as we start to deliver the benefits and
capitalise on opportunities in the year ahead.
David Shearer
Chairman
Chief Executive's statement
Results
I present our results for the financial year ended 31 March 2024, that
demonstrate a resilient performance despite cost inflation and the ongoing
macro-economic uncertainty, in common with many businesses and industries
across the UK, Ireland and internationally.
Revenue declined by 4.3% to £421.5m (FY2023: £440.6m). Adjusted profit
before tax(1) decreased to £14.7m (FY2023: £30.7m(2)). Adjusted earnings per
share(3) were 2.35 pence (FY2023: 4.96 pence(2)).
Our Hire business performed well despite challenging trading conditions and
the performance of our seasonal products, which were negatively impacted by
the winter period. Revenues were down 1.7% versus FY2023, and similarly, our
Services business, excluding fuel, was down 1.6%. We are the only UK hire
company to provide a fully managed fuel service and we proactively promote
low-emission HVO fuel which now accounts for c.30% of our fuel sales. Impacted
by the decline in wholesale price in the year, our fuel revenues were down
22.7%, year on year. In line with our Velocity strategy, we have made in year
improvements to our testing, inspection and certification business, Lloyds
British, promoting greater access to our diverse customer base, investing in
their digital capabilities and restructuring the business to support their
growth potential.
Within our National customer segment which accounts for 53% of revenue, our
end markets remain positive, and there is a continued strong pipeline of major
infrastructure, construction and energy projects. These include investment in
hydrogen power infrastructure, major highways projects, nuclear new build and
decommissioning work, National Water infrastructure and the continued
investment in the rail network including the Government's commitment to HS2
and the proposed Northern Network. Our largest customers servicing these major
projects continue to demand commercially sustainable solutions to complex
problems, provided through our innovative products and specialist expertise.
As a result, revenues from our National customers have increased by 0.2%
year-on-year, however revenues from our Regional customers have softened,
declining 6.0%. Trade and Retail revenue has remained flat year-on-year as we
transition to our digital model.
During the year the Group has monitored and implemented price increases to
offset inflationary cost pressures on both overheads and new equipment
purchases. Our pricing strategy gives customers the very best value for the
high-quality products and services we deliver.
We have taken action to improve asset controls, with digital technology being
trialled to further assist in the control for accurate counting of hire
equipment. Itemised asset utilisation was 52.4% (FY2023: 54.4%) reflecting the
targeted investment in the Group's hire fleet and improved availability,
supported by our work with PEAK AI.
Our joint venture in Kazakhstan has performed as expected, albeit lower than
the record performance achieved in FY2023. The share of profit decreased to
£2.9m (FY2023: £6.6m).
Strategy and operational review
At our Capital Markets Day in July 2023, we launched our five-year 'Velocity'
strategy, designed to accelerate sustainable profitable growth. During FY2024
we have made significant progress in delivering the 'Enable' stage of the
five-year transformation programme that underpins the strategy, through
creating foundational improvements across technology and operational
efficiency. Whilst there is still work to do, we are pleased with progress
made in the year and look forward to the continued successful execution of the
transformation programme.
Market overview
Whilst the macro-economic environment remains uncertain, our customer base and
the sectors we serve are well diversified, and we are suitably positioned to
capitalise on significant growth projected in major infrastructure projects
and programmes.
National customers
We serve approximately 61,000 customers in the UK and Ireland, including 83 of
the UK's 100 largest contractors*. Our customers include major infrastructure
contractors working across Highways, Energy, Harbours and Airports, as well as
frameworks in Water and Sewerage (AMP7/8), Roads (National Highways), Rail
(CP6/7) and Broadband and Telecommunications. We continue to see revenue
growth from opportunities with both new and existing National customers.
During the year we won and extended major contracts with key National
customers. These contracts represent attractive growth opportunities but have
taken longer to mobilise, due to contract specific delays. Therefore, we
anticipate the benefit taking effect during FY2025.
Regional customers
We serve thousands of Regional customers through our Regional Account
Management team located across the UK. These customers operate in
Non-residential Construction, Infrastructure, RMI ('Repair Maintenance
Improvement') and support services that include Facilities Management,
Manufacturing and Production, Environmental Services, Engineering Services,
Defence and Media. Many customers operating in these areas have been
negatively impacted by the challenging economic environment, high interest
rates and increased material costs, and as a result our revenues from this
customer segment reduced by 6% on the prior year through a softening of volume
sales, offset marginally by increased rates.
Trade and Retail
We support our Trade and Retail customers through our national network of
Service Centres, by phone, online through our click and collect service, and
through an in-store digital model in B&Q stores nationally, delivering a
unique 4-hour delivery service in the process. During Q4 we successfully
evolved our Trade and Retail business in partnership with B&Q. Our tool
hire model is now an in-store digital offering in B&Q's c.300-strong store
network nationally, so that customers can now hire our products seamlessly as
part of their wider B&Q transaction at the B&Q tills, as well as
online through B&Q's website diy.com and trade-point.co.uk for home
delivery and collection. The Trade and Retail consumer market remains an
attractive opportunity for the business. As an already established hire
provider in the trade market, the industry-first partnership model with
B&Q will penetrate a new consumer market opportunity. This low
cost-to-serve combination of in-store and online hire, combined with our
existing digital propositions and Service Centre network, will accelerate our
strategic aim of increasing share within the Trade and Retail markets.
Operational efficiency
Operational efficiency continues to be a key part of our Velocity strategy and
cost control remains key to delivering long-term sustainable profitable
growth. The significant macro-inflationary pressures continue to impact our
business, in common with most UK businesses at present. To mitigate the
effects of this, we continue to control costs and focus on initiatives to
improve operational efficiency and the effective management of our supply
chain. By controlling costs, we will enable continued investment in the
transformational aspect of our Velocity strategy, supporting the delivery of
our stated targets of sustainable revenue and profitable growth. Our
industry-leading utilisation of Artificial Intelligence ('AI') through our
strategic collaboration with PEAK supports decision making through enhanced
management information that links our Service Centre network with our
logistics and asset intelligence. AI assists in predicting which products to
invest in, which will further enhance the optimisation of our asset holdings,
and through dynamic forecasting enable us to continue to achieve strong asset
utilisation rates.
By activating these technologies, we can further ensure that we have the right
products, in the right place, at the right time, in the most efficient way to
meet customer demand. This is key to delivering for our customers on their key
priorities of quality, availability, speed and receiving a first-class
customer experience. The use of technology, combined with our service-led
people culture makes this differentiating value proposition possible for our
customers, enabling them to reduce time and cost on site. We will be
digitally, and data driven to ensure our Service Centre network, our logistics
and our assets are optimised to continue playing a vital role in our customers
success.
Throughout FY2024, we continued to strengthen our partnership with PEAK AI,
providing further automation and insight around the optimisation of our fleet
holding, replenishment and informing our pricing strategy. These developments
contributed to a 1.8pp improvement in utilisation rates across targeted
assets. In FY2025 we will be deploying a further suite of initiatives,
including a predictive capital expenditure model and a new price optimisation
solution to dynamically adjust our pricing offered to customers. In addition,
we will also launch PEAK's Audiences app, utilising the latest machine
learning technology, to drive greater insight and understanding of our
customer behaviour and segmentation to better inform our sales and marketing
strategies.
Creating a modern workplace is a strategic pillar in achieving our growth
ambitions, and fully integrating our ERP ('Enterprise Resource Planning')
system is a foundational building block to enable this. Throughout the year we
have further developed our longstanding collaboration with Microsoft by
upgrading our ERP system to the cloud-based Microsoft Dynamics 365 Platform.
The Platform is simplifying some of our key business processes and
significantly improving the user experience, resulting in increased
productivity through efficiency, and in the process improving the customer
experience. Further to this, we invested in our digital capabilities
surrounding our hire fleet management. We have developed a stock counting
application to simplify and standardise the asset count process, which will be
used in our periodic asset counts.
We continue to develop our future state property programme, to modernise our
network with energy efficient, low carbon facilities that optimise
efficiencies and reduce operational costs whilst creating better working
environments for our people and a market-leading experience for our customers.
During the year we rationalised and consolidated a number of older, less
efficient properties into new Service Centres, including in Hull, Southampton
and a new flagship centre servicing the Capital; London Gateway, a
state-of-the-art 33,000 sq ft facility located in East London.
ESG
We are committed to becoming a net zero business by 2040; ten years ahead of
the UK Government's target. Our carbon emissions** in the UK and Ireland have
reduced by 21.4% from 361,361.42 tonnes in FY2023, to 283,947.52 tonnes in
FY2024. This reduction has been achieved through the continued procurement and
organic generation of renewable energy, investment into a greener property
network, a more efficient vehicle fleet and the use of HVO fuel in our larger
vehicles.
To minimise our carbon footprint, we actively procure more commercially
sustainable assets into our hire fleet including those with solar, hybrid,
electric and hydrogen technology. During FY2024 we invested £42.5m in our
hire fleet, of which 63% was on commercially sustainable equipment, in the
process bringing a world-first hydrogen powered access lift to market. We have
a target to ensure that eco products account for 70% of our itemised equipment
fleet by 2027.
During the year we acquired sustainable power solutions specialist, Green
Power Hire Limited ('GPH') to supply Battery Storage Units ('BSU') to the UK
rental market, enabling customers to achieve both financial and environmental
savings compared to alternative systems available. We continue to experience
strong demand from our current and potential new customers for eco products
and sustainable power solutions and are seeing an increasing number of tenders
specifically requiring BSUs. The acquisition has performed in line with our
business plan and since purchase we have procured further units to enlarge our
battery storage unit fleet and satisfy customer demand.
We also entered into a Joint Venture with AFC Energy plc, a leading provider
of hydrogen powered generator technologies to form 'Speedy Hydrogen Solutions
Limited'. This collaboration is providing the UK construction and temporary
power market with AFC Energy's sustainable, zero emission temporary power
solutions designed specifically for off-grid power. Through the JV we are
providing an exclusive full-service hire model for an initial three-year
period and are working with our National customers on their demand needs,
signifying the growing demand for zero emission power solutions.
Further initiatives to reduce our carbon emissions include investing in
modernising our Service Centre network. We installed building management
systems into a number of trial locations with a view to reducing our energy
consumption. During FY2024 these locations, on average, have achieved an
annualised energy consumption reduction of 63.5%, representing c.£40k of
efficiency per property.
We were proud to be awarded Gold Standard by EcoVadis, a leading provider of
business sustainability ratings, which puts Speedy Hire in the top 5% of
sustainable businesses globally. We were also named as a European Climate
Leader for 2023 by the Financial Times and attained the RoSPA Presidents Award
for achieving the RoSPA Gold standard for ten consecutive years.
People
We recognise that our people are the most important component of our business,
and our ambition is to become a Times Top 100 place to work. Our People First
strategy prioritises personal and professional development, wellbeing and
equality, diversity and inclusion within the workplace. During the year we
have invested in our people to provide fair pay, reward and development
opportunities. We have introduced flexible working, and improved systems and
processes to make it easier for them to work in their everyday roles.
We have introduced a series of initiatives to enhance our colleagues'
experience and encourage loyalty, in the process reducing our voluntary
attrition rate to record low levels. Examples include an investment of £7.2m
in base pay for people working at our lower grade levels, improved colleague
wellbeing through the roll-out of Speedy Hire Work Life Balance to over a
third of our colleagues and implementing the UN's Women Empowerment Principles
to encourage more women into the business.
We are also preparing for the future by upskilling existing colleagues and
attracting new talent to ensure we have the right levels of capability in
future skills needed to achieve our Velocity strategy.
In addition, our Emerging Talent Development Board is a group of 11 from our
brightest 'emerging talent' colleagues in our business. They are charged with
developing themselves personally and professionally while working alongside
the Executive Team in contributing to the strategic plans and delivering on
complex business projects with female Chief Executive and Chief Financial
Officers in position.
I would like to take this opportunity to thank all our colleagues for their
resilience and relentless dedication to the business, whilst continuing to
deliver a first-class service to our customers.
Outlook
We continue to make good progress with implementation of our Velocity strategy
which is embedding a solid foundation for growth opportunities in the medium
to long-term which will benefit our customers and people whilst enhancing
shareholder returns.
The new financial year has started well with performance in line with Board
expectations. After the year end, we have continued positive momentum,
securing further contract wins and renewals.
As we implement a more efficient and streamlined service through enhanced AI
driven data and system digitisation, keep close control of costs, and maximise
growth potential through our strong visible pipeline in our core end markets,
we look forward to delivering on these opportunities in the year ahead.
Dan Evans
Chief Executive
* Source - Glenigan Limited
** Scope 1, 2 & 3
Financial review
Our financial results for FY2024 demonstrate resilience in the face of cost
inflation and well-documented macroeconomic uncertainty. Throughout all, we
have maintained our commitment to our people, excellent customer service and
progression of our Velocity strategy.
Revenue from our National customers was up marginally year on year, whilst our
Regional customers traded 6% down in FY2024. We have observed some encouraging
signs in the new financial year to date, with total revenues in line with
expectations.
The contract wins achieved in FY2024 are encouraging, with the business
securing additional annual turnover in excess of £40.0m across multi-year
agreements with new and existing customers. This new business is underpinned
by disciplined pricing and is a clear demonstration of the attractiveness of
Speedy's customer proposition. Since the year end, further new contracts and
extensions have been secured. As with prior periods, the Group expects a
second half weighting to its revenues and profits in FY2025 as we mobilise
these significant new contracts.
Our services business has performed well, although its pass-through revenues
were impacted by the effect of a decrease in wholesale fuel prices. Margins
were maintained in this segment.
Free cash flow(4) is a key metric for the Group and in the year this increased
to £23.5m (FY2023: £10.6m) following active working capital management.
In October 2023, the Group acquired the entire issued share capital of
sustainable power solutions specialist, Green Power Hire Limited ('GPH') for
an enterprise value of £20.2m. The acquisition has resulted in goodwill and
other intangible assets of £10.9m. Since its acquisition, the GPH business
has contributed £2.0m of revenue and £1.6m of EBITDA(1) to the Group, which
includes acquisition synergies of c.£0.8m. This trading performance is
continuing to build as we target rate increases and invest further in the
fleet to satisfy growing customer demand. More detail on the acquisition is
provided in note 3.
In addition to the acquisition, in November 2023 Speedy Hire formed a joint
venture, Speedy Hydrogen Solutions Limited ('SHS'), with our partner, AFC
Energy Plc.
Net debt(5) has increased to £101.3m as at 31 March 2024 representing
leverage(6) of 1.5 times (FY2023: £92.4m, 1.3x leverage). This follows the
acquisition of GPH, which was funded from the Group's existing debt
facilities.
Group financial performance
Total revenue for the year ended 31 March 2024 decreased by 4.3% versus FY2023
to £421.5m. Revenue (excluding fuel) decreased by 1.9% to £381.4m and
revenue from fuel was £40.1m (FY2023: £51.9m). Hire rate increases and
performance with our National customers have mitigated some of the softening
of revenues with our Regional customers.
Gross profit(7) was £230.0m (FY2023: £239.4m), a decrease of 3.9%. The gross
margin(7) increased to 54.6% (FY2023: 54.3%), reflecting the lower proportion
of pass-through fuel sales and our commitment to pricing discipline.
The share of profit from the joint venture in Kazakhstan returned to expected
levels at £2.9m (FY2023: £6.6m), following a reduction in scale of the
significant temporary power contract that gave rise to a record performance in
FY2023.
Adjusted EBITDA(1) decreased by 6.8% to £96.8m (FY2023: £103.9(2)), however
margins were held broadly flat at 23%.
Adjusted profit before taxation(1) decreased to £14.7m (FY2023: £30.7m(2)),
due to the decline in revenue and the impact of operational gearing on the
business. Higher interest costs and reduced performance from our joint venture
also contributed to the year on year decrease. ROCE(8) declined to 9.9%,
impacted by lower profits in the year.
The Group incurred non-underlying items before taxation of £9.0m (FY2023:
£28.5m), further detail on which is given below.
After taxation, amortisation and non-underlying items, the Group made a profit
of £2.7m, compared to £1.2m in FY2023.
Revenue and margin analysis
The Group generates revenue through two categories, Hire and Services.
Revenue and margin by type Year ended Year ended Change
31 March 31 March
2024 2023
£m £m %
Hire:
Revenue 253.6 258.0 (1.7)%
Cost of sales(7) (54.6) (54.8)
Gross profit 199.0 203.2 (2.1)%
78.5% 78.8%
Gross margin
Revenue and margin by type Year ended Year ended Change
31 March 31 March
2024 2023
£m £m %
Services:
Revenue 162.5 176.3 (7.8)%
Cost of sales (130.9) (142.9)
Gross profit 31.6 33.4 (5.4)%
19.4% 18.9%
Gross margin
Hire revenue decreased by 1.7% compared to FY2023, reflecting rate increases
mitigating a softening in Regional customer demand. A number of new and
renewed contracts with key customers were secured during the year, reflecting
the strength of our market position. The Group continued to implement rate
increases during FY2024, following on from the programme established in
FY2023, to offset the effects of cost inflation on both overheads and new
equipment purchases. The rate increases take effect as framework agreements
and as hire contracts are renewed, resulting in the benefits of those
increases building throughout the year.
Services revenues decreased by 7.8% in the year. Excluding fuel, services
revenues were down by 1.6%, affected by general market conditions. Fuel
revenue decreased 22.7% compared to FY2023 as a result of the decline in the
wholesale price of both diesel and hydrogenated vegetable oil ('HVO'), which
does not impact gross margin. Included within Services is £19.8m of revenue
from our Lloyds British business (FY2023: £19.6m).
Gross margin(7) increased from 54.3% to 54.6%, resulting from a decrease in
lower margin fuel sales, increase in hire rates and a lower depreciation
charge offsetting lower utilisation. Hire margin(7) decreased to 78.5%
(FY2023: 78.8%) due to pricing increases offset by lower utilisation as a
result of softening in customer demand. Asset utilisation on itemised assets
for the year decreased to 52.4%, with non-itemised asset utilisation reported
at 49.4%. Services margin of 19.4% was impacted positively by the reduction in
lower margin fuel revenue (FY2023: 18.9%).
Overheads
The overheads as disclosed in the income statement can be further analysed as
follows:
Year ended Year ended
31 March 31 March
2024 2023
£m £m
Distribution and administrative costs(7) 202.9 203.1
Amortisation - acquired intangibles (0.6) (0.4)
Underlying Overheads 202.3 202.7
Disciplined cost management, with savings realised from our operational and
management restructuring in the last financial year, has meant that we have
maintained our underlying cost base even whilst implementing significant
salary increases (£7.2m annual investment) for our people and absorbing
inflationary pressures. As a result, underlying overheads were 0.2% lower at
£202.3m (FY2023: £202.7m). To ensure we can continue to invest in our
five-year Velocity growth strategy, we are continuing to control costs through
initiatives to improve operational efficiency and targeted supply chain
improvements.
Total headcount decreased 2.4% in the year, and average headcount 3.3%, as a
result of depot optimisation and restructuring projects.
2024 2023
£m £m %
Headcount at year end 3,293 3,375 (2.4)%
Average headcount during the year 3,409 3,524 (3.3)%
Non-underlying items
Year ended Year ended
31 March 31 March
2024 2023
£m £m
Asset write-off - 20.4
Other professional and support costs 1.9 1.4
Restructuring costs 3.9 6.7
Transformation costs 3.2 -
Total 9.0 28.5
In October 2023, the Group acquired GPH, advancing the Group's sustainable
offering to customers and evidencing the Velocity strategy in action. In
addition to the acquisition of GPH, the Group also incurred costs in respect
of the formation of SHS, the joint venture with AFC Energy Plc. The costs
incurred relate primarily to professional and other supporting fees, amounting
to £1.4m in total.
An external review of the entire depot network was commissioned in the year,
to assess the condition of each site and the dilapidations that may be payable
under the respective lease agreements. This is the first review of its kind
undertaken by the Group, and it is not expected that a similar exercise of
this scale will be required going forwards. Fees in relation to this review
total £0.5m.
The Group incurred further, non-underlying, restructuring costs associated
with moving towards its target operating model. At the year end, the Group had
exited all B&Q concessions, and our products and services are now
available for digital hire in-store within B&Q and Tradepoint locations as
well as on the respective websites. In evolving our partnership with B&Q
and moving to a more digitally focussed model, the Group incurred £2.7m of
non-recurring losses.
The remainder of the restructuring costs included costs associated with depot
optimisation and restructuring projects of £1.2m.
The investment in implementing our Velocity strategy and executing our
transformation programme represents a significant cost to the business and
resulted in an incremental cost of £3.2m to the business in the year.
Detail on the non-underlying items which occurred in FY2023 can be found in
note 4.
Interest and banking facilities
The Group's net interest on borrowings increased to £7.7m (FY2023: £5.1m)
reflecting higher average gross borrowings throughout the year following the
acquisition of GPH and the impact of increased interest rates. Interest on
lease liabilities increased to £5.0m (FY2023: £3.5m). The Group's main bank
facilities expire in July 2026, with the additional uncommitted accordion of
£220m remaining in place through to this date. The facility continues to give
the Group headroom with which to support organic growth and acquisition
opportunities.
The facility includes quarterly leverage(6) and fixed charge cover covenant
tests which are only applied if headroom in the facility falls below £18.0m.
The Group tested and maintained significant headroom against these covenants
in the year.
Borrowings under the facility are priced based on SONIA plus a variable
margin, while any unutilised commitment is charged at 35% of the applicable
margin. During the year, the margin payable on the outstanding debt fluctuated
between 1.55% and 2.25% dependent on the weighting of the asset base on which
borrowings are based between receivables and plant and machinery. The
effective average margin in the year was 1.92% (FY2023: 1.84%).
The Group utilises interest rate hedges to manage fluctuations in SONIA. The
fair value of these hedges was £0.4m at 31 March 2024 (FY2023: £1.0m). The
hedges have varying maturity dates, notional amounts and rates and provide the
Group with mitigation against interest rate rises. Over the next 12 months
c.50% of the expected net debt is hedged. As of May 2024, 73.3% of the Group's
net debt is hedged with a weighted average hedge rate of 4.1%, before bank
margin.
Taxation
The Group seeks to protect its reputation as a responsible taxpayer and adopts
an appropriate attitude to arranging its tax affairs, aiming to ensure
effective, sustainable and active management of tax matters in support of
business performance.
The tax charge for the year was £2.4m (FY2023: £0.6m), with an effective tax
rate of 47.1% (FY2023: 33.3%). Adjusting for the impact of non-underlying
items, the effective tax rate for FY2024 was 29.3% (FY2023: 20.2%).
Shares and earnings per share
At 31 March 2024, 516,983,637 Speedy Hire Plc ordinary shares were in issue
(FY2023: 516,983,637), of which 4,106,820 were held in the Employee Benefit
Trust (FY2023: 4,162,452) and 55,146,281 were held in Treasury (FY2023:
55,146,281).
Adjusted earnings per share(3) was 2.35 pence (FY2023: 4.96 pence(2)). Basic
earnings per share(3) was 0.59 pence (FY2023: 0.25 pence), with both years
impacted by non-underlying items in their respective years.
Balance sheet
The Group has maintained a strong balance sheet and is well placed to continue
to pursue financial and strategic objectives despite the macroeconomic
uncertainties.
Total capital expenditure during the year amounted to £51.5m (FY2023:
£60.9m).
We have continued to invest in the hire fleet with additions of £42.5m in
FY2024, of which 63% relate to carbon efficient ECO products in line with our
target to be a net zero business by 2040 and the increasing relevance of
sustainable solutions, including customers mandating zero site emissions in
some instances. The acquisition of GPH also contributed a further £11.8m of
hire fleet additions in the year. Itemised asset utilisation has decreased to
52.4% (FY2023: 54.4%), with non-itemised asset utilisation 49.4%.
Expenditure on non-hire property, plant and equipment of £9.0m (FY2023:
£8.8m) represents the investment in our properties and IT capabilities.
Proceeds from disposal of hire equipment were £16.1m (FY2023: £17.4m). The
decrease was driven primarily by an exercise to dispose of certain
underutilised assets, resulting in a lower condition of assets being taken to
auction attracting lower proceeds.
The Group expects to invest further in its hire fleet to support revenue
growth in FY2025, with budgeted capex of c.£55.0m to support growth
aspirations.
Net property, plant and equipment (excluding IFRS 16 right of use assets) was
£233.1m as at 31 March 2024 (FY2023: £237.7m), of which equipment for hire
represents 90.3% (FY2023: 87.5%).
Following the write-off of assets in FY2023, the Group has implemented
additional controls including enhanced senior engagement and involvement,
weekly perpetual counts and full counts in September and March. The asset
count performed in March 2024 did not identify any significant issues and
indicated that the improved controls were operating effectively.
Intangible assets increased to £39.7m (FY2023: £25.0m), following the
acquisition of GPH.
Right of use assets of £97.3m (FY2023: £83.2m) and corresponding lease
liabilities of £97.6m (FY2023: £86.1m) have increased in part due to new
vehicle leases to support the move to a lower carbon fleet as well as property
lease renewals, offset in part by depot closures and consolidations.
Continued focus on reducing overdue debt coupled with strong cash collections
have resulted in gross trade receivables of £97.3m at 31 March 2024 (FY2023:
£102.2m). Bad debt and credit note provisions were £3.4m as at 31 March 2024
(FY2023: £4.3m), equivalent to 3.5% of gross trade receivables (FY2023:
4.2%). In setting the provisions the Directors have given specific
consideration to the impact of macroeconomic uncertainties. Whilst the Group
has not experienced a significant worsening of debt collections or debt
write-offs to 31 March 2024, we continue to monitor the situation closely.
Debtor days as at 31 March 2024 were 64 (FY2023: 61 days). Trade payables as
at 31 March 2024 were £44.9m (FY2023: £39.1m). Creditor days were 40 days
(FY2023: 37 days).
Cash flow and net debt
Cash generated from operations (before changes in hire fleet) for the year was
£94.2m (FY2023: 88.7m), representing 97.3% (FY2023: 85.5%) conversion from
EBITDA, reflecting the continued focus on working capital improvements. Free
cash flow(4) increased to £23.5m (FY2023: £10.6m), as cash disciplines
across the business were reinforced.
Net debt(5) increased by £8.9m from £92.4m at the beginning of the year to
£101.3m at 31 March 2024, reflecting £20.2m for the acquisition of GPH
funded from the Group's existing facilities. Excluding the impact of IFRS 16,
leverage(6) increased to 1.5 times (FY2023: 1.3 times).
The Group retained substantial headroom within its committed bank facility
throughout the year, with cash and undrawn facility availability of £56.7m as
at 31 March 2024 (FY2023: £83.5m).
Dividend
The Board has proposed a final dividend for FY2024 of 1.80 pence per share
(FY2023: 1.80 pence per share) to be paid on 20 September 2024 to shareholders
on the register on 9 August 2024.
The cash cost of this dividend is expected to be c.£8m. This takes the total
dividend for FY2024 to 2.60 pence per share (FY2023: 2.60 pence per share),
following an interim dividend of 0.80 pence per share (FY2023: 0.80 pence per
share).
The dividend proposed represents a temporary deviation a from the Group's
capital allocation policy, however is in line with our Velocity strategy of
enhancing shareholder returns and is affordable, twice covered by free cash
flow in the year.
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 as highlighted as part of our
Velocity strategy:
- 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;
- Gearing and treatment of excess capital: the Board is
committed to maintaining an efficient balance sheet. The Board has adopted a
target leverage in the region of 1.5x through the business cycle, although it
is prepared to move outside this if circumstances warrant;
- Acquisitions: the Board will continue to explore value
enhancing acquisition opportunities in markets adjacent to, and consistent
with, its Velocity strategy.
The Board continues to believe that a strong balance sheet is appropriate for
the current stage of the cycle to allow the Company to take full advantage of
opportunities that arise
Paul Rayner
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 2024. 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
Dan Evans Chief Executive
Paul Rayner Chief Financial Officer
David Garman Senior Independent Director
Rob Barclay Non-Executive Director
Rhian Bartlett Non-Executive Director
Shatish Dasani Non-Executive Director
Carol Kavanagh 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.
Safety, health and environment
Description and potential impact Strategy for mitigation
Serious injury or death The Group is recognised for its industry-leading position in promoting
enhanced health and safety compliance, together with a commitment to product
Speedy operates, transports and provides for rental a wide range of machinery. innovation. This is achieved by the Group's health, safety, and environmental
Without rigorous safety regimes in place there is a risk of injury or death to teams measuring and promoting employee understanding of, and compliance with,
employees, customers or members of the public. procedures that affect safety and protection of the environment. All
management grade employees are enrolled on safety-related training courses and
Environmental hazard are expected to champion a safety awareness within the Group's culture.
The provision of such machinery includes handling, transport and dispensing of We monitor leading indicators and lagging indicators to mitigate the safety,
substances, including fuel, that are hazardous to the environment in the event health and environmental risk across the Group.
of spillage.
We maintain systems that enable us to hold appropriate industry recognised
accreditations supported by a specialist software platform for managing data
and reporting in relation to Health, Safety and Environment.
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
Description and potential impact Strategy for mitigation
Provision of equipment We operate an industry-leading four-hour service promise which covers a wide
range of our assets.
Speedy's commitment is to provide well maintained equipment to its customers
on a consistent and dependable basis.
Our use of personal digital assistants ('PDAs') are fully embedded into our
business and these are used to improve the on-site customer experience.
Back office services
It is important that Speedy is able to provide timely and accurate management
information to its customers, along with accurate invoices and supporting Speedy liaises with its customer base and takes into account feedback where
documentation. particular issues are noted, to ensure that work on resolving those issues is
prioritised accordingly.
In both cases, a failure to provide such service could lead to a failure to
attract or retain customers, or to diminish the level of business such
customers undertake with Speedy.
Sustainability and Climate Change
Climate change The Sustainability Committee oversees the development of the sustainability
and climate change response plan.
There is a risk that climate change may impact Speedy's operations or ability
to trade. Conversely, there is a risk that Speedy will fail to meet internal The Group has set industry-leading science-based targets to measure its
or external targets designed to reduce the Group's impact on climate change. progress against.
Further details of the risks, opportunities and mitigating actions in relation
to sustainability and climate change are detailed in the Taskforce for
This could arise from insufficient target setting, inadequate progress of Climate-Related Financial Disclosures ('TCFD') section of the Annual Report
initiatives, or a failure to capture relevant data accurately. and Accounts.
Sustainability
There is a risk that the Group's business model may not be sustainable in the
long term, for example if assets reliant on fossil fuels are not replaced or
if the distribution network continues to be similarly reliant on fossil fuels.
The result from either of the above may include loss of customer confidence
impacting revenue, or investor and bank confidence leading to difficulty in
obtaining future funding.
Revenue and trading performance
Description and potential impact Strategy for mitigation
Competitive pressure The Group monitors its competitive position closely, to ensure that it is able
to offer customers the best solution. The Group provides a wide breadth of
The hire market is fragmented and highly competitive. There is a risk that offerings, supplemented by its rehire division for specialist equipment. The
customers can readily change provider, with minimal disruption to their own Group monitors the performance of its major accounts against forecasts,
business activity. strength of client future order books and individual expectations with a view
to ensuring that the opportunities for the Group are maximised. Market share
There is a risk that the Group does not have an effective route to market for is measured and competitors' activities are reported on and addressed where
consumer rentals and this could lead to a missed opportunity that is appropriate. The Group's integrated services offering further mitigates
capitalised upon by our competition. against this risk as it demonstrates value to our customers, setting us apart
from purely asset hire companies.
There is a risk that cost inflation may reduce margins if customers resist
price increases. This risk is higher in a small number of cases where larger
customers may be on fixed term agreements with no inflation clause.
Whilst we develop and maintain strategic relationships with larger customers,
no single customer currently accounts for more than 10% of revenue or
receivables. We have been successful in growing our SME and retail customer
Reliance on high value customers base, which helps to mitigate this risk.
There is a risk to future revenues should preferred supplier status with
larger customers be lost when such agreements may individually represent a
material element of our revenues. The Group continues to expand its partnership with B&Q with the launch of
B&Q Tool Hire which enables customers to place a tool hire order either
online on the B&Q and Trade Point websites, or instore.
Bids and Tenders
There is a risk to future revenue growth if the Group is unsuccessful in its We have a team dedicated to responding to bids and tenders, with a clear
ambition to win new contracts using innovative solutions, including eco approval process to ensure opportunities are maximised.
products, that appropriately balance the available reward with potential
increases in risk.
Project and change management
Acquisitions The Group has a defined process for monitoring and filtering potential
targets, with input from advisors and other third parties.
Our strategy includes value enhancing acquisitions that complement or extend
our existing business in specialised markets. There is a risk that suitable
targets are not identified, that acquired businesses do not perform to
expectations or they are not effectively integrated into the existing Group. All potential business combinations are presented to the Board, with an
associated business case, for approval.
Transformation
Once a decision in principle is made, a detailed due diligence process
The Velocity strategy represents an ambition to transform the Group. There are covering a range of criteria is undertaken. This will include the use of
risks that this might be unsuccessful and fail to deliver the required change specialists to supplement the Group's capabilities. The results of due
in respect of new initiatives or that the transformation activity may distract diligence are presented to the Board prior to formal approval being granted.
from or harm our established businesses.
The Transformation Office operates with clearly defined governance structures,
led by the Transformation Director and sponsored by the Executive Team.
People
Description and potential impact Strategy for mitigation
Colleague excellence The Group regularly reviews remuneration packages and aims to offer
competitive reward and benefit packages, including appropriate short and
In order to achieve our strategic objectives, it is imperative that we are long-term incentive schemes. We have reviewed the reward packages for
able to recruit, retain, develop and motivate colleagues who possess the right colleagues with skills in disciplines with particularly high turnover such as
skills for the Group, whilst also demonstrating our commitment to diversity, drivers and engineers. We have a medium term forecast to offer market
equity and inclusivity. competitive rewards to all colleagues as we strive to become recognised as an
employer of choice.
Labour availability
We have set targets to improve our diversity, equity and inclusivity which are
There is a risk that with increased numbers of people leaving the labour designed to attract individuals with the right talent from across the
market, or salary inflation leading to increased staff turnover, there will be population.
shortages of available colleagues for the Group, with greater requirements for
training.
Skill and resource requirements for meeting the Group's objectives are
actively monitored and action is taken to address identified gaps. Succession
planning aims to identify talent 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. We actively consider
promotion opportunities in preference to external hiring where possible.
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.
We also have a number of wellbeing initiatives to provide appropriate support
to colleagues.
Partner and supplier service levels
Supply chain A dedicated and experienced supply chain function is in place to negotiate all
contracts and maximise the Group's commercial position. Supplier
Speedy procures assets and services from a wide range of sources, both UK and accreditations are recorded and tracked centrally through a supplier portal
internationally based. Within the supply chain there are risks of where relevant and set service-related KPIs are included within standard
non-fulfilment. contract terms. Regular reviews take place with all supply chain partners.
In recent years, BREXIT, the COVID-19 pandemic and the war in Ukraine all Where practical, agreements with alternative suppliers are in place for key
resulted in some supply chain challenges that may now be considered permanent. ranges, diluting reliance on individual suppliers.
Partner reputation
Significant revenues are generated from our rehire business, where the
delivery or performance is affected through a third party partner.
Speedy's ability to supply assets with the expected customer service is
therefore reliant on the performance of others with the risk that if this is
not effectively managed, the reputation of Speedy, and hence future revenues,
may be adversely impacted.
Operating costs
Description and potential impact Strategy for mitigation
Fixed cost base The Group has a purchasing policy in place to negotiate supply contracts that,
wherever possible, determine fixed prices for a period of time. In most cases,
Speedy has a fixed cost base including people, transport and property. When multiple sources exist for each supply, decreasing the risk of supplier
revenues fluctuate this can have a disproportionate effect on the Group's dependency and creating a competitive supply-side environment. All significant
financial results. 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 who manage the estate, supported where appropriate by
external specialists.
Fuel management
As a result of changes in the worldwide fuel supply chain, the Group faces
risks around the fluctuations in the price of fuel. We operate a dedicated fleet of commercial vehicles that are maintained to
support our brand image. This includes electric and hybrid vehicles. Fuel is
purchased through agreements controlled by our supply chain processes.
This may impact both our own cost base and on fuel prices charged to our
customers.
The growth of our services offering will help to mitigate this risk as these
activities have a greater proportion of variable overheads.
Funding
Description and potential impact Strategy for mitigation
Sufficient capital The Board has established a treasury policy regarding the nature, amount and
maturity of committed funding facilities that should be in place to support
Should the Group not be able to obtain sufficient capital in the future, it the Group's activities.
might not be able to take advantage of strategic opportunities or it might be
required to reduce or delay expenditure, resulting in the ageing of the fleet
and/or non-availability.
The £180m asset based finance facility, along with an additional uncommitted
accordion of £220m, is available through to July 2026.
This could disadvantage the Group relative to its competitors and might
adversely impact its ability to command acceptable levels of pricing.
We have a defined capital allocation policy. This ensures that 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.
Cyber Security and data integrity
IT system availability Annual and medium-term planning provides visibility as to the level and type
of IT infrastructure and services required to support the business strategy.
Speedy is increasingly reliant on IT systems to support our business Business cases are prepared for any new/upgraded systems and require formal
activities. Interruption in availability or a failure to innovate will reduce approval.
current and future trading opportunities respectively.
Management information is provided in all key areas from dashboards that are
Data accuracy based on real time data drawn from central systems. We have a dedicated data
management team which is responsible for putting in place procedures to
The quality of data held has a direct impact on how both strategic and maintain accuracy of the information provided by data owners across the
operational decisions are made. If decisions are made based on erroneous or business.
incomplete data there could be a negative effect on the performance of the
Group. Mitigations for IT data recovery are described below under business continuity
as these risks are linked.
Data security
We have an established Cyber Security Governance Committee which meets
Speedy, as with any organisation, holds data that is commercially sensitive regularly to monitor our control framework and reports on a routine basis to
and in some cases personal in nature. There is a risk that disclosure or loss the Audit & Risk Committee.
of such data is detrimental to the business, either as a reduction in
competitive advantage or as a breach of law or regulation. 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.
Economic vulnerability
Economy The Group assesses changes in both Government and private sector spending as
part of its wider market analysis. The impact on the Group of any such change
Any changes in construction/industrial market conditions could affect activity is assessed as part of the ongoing financial and operational budgeting and
levels and consequently the Group's revenue. forecasting process.
As markets change and evolve, there is a risk that the Group strategy will Our strategy is to develop a differentiated proposition in our chosen markets
need to be aligned accordingly. and to ensure that we are well positioned with clients and contractors. The
Board oversees the importance of strategic clarity and alignment, which is
seen as essential for the setting and execution of priorities, including
resource allocation.
There is a risk of recession in the UK which could affect the Group's revenue.
Our close relationships with our customers, coupled with the differentiation
Inflation allows us to adopt a partnership approach to responding to cost inflation.
There is a risk of continued inflationary pressure on both material and
employee costs, impacting margins that the Group is able to generate if
customers resist price rises or are in existing framework agreements for fixed We consistently monitor our share in each market segment and seek to balance
terms. our risk between cyclical areas and those which are more predictable.
Geopolitical uncertainty
There is a risk that a prolonged war in Ukraine or an increase in hostilities
in the Middle East, or elsewhere, may have a further impact on the global
economy. This may result in a range of impacts for the Group, including cost
inflation, labour availability and disruption to the supply chain.
Business continuity
Description and potential impact Strategy for mitigation
Business interruption Preventative controls, back-up and recovery procedures are in place for key IT
systems. Changes to Group systems are considered as part of wider change
Any significant interruption to Speedy's operational capability, whether IT management programmes and implemented in phases wherever possible. The Group
systems, physical restrictions or personnel, could adversely impact current has critical incident plans in place for all its sites. Insurance cover is
and future trading as customers could readily migrate to competitors. reviewed at regular intervals to ensure appropriate coverage in the event of a
business continuity issue.
This could range from short-term impact in processing of invoices that would
affect cash flows to the loss of a major site. Speedy has a documented plan to establish a crisis management team when events
occur that interrupt business. This includes detailed plans for all critical
trading sites and head office support. These plans are regularly tested by
both management and third-party advisors. They have proven to be effective in
Joint venture both the significant event of a global pandemic and more localised events such
as extreme weather closing a number of our trading locations.
The Group's joint venture in Kazakhstan, Speedy Zholdas, may be impacted by a
prolonged war in Ukraine. This may be a direct result of military activity in
the wider region, or there may be politically motivated impacts as Kazakhstan
has historically maintained strong links with Russia. The main impact that the We continue to monitor the situation in Kazakhstan through regular contact
Group has faced to date has been the impact of fluctuations in exchange rates. with the expat management team and will take action as may be necessary to
ensure the safety of our colleagues.
Asset holding and integrity
Asset range and availability We regularly monitor the status of our assets and use this information to
optimise our asset holdings.
Speedy's business model relies on providing assets for hire to customers, when
they want to hire them. In order to maximise profitability and returns on
deployed capital, demand is balanced with the requirement to hold a range of
assets that is optimally utilised. This is based on our knowledge of customer expectations of delivery
timescales, which vary by asset class. By structuring our depot network
accordingly, we can centralise low volumes of holdings of specialist assets.
A proportion of Speedy's assets that are hired to customers do not have unique
identifiers, and therefore there is a risk of loss and/or misappropriation.
This could impact the Group's ability to meet customer demands. We constantly review our range of assets and introduce innovative solutions,
including eco products, to our customers as new products come to market.
A comprehensive control framework is in place for all assets across the three
lines of defence of operational management (including delivery/collection
processes and perpetual inventory counts), financial control (including
routine asset register reconciliations) and internal audit assurance
(including standalone asset counts).
Viability Statement
The Group operates an annual planning process which includes assessment of 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 strategic plan is 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 £180m asset-based finance facility which
runs through to July 2026. The strategic plan assumes financing facilities
will be available on an appropriate basis to meet the Group's capital
investment and acquisition strategies for the entire viability period.
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 and the effectiveness of any mitigating
actions. These scenarios include lower than anticipated levels of revenue
across the Group, while maintaining a broadly consistent cost base.
Mitigations applied in these downturn scenarios include a reduction in planned
capital expenditure and discretionary spend.
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 2027.
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 2024
Year ended 31 March 2024 Year ended 31 March 2023
───────────────────── ───────────────────────
Non-underlying items¹ Non-underlying
Underlying Underlying items¹
performance Total performance Total
Note £m £m £m £m £m £m
Revenue 2 421.5 - 421.5 440.6 - 440.6
Cost of sales (191.5) - (191.5) (201.2) (20.4) (221.6)
───── ───── ───── ───── ───── ─────
Gross profit 230.0 - 230.0 239.4 (20.4) 219.0
Distribution and administrative costs (202.9) (9.0) (211.9) (203.1) (8.1) (211.2)
Impairment losses on trade receivables (3.2) - (3.2) (4.0) - (4.0)
───── ───── ───── ───── ───── ─────
Operating profit/(loss) 23.9 (9.0) 14.9 32.3 (28.5) 3.8
Share of results of joint venture 2.9 - 2.9 6.6 - 6.6
───── ───── ───── ───── ───── ─────
Profit/(loss) from operations 26.8 (9.0) 17.8 38.9 (28.5) 10.4
Financial expense 5 (12.7) - (12.7) (8.6) - (8.6)
───── ───── ───── ───── ───── ─────
Profit/(loss) before taxation 14.1 (9.0) 5.1 30.3 (28.5) 1.8
Taxation 6 (4.3) 1.9 (2.4) (6.5) 5.9 (0.6)
───── ───── ───── ───── ───── ─────
Profit/(loss) for the financial year 9.8 (7.1) 2.7 23.8 (22.6) 1.2
═════ ═════ ═════ ═════ ═════ ═════
Earnings per share
- Basic (pence) 7 0.59 0.25
- Diluted (pence) 7 0.58 0.24
═════ ═════
Non-GAAP performance measures
EBITDA before non-underlying items² 9 96.8 103.9
═════ ═════
Adjusted profit before tax² 9 14.7 30.7
═════ ═════
Adjusted earnings per share (pence)³ 7 2.35 4.96
Adjusted diluted earnings per share (pence)³ 7 2.33 4.92
═════ ═════
¹ Detail on non-underlying items is provided in note 4.
² See notes 9 and 17.
³ See notes 7 and 17.
All activities in each year presented related to continuing operations.
The accompanying notes form part of the financial statements.
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2024
Year ended 31 March Year ended 31 March
2024 2023
£m £m
Profit for the financial year 2.7 1.2
───── ─────
Other comprehensive (expense)/ income that may be reclassified subsequently to
the Income Statement:
- Effective portion of change in fair value of cash flow hedges (0.1) 0.2
- Exchange difference on translation of foreign operations (0.2) 0.5
───── ─────
Other comprehensive (expense)/ income (0.3) 0.7
───── ─────
Total comprehensive income for the financial year 2.4 1.9
═════ ═════
Consolidated Balance Sheet
as at 31 March
2024
Note 31 March 31 March
2024 2023
Restated¹
ASSETS £m £m
Non-current assets
Intangible assets 10 39.7 25.0
Investment in joint venture 8.8 9.2
Property, plant and equipment
Land and buildings 11 14.5 13.9
Hire equipment 11 210.6 207.9
Other 11 8.0 15.9
Right of use assets 12 97.3 83.2
───── ─────
378.9 355.1
Current assets ───── ─────
Inventories 11.8 12.7
Trade and other receivables 102.3 106.0
Cash 13 4.0 1.1
Current tax asset 2.7 0.3
Derivative financial assets 0.5 1.2
───── ─────
121.3 121.3
───── ─────
Total assets 500.2 476.4
───── ─────
LIABILITIES
Current liabilities
Bank overdraft 13 (1.2) (1.3)
Lease liabilities 14 (22.1) (22.1)
Trade and other payables (96.4) (88.6)
Derivative financial liabilities (0.1) (0.6)
Provisions¹ 15 (8.8) (9.3)
───── ─────
(128.6) (121.9)
Non-current liabilities
Borrowings 13 (104.1) (92.2)
Lease liabilities 14 (75.5) (64.0)
Provisions¹ 15 (7.6) (6.3)
Deferred tax liability (8.7) (7.4)
───── ─────
(195.9) (169.9)
───── ─────
Total liabilities (324.5) (291.8)
───── ─────
Net assets 175.7 184.6
═════ ═════
EQUITY
Share capital 16 25.8 25.8
Share premium 1.9 1.9
Capital redemption reserve 0.7 0.7
Merger reserve 1.0 1.0
Hedging reserve 0.2 0.3
Translation reserve (1.5) (1.3)
Retained earnings 147.6 156.2
───── ─────
Total equity 175.7 184.6
═════ ═════
¹ See note 17.
Consolidated Statement of Changes in Equity
for the year ended 31 March 2024
Share Share Capital redemption reserve Merger Hedging Retained Total
capital premium reserve reserve Translation Earnings equity
reserve
Note £m £m £m £m £m £m £m £m
At 1 April 2022 25.9 1.8 0.6 1.0 0.1 (1.8) 188.8 216.4
Profit for the year - - - - - - 1.2 1.2
Other comprehensive expense - - - - 0.2 0.5 - 0.7
─-----── ───── ───── ───── ───── ───── ───── ────
Total comprehensive income - - - - 0.2 0.5 1.2 1.9
Dividends 8 - - - - - - (10.9) (10.9)
Equity-settled share-based payments - - - - - - 1.1 1.1
Purchase of own shares for cancellation or placement in treasury 16 (0.1) - 0.1 - - - (24.0) (24.0)
Issue of shares under the Sharesave Scheme - 0.1 - - - - - 0.1
─-----── ───── ───── ───── ───── ───── ───── ────
At 31 March 2023 25.8 1.9 0.7 1.0 0.3 (1.3) 156.2 184.6
Profit for the year - - - - - - 2.7 2.7
Other comprehensive income - - - - (0.1) (0.2) - (0.3)
─-----── ───── ───── ───── ───── ───── ───── ────
Total comprehensive income - - - - (0.1) (0.2) 2.7 2.4
Dividends 8 - - - - - - (11.8) (11.8)
Equity-settled share-based payments - - - - - - 0.5 0.5
-─── ───── ───── ───── ───── ───── ───── ────
At 31 March 2024 25.8 1.9 0.7 1.0 0.2 (1.5) 147.6 175.7
═══ ═════ ═════ ═════ ═════ ═════ ═════ ════
Consolidated Cash Flow Statement
for the year ended 31 March 2024
Note Year ended 31 March 2024 Year ended 31 March 2023
£m £m
Cash generated from operating activities
Profit before tax 5.1 1.8
Net financial expense 5 12.7 8.6
Amortisation 10 3.6 1.8
Depreciation 66.9 69.6
Share of profit from joint venture (2.9) (6.6)
Termination of lease contracts - (0.4)
Loss on planned disposals of hire equipment 2.4 0.2
Loss/(profit) on other disposals of hire equipment 0.2 (1.9)
Exceptional write-off 4 - 20.4
Decrease/(increase) in inventories 0.9 (4.6)
Decrease in trade and other receivables 5.6 1.5
Decrease in trade and other payables (1.6) (3.5)
Increase in provisions 15 0.8 0.7
Equity-settled share-based payments 0.5 1.1
───── ─────
Cash generated from operations before changes in hire fleet 94.2 88.7
Purchase of hire equipment (41.3) (54.2)
Proceeds from planned sale of hire equipment 5.4 6.3
Proceeds from customer loss/damage of hire equipment 10.7 11.1
───── ─────
Cash generated from operations 69.0 51.9
Interest paid (12.7) (8.4)
Tax paid (3.7) (3.1)
───── ─────
Net cash flow from operating activities 52.6 40.4
Cash flow used in investing activities
Purchase of non-hire property, plant and equipment (9.0) (8.7)
Capital expenditure on IT development (1.9) (0.9)
Acquisition of a subsidiary
-
3 (20.2)
Proceeds from sale of non-hire property, plant and equipment 3.0 0.6
Dividends and loan repayments from joint venture 3.9 5.6
───── ─────
Net cash flow used in investing activities (24.2) (3.4)
───── ─────
Net cash flow before financing activities 28.4 37.0
───── ─────
Cash flow from financing activities
Payments for the principal element of leases (26.0) (26.5)
Drawdown of loans 574.3 595.6
Repayment of loans (561.9) (572.3)
Proceeds from the issue of Sharesave Scheme shares - 0.1
Purchase of own shares for cancellation or placement in treasury - (24.0)
Dividends paid 8 (11.8) (10.9)
───── ─────
Net cash flow used in financing activities (25.4) (38.0)
───── ─────
Increase/(decrease) in cash and cash equivalents 3.0 (1.0)
Net cash at the start of the financial year 13 (0.2) 0.8
───── ─────
Net cash at the end of the financial year 13 2.8 (0.2)
═════ ═════
Analysis of cash and cash equivalents
Cash 13 4.0 1.1
Bank overdraft 13 (1.2) (1.3)
───── ─────
2.8 (0.2)
═════ ═════
Notes to the Financial Statements
1 Summary of material accounting policy information
Speedy Hire Plc is a public limited company listed on the London Stock
Exchange, incorporated and domiciled in the United Kingdom. The consolidated
Financial Statements of the Company for the year ended 31 March 2024 comprise
the Company and its subsidiaries (together referred to as the 'Group').
The accounting policies set out below have, unless otherwise stated, been
applied consistently to all periods presented in these Consolidated Financial
Statements.
Basis of preparation
These financial statements have been prepared under the historical cost
convention, with the exception of derivative financial instruments which are
measured at fair value through profit or loss.
The Directors consider the going concern basis of preparation for the Group
and Company to be appropriate for the following reasons.
The Group's £180m asset based finance facility was entered into in July 2021
on a three year tenure. On 26 May 2023 options for a further two one-year
extensions were exercised and the facility now terminates in July 2026. There
are no prior scheduled repayment requirements. Cash and facility headroom as
at 31 March 2024 was £56.7m (2023: £83.5m) 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 covering at least 12 months from the date
on which the financial statements were authorised for issue, 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 current and future market conditions on projected revenues
and an assessment of the net capital investment required to support those
expected level of revenues.
The Board has considered severe but plausible downside scenarios to the base
case, which result in reduced levels of revenue across the Group, whilst also
maintaining a consistent 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 2024 or
31 March 2023 but is derived from those accounts. Statutory accounts for
Speedy Hire Plc for the year ended 31 March 2023 have been delivered to the
Registrar of Companies, and those for the year ended 31 March 2024 will be
delivered in due course. The Group's auditor has reported on the accounts for
31 March 2024; their report was (i) qualified due to a limitation of scope in
respect of property, plant and equipment, (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 business delivers asset management, with tailored services and a
continued commitment to relationship management. Corporate items comprise
certain central activities and costs that are not directly related to the
activity of the operating segment. 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 activity of the operating segment, together with net
corporate borrowings and taxation.
For the year ended 31 March 2024 / As at 31 March 2024
Hire excluding disposals Services UK and Ireland¹ Corporate items Total
£m £m £m £m £m
Revenue 253.6 162.5 421.5 - 421.5
Cost of sales (54.6) (130.9) (191.5) - (191.5)
─────── ─────── ─────── ─────── ───────
Gross Profit 199.0 31.6 230.0 - 230.0
═════ ═════ ═════ ═════ ═════
Segment result:
Adjusted EBITDA 99.5 (2.7) 96.8
Depreciation² (66.5) (0.4) (66.9)
Loss on planned disposals of hire equipment (2.4) - (2.4)
─────── ─────── ───────
Operating profit/(loss) before amortisation and non-underlying items 30.6 (3.1) 27.5
Amortisation² (0.6) (3.0) (3.6)
Non-underlying items (9.0) - (9.0)
─────── ─────── ───────
Operating profit/(loss) 21.0 (6.1) 14.9
Share of results of joint venture - 2.9 2.9
─────── ─────── ───────
Profit/(loss) from operations 21.0 (3.2) 17.8
═════ ═════ ═════
Financial expense (12.7)
───────
Profit before tax 5.1
Taxation (2.4)
───────
Profit for the financial year 2.7
═════
Intangible assets² 29.4 10.3 39.7
Investment in joint venture 0.6 8.2 8.8
Land and buildings 15.1 - 15.1
Hire equipment 210.6 - 210.6
Non-hire equipment 7.4 - 7.4
Right of use assets 97.3 - 97.3
Taxation assets - 2.7 2.7
Current assets 110.9 3.7 114.6
Cash - 4.0 4.0
─────── ─────── ───────
Total assets 471.3 28.9 500.2
═════ ═════ ═════
Lease liabilities (97.6) - (97.6)
Other liabilities (109.3) (4.8) (114.1)
Borrowings - (104.1) (104.1)
Taxation liabilities - (8.7) (8.7)
─────── ─────── ───────
Total liabilities (206.9) (117.6) (324.5)
═════ ═════ ═════
¹ UK and Ireland also includes revenue and costs relating to the disposal of
hire assets.
² Intangible assets in Corporate items relate to the Group's ERP system,
amortisation is charged to the UK and Ireland segment as this is fundamental
to the trading operations of the Group. Depreciation in Corporate items
relates to computers and is recharged from the UK and Ireland based on
proportional usage.
For the year ended 31 March 2023 / As at 31 March 2023 revised²
Hire excluding disposals Services UK and Ireland¹ Corporate items Total
£m £m £m £m £m
Revenue 258.0 176.3 440.6 - 440.6
Cost of sales (54.8) (142.9) (201.2) - (201.2)
───── ───── ───── ───── ─────
Gross Profit 203.2 33.4 239.4 - 239.4
═════ ═════ ═════ ═════ ═════
Segment result:
Adjusted EBITDA² 105.8 (1.9) 103.9
Depreciation³ (69.3) (0.3) (69.6)
Loss on planned disposals of hire equipment² (0.2) - (0.2)
───── ───── ─────
Operating profit/(loss) before amortisation and non-underlying items 36.3 (2.2) 34.1
Amortisation³ (1.8) - (1.8)
Non-underlying items (25.6) (2.9) (28.5)
───── ───── ─────
Operating profit/(loss) 8.9 (5.1) 3.8
Share of results of joint venture - 6.6 6.6
───── ───── ─────
Profit from operations 8.9 1.5 10.4
═════ ═════ ═════
Financial expense (8.6)
─────
Profit before tax 1.8
Taxation (0.6)
─────
Profit for the financial year 1.2
═════
Intangible assets³ 19.1 5.9 25.0
Investment in joint venture - 9.2 9.2
Land and buildings 13.9 - 13.9
Hire equipment 207.9 - 207.9
Non-hire equipment 15.9 - 15.9
Right of use assets 83.2 - 83.2
Taxation assets - 0.3 0.3
Current assets 115.2 4.7 119.9
Cash - 1.1 1.1
───── ───── ─────
Total assets 455.2 21.2 476.4
═════ ═════ ═════
Lease liabilities (86.1) - (86.1)
Other liabilities (98.5) (7.6) (106.1)
Borrowings - (92.2) (92.2)
Taxation liabilities - (7.4) (7.4)
───── ───── ─────
Total liabilities (184.6) (107.2) (291.8)
═════ ═════ ═════
¹ UK and Ireland also includes revenue and costs relating to the disposal
of hire assets.
² See note 17.
³ Intangible assets in Corporate items relate to the Group's ERP system,
amortisation is charged to the UK and Ireland segment as this is fundamental
to the trading operations of the Group. Depreciation in Corporate items
relates to computers and is recharged from the UK and Ireland based on
proportional usage.
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 / As at 31 March 2024 Year ended / As at 31 March 2023
──────────────────── ────────────────────
Revenue Non-current Non-current
assets¹ Revenue assets¹
£m £m £m £m
UK 414.2 370.1 431.8 345.3
Ireland 7.3 8.8 8.8 9.8
───── ───── ───── ─────
421.5 378.9 440.6 355.1
═════ ═════ ═════ ═════
¹ Non-current assets excluding financial instruments and deferred tax assets.
Revenue by type
Revenue is attributed to the following activities:
Year ended Year ended
31 March 2024 31 March 2023
£m £m
Hire and related activities 253.6 258.0
Services 162.5 176.3
Disposals 5.4 6.3
───── ─────
421.5 440.6
═════ ═════
Major customers
No one customer represents more than 10% of revenue, reported profit or
combined assets of the Group.
3 Acquisition of a subsidiary
On 9 October 2023, the Group acquired the entire issued share capital of
sustainable power solutions specialist, Green Power Hire Limited ('GPH'), for
an enterprise value of £20.2m. The total consideration, which was funded from
the Group's existing debt facilities, represented £10m of equity value and
assumed debt of £10.2m which was settled at completion. Speedy Hire acquired
GPH from its principal shareholder, Russell's (Kirbymoorside) Limited, and
four other shareholders. The acquisition enhances the Group's sustainable
offering to customers, combining product innovation and sustainability,
aligned with the Velocity strategy and the Group's target to be a net zero
business by 2040.
The acquisition has been accounted for using the acquisition method of
accounting. Fair value adjustments have been made in respect of:
· Right of use assets and lease liabilities - to recognise the
lease liability as if it were a new lease in accordance with IFRS 16,
determined based on the remaining lease payments, discounted using the
relevant incremental borrowing rate. A corresponding right of use asset has
then been recognised, with no further fair value adjustments to the asset
necessary.
· Customer relationships - valued using the excess earnings method,
based on income forecast to be generated over the next 12 years. The valuation
assumes the customer attrition rate will be 20.0% per annum, with growth in
income from customers of between 56.8% and 2.0% per annum. Contributory asset
charges have been applied using a risk-adjusted weighted average cost of
capital in respect of fixed assets, working capital and the workforce. A
discount rate of 18% (post tax) has then been applied to the resulting
earnings. The customer list intangible is being amortised over ten years,
considered to be the period over which the majority of the cash flows are
expected to arise.
· Trade receivables - review of trade receivables at acquisition
revealed £0.1m which is more than 6 months overdue. As GPH's usual terms are
30 days, this amount has been provided for in full.
· Corporation tax receivable - not recognised in the completion
balance sheet.
· PAYE liabilities - payable by Green Power Hire Limited on the
shares sold by management to Speedy Asset Services.
· Deferred tax - not recognised in the completion balance sheet.
For the period to 31 March 2024, GPH contributed revenue of £1.5m and profit
of £0.4m to the Speedy Hire Group results. If the acquisition had been owned
for the entire financial year, management estimates that consolidated revenue
would have been £1.4m higher and consolidated profit before tax would have
increased by £0.5m. In determining these amounts, management has assumed that
the fair value adjustments that arose on the date of acquisition would have
been the same if the acquisition had occurred on 1 April 2023 and no
adjustment has been made for any possible synergies of the acquisition.
The fair value of the assets and liabilities acquired are as follows:
Book value at acquisition Fair value adjustment Fair value
£m £m £m
Hire equipment assets 11.8 - 11.8
Intangible assets - customer relationships - 1.0 1.0
Trade and other receivables 1.4 (0.1) 1.3
Corporation tax - 0.1 0.1
Trade and other payables (2.3) (1.4) (3.7)
Borrowings (10.2) - (10.2)
Deferred tax - (0.2) (0.2)
───── ───── ─────
Net assets acquired 0.7 (0.6) 0.1
Goodwill 9.9
─────
Total cash consideration 10.0
═════
Satisfied by:
- settlement of debt 10.2
- cash consideration 10.0
─────
Total cash outflow - acquisition of business 20.2
═════
Goodwill recognised on the acquisition represents the future earnings
potential of the business in supplementing the Group's existing product
offering, over and above the value of net assets acquired. There has been no
change in the value of goodwill arising from this business combination from
the acquisition date to 31 March 2024.
At the acquisition date, the gross contractual amount of trade receivables
acquired was £0.8m, of which £0.1m was not expected to be collected,
reflected in the fair value adjustments above.
The acquisition costs expensed in the year in relation to the acquisition of
GPH, £0.9m, are included in profit before tax brought into the cash flow and
are discussed in more detail in note 4.
4 Non-underlying items
Year ended Year ended
31 March 2024 31 March
2023
£m £m
Asset write-off - 20.4
Other professional and support costs 1.9 1.4
Restructuring costs 3.9 6.7
Transformation costs 3.2 -
───── ─────
9.0 28.5
═════ ═════
Other Professional and support costs
In October 2023, the Group acquired GPH, advancing the Group's sustainable
offering to customers and evidencing the Velocity strategy in action. In
addition to the acquisition of GPH, the Group also incurred costs in respect
of the formation of Speedy Hydrogen Solutions, the joint venture with AFC
Energy Plc. The costs incurred relate primarily to professional and other
supporting fees, amounting to £1.4m in total.
An external review of the entire depot network was commissioned in the year,
to assess the condition of each site and the dilapidations that may be payable
under the respective lease agreements. This is the first review of its kind
undertaken by the Group, and it is not expected that a similar exercise of
this scale will be required going forwards. Fees in relation to this review
total £0.5m.
Restructuring costs
The Group incurred further, non-underlying, restructuring costs associated
with moving towards its target operating model. At the year end, the Group had
exited all B&Q concessions and our products and services are now available
for digital hire in-store within every B&Q and Tradepoint as well as on
the respective websites. In evolving our partnership with B&Q and moving
to a more digitally focused model, the Group incurred £2.7m of losses.
The remainder of the restructuring costs included costs associated with depot
optimisation and restructuring projects of £1.2m.
Transformation costs
Our Velocity strategy is split into two distinct phases through to 31 March
2028, being 'Enabling Growth' (years 1 to 3) and 'Delivering Growth' (years 1
to 5). The investment in implementing our Velocity strategy and executing our
transformation programme represents a significant, cost to the business and
will continue to do so throughout the 'Enabling' phase to March 2026. The
anticipated cost (including those incurred in FY2024) of this phase is between
£19m and £22m, with £13m to £15m expected to be non-underlying, primarily
relating to incremental people costs. The remainder of the costs either
represent underlying costs to the business or are capital in nature.
Management will continue to monitor and reassess the above based on the
phasing and delivery of the transformation programme.
Of the £3.2m non-underlying cost to the business in the year, £2.2m relates
primarily to incremental people costs, represented by 48 additional heads at
31 March 2024.
The commencement of the transformation programme also necessitated an
assessment of the Group's existing digital capabilities, rendering some
previously capitalised intangible assets as either obsolete or no longer
viable as part of the Group's Velocity strategy. This has resulted in a £1.0m
write-off of intangible assets, representing the remainder of the
non-underlying items relating to transformation.
The net cash outflow from activities associated with non-underlying items is
£6.0m.
The following non-underlying items occurred in FY2023:
Asset write-off
During FY2023, the Group undertook a comprehensive count of all hire
equipment. As at 31 March 2022, the reported net book value of the Group's
hire equipment assets was £226.9m. The Company categorises hire equipment
into two groups: those that are individually identifiable by a unique serial
number to the asset register ('itemised assets', representing 78%, or
£177.0m, of the total reported net book value), and other equipment such as
scaffolding towers, fencing and non-mechanical plant which does not have a
unique serial identifier and is not tracked on an individual asset basis
('non-itemised assets', representing 22%, or £49.9m, of the total reported
net book value). The comprehensive count covered both itemised and
non-itemised assets. Whilst this count validated the previously disclosed net
book value of itemised assets, it identified a shortfall in the quantity of
non-itemised assets, resulting in a write-off of c.£20.4m in FY2023.
Other professional and support costs
The Board commissioned an external investigation into the issue identified
with non-itemised assets, including a review of controls and accounting
procedures. The Group has strengthened the control environment for managing
its non-itemised asset fleet, including additional counts, increased internal
audit focus, enhanced control over purchases and disposals, and new procedures
for reconciliation to the fixed asset register, which also incorporate
recommendations from the investigation. The associated professional and
support fees amounted to £1.4m, which are also presented within
non-underlying items. These fees include a further £0.3m of auditor
remuneration, specifically in relation to increased work over assets,
including additional auditor attendance at asset counts across the business.
Restructuring
An operational efficiency review resulted in restructuring costs and a net
depot reduction at the end of March 2023. The cost of these closures and other
restructuring costs across the business was £6.7m.
5 Financial expense
Year ended Year ended
31 March 31 March
2024 2023
£m £m
Interest on bank loans and overdrafts 7.4 4.4
Amortisation of issue costs 0.4 0.7
───── ─────
Total interest on borrowings 7.8 5.1
Interest on lease liabilities 5.0 3.5
Other finance income (0.1) -
───── ─────
Financial expense 12.7 8.6
═════ ═════
6 Taxation
Year ended Year ended
31 March 31 March
2024 2023
£m £m
Tax charged in the Income Statement from continuing operations
Current tax
UK corporation tax on profit at 25% (2023: 19%) 1.7 3.8
Adjustment in respect of prior years (0.4) (1.0)
───── ─────
Total current tax 1.3 2.8
───── ─────
Deferred tax
UK deferred tax at 25% (2023: 25%) 1.0 (3.8)
Adjustment in respect of prior years 0.1 1.6
───── ─────
Total deferred tax 1.1 (2.2)
───── ─────
Total tax charge from continuing operations 2.4 0.6
═════ ═════
Tax charged in other comprehensive income
Deferred tax on effective portion of changes in fair value of cash flow hedges - -
═════ ═════
Tax charged in equity
Deferred tax - -
═════ ═════
The adjusted effective tax rate of 29.3% (2023: 20.2%) is higher than the
standard rate of UK corporation tax of 25%. The tax charge in the Income
Statement for the year of 47.1% (2023: 33.3%) is higher than the standard rate
of corporation tax in the UK and is explained as follow:
Year ended Year ended
31 March 31 March
2024 2023
£m £m
Profit before tax 5.1 1.8
───── ─────
Accounting profit multiplied by the standard rate of corporation tax at 25% 1.3 0.3
(2023: 19%)
Expenses not deductible for tax purposes 2.2 0.9
Share-based payments - 0.1
Share of joint venture income already taxed (0.8) (1.3)
Change in tax rates - -
Adjustment in respect of prior years (0.3) 0.6
───── ─────
Tax charge for the year reported in the Income Statement 2.4 0.6
═════ ═════
An increase in the UK corporation tax rate from 19% to 25% (effective from 1
April 2023) was substantively enacted on 24 May 2021.
7 Earnings per share
The calculation of basic earnings per share is based on the profit for the
financial year of £2.7m (2023: £1.2m) and the weighted average number of
ordinary shares in issue, and is calculated as follows:
Year ended Year ended
31 March 31 March
2024 2023
Weighted average number of shares in issue (m)
Number of shares at the beginning of the year 457.7 514.0
Exercise of share options - 0.2
Movement in shares owned by the Employee Benefit Trust - -
Vested shares not yet exercised 2.7 2.7
Shares repurchased and subsequently cancelled or placed in treasury - (28.9)
───── ─────
Weighted average for the year - basic number of shares 460.4 488.0
Share options 3.9 3.5
Employee share scheme - 0.2
───── ─────
Weighted average for the year - diluted number of shares 464.4 491.7
═════ ═════
Year ended Year ended
31 March 31 March
2024 2023
Profit (£m)
Profit for the year after tax - basic earnings 2.7 1.2
Intangible amortisation charge - acquired intangibles (after tax) 1.0 0.4
Non-underlying items (after tax) 7.1 22.6
─────── ───────
Adjusted earnings¹ 10.8 24.2
═════ ═════
Earnings per share (pence)
Basic earnings per share 0.59 0.25
Dilutive shares and options (0.01) (0.01)
─────── ───────
Diluted earnings per share 0.58 0.24
═════ ═════
Adjusted earnings per share¹ 2.35 4.96
Dilutive shares and options (0.02) (0.04)
─────── ───────
Adjusted diluted earnings per share¹ 2.33 4.92
═════ ═════
¹ Prior period revised, see note 17.
More detail on adjusted earnings is provided in note 9.
Total number of shares outstanding at 31 March 2024 amounted to 516,983,637
(2023: 516,983,637), including 4,106,820 (2023: 4,162,452) shares held in the
Employee Benefit Trust and 55,146,281 (2023: 55,146,281) shares held in
treasury, which are excluded in calculating basic earnings per share.
8 Dividends
The aggregate amount of dividend paid in the year comprises:
Year ended Year ended
31 March 31 March
2024 2023
£m £m
2022 final dividend (1.45 pence on 489.5m ordinary shares) - 7.1
2023 interim dividend (0.80 pence on 474.7m ordinary shares) - 3.8
2023 final dividend (1.80 pence on 452.9m ordinary shares) 8.2 -
2024 interim dividend (0.80 pence on 453.5m ordinary shares) 3.6 -
───── ─────
11.8 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 1.80 pence (2023: 1.80
pence) per share, bringing the total amount payable in respect of the 2024
year to 2.60 pence (2023: 2.60 pence), to be paid on 20 September 2024 to
shareholders on the register on 9 August 2024.
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 2024, the Trust held 4,106,820 ordinary shares (2023:
4,162,452).
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 non-underlying 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. The measures on a continuing basis are as follows:
Year ended Year ended
31 March 31 March
2024 2023
£m £m
Operating profit 14.9 3.8
Add back: amortisation 3.6 1.8
Add back: non-underlying items 9.0 28.5
───── ─────
Adjusted operating profit 27.5 34.1
Add back: depreciation 66.9 69.6
Add back: loss on planned disposals of hire equipment(1) 2.4 0.2
───── ─────
Adjusted EBITDA 96.8 103.9
═════ ═════
Profit before tax 5.1 1.8
Add back: amortisation of acquired intangibles(2) 0.6 0.4
Add back: non-underlying items 9.0 28.5
───── ─────
Adjusted profit before tax 14.7 30.7
═════ ═════
Return on capital employed (ROCE)
Adjusted profit before tax 14.7 30.7
Interest 12.7 8.6
───── ─────
Profit before tax, interest, amortisation of acquired intangibles and 27.4 39.3
non-underlying items(3)
Average gross capital employed(4) 277.0 280.5
ROCE 9.9% 14.0%
(1) See note 17. Prior period revised to add back profit or loss on planned
disposals of hire equipment in the calculation of adjusted EBITDA.
(2) See note 17. Prior period revised to add back only acquired intangible
amortisation in the calculation of adjusted profit before tax.
(3) Profit before tax, interest, amortisation and non-underlying items for the
last 12 months.
(4)Average gross capital employed (where capital employed equals total equity
and net debt) based on a two-point average for the last 12 months.
10 Intangible assets
Internally generated
Acquired
Goodwill Customer lists Brands Total acquired intangibles IT development Total intangible assets
£m £m £m £m £m £m
Cost
At 1 April 2022 29.9 8.3 2.6 40.8 6.9 47.7
Additions - - - - 0.9 0.9
Disposals (12.4) (5.4) (1.3) (19.1) - (19.1)
───── ───── ───── ───── ───── ─────
At 31 March 2023 17.5 2.9 1.3 21.7 7.8 29.5
Transfer from property, plant and equipment - - - - 8.3 8.3
Additions - - - - 1.9 1.9
Acquisitions 9.9 1.0 - 10.9 - 10.9
───── ───── ───── ───── ───── ─────
At 31 March 2024 27.4 3.9 1.3 32.6 18.0 50.6
═════ ═════ ═════ ═════ ═════ ═════
Accumulated amortisation
At 1 April 2022 12.4 6.8 2.1 21.3 0.5 21.8
Charged in year - 0.3 0.1 0.4 1.4 1.8
Disposals (12.4) (5.4) (1.3) (19.1) - (19.1)
───── ───── ───── ───── ───── ─────
At 31 March 2023 - 1.7 0.9 2.6 1.9 4.5
Transfer from property, plant and equipment - - - - 2.8 2.8
Charged in year - 0.4 0.2 0.6 3.0 3.6
───── ───── ───── ───── ───── ─────
At 31 March 2024 - 2.1 1.1 3.2 7.7 10.9
═════ ═════ ═════ ═════ ═════ ═════
Net book value
At 31 March 2024 27.4 1.8 0.2 29.4 10.3 39.7
═════ ═════ ═════ ═════ ═════ ═════
At 31 March 2023 17.5 1.2 0.4 19.1 5.9 25.0
═════ ═════ ═════ ═════ ═════ ═════
At 31 March 2022 17.5 1.5 0.5 19.5 6.4 25.9
═════ ═════ ═════ ═════ ═════ ═════
The remaining amortisation period of each category of intangible fixed asset
is the following; Customer lists three to ten years (2023: one to four years),
Brands three years (2023: four years) and IT development four years (2023:
five years).
During the year ended 31 March 2022, the Geason business was closed. The
associated goodwill and intangible assets were fully impaired in 2021. Geason
was put into liquidation in the year ended 31 March 2023, resulting in the
disposal of the related goodwill and intangibles, as shown in the table above.
Analysis of goodwill, customer lists, brands and IT development by cash
generating unit:
Goodwill Customer Brands IT development Total
lists
£m £m £m £m £m
Allocated to
Hire 26.4 1.4 0.1 8.9 36.8
Services 1.0 0.4 0.1 1.4 2.9
───── ───── ───── ───── ─────
At 31 March 2024 27.4 1.8 0.2 10.3 39.7
═════ ═════ ═════ ═════ ═════
Allocated to
Hire 16.5 0.5 0.3 5.4 22.7
Services 1.0 0.7 0.1 0.5 2.3
───── ───── ───── ───── ─────
At 31 March 2023 17.5 1.2 0.4 5.9 25.0
═════ ═════ ═════ ═════ ═════
All goodwill has arisen from business combinations and has been allocated to
the cash-generating unit ('CGU') expected to benefit from those business
combinations. All intangible assets are held in the UK.
The Group tests goodwill for impairment annually, or more frequently if there
are indications that goodwill might be impaired, and considers at each
reporting date whether there are indicators that impairment may have occurred.
Other assets are assessed at each reporting date for any indicators of
impairment and tested if an indicator is identified. The Group's reportable
CGUs comprise the UK&I Hire business (Hire) and UK&I Services business
(Services), representing the lowest level within the Group at which the
associated assets are monitored for management purposes.
The recoverable amounts of the assets allocated to the 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 Board approved FY2025 budget, and a subsequent four-year period using
the Group's strategic plan, together with a terminal value into perpetuity
using long-term growth rates. The resulting forecast cash flows are discounted
back to present value, using an estimate of the Group's pre-tax weighted
average cost of capital, adjusted for risk factors associated with the CGUs
and market-specific risks.
The impairment model is prepared in nominal terms. The future cash flows are
based on current price terms inflated into future values, using general
inflation and any known cost or sales initiatives. The discount rate is
calculated in nominal terms, using market and published rates.
The pre-tax discount rates and terminal growth rates applied are as follows:
31 March 2024 31 March 2023
──────────────────── ────────────────────
Pre-tax Terminal value Pre-tax Terminal value
discount rate growth rate discount rate growth rate
UK and Ireland Hire and Services 12.2% 2.0% 12.0% 2.5%
═════ ═════ ═════ ═════
A single discount rate is applied to both CGUs as they operate in the same market, with access to the same shared Group financing facility, with no additional specific risks applicable to either CGU.
At 31 March 2024, the headroom between value in use and carrying value of
related assets for the UK and Ireland was £131.0m (2023: £99.2m) - £45.0m
for Hire (2023: £50.7m) and £86.0m for Services (2023: £48.5m).
Impairment calculations are sensitive to changes in key assumptions of revenue growth and discount rate. The table below shows the reduction in headroom created by a change in assumptions:
Reduction in headroom at 31 March 2024 (£m)
──────────────────────── ──────────────────────────
Revenue growth - 1% decrease per annum Pre-tax discount rate - 0.5% increase
Hire 30.2 18.3
Services 4.6 3.2
There are no reasonable variations in these assumptions that would be
sufficient to result in an impairment of either CGU at 31 March 2024. A 1.5%
decline in forecast revenue cash flows for Hire and an 18.5% decline in
forecast revenue cash flows for Services would reduce headroom to nil for each
CGU respectively, assuming no cost mitigation plans. The position will be
reassessed at the next reporting date.
It is noted that the market capitalisation of the Group at 31 March 2024 was
below the consolidated net asset position - one indicator that an impairment
may exist. Based on the impairment test performed, it is determined that no
impairment is required in this regard.
11 Property, plant and equipment
Land and Hire Total
buildings equipment Other
£m £m £m £m
Cost
At 1 April 2022 53.2 422.7 91.7 567.6
Foreign exchange - (0.1) - (0.1)
Additions 3.3 52.1 5.5 60.9
Disposals¹ (2.0) (22.2) (0.6) (24.8)
Exceptional write-off² - (33.0) - (33.0)
Transfers to inventory - (23.6) - (23.6)
───── ───── ───── ─────
At 31 March 2023 restated¹ 54.5 395.9 96.6 547.0
Transfer to Intangible Assets³ - - (8.3) (8.3)
Foreign exchange - (0.5) - (0.5)
Acquisitions - 11.8 - 11.8
Additions 6.7 42.5 2.3 51.5
Disposals (3.0) (35.9) (62.4) (101.3)
Transfers to inventory - (27.8) - (27.8)
───── ───── ───── ─────
At 31 March 2024 58.2 386.0 28.2 472.4
═════ ═════ ═════ ═════
Accumulated depreciation
At 1 April 2022 37.6 195.8 76.5 309.9
Foreign exchange - 0.2 - 0.2
Charged in year 4.4 33.9 4.7 43.0
Disposals¹ (1.4) (11.9) (0.5) (13.8)
Exceptional write-off² - (12.6) - (12.6)
Transfers to inventory - (17.4) - (17.4)
───── ───── ───── ─────
At 31 March 2023 restated¹ 40.6 188.0 80.7 309.3
Transfer to Intangible Assets³ - - (2.8) (2.8)
Foreign exchange - (0.2) - (0.2)
Charged in year 4.4 32.6 3.5 40.5
Disposals (1.3) (24.5) (61.2) (87.0)
Transfers to inventory - (20.5) - (20.5)
───── ───── ───── ─────
At 31 March 2024 43.7 175.4 20.2 239.3
═════ ═════ ═════ ═════
Net book value
At 31 March 2024 14.5 210.6 8.0 233.1
═════ ═════ ═════ ═════
At 31 March 2023 13.9 207.9 15.9 237.7
═════ ═════ ═════ ═════
At 31 March 2022 15.6 226.9 15.2 257.7
═════ ═════ ═════ ═════
¹ Disposals in the year to 31 March 2023 incorrectly included an element of
the exceptional write-off. This has been restated to correctly present cost
and accumulated depreciation of hire equipment, each being £23.0m lower than
reported in the prior period, with nil impact on hire equipment net book value
reported as at 31 March 2023.
² See note 4.
³ At 31 March 2023, software with a net book value of £6.7m was included in
other property, plant and equipment. This has been transferred to Intangible
Assets during the year to correct the classification.
The net book value of land and buildings is made up of improvements to short
leasehold properties.
Of the £210.6m (2023: £207.9m) net book value of hire equipment, £28.1m
(2023: 32.1m) relates to non-itemised assets.
The net book value of other - non-hire equipment - comprises, fixtures,
fittings, office equipment and IT equipment.
At 31 March 2024, no indicators of impairment were identified in relation to
property, plant and equipment (2023: none).
12 Right of use assets
Land and Total
buildings Other
£m £m £m
Cost
At 1 April 2022 144.4 55.6 200.0
Additions 2.1 28.1 30.2
Remeasurements 4.1 3.5 7.6
Disposals (5.3) (22.4) (27.7)
───── ───── ─────
At 31 March 2023 145.3 64.8 210.1
Additions 9.0 13.0 22.0
Remeasurements 17.9 0.8 18.7
Disposals (6.7) (11.7) (18.4)
───── ───── ─────
At 31 March 2024 165.5 66.9 232.4
═════ ═════ ═════
Accumulated depreciation
At 1 April 2022 92.3 33.5 125.8
Charged in year 13.1 13.5 26.6
Disposals (5.1) (20.4) (25.5)
───── ───── ─────
At 31 March 2023 100.3 26.6 126.9
Charged in year 12.6 13.8 26.4
Disposals (6.6) (11.6) (18.2)
───── ───── ─────
At 31 March 2024 106.3 28.8 135.1
═════ ═════ ═════
Net book value
At 31 March 2024 59.2 38.1 97.3
═════ ═════ ═════
At 31 March 2023 45.0 38.2 83.2
═════ ═════ ═════
At 31 March 2022 52.1 22.1 74.2
═════ ═════ ═════
Included within disposals for the year ended 31 March 2023 is £0.1m (2023:
£1.7m) relating to exceptional disposals following the restructure undertaken
(see note 4).
Land and buildings leases comprise depots and associated ancillary leases such
as car parks and yards.
Other leases consist of cars, lorries, vans and forklifts.
13 Borrowings
31 March 31 March
2024 2023
£m £m
Current borrowings
Bank overdraft 1.2 1.3
Lease liabilities¹ 22.1 22.1
───── ─────
23.3 23.4
═════ ═════
Non-current borrowings
Maturing between two and five years
- Asset based finance facility 104.1 92.2
- Lease liabilities¹ 75.5 64.0
───── ─────
Total non-current borrowings 179.6 156.2
───── ─────
Total borrowings 202.9 179.6
Less: cash (4.0) (1.1)
Exclude lease liabilities (97.6) (86.1)
───── ─────
Net debt(2) 101.3 92.4
═════ ═════
(1) See note 17.
(2) Key performance indicator - excluding lease liabilities.
Reconciliation of financing liabilities and net debt
1 April Non-cash Cash flow 31 March
2023 movement 2024
£m £m £m £m
Bank borrowings (92.2) 0.5 (12.4) (104.1)
Lease liabilities (86.1) 19.5 (31.0) (97.6)
───── ───── ───── ─────
Liabilities arising from financing activities (178.3) 20.0 (43.4) (201.7)
Cash at bank and in hand 1.1 - 2.9 4.0
Bank overdraft (1.3) - 0.1 (1.2)
───── ───── ───── ─────
Net debt (178.5) 20.0 (40.4) (198.9)
═════ ═════ ═════ ═════
The Group has a £180m asset based finance facility which is sub divided into:
(a) A secured overdraft facility, which secures by cross
guarantees and debentures the bank deposits and overdrafts of the Company and
certain subsidiary companies up to a maximum of £5m.
(b) An asset based finance facility of up to £175m, based on
the Group's itemised hire equipment and trade receivables balance. The cash
and undrawn availability of this facility as at 31 March 2024 was £56.7m
(2023: £83.5m), based on the Group's eligible hire equipment and trade
receivables.
The facility is for £180m, reduced to the extent that any ancillary
facilities are provided, and is repayable in July 2026, with no prior
scheduled repayment requirements. An additional uncommitted accordion of
£220m is in place.
Interest on the facility is calculated by reference to SONIA (previously
LIBOR) applicable to the period drawn, plus a margin of 155 to 255 basis
points, depending on leverage and on the components of the borrowing base.
During the year, the effective margin was 1.92% (2023: 1.82%).
The facility is secured by fixed and floating charges over the Group's
itemised hire fleet assets and trade receivables.
The facility has a Minimum Excess Availability covenant: At any time, 10
percent of the Total Commitments.
Where availability falls below the Minimum Excess Availability, the financial
covenants (below) are required to be tested. Covenants are not required to be
tested where availability is above Minimum Excess Availability.
Leverage in respect of any Relevant Period shall be less than or equal to 3:1;
Fixed Charge Cover in respect of any Relevant Period shall be greater than or
equal to 2.1:1
14 Lease liabilities
Land and Total
buildings Other
£m £m £m
At 1 April 2022 53.2 23.5 76.7
Additions 2.1 28.1 30.2
Remeasurements 4.1 3.5 7.6
Repayments (15.5) (14.5) (30.0)
Unwinding of discount rate 1.8 1.7 3.5
Terminations (0.5) (1.4) (1.9)
───── ───── ─────
At 31 March 2023 45.2 40.9 86.1
Additions 9.0 13.0 22.0
Remeasurements 14.8 0.8 15.6
Repayments (15.5) (15.5) (31.0)
Unwinding of discount rate 2.5 2.5 5.0
Terminations (0.1) - (0.1)
───── ───── ─────
At 31 March 2024 55.9 41.7 97.6
═════ ═════ ═════
Included within terminations for the year ended 31 March 2024 is £0.1m (2023:
£0.8m) relating to exceptional terminations of property leases.
Amounts payable for lease liabilities (discounted at the incremental borrowing
rate of each lease) fall due as follows:
31 March 31 March
2024 2023
£m £m
Payable within one year 22.1 22.1
Payable in more than one year 75.5 64.0
───── ─────
At 31 March 97.6 86.1
═════ ═════
15 Provisions
Dilapidations Training provision Total
£m £m £m
At 1 April 2022 14.2 0.7 14.9
Additional provision recognised 2.9 - 2.9
Provision utilised in the year (1.6) (0.7) (2.3)
Unwinding of the discount 0.1 - 0.1
───── ───── ─────
At 31 March 2023 15.6 - 15.6
Additional provision recognised 2.1 - 2.1
Provision utilised in the year (1.3) - (1.3)
───── ───── ─────
At 31 March 2024 16.4 - 16.4
═════ ═════ ═════
Of the £16.4m provision at 31 March 2024 (2023: £15.6m), £8.8m (2023:
£9.3m¹) is due within one year and £7.6m (2023: £6.3m¹) is due after one
year.
¹ Restated, see note 17.
The dilapidations provision relates to amounts payable to restore leased
premises to their original condition upon the Group's exit of the lease for
the site and other committed costs. Dilapidations may not be settled for some
months following the Group's exit of the lease and are calculated based on
estimated expenditure required to settle the landlord's claim at current
market rates. The total liability is discounted to current values. The
additional provision recognised in the year relates to a change in the method
of estimating the provision.
The provision recognised is based on management's best estimate of likely
settlement and sits within a range of potential outcomes. The calculated
provision equates to an expected settlement of £7.24 per square foot. If this
were to change by £1 per square foot, a £2.1m movement in the provision
would result.
The movement in the prior year on the training provision is settlement of the costs within the provision previously set up relating to the Geason Training business.
16 Share capital
31 March 2024 31 March 2023
Number Amount Number Amount
m £m m £m
Authorised, allotted, called-up and fully paid
Opening balance (ordinary shares of 5 pence each) 517.0 25.8 518.2 25.9
Exercise of Sharesave Scheme options - - 0.2 -
Purchase and cancellation of own shares - - (1.4) (0.1)
───── ───── ───── ─────
Total 517.0 25.8 517.0 25.8
═════ ═════ ═════ ═════
In January 2022 the Company commenced a share buyback programme. By
resolutions passed at the 9 September 2021 AGM, the Company's shareholders
generally authorised the Company to make market purchases of up to 52,831,110
of its ordinary shares. A further resolution was then passed in June 2022,
authorising the Company to make further market purchases up to a maximum of
50,613,543 of its ordinary shares.
In the year ended 31 March 2022, a total of 11,114,363 ordinary shares were
purchased and cancelled. A further 401,186 shares were acquired immediately
prior to the year ended 31 March 2022 and cancelled in April 2022. In the year
ended 31 March 2023, a total of 1,051,228 ordinary shares were purchased and
subsequently cancelled, with a further 55,146,281 shares repurchased and
placed in treasury.
The share buyback programme was completed on 8 March 2023, at which point all
shares for which there was an obligation to buyback from the broker had been
repurchased by Speedy Hire. In the year ended 31 March 2023, the average price
paid was 42p (2022: 54p) with a total consideration (inclusive of all costs)
of £24.0m (2022: £6.2m). Related costs incurred totalled £0.2m.
During the year, nil ordinary shares of 5 pence were issued on exercise of
options under the Speedy Hire Sharesave Schemes (2023: 0.2m).
An Employee Benefits Trust was established in 2004 (the 'Trust'). The Trust
holds shares issued by the Company in connection with the Performance Share
Plan. No shares were acquired by the Trust during the year and 55,632 (2023:
73,970) shares were transferred to employees during the year. At 31 March
2024, the Trust held 4,106,820 (2023: 4,162,452) shares.
17 Prior period adjustment
The presentation of the dilapidations provision at 31 March 2023, between
current and non-current liabilities, has been reassessed. Provisions have been
classified as current where the end of the lease term is within 12 months of
the balance sheet date. A summary of the affected accounts and the
restatements made as at 31 March 2023 is as follows:
Reported Adjustment Restated
£m £m £m
Current liabilities:
Provisions (3.6) (5.7) (9.3)
Non-current liabilities:
Provisions (12.0) 5.7 (6.3)
Net assets 184.6 - 184.6
The related adjustment on the beginning of the preceding period, 1 April 2022,
has been assessed with no material impact identified.
The definition of adjusted profit has been amended to profit before tax,
amortisation of acquired intangible assets and non-underlying items. It is
determined to be more appropriate to exclude amortisation on internally
generated intangibles as these form part of, and support, the underlying
operations of the business. This is a change from all intangible asset
amortisation having been previously added back in the calculation of adjusted
profit.
The definition of adjusted EBITDA has been amended to operating profit before
depreciation, amortisation and non-underlying items, where depreciation
includes the net book value of planned hire equipment disposals, less the
proceeds on those disposals (profit or loss on planned disposals of hire
equipment). Such disposals relate to auction sales which are planned
divestment, hence do not form an underlying part of the trading business.
Both these measures have been revised to more accurately reflect the
underlying performance of the business.
Prior period comparatives have been revised for the year ended 31 March 2023
for consistency, as follows:
Reported Restated
Adjusted profit before tax (£m) 32.1 30.7
Adjusted EBITDA (£m) 103.7 103.9
Adjusted earnings per share (pence) 5.25 4.96
Adjusted diluted earnings per share (pence) 5.21 4.92
Return on capital employed (%) 14.5% 14.0%
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