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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Ashtead Technology Holdings Plc | LSE:AT. | London | Ordinary Share | GB00BLH42507 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
22.00 | 2.64% | 855.00 | 850.00 | 858.00 | 860.00 | 825.00 | 842.00 | 256,312 | 16:35:29 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Oil And Gas Field Expl Svcs | 73.12M | 12.67M | 0.1584 | 53.66 | 679.56M |
TIDMAT.
RNS Number : 2560L
Ashtead Technology Holdings plc
04 September 2023
4 September 2023
Ashtead Technology Holdings plc
("Ashtead Technology" or the "Group")
Unaudited Half Year Results for the Six-Months Ended 30 June 2023
Strong start to the year with positive outlook
Ashtead Technology Holdings plc (AIM: AT.), a leading subsea equipment rental and solutions provider for the global offshore energy sector, announces its unaudited results for the six months ended 30 June 2023 ("HY23" or "the period").
Financial Performance (GBP'm)
HY23 HY22 % Movement Revenue 49.8 31.7 57.1% Gross profit 39.3 23.3 68.7% Gross profit % 78.8% 73.4% 540bps Adjusted EBITDA (1) 21.3 12.3 73.7% Adjusted EBITDA % 42.7% 38.6% 410bps Adjusted EBITA (2) 15.7 8.2 91.5% Adjusted EBITA % 31.4% 25.8% 560bps Adjusted profit before tax (3) 14.3 7.6 87.9% Adjusted basic earnings per share 14.2p 8.3p 71.1% Return on Invested Capital (ROIC) (4) 25.5% 19.1% 640bps Leverage (5) 0.7 0.9
Additional Statutory Accounting Measures (GBP'm)
HY23 HY22 % Movement Operating profit 15.1 7.5 102.4% Profit before tax 13.2 6.9 91.8% Basic earnings per share 13.1p 7.4p 77.0%
-- Strong year-on-year increase in revenue (57.1%) driven by continued high demand across both offshore renewables and offshore oil and gas
o Offshore renewables revenue increased by 74.1% to GBP16.3m (HY22: GBP9.4m)
o Offshore oil and gas revenue increased by 50.0% to GBP33.5m (HY22: GBP22.3m)
-- Organic growth of 40.5%, with M&A contributing 13.9% and 2.7% from favourable FX
-- Gross Profit margin increased to 78.8% (HY22: 73.4%) reflecting a higher proportion of growth coming from equipment rental, higher utilisation and increased pricing
-- Adjusted EBITA increased by 91.5% to GBP15.7m (HY22: GBP8.2m) with an adjusted EBITA margin of 31.4% (HY22: 25.8%) driven by top line growth and operational leverage
-- Adjusted basic earnings per share of 14.2p (HY22: 8.3p) and basic earnings per share of 13.1p (HY22: 7.4p)
-- ROIC of 25.5% increased from 19.1% in HY22
-- Net debt of GBP26.4m (HY22: GBP21.2m) with leverage reducing to 0.7x from 1.0x at year end due to cash generation and growth in LTM EBITDA
Operational Highlights and Outlook
-- WeSubsea and Hiretech acquisitions both integrated and demonstrating strong momentum with growth in revenues and profits.
-- Year to date investment of GBP8m in capital expenditure (HY22: GBP7.8m) with full year forecast of GBP20m, having raised capex earlier in the year. We remain focused on expanding our capabilities and international reach and are investing in expanding our fleet to take advantage of structural growth opportunities
-- Breadth, depth and reliability of the Ashtead Technology fleet, the largest independent fleet in the market, continuing to provide a competitive advantage
-- Continuing to see high levels of quoting activity with value of quotes in HY23 up >50% compared to HY22
-- Employee headcount at 30 June 2023 of 289, 11% higher than December 2022, with recruitment focused on expanding on our sales and technical capacity for continued growth
-- Continuing to review M&A opportunities to complement organic growth and consolidate a highly fragmented market
-- The Board is very encouraged by the Group's performance in HY23 and expects FY23 to be comfortably ahead of its previous expectations
Allan Pirie, Chief Executive Officer, said:
"I am extremely pleased to announce our strongest ever set of interim results. We have continued to see positive momentum through the first half of 2023 with the Group benefiting from our strategic investment in people and equipment, together with further increases to both utilisation and pricing. Our recent acquisitions of Hiretech and WeSubsea have performed ahead of our expectations and we are benefitting from our increased breadth of capabilities.
Market fundamentals remain strong and we continue to expand our offering whilst growing within our existing markets. Given the unseasonal strength of the final quarter of FY22 we expect year-on-year growth to moderate in the second half. Our HY23 results and positive end market dynamics give the Board increased confidence in the outlook for the business and we expect FY23 outturn to be comfortably ahead of our previous expectations."
For further information, please contact:
Ashtead Technology (Via Vigo Consulting) Allan Pirie, Chief Executive Officer Ingrid Stewart, Chief Financial Officer Vigo Consulting (financial PR) Tel: +44 (0)20 7390 0230 Patrick d'Ancona ashteadtechnology@vigoconsulting.com Finlay Thomson Kate Kilgallen Numis Securities Limited (Nomad Tel: +44 (0)20 7260 1000 and Broker) Julian Cater George Price Kevin Cruickshank (QE)
(1) Adjusted EBITDA is defined as operating profit adjusted to add back depreciation, amortisation, foreign exchange movements and non-trading items as shown in Note 18 of the HY23 accounts
(2) Adjusted EBITA is defined as operating profit adjusted to add back amortisation, foreign exchange movements and non-trading items as shown in Note 18 of the HY23 accounts
(3) Adjusted profit before tax is defined as profit before tax adjusted to add back amortisation, foreign exchange movements and non-trading items as shown in Note 18 of the HY23 accounts
(4) Return on Invested Capital (ROIC) is defined as LTM(6) Adjusted EBITA divided by Invested Capital. Invested capital is defined as average net debt plus average equity
(5) Leverage is defined as net debt divided by LTM Adjusted EBITDA
(6) LTM is defined as latest twelve months to 30 June 2023
Notes to editors:
Ashtead Technology is a leading subsea equipment rental and solutions provider for the global offshore energy sector. Ashtead Technology's specialist equipment, advanced-technologies and support services enable its customers to understand the subsea environment and manage offshore energy production infrastructure.
The Company's service offering is applicable across the lifecycle of offshore wind farms and offshore oil and gas infrastructure.
In the fast-growing offshore wind sector, Ashtead Technology's specialist equipment and services are essential through the project development, construction and installation phase. Once wind farms are operational, Ashtead Technology supports customers with inspection, maintenance and repair ("IMR") equipment and services. In the more mature oil and gas sector, Ashtead Technology's focus is on IMR and decommissioning.
Headquartered in the UK, the Company operates globally, servicing customers from its ten facilities located in key offshore energy hubs.
Cautionary Statement
This announcement contains certain forward-looking statements, including with respect to the Group's current targets, expectations and projections about future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts and reflect the directors' beliefs and expectations, made in good faith and based on the information available to them at the time of the announcement. Such statements involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement and should be treated with caution. Any forward-looking statements made in this announcement by or on behalf of Ashtead Technology speak only as of the date they are made. Except as required by applicable law or regulation, Ashtead Technology expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.
This announcement contains inside information as defined in Article 7 of the retained EU law version of the Market Abuse Regulation No 596/2014 ("UK MAR") and has been announced in accordance with the Company's obligations under Article 17 of UK MAR. Upon publication of this announcement, this information is now considered in the public domain.
CEO STATEMENT
We have seen continued positive momentum in the business through the first half of 2023 and I am pleased to present our half year results which demonstrate significant growth on HY22. As we near the second anniversary of our IPO in November 2021, I am delighted with the progress the business has made against its strategic goals, as we continue to grow and go from strength to strength.
Strong market dynamics, investment in both organic and inorganic growth, and increased cost utilisation and pricing have resulted in a strong financial performance in HY23 with revenue growth of 57.1% on the prior year, delivering EBITA margins of 31.4% (HY22: 25.8%) and ROIC of 25.5% (HY22: 19.1%). Market dynamics remain strong with long term structural growth across our key end markets. Rystad Energy predict a 22% increase in addressable market in 2023 with a CAGR of 12% 2022 through to 2025. We have seen an increase in quoting activity of over 50% compared to HY22 and our customers continue to report increases in backlog which gives us confidence through the remainder of the year, into 2024 and beyond.
As the market continues to evolve and with increased need for energy security, we delivered significant growth in revenues from the offshore renewables market with a 74.1% growth on HY22, whilst our oil and gas activity grew at 50.0%. Renewables revenues made up 32.7% of our business with this activity coming from our European, American and Asian operations. Whilst the offshore wind sector currently faces increased cost pressures, the global inventory of projects support a reported increase in offshore wind backlog amongst our largest customers, with a record 70 GW of projects expected to be auctioned in 2023.
Our People
We were delighted to recruit Christine Cochrane as our first HR Director who joined us in August. Hiring new talent, providing valuable training and development, and a rewarding place to work, has been, and always will be, a priority for the business and Christine's appointment underlines our focus on these areas.
We increased our headcount to 289, an increase of 11% from year end and 32% on the prior year with the growth predominantly coming from further expansion of our technical and sales teams. We have continued with our Star Awards programme where we reward our employees that have gone above and beyond in demonstrating our company values, and increased our employee recruitment referral bonus which has been a successful tool in supporting our recruitment drive.
Our Equipment
GBP8m of capital expenditure (GBP7.7m in rental fleet) was invested during the first half of the year with a forecast of GBP20m for the full year, having increased capex earlier in the year. We continue to broaden our range of complementary equipment and services, increasing our offering to our customers, investing in equipment that is fungible across both sectors, or is relevant to the offshore renewables market, and ensuring that we maintain our market position as the leading independent provider of subsea rental equipment. The strength of the underlying markets is contributing to lengthening lead times on certain products. Our investment in rental fleet in 2H23 will help secure the equipment to meet anticipated demand both in coming months and into 2024.
Sustainability
We continue to make progress on our sustainability journey and being a good corporate citizen is at the heart of the way we do business at Ashtead Technology. We have maintained our QHSE record and were delighted with the positive feedback from our recent external ISO audits. Our revenues from the renewables market continued to grow and we retain our focus on supporting the energy transition.
Integration
Integration of both WeSubsea and Hiretech into the Ashtead Technology group has progressed well, both businesses have performed ahead of expectations, demonstrating a combined 38.6% growth in revenues year on year. Both acquisitions are highly complementary to our mechanical solutions business and we have witnessed an increase in both cross selling and international opportunities and synergistic benefits of having the equipment as part of our wider offering.
We have integrated both acquisitions into our ERP system with all employees and assets transferred to Ashtead Technology entities. The WeSubsea brand has been retained in relation to the equipment only and we are in the process of fully phasing out the Hiretech brand name in support of our one route to market approach.
These acquisitions are great case studies of the benefits of our M&A strategy and approach to integration and we continue to build on the M&A pipeline as one of our key growth strategies.
Outlook
Market fundamentals remain strong and we continue to expand our offering whilst growing within our existing markets. Given the unseasonal strength of the final quarter of FY22 we expect year-on-year growth to moderate in the second half. Our HY23 results and positive end market dynamics give the Board increased confidence in the outlook for the business and we expect outturn for the year to be comfortably ahead of our previous expectations.
Allan Pirie
Chief Executive Officer
CFO STATEMENT
I am delighted to report another strong set of financial results for the first half of 2023 as the positive momentum from FY22 continues into FY23. Our revenues have grown by 57.1% predominantly due to organic growth (40.5%), enhanced by M&A (13.9% growth) and positive FX movements (2.7%).
Renewables revenues accounted for 32.7% of Group HY23 revenue, representing 74.1% growth from this market compared to the prior year. An increased focus on energy security has also resulted in continued growth from the oil and gas market with revenues from this market increasing by 50.0%. Despite the continued resurgence of oil and gas activity, we maintain our target of 50% activity from the offshore renewables market in the medium term.
Our strongest growth in the period has come from our European operations which saw a 90% increase in revenue year on year, in part supported by acquisition as both Hiretech and WeSubsea operations were European based. This region has seen a resurgence in activity across its multiple geographies and in both renewables and oil and gas activity, with a positive outlook for remainder of the year and into 2024 and beyond with Rystad predicting a 16% CAGR in the European market from 2022 to 2025. Both Americas and Middle East businesses continued to grow (40% and 18% respectively) with Asia revenues down 6% on prior year due to a number of project delays in the region, but with Asia expected to rebound in 2024 with Rystad predicting a 22% CAGR in addressable market in this region from 2022 to 2025. We have taken advantage of the global nature of our fleet and the different pricing dynamics across the regions, with a focus on return on investment.
Gross profit
The Group achieved gross profit of GBP39.3m (HY22: GBP23.3m) representing a gross profit margin of 78.8%, up from 73.4% in HY22. The gross margin improvement predominantly resulted from improved pricing, higher activity levels and an increase in the proportion of revenues from equipment rental. Our average annualised cost utilisation increased to 45% (HY22: 44%). Our target cost utilisation remains around 45%+.
Administration costs
Administration costs (excluding depreciation, amortisation and exchange gain/loss) for HY23 were GBP18.5m (HY22: GBP11.6m), a GBP6.9m increase on HY22. GBP2.6m of this increase is due to increased bonus provision (GBP1.3m) and LTIP costs (GBP1.3m). The performance in HY23 compared to budget has resulted in us increasing our bonus provision in HY23 and the increased LTIP cost is predominantly due to the timing of awards. Personnel costs (excluding bonus and LTIP) increased by GBP3.1m due to the increase in employees (32% increase in personnel since June 2022) and a 7% pay increase adopted in January 2023. Excluding the bonus accrual and LTIP cost, personnel cost reduced as a percentage of revenue to 21.7% (from 24.3% in HY22). Other overhead increases relate to travel, marketing, audit, legal and professional costs and insurance which have increased by GBP1.1m due to increased scale and activity in the business, and inflationary rises.
Profitability
Adjusted EBITA of GBP15.7m compares to GBP8.2m in HY22 representing an EBITA margin of 31.4% compared to 25.8% in HY22 and delivering continued margin growth on our full year FY22 numbers. The increase in EBITA was the principal driver for an increase in ROIC to 25.5% (HY22: 19.1%).
Finance costs of GBP1.9m include a GBP0.5m write-off of deferred finance costs due to the refinancing which completed in April 2023. Excluding this, normalised finance costs were GBP1.4m, an increase of GBP0.8m due to an increase in drawn debt (utilised for the WeSubsea and Hiretech acquisitions) and increased banking base rates.
Profit Before Tax of GBP13.2m compares to GBP6.9m in HY22, an increase of 92%.
The tax provision for the period was GBP2.8m (HY22: GBP1.0m) representing an effective tax rate of 21.1% (HY22: 14.4%). The estimate has been based on the effective tax rates of each entity after removing any adjusting items. The higher effective tax rate in HY23 reflects reduced availability of brought forward overseas losses and the increased tax rate in the UK.
Adjusting for amortisation and exceptional costs results in an Adjusted basic earnings per share of 14.2p which compares to 8.3p in HY22.
Cash flow and balance sheet
The Group generated positive cash inflow before financing activities of GBP4.3m (HY22: GBP2.8m) in the period.
Continued investment in our equipment rental fleet has resulted in an increased net book value of property, plant and equipment from GBP25.8m in HY22 to GBP34.2m, and contributed to the GBP1.6m increase in depreciation from GBP4.1m in HY22 to GBP5.6m in HY23. We also increased our goodwill and intangible assets compared to the prior year due to the acquisitions completed in H2 2022.
Working capital at 30 June 2023 represented 9% of the last 12 months revenues compared to 16% at 30 June 2022 due to improvements in cash collection and timing of capex creditors.
We were pleased to announce our first dividend payment as a listed company following announcement of our annual results for FY22 which resulted in a GBP0.8m payment in June. We continue to see attractive opportunities in our M&A pipeline and in line with previous guidance, the Board has not recommended an interim dividend for HY23 and intends to continue its small, progressive dividend policy as part of its full year reporting.
Net debt has increased from GBP21.2m at HY22 to GBP26.4m but leverage has reduced from 0.9x to 0.7x (1.0x at year end). Both acquisitions were funded wholly through debt which contributed to the increase in net debt year on year. We have debt capacity of GBP118.5m (including GBP50m accordion facility) as at 30 June 2023 that can be utilised to fund further organic and inorganic growth.
Ingrid Stewart
Chief Financial Officer
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE
HALF-YEARLY FINANCIAL REPORT
The Directors of Ashtead Technology Holdings plc (set out on page 26 and 27 of the latest Annual Report and Accounts) confirm that to the best of their knowledge:
-- the condensed consolidated set of financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK;
-- the interim management report includes a fair review of the information required by:
(i) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(ii) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By order of the Board of Directors
Allan Pirie Ingrid Stewart
Chief Executive Officer Chief Financial Officer 4 September 2023 4 September 2023
Consolidated income statement
for the six-month period ended 30 June 2023
Unaudited Unaudited Audited six months six months year ended to 30 June to 30 June 31 December 2023 2022 2022 Notes GBP000 GBP000 GBP000 Revenue 2 49,846 31,730 73,120 Cost of sales 2 (10,573) (8,450) (18,829) ---------------------------- --------------------------------- -------------- Gross profit 2 39,273 23,280 54,291 Administrative expenses 2 (24,323) (16,158) (36,217) Impairment loss on trade receivables 2 (320) (211) (810) Other operating income 2 508 569 804 ---------------------------- --------------------------------- -------------- Operating profit 2 15,138 7,480 18,068 Finance income 3 50 - 21 Finance costs 3 (1,949) (579) (1,459) ---------------------------- --------------------------------- -------------- Profit before taxation 13,239 6,901 16,630 Taxation charge 4 (2,799) (997) (3,965) ---------------------------- --------------------------------- -------------- Profit for the financial period 10,440 5,904 12,665 ============================ ================================= ============== Profit attributable to: Equity shareholders of the Company 10,440 5,904 12,665 ============================ ================================= ============== Earnings per share Basic 5 13.1 7.4 15.9 Diluted 5 12.9 7.4 15.7 ============================ ================================= ============== The below financial measures are non-GAAP metrics used by management and are not an IFRS disclosure: Adjusted EBITDA^ 18 21,288 12,252 28,555 Adjusted EBITA^^ 18 15,651 8,174 20,124 ========================= ====== ======
^ Adjusted EBITDA is calculated as earnings before interest, tax, depreciation, amortisation and items not considered part of underlying trading including share based payments and foreign exchange gains and losses, is a non-GAAP metric used by management and is not an IFRS disclosure. See Note 18 to the condensed consolidated interim financial statements for calculations.
^^ Adjusted EBITA is calculated as earnings before interest, tax, amortisation and items not considered part of underlying trading including share based payments and foreign exchange gains and losses, is a non-GAAP metric used by management and is not an IFRS disclosure. See Note 18 to the condensed consolidated interim financial statements for calculations.
All results derive from continuing operations.
Consolidated statement of comprehensive income
for the six-month period ended 30 June 2023
Unaudited Unaudited Audited six months Six months year ended to 30 June to 30 June 31 December 2023 2022 2022 GBP000 GBP000 GBP000 Profit for the period 10,440 5,904 12,665 Other comprehensive income: Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (1,098) 1,036 1,179 ---------------------- ----------- ------------ Other comprehensive income for the period, net of tax (1,098) 1,036 1,179 Total comprehensive income 9,342 6,940 13,844 ====================== =========== ============ Total comprehensive income attributable to: Equity shareholders of the Company 9,342 6,940 13,844 ====================== =========== ============
Consolidated balance sheet
at 30 June 2023
Unaudited as at Unaudited Audited 30 June as at as at 31 December 2023 30 June 2022 2022 Notes GBP000 GBP000 GBP000 Non-current assets Property, plant and equipment 6 34,193 25,782 31,812 Goodwill 7 65,796 49,185 66,043 Intangible assets 7 5,387 1,259 5,978 Right-of-use assets 13 2,342 2,746 2,631 Deferred tax asset - 1,059 - --------- ------------- ------------------ 107,718 80,031 106,464 --------- ------------- ------------------ Current assets Inventories 8 2,679 2,351 1,865 Trade and other receivables 9 24,298 21,748 19,456 Cash and cash equivalents 6,492 4,425 9,037 --------- ------------- ------------------ 33,469 28,524 30,358
--------- ------------- ------------------ Total assets 141,187 108,555 136,822 ========= ============= ================== Current liabilities Trade and other payables 10 18,779 14,196 19,134 Income tax payable 1,863 551 1,820 Lease liabilities 13 797 791 865 --------- ------------- ------------------ 21,439 15,538 21,819 --------- ------------- ------------------ Non-current liabilities Loans and borrowings 11 30,347 22,678 34,865 Lease liabilities 13 1,723 2,164 1,991 Deferred tax liability 2,241 - 2,227 Provisions for liabilities 135 103 117 --------- ------------- ------------------ 34,446 24,945 39,200 --------- ------------- ------------------ Total liabilities 55,885 40,483 61,019 --------- ------------- ------------------ Equity Share capital 16 3,997 3,979 3,979 Share premium 16 14,115 14,115 14,115 Merger reserve 16 9,435 9,435 9,435 Share based payment reserve 16 1,780 - 827 Foreign currency translation reserve 16 (1,209) (254) (111) Retained earnings 16 57,184 40,797 47,558 --------- ------------- ------------------ Total equity 85,302 68,072 75,803 --------- ------------- ------------------ Total equity and liabilities 141,187 108,555 136,822 ========= ============= ==================
Consolidated statement of changes in equity
for the six-month period ended 30 June 2023
Foreign Share based currency Merger payment translation Retained Share capital Share premium reserve reserve reserve earnings Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 At 1 January 2022 audited 3,979 14,115 9,435 - (1,290) 34,893 61,132 ------------- ------------- ------------- ------------ ------------ ------------- ------------- Profit for the period - - - - - 5,904 5,904 Other comprehensive income - - - - 1,036 - 1,036 ------------- ------------- ------------- ------------ ------------ ------------- ------------- Total comprehensive income - - - - 1,036 5,904 6,940 ------------- ------------- ------------- ------------ ------------ ------------- ------------- At 30 June 2022 unaudited 3,979 14,115 9,435 - (254) 40,797 68,072 ------------- ------------- ------------- ------------ ------------ ------------- ------------- Profit for the period - - - - - 6,761 6,761 Other comprehensive income - - - - 143 - 143 ------------- ------------- ------------- ------------ ------------ ------------- ------------- Total comprehensive income - - - - 143 6,761 6,904 ------------- ------------- ------------- ------------ ------------ ------------- ------------- Share based payment charge - - - 827 - - 827 ------------- ------------- ------------- ------------ ------------ ------------- ------------- At 31 December 2022 audited 3,979 14,115 9,435 827 (111) 47,558 75,803 ------------- ------------- ------------- ------------ ------------ ------------- ------------- Profit for the period - - - - - 10,440 10,440 Other comprehensive income - - - - (1,098) - (1,098) ------------- ------------- ------------- ------------ ------------ ------------- ------------- Total comprehensive loss - - - - (1,098) 10,440 9,342 ------------- ------------- ------------- ------------ ------------ ------------- ------------- Share based payment charge - - - 953 - - 953 Issue of shares 18 - - - - (18) - Dividends paid - - - - - (796) (796) ------------- ------------- ------------- ------------ ------------ ------------- ------------- At 30 June 2023 unaudited 3,997 14,115 9,435 1,780 (1,209) 57,184 85,302 ============= ============= ============= ============ ============ ============= ===========
Consolidated cash flow statement
Unaudited Unaudited Audited six months six months year ended to 30 June to 30 June 31 December 2023 2022 2022 Notes GBP000 GBP000 GBP000 Cash generated from operating activities Profit before taxation 13,239 6,901 16,630 Adjustments to reconcile profit before taxation to net cash from operating activities Finance income 3 (50) - (21) Finance costs 3 1,949 579 1,459 6, Depreciation 13 5,637 4,078 8,431 Amortisation 7 860 758 1,202 Gain on sale of property, plant and equipment (508) (569) (804) Share based payment charges 1,281 - 825 Provision for liabilities 24 (17) (4) ----------- ----------- ------------ Cash generated before changes in working capital 22,432 11,730 27,718 (Increase)/decrease in inventories (848) (484) 274 (Increase)/decrease in trade and other receivables (5,408) (4,635) 785 Increase in trade and other payables 818 4,716 7,207 ----------- ----------- ------------ Cash inflow from operations 16,994 11,327 35,984 Interest paid (1,257) (426) (1,132) Tax paid (2,535) (1,112) (1,998) Net cash generated from operating activities 13,202 9,789 32,854 ----------- ----------- ------------ Cash flow used in investing activities Purchase of property, plant and equipment (7,780) (7,571) (13,728) Proceeds from disposal of property, plant and equipment 818 823 1,518 Purchase of computer software (269) (255) (725) Acquisition of subsidiary undertakings net of cash acquired (1,674) - (23,999) Interest received 50 - 21 Net cash used in investing activities (8,855) (7,003) (36,913)
----------- ----------- ------------ Cash flow (used in)/generated from financing activities Loans received 2,014 - 31,000 Transaction fees on loans received (1,241) (5) (228) Repayment of bank loans (5,628) (3,017) (21,727) Payment of lease liability (628) (520) (1,064) Dividends paid (796) - - Net cash (used in)/generated from financing activities (6,279) (3,542) 7,981 ----------- ----------- ------------ Net (decrease)/increase in cash and cash equivalents (1,932) (756) 3,922 Cash and cash equivalents at beginning of the period 9,037 4,857 4,857 Net foreign exchange difference (613) 324 258 Cash and cash equivalents at end of the period 6,492 4,425 9,037 =========== =========== ============
for the six-month period ended 30 June 2023
Notes to the consolidated interim financial statements
1. General information
Background
Ashtead Technology Holdings plc (the "Company") is a public limited company incorporated in the United Kingdom under the Companies Act 2006, whose shares are traded on AIM. The condensed consolidated interim financial statements of the Company for the six-month period ended 30 June 2023 comprise the Company and its interest in subsidiaries (together referred to as the "Group"). The Company is domiciled in the United Kingdom and its registered address is 1 Gateshead Close, Sunderland Road, Sandy, Bedfordshire, SG19 1RS, United Kingdom. The Company registration number is 13424040.
Basis of preparation
The annual consolidated financial statements of Ashtead Technology Holdings plc will be prepared in accordance with UK-adopted International Accounting Standards. These condensed consolidated interim financial statements for the six-month period ended 30 June 2023 have been prepared in accordance with UK adopted International Accounting Standard ("IAS") 34, 'Interim Financial Reporting' and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
The financial information for the six-month period ended 30 June 2023 is unaudited. It does not constitute statutory financial statements within the meaning of Section 434 of the Companies Act 2006. This report should be read in conjunction with the Group's Annual Report and Accounts as at and for the year ended 31 December 2022 ("last Annual Report and Accounts"), which were prepared in accordance with UK-adopted International Accounting Standards. The last Annual Report and Accounts have been filed with the Registrar of Companies and are available from the Group's website ( www.ashtead-technology.com ). The auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
The condensed consolidated interim financial statements unless otherwise stated are presented in sterling, to the nearest thousand. The functional currency of the Group is sterling.
The condensed consolidated interim financial statements were approved by the Board of Directors on 4 September 2023.
Accounting policies
The condensed consolidated interim financial statements have been prepared in accordance with the accounting policies set out on pages 53-59 of the last Annual Report and Accounts.
Taxation
Tax on income in the interim periods are accrued using management's best estimate of the weighted average annual tax rate that would be applicable to expected total annual earnings.
Critical accounting judgements and estimates
In preparing these condensed consolidated interim financial statements, management has made judgements, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas of judgement and estimate which have the greatest potential effect on the amounts recognised in these financial statements are the provision for bad debts, impairment of goodwill, carrying value and useful lives of property, plant and equipment and business combinations. These are consistent with matters disclosed on pages 58-59 of the last Annual Report and Accounts.
Standards, amendments, and interpretations not yet effective
A number of amendments and interpretations have been issued which are not expected to have any significant impact on the accounting policies and reporting.
Standards and amendments effective for the period
There are no new or amended standards or interpretations from 1 January 2023 onwards that have a significant impact on the accounting policies and reporting.
Going concern
These condensed consolidated financial statements of the Group are prepared on a going concern basis. The Directors of the Group assert that the preparation of the condensed consolidated financial statements on a going concern basis is appropriate, which is based upon a review of the future forecast performance of the Group for an eighteen-month period ending 31 December 2024.
During the six months ended 30 June 2023 the Group has continued to generate positive cash flow from operating activities, repaying GBP5,628,000 of its drawn RCF during the period, with a cash and cash equivalents balance of GBP6,492,000 at 30 June 2023 (31 December 2022: GBP9,037,000). The Group has access to a multi currency RCF with total commitments of GBP100,000,000. In addition, the Group has the ability to call upon an additional accordion facility of GBP50,000,000 subject to credit approval. The RCF and accordion facility expire in April 2027, with an option to extend by 1 year subject to credit approval. As at 30 June 2023 the RCF had an undrawn balance of GBP68,488,000 and the GBP50,000,000 accordion facility was undrawn.
The Facility Agreement is subject to a leverage covenant of 3.0x and an interest cover covenant of 4:1, which are both to be tested on a quarterly basis. The Group has complied with all covenants from entering the Facility Agreement until the date of these financial statements.
The Group monitors its funding and liquidity position throughout the period to ensure it has sufficient funds to meet its ongoing cash requirements. Cash forecasts are produced based on a number of inputs such as estimated revenues, margins, overheads, collection and payment terms, capex requirements and the payment of interest and capital on its existing debt facilities. Consideration is also given to the availability of bank facilities. In preparing these forecasts, the Directors have considered the principal risks and uncertainties to which the business is exposed.
Taking account of reasonable changes in trading performance and bank facilities available, the application of severe but plausible downside scenarios to the forecasts, the cash forecasts prepared by management and reviewed by the Directors indicate that the Group is cash generative and has adequate financial resources to continue to trade for the foreseeable future and to meet its obligations as they fall due.
2. Segmental analysis
The Chief Operating Decision Maker (CODM) is determined as the Group's Board of Directors. The Group's Board of Directors reviews the internal management reports of each geographic region monthly as part of the monthly management reporting. The operations within each of the regional segments display similar economic characteristics. There are no reportable segments which have been aggregated for the purpose of the disclosure of segment information.
The Group operates in the following four geographic regions, which have been determined as the Group's reportable segments. The operations of each geographic region are similar.
-- Europe -- Americas -- Asia-Pacific -- Middle East
Unaudited for the six-month period ended 30 June 2023
Asia Middle Head Office Europe Americas Pacific East Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Total revenue 32,675 8,775 5,314 3,082 - 49,846 (6,191) (2,846) (945) (591) - (10,573) Cost of sales -------- -------- -------- -------- -------- -------- Gross profit 26,484 5,929 4,369 2,491 - 39,273 Administrative expenses (8,624) (2,781) (1,805) (751) (4,552) (18,513) 313 51 126 18 - 508 Other operating income -------- -------- -------- -------- -------- -------- Operating profit before depreciation, amortisation and foreign exchange gain/(loss) 18,173 3,199 2,690 1,758 (4,552) 21,268
Foreign exchange gain 367 Depreciation (5,637) (860) Amortisation -------- Operating profit 15,138 Finance income 50 Finance costs (1,949) -------- Profit before taxation 13,239 Taxation charge (2,799) -------- Profit for the financial 10,440 period -------- Total assets 100,084 16,392 10,233 5,601 8,877 141,187 Total liabilities 17,678 4,662 2,038 837 30,670 55,885
Unaudited for the six-month period ended 30 June 2022
Asia Middle Head Europe Americas Pacific East Office Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Total revenue 17,178 6,265 5,681 2,606 - 31,730 (4,163) (2,129) (1,172) (986) - (8,450) Cost of sales -------- -------- -------- -------- -------- -------- Gross profit 13,015 4,136 4,509 1,620 - 23,280 Administrative expenses (5,384) (2,095) (967) (550) (2,693) (11,689) 223 83 267 (4) - 569 Other operating income -------- -------- -------- -------- -------- -------- Operating profit before depreciation, amortisation and foreign exchange gain/(loss) 7,854 2,124 3,809 1,066 (2,693) 12,160 Foreign exchange gain 156 Depreciation (4,078) (758) Amortisation -------- Operating profit Finance costs 7,480 (579) -------- Profit before taxation 6,901 Taxation charge (997) -------- Profit for the financial 5,904 period -------- Total assets 68,545 16,175 12,381 5,873 5,581 108,555 Total liabilities 11,718 3,909 1,339 681 22,836 40,483
Audited for the year ended 31 December 2022
Europe Americas Asia Pacific Middle Head Office Total East GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Total revenue 42,827 13,912 10,874 5,507 - 73,120 (9,663) (4,867) (2,368) (1,931) - (18,829) Cost of sales -------- -------- -------- -------- -------- -------- Gross profit 33,164 9,045 8,506 3,576 - 54,291 Administrative expenses (12,735) (5,274) (3,014) (1,563) (4,805) (27,391) 264 156 362 22 - 804 Other operating income -------- -------- -------- -------- -------- -------- Operating profit before depreciation, amortisation and foreign exchange gain/(loss) 20,693 3,927 5,854 2,035 (4,805) 27,704 Foreign exchange loss (3) Depreciation (8,431) (1,202) Amortisation -------- Operating profit 18,068 Finance income 21 Finance costs (1,459) -------- Profit before taxation 16,630 Taxation charge (3,965) -------- Profit for the financial 12,665 period -------- Total assets 93,522 15,335 11,025 5,429 11,511 136,822 Total liabilities 17,500 2,755 2,310 723 37,731 61,019
Central administrative expenses represent expenditures which are not directly attributable to any single operating segment. The expenditure has not been allocated to individual operating segments.
The revenues generated by each geographic segment almost entirely comprise revenues generated in a single country. Revenues in the Europe, Americas, Asia Pacific and Middle East segments are almost entirely generated in the UK, USA, Singapore and UAE respectively. Revenues generated outside of these jurisdictions are not material to the Group. The basis for the allocation of revenues to individual countries is dependent upon the depot from which the equipment is provided.
The carrying value of non-current assets, other than deferred tax assets, split by the country in which the assets are held is as follows:
Unaudited Audited as at 30 Unaudited as at 31 December June as at 30 June 2022 2023 2022 GBP000 GBP000 GBP000 UK 84,257 55,510 82,337 USA 11,456 10,998 11,163 Singapore 7,932 8,470 8,885 UAE 4,073 3,994 4,079 3. Finance income and costs Unaudited Unaudited Audited six months six months year ended to 30 June to 30 June 31 December 2023 2022 2022 Finance income GBP000 GBP000 GBP000 Bank interest receivable 50 - 21 =============== ================= ======================= Unaudited Unaudited Audited six months six months year ended to 30 June to 30 June 31 December 2023 2022 2022 Finance costs GBP000 GBP000 GBP000
Interest on bank loans (held at amortised cost) 1,236 419 1,139 Amortisation of deferred finance costs 650 91 182 Interest expense on lease liability (Note 13) 63 69 138 1,949 579 1,459 =========== =========== ============ 4. Tax
The tax expense for the six-month period ended 30 June 2023 is based upon management's best estimate of the weighted average annual tax rate expected for each jurisdiction for the full year ending 31 December 2023 applied to the profit before tax for the interim period. The effective tax rate for the six-month period ended 30 June 2023 is 21.1% and the income tax expense is lower than the standard UK rate of 22% for the period (19% to 31 March 2023 increasing to 25% from 1 April 2023) due to lower tax rates in overseas jurisdictions. The effective tax rate for the year ended 31 December 2022 was 23.8% and the income tax expense was higher than the standard UK rate of 19% during 2022 due to a deferred tax liability recognised arising from temporary timing differences on intangible assets.
5. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of Ordinary Shares in issue during the period.
Diluted earnings per share
For diluted earnings per share, the weighted average number of Ordinary Shares in issue is adjusted to assume conversion of all potentially dilutive Ordinary Shares. The Group has potentially dilutive Ordinary Shares arising from share options granted to employees under the share schemes as detailed in Note 15 of these condensed consolidated interim financial statements. During the period ended 30 June 2022, the Group had no potentially dilutive Ordinary Shares.
Adjusted earnings per share
Earnings attributable to ordinary shareholders of the Group for the period, adjusted to remove the impact of adjusting items and the tax impact of these, divided by the weighted average number of Ordinary Shares outstanding during the period.
Unaudited Unaudited Unaudited Unaudited Audited Audited Adjusted Statutory Adjusted Statutory Adjusted Statutory Six months Six months to 30 Six months Six months to 30 Year ended 31 Year ended to 30 June 2023 June 2023 to 30 June 2022 June 2022 December 2022 31 December 2022 Earnings attributable to equity shareholders of the Group: Profit for the period (GBP000) 11,355* 10,440 6,581* 5,904 15,619* 12,665 -------------------------------- ----------------- ----------------- ----------------- ------------------- -------------------- Number of shares: Weighted average number of Ordinary Shares - Basic 79,798,317 79,798,317 79,582,000 79,582,000 79,582,000 79,852,000 Weighted average number of Ordinary Shares - Diluted 80,817,881 80,817,881 79,582,000 79,582,000 80,679,071 80,679,071 -------------------------------- ----------------- ----------------- ----------------- ------------------- -------------------- Earnings per share attributable to equity holders of the Group - continuing operations: Basic earnings per share (pence) 14.2 13.1 8.3 7.4 19.6 15.9 Diluted earnings per share (pence) 14.1 12.9 8.3 7.4 19.4 15.7 -------------------------------- ----------------- ----------------- ----------------- ------------------- --------------------
* Refer to Note 18 for the reconciliation of Non-GAAP Profit Metrics.
6. Property, plant and equipment Assets held for Leasehold Freehold Fixtures and rental improvements property fittings Motor vehicles Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Cost: At 1 January 2022 audited 104,867 1,739 197 3,683 305 110,791 Additions 7,715 190 - 131 - 8,036 Disposals (2,802) - - (64) (30) (2,896) Foreign exchange movements 5,197 71 - 180 35 5,483 At 30 June 2022 unaudited 114,977 2,000 197 3,930 310 121,414 ---------------- ---------------- ---------------- ---------------- -------------- --------- Acquisitions 10,984 409 - 443 29 11,865 Fair value adjustment on acquisitions 467 - - - - 467 Additions 5,383 18 - 164 - 5,565 Disposals (3,478) (76) - 4 - (3,550) Foreign exchange movements 740 14 - (10) - 744 At 31 December 2022 audited 129,073 2,365 197 4,531 339 136,505 ---------------- ---------------- ---------------- ---------------- -------------- --------- Additions 8,033 24 - 192 - 8,249 Disposals (4,487) - - (6) - (4,493) Foreign exchange movements (2,347) (43) - (78) (1) (2,469) At 30 June 2023 unaudited 130,272 2,346 197 4,639 338 137,792 ---------------- ---------------- ---------------- ---------------- -------------- --------- Accumulated depreciation: At 1 January 2022 audited (85,621) (1,219) (68) (2,867) (184) (89,959) Charge for the period (3,349) (112) (4) (162) (19) (3,646) Disposals 2,549 - - 63 29 2,641 Foreign exchange movements (4,452) (50) - (144) (22) (4,668) At 30 June 2022 unaudited (90,873) (1,381) (72) (3,110) (196) (95,632) ---------------- ---------------- ---------------- ---------------- -------------- --------- Acquisitions (5,920) (338) - (267) (21) (6,546) Fair value adjustment on acquisitions (1,118) - - (81) - (1,199) Charge for the period (3,543) (141) (4) (149) (18) (3,855) Disposals 3,064 43 - (17) - 3,090 Foreign exchange movements (566) (12) - 27 - (551) At 31 December 2022 audited (98,956) (1,829) (76) (3,597) (235) (104,693) ---------------- ---------------- ---------------- ---------------- -------------- --------- Charge for the period (4,799) (114) (4) (179) (18) (5,114) Disposals 4,178 - - 5 - 4,183 Foreign exchange movements 1,929 36 1 61 (2) 2,025 At 30 June 2023 unaudited (97,648) (1,907) (79) (3,710) (255) (103,599) ---------------- ---------------- ---------------- ---------------- -------------- --------- Net book value: At 31 December 2021 audited 19,246 520 129 816 121 20,832 ================ ================ ================ ================ ============== ========= At 30 June 2022 unaudited 24,104 619 125 820 114 25,782 ================ ================ ================ ================ ============== ========= At 31 December
2022 audited 30,117 536 121 934 104 31,812 ================ ================ ================ ================ ============== ========= At 30 June 2023 unaudited 32,624 439 118 929 83 34,193 ================ ================ ================ ================ ============== ========= 7. Goodwill and intangible assets Customer Non-compete Computer Goodwill relationships arrangements software Total GBP000 GBP000 GBP000 GBP000 GBP000 Cost: At 1 January 2022 audited 48,651 4,447 208 3,769 57,075 Additions - - - 255 255 Foreign exchange movements 534 2 - 9 545 -------- -------------------------- -------------------- -------------------- ------------------------ At 30 June 2022 unaudited 49,185 4,449 208 4,033 57,875 -------- -------------------------- -------------------- -------------------- ------------------------ Acquisitions 16,852 4,414 274 - 21,540 Additions - - - 470 470 Foreign exchange movements 6 - - (9) (3) -------- -------------------------- -------------------- -------------------- ------------------------ At 31 December 2022 audited 66,043 8,863 482 4,494 79,882 -------- -------------------------- -------------------- -------------------- ------------------------ Additions - - - 269 269 Foreign exchange movements (247) - - - (247) -------- -------------------------- -------------------- -------------------- ------------------------ At 30 June 2023 unaudited 65,796 8,863 482 4,763 79,904 -------- -------------------------- -------------------- -------------------- ------------------------ Amortisation: At 1 January 2022 audited - (3,710) (176) (2,778) (6,664) Charge for the period - (594) (26) (138) (758) Foreign exchange movements - 1 - (10) (9) -------- -------------------------- -------------------- -------------------- ------------------------ At 30 June 2022 unaudited - (4,303) (202) (2,926) (7,431) -------- -------------------------- -------------------- -------------------- ------------------------ Charge for the period - (246) (13) (185) (444) Foreign exchange movements - 1 - 13 14 -------- -------------------------- -------------------- -------------------- ------------------------ At 31 December 2022 audited - (4,548) (215) (3,098) (7,861) -------- -------------------------- -------------------- -------------------- ------------------------ Charge for the period - (549) (48) (263) (860) Foreign exchange movements - - - - - -------- -------------------------- -------------------- -------------------- ------------------------ At 30 June 2023 unaudited - (5,097) (263) (3,361) (8,721) -------- -------------------------- -------------------- -------------------- ------------------------ Net book value: At 31 December 2021 audited 48,651 737 32 991 50,411 ======== ========================== ==================== ==================== ======================== At 30 June 2022 unaudited 49,185 146 6 1,107 50,444 ======== ========================== ==================== ==================== ======================== At 31 December 2022 audited 66,043 4,315 267 1,396 72,021 ======== ========================== ==================== ==================== ======================== At 30 June 2023 unaudited 65,796 3,766 219 1,402 71,183 ======== ========================== ==================== ==================== ========================
Goodwill has arisen on the acquisition of the following subsidiaries: Amazon Group Limited (the parent company of the existing Ashtead Technology Group at the time of acquisition in April 2016), TES Survey Equipment Services LLC, Welaptega Marine Limited, Aqua-Tech Solutions LLC and its subsidiary Alpha Subsea LLC, Underwater Cutting Solutions Limited, WeSubsea AS and its subsidiary WeSubsea UK Limited and Hiretech Limited, as well as the acquisition of the trade and assets of Forum Subsea Rentals, a division of Forum Energy Technologies (UK) Limited, Forum Energy Asia Pacific PTE Ltd and Forum US, Inc.
The Group tests annually for impairment, or more frequently if there are indicators that goodwill might be impaired.
For each of the operating segments to which goodwill has been allocated, the recoverable amount has been determined on the basis of a value in use calculation. In each case, the value in use was found to be greater than the carrying amount of the group of CGUs to which the goodwill has been allocated. Accordingly, no impairment to goodwill has been recognised. The value in use has been determined by discounting future cash flows forecast to be generated by the relevant regional segment. The key assumptions on which management has based its cash flow projections are the same as those used in the last Annual Report and Accounts.
8. Inventories Audited Unaudited Unaudited 31 December 30 June 2023 30 June 2022 2022 GBP000 GBP000 GBP000 Raw materials and consumables 2,679 2,351 1,865 ============= ============= ============
The cost of inventories recognised as an expense and included in cost of sales during the period was GBP3,282,000 (H1 2022: GBP1,690,000). The impairment loss recognised as an expense during the period was GBP54,000 (H1 2022: GBPnil).
9. Trade and other receivables Unaudited Unaudited Audited 30 June 2023 30 June 2022 31 December 2022 GBP000 GBP000 GBP000 Trade receivables 21,959 18,295 16,494 Prepayments 1,386 1,045 1,397 Accrued income 953 2,408 1,565 24,298 21,748 19,456 ============= ============= =================
The Directors consider that the carrying amount of trade receivable and accrued income approximates to fair value. The impairment loss recognised as an expense during the period was GBP320,000 (H1 2022: GBP211,000).
10. Trade and other payables Unaudited Unaudited Audited 30 June 2023 30 June 2022 31 December 2022 GBP000 GBP000 GBP000 Trade payables 4,990 5,775 5,896 Accruals 13,789 8,298 13,137 Amounts due to related parties - 123 101 18,779 14,196 19,134 ============= ============= =================
The Directors consider that the carrying amount of trade and other payables equates to fair value. The amounts due to related parties bear no interest and are due on demand.
11. Loans and borrowings Audited Unaudited Unaudited 31 December 30 June 2023 30 June 2022 2022 Non-current GBP000 GBP000 GBP000 Bank loans (held at amortised cost) 30,347 22,678 34,865 ============= ============= ============
At 30 June 2023 the bank loans comprise a revolving credit facility of GBP31,512,000 (of which GBP5,512,000 is denominated in USD) which carries interest at SONIA plus 2.25%. The lenders are ABN AMRO Bank N.V. and Citibank N.A., Clydesdale Bank plc and HSBC Bank plc. The Facility Agreement is subject to a leverage covenant of 3.0x and an interest cover covenant of 4:1. The total commitments are GBP100,000,000 for the RCF with an additional GBP50,000,000 accordion facility available subject to credit approval. As at 30 June 2023 the RCF had an undrawn balance of GBP68,488,000 and the GBP50,000,000 accordion facility was undrawn. A non-utilisation fee of 0.7875% is charged on the non-utilised element of the RCF facility. The revolving credit facility is fully repayable by April 2027, with an option to extend by 1 year.
At 30 June 2022 the bank loans comprise a revolving credit facility of GBP23,121,000 (of which GBP11,430,000 is denominated in USD) which carried interest at SONIA plus 2.2%. The lenders were HSBC Bank plc and Clydesdale Bank plc. The Facility Agreement was subject to a leverage covenant of 2.5x and an interest cover covenant of 4:1. The total commitments were GBP40,000,000 for the RCF with an additional GBP10,000,000 accordion facility available subject to credit approval. As at 30 June 2022 the RCF had an undrawn balance of GBP16,879,000 and the GBP10,000,000 accordion facility was undrawn. A non-utilisation fee of 0.88% was charged on the non-utilised element of the RCF facility.
Certain companies within the Group are party to cross guarantees with respect to bank loans totalling GBP31,512,000 (31 December 2022: GBP35,438,000) advanced to Ashtead Technology Limited and Ashtead Technology Offshore Inc. The lenders have a floating charge over certain assets of the Group.
Bank loans are repayable as follows:
Unaudited Unaudited Audited 30 June 2023 30 June 2022 31 December 2022 GBP000 GBP000 GBP000 Within one year - - - Within one to two years - - - Within two to three years - 23,121 35,438 Within three to four years 31,512 - - ------------- ------------- ----------------- 31,512 23,121 35,438 Deferred finance costs (1,165) (443) (573) 30,347 22,678 34,865 ============= ============= ================= 12. Financing liabilities reconciliation Audited Other Changes in Unaudited 1 January 2022 Cash flows Interest paid non-cash changes exchange rates 30 June 2022 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Cash at bank and in hand 4,857 (756) - - 324 4,425 --------------- ---------- ------------- ----------------- ---------------- ------------------ Bank loans (24,425) 3,022 - (91) (1,184) (22,678) Lease liabilities (3,134) 520 69 (261) (149) (2,955) --------------- ---------- ------------- ----------------- ---------------- -------------------- Net debt (22,702) 2,786 69 (352) (1,009) (21,208) =============== ========== ============= ================= ================ ====================
The non-cash movement relates to the amortisation of deferred finance costs, accrual of finance costs on lease liability and the addition of new leases during the period.
Other Changes in Unaudited non-cash exchange Audited 30 June 2022 Cash flows Acquisitions Interest paid changes rates 31 December 2022 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Cash at bank and in hand 4,425 (3,162) 7,938 - - (164) 9,037 ------------- ---------- ------------ ------------- -------------- ------------- ------------------ Bank loans (22,678) (12,067) - - (91) (29) (34,865) Lease liabilities (2,955) 544 - 69 (310) (204) (2,856) ------------- ---------- ------------ ------------- -------------- ------------- -------------------- Net debt (21,208) (14,685) 7,938 69 (401) (397) (28,684) ============= ========== ============ ============= ============== ============= ====================
The non-cash movement relates to the amortisation of deferred finance costs, accrual of finance costs on lease liability and the addition of new leases during the period.
Audited Other Changes in Unaudited 31 December 2022 Cash flows Interest paid non-cash changes exchange rates 30 June 2023 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Cash at bank and in hand 9,037 (1,933) - - (612) 6,492 ----------------- ---------- ------------- ----------------- ---------------- ------------- Bank loans (34,865) 4,855 - (650) 313 (30,347) Lease liabilities (2,856) 628 63 (171) (184) (2,520) ----------------- ---------- ------------- ----------------- ---------------- --------------- Net debt (28,684) 3,550 63 (821) (483) (26,375) ================= ========== ============= ================= ================ ===============
The non-cash movement relates to the amortisation of deferred finance costs, accrual of finance costs on lease liability and the addition of new leases during the period.
13. Leases
Leases as lessee
The Group leases warehouses, offices, and other facilities in different locations (UK, UAE, Singapore, Canada, USA). The lease term ranges from 2 to 15 years with an option to renew and/or extend available for some of the leases. Lease payments are renegotiated every 3-5 years to reflect market terms. The Group has elected not to recognise right-of-use assets and lease liabilities for leases that are short-term and/or of low-value items. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Further information about leases is presented below:
a) Amounts recognised in consolidated balance sheet Right-of-use assets GBP000 Balance at 1 January 2022 audited 2,923 Additions to right-of-use assets 180 Depreciation charge for the period (432) Effects of movements in exchange 75 rates ------ 2,746 Balance at 30 June 2022 unaudited ------ Additions to right-of-use assets 391 Depreciation charge for the period (498) Effects of movements in exchange (8) rates ------ 2,631
Balance at 31 December 2022 audited ------ Additions to right-of-use assets 108 Depreciation charge for the period (523) Effects of movements in exchange 126 rates ------ 2,342 Balance at 30 June 2023 unaudited ------ Audited Unaudited Unaudited 31 December 30 June 2023 30 June 2022 2022 Lease liabilities: GBP000 GBP000 GBP000 Current 797 791 865 Non-current 1,723 2,164 1,991 Total lease liabilities 2,520 2,955 2,856 ================================= ====================== ============
Lease liabilities are repayable as follows:
Audited Unaudited Unaudited 31 December 30 June 2023 30 June 2022 2022 GBP000 GBP000 GBP000 Within one year 895 910 976 Within one to two years 757 690 743 Within two to three years 502 683 668 Within three to four years 376 460 365 Within four to five years 214 335 315 Beyond five years - 198 64 ------------- ------------- ------------- 2,744 3,276 3,131 Effect of discounting (224) (321) (275) Total lease liabilities 2,520 2,955 2,856 ============= ============= ============= b) Amounts recognised in the income statement Unaudited Unaudited Audited six months six months year ended to 30 June to 30 June 31 December 2023 2022 2022 GBP000 GBP000 GBP000 Depreciation charge 523 432 930 Interest expense on lease liability 63 69 138 Expenses relating to short-term leases 119 100 172 Total amount recognised in the income statement 705 601 1,240 ============================ ============================ ============ c) Amounts recognised in the cash flow statement Unaudited Unaudited Audited six months six months year ended to 30 June to 30 June 31 December 2023 2022 2022 GBP000 GBP000 GBP000 Total cash payments for leases 691 589 1,202 =========== =========== ============ 14. Capital commitments Audited Unaudited Unaudited 31 December 30 June 2023 30 June 2022 2022 GBP000 GBP000 GBP000 Capital expenditure contracted for but not provided 9,364 2,720 689 ============= ============= ============ 15. Share based payments
IPO LTIP Awards
The IPO LTIP awards were granted on 5 September 2022 and comprise three equal tranches, with the first tranche vested on the publication of the annual report for the year ended 31 December 2022, the second tranche vesting on the publication of the annual report for the year ended 31 December 2023 and the third tranche vesting on the publication of the annual report for the year ended 31 December 2024. Certain senior managers from various Group companies are eligible for nil cost share option awards with Ashtead Technology Holdings plc granting the awards and on exercise, the awards will be equity settled with ordinary shares in Ashtead Technology Holdings plc. The IPO LTIP share awards vesting is subject to the achievement of a target annual Adjusted EPS and participants remaining employed by the Group over the vesting period.
The outstanding number of IPO LTIP awards at 30 June 2023 is 1,011,329 (30 June 2022: nil).
Tranche Tranche Tranche Share based payments 1 2 3 ---------------------------------------- -------------- -------------- -------------- Valuation model Black-Scholes Black-Scholes Black-Scholes Weighted average share price (pence) 260.5 260.5 260.5 Exercise price (pence) 0 0 0 Expected dividend yield 0.76% 0.81% 0.85% Expected volatility 41.93% 41.93% 41.93% Risk-free interest rate 2.79% 3.14% 3.04% Expected term (years) 0.67 1.67 2.67 Weighted average fair value (pence) 259.2 257.0 254.7 Attrition 5% 5% 5% Weighted average remaining contractual life (years) 9.17 9.17 9.17 ---------------------------------------- -------------- -------------- --------------
The expected volatility has been calculated using the Group's historical market data history since IPO in 2021.
Weighted average Number of exercise Share based payments shares price (GBP) ---------------------------------------- ---------- ------------- Outstanding at beginning of the period 1,097,751 - Granted - - Exercised (86,422) 375.6 Forfeited - - ---------------------------------------- ---------- ------------- Outstanding at the end of the period 1,011,329 - ---------------------------------------- ---------- ------------- Exercisable at the end of the period 279,497 - ---------------------------------------- ---------- -------------
Share-based payments expense recognised in the consolidated income statement during the period was GBP1,185,000 (H1 2022: GBPnil).
2023 LTIP Awards
The 2023 LTIP awards were granted on 4 May 2023, with vesting on the announcement of the annual results for the year ended 31 December 2025. Certain senior managers from various Group companies are eligible for nil cost share option awards with Ashtead Technology Holdings plc granting the awards and on exercise, the awards will be equity settled with ordinary shares in Ashtead Technology Holdings plc. The share awards vesting is subject to the achievement of agreed Adjusted EPS, ROIC and total shareholder return ("TSR") targets and participants remaining employed by the Group over the vesting period.
The outstanding number of awards at 30 June 2023 is 438,622 (30 June 2022: nil).
Share based payments EPS ROIC TSR ---------------------------------------- -------------- -------------- ------------ Valuation model Black-Scholes Black-Scholes Monte Carlo Weighted average share price (pence) 379.0 379.0 379.0 Exercise price (pence) 0 0 0 Expected dividend yield 0.0% 0.0% 0.0% Expected volatility 40.17% 40.17% 40.17% Risk-free interest rate 3.71% 3.71% 3.71% Expected term (years) 3.02 3.02 3.02 Weighted average fair value (pence) 379.0 379.0 298.0 Attrition 5% 5% 5% Weighted average remaining contractual life (years) 9.84 9.84 9.84 ---------------------------------------- -------------- -------------- ------------
The expected volatility has been calculated using the Group's historical market data history since IPO in 2021.
Weighted average Number of exercise Share based payments shares price (GBP) --------------------------------------- ---------- ------------- Outstanding at beginning of the period - - Granted 438,622 - Exercised - - Forfeited - - --------------------------------------- ---------- ------------- Outstanding at the end of the period 438,622 - --------------------------------------- ---------- ------------- Exercisable at the end of the period - - --------------------------------------- ---------- -------------
Share-based payments expense recognised in the consolidated income statement during the period was GBP94,000 (H1 2022: GBPnil).
16. Share capital and reserves
The Group considers its capital to comprise its called up share capital, share premium, merger reserve, share based payment reserve, retained earnings and foreign exchange translation reserve. Quantitative detail is shown in the consolidated statement of changes in equity. The Directors' objective when managing capital is to safeguard the Group's ability to continue as a going concern in order to provide returns for the shareholders and benefits for other stakeholders.
Unaudited Unaudited Audited 30 June 30 June 31 December Called up share capital 2023 2022 2022 Allotted, called up and fully paid No. GBP000 No. GBP000 No. GBP000 Ordinary shares of GBP0.05 each 79,947,919 3,997 79,582,000 3,979 79,582,000 3,979 --------- --------- ------------ 3,997 3,979 3,979 ========= ========= ============
Ordinary share capital represents the number of shares in issue at their nominal value. The holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
Share premium
Share premium represents the amount over the par value which was received by the Group upon the sale of the Ordinary Shares. Share premium is stated net of direct costs of GBP929,000 relating to the issue of the shares.
Merger reserve
The merger reserve was created as a result of the share for share exchange under which Ashtead Technology Holdings plc became the parent undertaking prior to the IPO. Under merger accounting principles, the assets and liabilities of the subsidiaries were consolidated at book value in the Group financial statements and the consolidated reserves of the Group were adjusted to reflect the statutory share capital, share premium and other reserves of the Company as if it had always existed, with the difference presented as the merger reserve.
Share based payment reserve
The share based payment reserve is built up of charges in relation to equity settled share based payment arrangements which have been recognised within the consolidated income statement.
Foreign currency translation reserve
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to the Group's presentational currency, sterling, at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated at an average rate for each month where this rate approximates to the foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income and accumulated in the translation reserve, within invested capital. When a foreign operation is disposed of, such that control, joint control or significant influence (as the case may be) is lost, the entire accumulated amount in the foreign currency translation reserve is recycled to the income statement as part of the gain or loss on disposal.
Retained earnings
The movement in retained earnings is as set out in the Consolidated Statement of Changes in Equity. Retained earnings represent cumulative profits or losses, net of dividends and other adjustments.
17. Related parties
There were no transactions with related parties, other than key management personnel, in the six-month period ended 30 June 2023.
Compensation of key management personnel: Unaudited Unaudited Audited six months six months year ended to 30 June to 30 June 31 December 2023 2022 2022 GBP000 GBP000 GBP000 Salaries and fees 428 407 790 Bonus 530 200* 200* Other benefits 38 41 72 Share based payment charges (Note 15) 756 - 491 Total 1,752 648 1,553 ============= =========== ============
* Bonus paid was a contractual obligation on the successful completion of the IPO, which was accrued at 31 December 2021 and paid during February 2022.
The outstanding balance due to related parties as at 30 June 2022 (GBP123,000) and 31 December 2022 (GBP384,000) related to payments to BP INV2B Bidco Limited, BP INV2 Holdco Limited and BP INV2 Newco Limited which are no longer considered related parties as at 30 June 2023.
18. Reconciliation of Non-GAAP Profit Metrics Reconciliation of Unaudited Adjusted EBITDA six months Unaudited Audited to 30 June six months to year ended 2023 30 June 2022 31 December 2022 Notes GBP000 GBP000 GBP000 Adjusted EBITDA 21,288 12,252 28,555 Cost associated with M&A - - (787) Restructuring costs (20) - (28) - (92) (36) Other exceptional costs -------- -------- -------- Operating profit before depreciation, amortisation and foreign exchange gain/(loss) 21,268 12,160 27,704 Depreciation on property, plant and equipment 6 (5,114) (3,646) (7,501) Depreciation on (523) (432) (930) right-of-use asset 13 -------- -------- -------- Operating profit before amortisation and foreign exchange gain/(loss) 15,631 8,082 19,273 Amortisation of intangible assets 7 (860) (758) (1,202) Foreign exchange 367 156 (3) gain/(loss) -------- -------- -------- Operating profit 15,138 7,480 18,068
======================== ======================== =========================== Reconciliation of Unaudited Unaudited Audited Adjusted EBITA six months to 30 June six months to 30 June year ended 31 2023 2022 December 2022 Notes GBP000 GBP000 GBP000 Adjusted EBITA 15,651 8,174 20,124 Cost associated with M&A - - (787) Restructuring costs (20) - (28) Other exceptional costs - (92) (36) Amortisation of intangible assets 7 (860) (758) (1,202) Foreign exchange 367 156 (3) gain/(loss) -------- -------- -------- Operating profit 15,138 7,480 18,068 ======================== ======================== =========================== Reconciliation Unaudited of Adjusted Unaudited six months Audited Profit six months to year ended Before Tax to 30 June 30 June 31 December 2023 2022 2022 Notes GBP000 GBP000 GBP000 Adjusted Profit Before Tax 14,274 7,595 18,686 Cost associated with M&A - - (787) Restructuring costs (20) - (28) Amortisation of deferred finance costs (522) - - Other exceptional costs - (92) (36) Foreign exchange gain/(loss) 367 156 (3) Amortisation of intangible (860) (758) (1,202) assets 7 -------- -------- -------- Profit before taxation 13,239 6,901 16,630 ================================= ======================== ============================ Reconciliation Unaudited Audited of Adjusted Unaudited six months year ended Profit six months to 30 June 31 December After Tax to 30 June 2023 2022 2022 Notes GBP000 GBP000 GBP000 Adjusted Profit After Tax 11,355 6,581 15,619 Cost associated with M&A - - (787) Restructuring costs (20) - (28) Amortisation of deferred finance costs (522) - - Other exceptional costs - (92) (36) Foreign exchange gain/(loss) 367 156 (3) Amortisation of intangible assets 7 (860) (758) (1,202) Tax impact of the adjustments above 120 17 12 Deferred tax arising from temporary timing differences on intangible - - (910) assets -------- -------- -------- Profit for the financial period 10,440 5,904 12,665 ================================= ======================== ============================
Adjusted Profit After Tax is used to calculate the Adjusted earnings per share in Note 5.
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