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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ashtead Technology Holdings plc | LSE:AT | London | Ordinary Share | Ordinary Shares |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Dec 2021 to Dec 2024
TIDMAT.
RNS Number : 1924Y
Ashtead Technology Holdings plc
05 September 2022
5 September 2022
Ashtead Technology Holdings plc
("Ashtead Technology" or the "Group")
Unaudited Half Year Results for the Six-Months Ended 30 June 2022
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 2022 ("HY22" or "the period").
Financial Performance
GBP'm HY22 HY21 % Movement Revenue 31.7 24.7 28.5% Gross profit 23.3 17.8 30.9% Gross profit % 73.4% 72.0% 140bps Adjusted EBITDA (1) 12.3 10.1 21.1% Adjusted EBITDA % 38.6% 41.0% (240bps) Adjusted EBITA (2) 8.2 5.5 47.7% Adjusted EBITA % 25.8% 22.4% 340bps Adjusted profit before tax (3) 7.6 3.9 95.3% Adjusted earnings per share 8.3p 4.1p 102.0% Return on Invested Capital (4) 19.1% 10.9% 820bps Leverage (5) 0.9 1.8
Additional Statutory Accounting Measures
GBP'm HY22 HY21 % Movement Operating profit 7.5 4.0 85.5% Profit before tax 6.9 2.1 233.1% Basic earnings per share 7.4p 1.9p 289.5%
(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 17 of the HY22 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 17 of the HY22 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 17 of the HY22 accounts
(4) Return on Invested Capital 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 LTM Adjusted EBITDA divided by net debt
(6) LTM is defined as latest twelve months to 30 June 2022
-- Strong year-on-year revenue increase (28.5%) delivered through growth across all geographic markets, enabled by higher demand in both offshore renewables and offshore oil and gas
o Offshore renewables revenue increased by 25.6% to GBP9.4m (HY21: GBP7.5m)
o Offshore oil and gas revenue increased by 29.8% to GBP22.4m (HY21: GBP17.2m)
-- Gross Profit margin increased to 73.4% (HY21: 72.0%) reflecting higher cost utilisation and improved pricing
-- Adjusted EBITDA rose 21.1% to GBP12.3m (HY21: GBP10.1m), with EBITDA margin in line with expectations
-- Adjusted EBITA increased by 47.7% to GBP8.2m (HY21: GBP5.5m) with an adjusted EBITA margin of 25.8% (HY2021: 22.4%) driven by top line growth
-- Net debt of GBP21.2m with leverage reducing to 0.9x from 1.0x at year end due to cash generation and growth in LTM EBITDA
Operational Highlights and Outlook
-- LTM average cost utilisation of 44% (H1 2021: 39%), reflecting an increase in offshore activity across both oil and gas, and renewables end markets
-- Year to date investment of GBP7.6m in capital expenditure supporting rental fleet expansion (HY21: GBP2.5m), positioning the business for continued growth. Spend accelerated in HY22 to capture market opportunity and minimise delays due to extended lead times
-- Quoting activity increased with value of quotes in HY22 up 29% compared to HY21
-- Employee headcount at 30 June 2022 of 219, 7% higher than last year end, positioning the business for continued growth
-- Further strengthening of senior team through appointment of Phil Middleton as Survey & Robotics Director, Bob Gillespie as Commercial Director and Ross MacLeod as Integrated Projects Director
-- Continuing to review M&A opportunities to complement organic growth and consolidate a highly fragmented market. Separate announcement made today regarding signing of sale and purchase agreement to acquire WeSubsea, transaction expected to complete Q4 2022
-- The Board is very encouraged by the Group's performance in HY22 and expects FY22 to be at least in line with market expectations
Allan Pirie, Chief Executive Officer, said:
"We are pleased with our half year performance which demonstrates continued positive momentum in the business against a supportive backdrop. As governments set out their plans to ensure energy security, investment in both oil and gas and renewables offshore infrastructure is expected to continue. We are well placed to benefit from this, and the market fundamentals remain strong for Ashtead Technology. Our HY22 results and end market outlook give us increased confidence in the outlook for our business."
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 Patrick d'Ancona 0230 Finlay Thomson Numis Securities Limited (Nomad Tel: +44 (0)20 7260 and Broker) 1000 Julian Cater George Price Jonny Abbott Kevin Cruickshank (QE)
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 nine 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.
Upon publication of this announcement, this information is now considered in the public domain.
CEO STATEMENT
I am pleased to present our first half year results statement following our IPO in November 2021. The focus during HY22 has been on continued investment in both equipment and people to capitalise on the positive momentum within the markets in which we operate and position the business for further growth. We have been delighted with the progress the business has made in its short period since listing and believe we are well--placed to take advantage of the current market dynamics.
The strong market demand has enabled us to improve cost utilisation and pricing and deliver a strong financial performance in HY22. We saw a 29% increase in quoting in the first half of this year from HY21 levels giving us confidence through the remainder of the year. Our revenues in HY22 were 28.5% higher than the comparable period, supported by the strong market backdrop and continued recovery following the COVID pandemic. Of this increase, 3.6% came from positive FX movements in comparison to HY21 and we expect this trend to continue through H2 2022 given the strengthening of the US dollar against sterling. Operating profit increased by 85.5% to GBP7.5m in HY22 compared to GBP4.0m in the comparable period, and our ROIC has increased to 19.1% from 10.9% in HY21.
In an ever-evolving energy market, the events of early 2022 have created a focus on the urgent need for governments globally to secure energy supply in a sustainable, affordable and responsible way. This has both heightened the need to accelerate investment in offshore renewable energy and rejuvenated activity in offshore oil and gas. The fungibility of Ashtead Technology's equipment rental fleet and the expertise that has built across both end markets positions our business well to capture growth across both adjacent markets.
Our People
Our people are at the heart of Ashtead Technology's success. 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.
Through the course of the period we have made three senior appointments to further strengthen our market-leading position, enhance our capabilities and expand our technology offering. Phil Middleton joined the business in May as Survey & Robotics Director to lead the Survey & Robotics service line globally and we have recently announced the appointment of Bob Gillespie as Commercial Director. Both Phil and Bob are well known figures within the subsea industry and bring a wealth of experience within the global oil and gas, and renewables, markets. We are also delighted to have promoted Ross MacLeod into the newly created role of Integrated Projects Director, focussing on providing unique solutions by combining the capabilities of each of our three business lines, with a particular focus on the offshore renewables market.
Our Equipment
GBP7.6m of capital expenditure was invested during the first half of the year. Ashtead Technology is focussed on maintaining its market position as the leading independent provider of subsea rental equipment whilst broadening the range of complementary equipment and services we offer to our customers. With c.85% of our fleet fungible across both our oil and gas and renewables markets we are well-placed to service the needs of our customers across both growth markets.
During the course of the period lead times for new equipment and spares have continued to increase but our proactive approach to supply chain management has ensured we have industry-leading levels of product availability. Tight market conditions are increasing customer propensity to rent, which has enabled us to increase cost utilisation from 39% to 44% during the period and through our pricing increases have offset inflationary pressures in the business.
Our Strategy
Through our three service lines - Survey & Robotics, Mechanical Solutions and Asset Integrity - we support the installation, IMR, and decommissioning of offshore energy infrastructure through the provision of subsea equipment rental and solutions. Our target is to achieve low double-digit organic revenue growth by executing on our proven strategy of:
-- Continuing to support the energy transition and capitalise on the significant expected increase in expenditure in the global offshore wind market
-- Maintaining Ashtead Technology's position as the leading independent subsea equipment rental business, growing and strengthening our business in subsea technology rental and solutions, whilst continuing to capitalise on customers' increasing propensity to rent
-- Continuing to broaden the range of complementary equipment and services and leveraging the Group's global footprint through the further internationalisation of Ashtead Technology's products and services
We remain focused on operational excellence, ensuring the reliability and availability of equipment, the delivery of integrated solutions and service agility, employee training and development, digitisation of internal processes and utilising our significant domain expertise and product knowledge, increasing operational benefits through continuous improvement to better serve our customers.
The Group plans to complement its organic growth through a clear and focused M&A strategy, building on its strong track record of value-enhancing transactions. We are focused on strengthening geographic, equipment and service capability to better support the Group's customers globally, and continue to review opportunities to acquire businesses which complement our current offering. The acquisition target listing contains a number of opportunities across each of the Group's service lines.
Sustainability
We continue to make progress on our sustainability journey and have recently obtained ISO 14001 (Environmental) certification. Our five priorities are aligned with the ten principles of the UN Global Compact - employee health, safety and wellbeing, labour practices & human rights, energy transition, ecological impact and business ethics - and initiatives such as the Ashtead Technology Star Awards are designed to help achieve our goals and support our sustainability efforts.
Our revenues from the renewables market continued to grow, increasing by 25.6% on HY21 and representing 29.5% of our revenues in the period. Our target remains 50% in the medium term despite the recent resurgence of activity from the oil and gas market.
Safety is core to our business and we are delighted to have maintained our zero TRIR (Total Recordable Incident Rate) score during the period, ensuring our employees are safe whilst at work.
Outlook
The Board is very encouraged by the Group's performance in HY22 which provides increased confidence in the outlook for the business and expects FY22 to be at least in line with market expectations.
Allan Pirie
Chief Executive Officer
CFO STATEMENT
The business has maintained its positive momentum from the FY21 results and continued on its growth trajectory into HY22 with a 28.5% increase in revenue compared to the comparable prior period. Increased activity levels in both the offshore oil and gas and renewables markets strengthened demand for Ashtead Technology's services through HY22 and contributed to underlying revenue growth of 24.9%. Additionally, positive FX movements contributed a further 3.6% increase in revenue.
Renewables revenues accounted for 29.5% of Group revenue HY22, representing 25.6% growth from this market compared to prior year. An increased focus on energy security and affordability has resulted in a resurgence in the oil and gas market with revenues from this market increasing by 29.8%. Despite this resurgence, it is our strong view that renewable energy will grow at a significant rate and we maintain our target of 50% activity from this market in the medium term.
Gross profit
The Group achieved gross profit of GBP23.3m (HY21: GBP17.8m) representing a gross profit margin of 73.4%, up from 72.0% in HY21. The gross margin improvement predominantly resulted from higher activity levels and improved pricing. Our average annualised cost utilisation increased by 5% from 39% to 44% from June 2021 to June 2022, which supported improved pricing.
Administration costs
Administration costs (excluding depreciation, amortisation and exchange gain/loss) for HY22 were GBP11.7m, a GBP2.9m increase on the prior year. Personnel costs increased to 28.1% of revenue (from 26.1%) due to the re--introduction of the annual bonus scheme for FY22. Excluding the bonus accrual, personnel cost reduced as a percentage of revenue to 24.2%. The Group has continued to invest in its employees through HY22, increasing headcount from 204 in Dec 2021 to 219 in June 2022. No cost has been booked for the LTIP in HY22 as the awards have not yet been formalised.
Profitability
Adjusted EBITA of GBP8.2m compares to GBP5.5m in HY21 representing an EBITA margin of 25.8% compared to 22.4% in HY21 and continued margin growth on our full year FY21 numbers. The increase in profitability was the principal driver for an increase in ROIC (Return on Invested Capital) to 19.1% (HY21: 10.9%).
There was an exchange rate benefit year on year of GBP0.3m at EBITA level, caused predominantly by the strengthening of the US dollar against our GBP reporting currency. At HY21 FX rates the EBITA margin was 25.1%.
Where we have provided adjusted figures, they are after the add-back of various one-off items. The adjustments to determine Adjusted EBITA total GBP0.7m (HY21: GBP1.5m) and are set out in note 17 of the accounts.
Profit Before Tax of GBP6.9m compares to GBP2.1m in HY21.
Net finance expense
In addition to reducing leverage through the raising of GBP15m of primary capital, the Group refinanced its debt as part of the IPO process in November 2021 significantly reducing its interest cost. HY22 interest costs were GBP0.6m (HY21: GBP2.0m) with HY21 representing higher interest loans held under the previous private equity ownership structure.
Taxation
The tax provision for the period was GBP1.0m (HY21: GBP0.7m) representing an effective tax rate of 14.4% (HY21: 34.2%). The estimate has been based on the effective tax rates of each entity in FY21 after removing any adjusting items. The high effective tax rate in HY21 reflects the non-deductibility of costs relating to the IPO and higher standard income tax rates in overseas territories. The low effective tax rate in HY22 reflects the utilisation of brought forward overseas losses. Going forward, the directors expect the effective tax rate to be closer to UK statutory tax rates.
EPS and dividend
We are pleased with our performance during the first half year trading as a PLC having delivered positive results against our forecast at the time of our listing. Our adjusted basic earnings per share was 8.3p in HY22, up from 4.1p in the comparable period in 2021, supported by improved market conditions.
The company's capital allocation policy encompasses organic fleet investment, bolt-on M&A and shareholder returns by way of dividends. Mindful of both the current organic growth and M&A opportunities, it is the Board's intention to declare its first dividend in conjunction with the Company's final results for FY22.
Cash flow and net debt
The Group generated positive cash inflow before financing activities of GBP2.8m (HY21: GBP1.5m) in the period.
Working capital at 30 June 2022 represented 16% of the last 12 months revenues compared to 18% at 30 June 2021. The working capital increase from trade debtors represents the ramp up of activity as we reach our peak summer trading, offset by a slight decrease to debtor days since year end and an increase in creditors predominantly due to increased capex spend.
Our net debt has reduced to GBP21.2m from GBP22.7m at 31 December 2021 and our leverage has reduced from 1.0x to 0.9x during the period.
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 28 and 29 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 2 September 2022 2 September 2022
Consolidated income statement
for the six-month period ended 30 June 2022
Hot Features
Premium
Unaudited Unaudited Audited
six months six months year ended
to 30 June to 30 June 31 December
2022 2021 2021
Notes GBP000 GBP000 GBP000
Revenue 2 31,730 24,691 55,805
Cost of sales 2 (8,450) (6,904) (15,262)
----------------------------- ----------------------------------------- --------------
Gross profit 2 23,280 17,787 40,543
Administrative
expenses 2 (16,369) (14,340) (33,930)
Other operating
income 2 569 585 995
----------------------------- ----------------------------------------- --------------
Operating profit 2 7,480 4,032 7,608
Finance costs 3 (579) (1,960) (4,019)
----------------------------- ----------------------------------------- --------------
Profit before
taxation 6,901 2,072 3,589
Taxation charge 4 (997) (708) (1,060)
----------------------------- ----------------------------------------- --------------
Profit for the
financial
period 5,904 1,364 2,529
============================= ========================================= ==============
Profit attributable
to:
Equity shareholders
of the Company 5,904 1,364 2,529
============================= ========================================= ==============
Earnings per share
Basic 5 7.4 1.9 3.6
Diluted 5 7.4 1.9 3.6
============================= ========================================= ==============
The below financial measures
are non-GAAP metrics used
by management and are not
an IFRS disclosure:
Adjusted EBITDA^ 17 12,252 10,121 22,437
Adjusted EBITA^^ 17 8,174 5,536 13,724
=========================== ====== ======
^ 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 17 to the 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 17 to the financial statements for calculations.
All results derive from continuing operations.
Consolidated statement of comprehensive income
for the six-month period ended 30 June 2022
Unaudited Unaudited Audited
six months Six months year ended
to 30 June to 30 June 31 December
2022 2021 2021
GBP000 GBP000 GBP000
Profit for the period 5,904 1,364 2,529
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translation
of foreign operations 1,036 (45) 163
Net gain on cash flow hedges - 351 351
-------------------------- ----------- ------------
Other comprehensive income for the
period, net of tax 1,036 306 514
Total comprehensive income 6,940 1,670 3,043
========================== =========== ============
Total comprehensive income attributable
to:
Equity shareholders of the Company 6,940 1,670 3,043
========================== =========== ============
Consolidated balance sheet
at 30 June 2022
Unaudited
as at Unaudited Audited
30 June as at 30 June as at 31 December
2022 2021 2021
Notes GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 6 25,782 20,300 20,832
Goodwill 7 49,185 48,549 48,651
Intangible assets 7 1,259 2,083 1,760
Right-of-use assets 13 2,746 3,042 2,923
Deferred tax asset 1,059 764 1,010
--------- -------------- ------------------
80,031 74,738 75,176
--------- -------------- ------------------
Current assets
Inventories 8 2,351 1,782 1,778
Trade and other receivables 9 21,748 16,235 17,224
Cash and cash equivalents 4,425 7,702 4,857
--------- -------------- ------------------
28,524 25,719 23,859
--------- -------------- ------------------
Total assets 108,555 100,457 99,035
========= ============== ==================
Current liabilities
Loans and borrowings 11 - 38,901 -
Trade and other payables 10 14,196 9,327 9,415
Income tax payable 551 1,042 821
Lease liabilities 13 791 763 783
--------- -------------- ------------------
15,538 50,033 11,019
--------- -------------- ------------------
Non-current liabilities
Loans and borrowings 11 22,678 1,160 24,425
Lease liabilities 13 2,164 2,493 2,351
Provisions for liabilities 103 310 108
--------- -------------- ------------------
24,945 3,963 26,884
--------- -------------- ------------------
Total liabilities 40,483 53,996 37,903
--------- -------------- ------------------
Equity
Share capital 15 3,979 3,500 3,979
Share premium 15 14,115 - 14,115
Merger reserve 15 9,435 9,435 9,435
Foreign currency translation
reserve 15 (254) (1,498) (1,290)
Retained earnings 15 40,797 35,024 34,893
--------- -------------- ------------------
Total equity 68,072 46,461 61,132
--------- -------------- ------------------
Total equity and liabilities 108,555 100,457 99,035
========= ============== ==================
Consolidated statement of changes in equity
for the six-month period ended 30 June 2022
Share Merger
capital Share premium reserve Hedging reserve Foreign currency translation reserve Retained earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January
2021 unaudited 3,500 - 9,429 (351) (1,453) 33,660 44,785
------- --------------------- ------- ---------------- ------------------------------------------------------ ------------------------- -----------------------
Profit for
the period - - - - - 1,364 1,364
Other
comprehensive
income - - - 351 (45) - 306
------- --------------------- ------- ---------------- ------------------------------------------------------ ------------------------- -----------------------
Total
comprehensive
income - - - 351 (45) 1,364 1,670
------- --------------------- ------- ---------------- ------------------------------------------------------ ------------------------- -----------------------
Issue of
shares* - - 6 - - - 6
------- --------------------- ------- ---------------- ------------------------------------------------------ ------------------------- -----------------------
At 30 June 2021
unaudited 3,500 - 9,435 - (1,498) 35,024 46,461
------- --------------------- ------- ---------------- ------------------------------------------------------ ------------------------- -----------------------
Profit for the
period - - - - - 1,165 1,165
Other
comprehensive
income - - - - 208 - 208
------- --------------------- ------- ---------------- ------------------------- --------------------------- --------------------------------------------------
Total
comprehensive
income - - - - 208 1 1,165 1,373
------- --------------------- ------- ---------------- ------------------------- --------------------------- --------------------------------------------------
Issue of
shares from
IPO 479 15,044 - - - - 15,523
Transaction
fees on issue
of shares
from IPO - (929) - - - - (929)
Dividends
declared** - - - - - (1,296) (1,296)
------- --------------------- ------- ---------------- ------------------------- --------------------------- --------------------------------------------------
At 31 December
2021 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
======= ===================== ======= ================ ====================================================== ========================= =========================
*The movement in merger reserve represents the issue of shares in BP INV2 Pledgeco Limited and Ashtead US Pledgeco Inc pre IPO.
**The dividends declared relate to the pre-IPO group restructure.
Consolidated cash flow statement
for the six-month period ended 30 June 2022
Unaudited Unaudited Audited
six months six months year ended
to 30 June to 30 June 31 December
2022 2021 2021
Notes GBP000 GBP000 GBP000
Cash generated from operating activities
Profit before taxation 6,901 2,072 3,589
Adjustments to reconcile profit before
taxation to net cash from operating
activities
Finance costs 3 579 1,960 4,019
Depreciation 6 4,078 4,586 8,713
Amortisation 7 758 760 1,516
Gain on sale of property, plant and
equipment (569) (585) (995)
Provision for liabilities (17) 157 (28)
----------- ------------------------------------------ ------------
Cash generated before changes in working
capital 11,730 8,950 16,814
Increase in inventories (484) (542) (524)
Increase in trade and other receivables (4,635) (5,507) (6,597)
Increase in trade and other payables 4,716 2,053 2,016
----------- ------------------------------------------ ------------
Cash inflow from operations 11,327 4,954 11,709
Interest paid (426) (1,188) (3,615)
Tax paid (1,112) (115) (858)
Net cash from operating activities 9,789 3,651 7,236
----------- ------------------------------------------ ------------
Cash flow used in investing activities
Purchase of property, plant and
equipment (7,571) (2,498) (6,923)
Purchase of intangible assets (255) (457) (966)
Disposal of property, plant and
equipment 823 779 1,453
Net cash outflow on investing activities (7,003) (2,176) (6,436)
----------- ------------------------------------------ ------------
Cash flow used in financing activities
Proceeds from IPO share issue - - 15,523
Transaction fees on share issue - (49) (929)
Proceeds from share issue - 6 50
Loans received - - 25,107
Transaction fees on loans received (5) - (914)
Repayment of bank loans (3,017) (4,326) (44,121)
Payment of lease liability (520) (453) (1,012)
Repayment of loan notes - - (830)
Net cash outflow from financing
activities (3,542) (4,822) (7,126)
----------- ------------------------------------------ ------------
Net decrease in cash and cash
equivalents (756) (3,347) (6,326)
Cash and cash equivalents at beginning
of the period 4,857 10,958 10,958
Net foreign exchange difference 324 91 225
Cash and cash equivalents at end of the
period 4,425 7,702 4,857
=========== ========================================== ============
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 2022 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 2022 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 2022 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 2021 ("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 2nd September 2022.
Predecessor accounting
Ashtead Technology Holdings plc was incorporated on 27 May 2021 and became the parent entity of the Group on 17 November 2021 when Ashtead Technology Holdings plc acquired the entire shareholding of both BP INV2 Pledgeco Limited and Ashtead US Pledgeco Inc by way of share for share exchange agreement.
This did not constitute a business combination under IFRS 3 'Business Combinations' as it is effectively a combination among entities under common control. There is currently no guidance in IFRS on the accounting treatment for combinations among entities or businesses under common control. IAS 8 requires management, if there is no specifically applicable standard or interpretation, to develop a policy that is relevant to the decision making needs of users and that is reliable. The entity first considers requirements and guidance in other international standards and interpretations dealing with similar issues, and then the content of the IASB's Conceptual Framework for Financial Reporting (Conceptual Framework). Management might consider the pronouncements of other standard-setting bodies that use a similar conceptual framework to the IASB's, provided that they do not conflict with the IASB's sources of guidance.
Considering facts and circumstances management decided to apply a method broadly described as predecessor accounting. The principles of predecessor accounting are:
-- Assets and liabilities of the acquired entity are stated at predecessor carrying values. Fair value measurement is not required.
-- No new goodwill arises in predecessor accounting.
-- Any difference between the consideration given and the aggregate carrying value of the assets and liabilities of the acquired entity at the date of the transaction is included in equity in retained earnings or in a separate reserve.
Management used merger accounting and applied merger relief at a Company level. 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 of Ashtead Technology Holdings plc with the difference presented as the merger reserve. The cost of investments in subsidiaries is determined by the historical cost of investments in the subsidiaries of the Group transferred from the previous owning entities, including transaction costs. The value of total equity reflected the combination of the former BP INV2 Pledgeco Limited and Ashtead US Pledgeco Inc Group.
These last Annual Report and Accounts are the first set of financial statements for the Group and were presented as a continuation of the former combined BP INV2 Pledgeco Limited and Ashtead US Pledgeco Inc Group on a consistent basis as if the Group reorganisation had taken place at the start of the earliest period presented. BP INV2 Pledgeco Limited and Ashtead US Pledgeco Inc and their respective subsidiaries did not form a legal group, however, they were under common management and control throughout the period.
Accounting policies
The condensed consolidated interim financial statements have been prepared in accordance with the accounting policies set out on pages 57-62 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 and carrying value and useful lives of property, plant and equipment. These are consistent with matters disclosed on page 62 in 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 2022 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 2023.
During the six months ended 30 June 2022 the Group has continued to generate positive cash flow from operating activities, repaying GBP3,017,000 of the RCF during the period, with a cash and cash equivalents balance of GBP4,425,000 at 30 June 2022 (31 December 2021: GBP4,857,000). The Group has access to a multi currency RCF and additional accordion facility. The RCF and accordion facility have total commitments of GBP40,000,000 and GBP10,000,000 respectively, both of which expire in November 2024, with an option to extend 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.
The Facility Agreement is subject to a leverage covenant of 2.5x 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 2022
Asia Middle Head Office
Europe Americas Pacific East 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
Unaudited for the six-month period ended 30 June 2021
Asia Middle Head Office
Europe Americas Pacific East Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Total revenue 14,596 4,697 4,107 1,291 - 24,691
(3,669) (1,685) (853) (697) - (6,904)
Cost of sales -------- -------- -------- -------- -------- --------
Gross profit 10,927 3,012 3,254 594 - 17,787
Administrative
expenses (5,457) (1,780) (447) (439) (640) (8,763)
Other operating 283 227 35 40 - 585
income -------- -------- -------- -------- -------- --------
Operating profit before
depreciation,
amortisation
and foreign exchange
gain/(loss) 5,753 1,459 2,842 195 (640) 9,609
Foreign exchange loss (232)
Depreciation (4,585)
(760)
Amortisation --------
Operating profit Finance
costs 4,032
(1,960)
--------
Profit before taxation 2,072
Taxation charge (708)
--------
Profit for the financial 1,364
period --------
Total assets 61,167 15,773 9,804 3,756 9,957 100,457
Total
liabilities 8,302 2,742 859 553 41,540 53,996
Audited for the year ended 31 December 2021
Asia Middle Head
Europe Americas Pacific East Office Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Total revenue 33,241 11,779 7,911 2,874 - 55,805
(7,723) (4,599) (1,817) (1,123) - (15,262)
Cost of sales -------- -------- -------- -------- -------- --------
Gross profit 25,518 7,180 6,094 1,751 - 40,543
Administrative expenses (9,143) (3,799) (2,169) (1,064) (7,311) (23,486)
351 313 77 254 - 995
Other operating income -------- -------- -------- -------- -------- --------
Operating profit before
depreciation, amortisation
and foreign exchange
gain/(loss) 16,726 3,694 4,002 941 (7,311) 18,052
Foreign exchange loss (215)
Depreciation (8,713)
(1,516)
Amortisation --------
Operating profit Finance
costs 7,608
(4,019)
--------
Profit before taxation 3,589
Taxation charge (1,060)
--------
Profit for the financial 2,529
period --------
Total assets 62,402 15,912 9,669 5,102 5,950 99,035
Total liabilities 8,343 3,014 1,080 644 24,822 37,903
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 2021
2022 2021
GBP000 GBP000 GBP000
UK 55,510 50,763 51,411
USA 10,998 12,206 11,394
Singapore 8,470 7,736 7,799
UAE 3,994 3,269 3,562
3. Finance costs
Unaudited Unaudited Audited
six months six months year ended
to 30 June to 30 June 31 December
2022 2021 2021
GBP000 GBP000 GBP000
Interest on bank loans (held at amortised
cost) 419 1,184 2,261
Amortisation of deferred finance costs 91 345 1,222
Loan note interest - 39 71
Interest expense on lease liability (Note
13) 69 78 151
Hedge reserve movement - 313 313
Other interest and charges - 1 1
579 1,960 4,019
=========== =========== ============
4. Tax
The tax expense for the six-month period ended 30 June 2022 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 2022 applied to the profit before tax for the interim period. The effective tax rate for the six-month period ended 30 June 2022 is 14.4% and the income tax expense is lower than the standard UK rate of 19% due to overseas losses carried forward. The effective tax rate for the year ended 31 December 2021 was 29.5% and the income tax expense was higher than the standard UK rate due to non-deductible expenses and higher standard income tax rates in overseas territories.
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. Up to and including 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 to 30 Six months to 30 Year ended 31 Year ended
to 30 June 2022 June 2022 June 2021 June 2021 December 2021 31 December 2021
Earnings
attributable
to equity
shareholders
of the Group:
Profit for
the period
(GBP000) 6,581* 5,904 2,836* 1,364 9,385* 2,529
-------------------------------- ------------------ ----------------- ----------------- ------------------- ---------------------
Number of
shares:
Weighted
average
number of
Ordinary
Shares -
Basic 79,580,000 79,580,000 69,998,000 69,998,000 70,995,578 70,995,578
Weighted
average
number of
Ordinary
Shares -
Diluted 79,580,000 79,580,000 69,998,000 69,998,000 70,995,578 70,995,578
-------------------------------- ------------------ ----------------- ----------------- ------------------- ---------------------
Earnings per
share
attributable
to equity
holders of
the Group -
continuing
operations:
Basic
earnings per
share
(pence) 8.3 7.4 4.1 1.9 13.2 3.6
Diluted
earnings per
share
(pence) 8.3 7.4 4.1 1.9 13.2 3.6
-------------------------------- ------------------ ----------------- ----------------- ------------------- ---------------------
* Refer to Note 17 for the reconciliation of Non-IFRS Profit Metrics.
6. Property, plant and equipment
Assets held for Leasehold Fixtures and
rental improvements Freehold property fittings Motor vehicles Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cost:
At 1 January
2021
unaudited 104,906 1,537 197 3,322 245 110,207
Additions 2,481 159 - 236 31 2,907
Disposals (2,781) - - (6) - (2,787)
Foreign
exchange
movements (832) (12) - (56) (2) (902)
At 30 June
2021
unaudited 103,774 1,684 197 3,496 274 109,425
---------------- ------------- ------------------- -------------- -------------------- --------
Additions 4,144 42 - 185 25 4,396
Disposals (3,885) - - (23) - (3,908)
Foreign
exchange
movements 834 13 - 25 6 878
At 31 December
2021 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
---------------- ------------- ------------------- -------------- -------------------- --------
Accumulated
depreciation:
At 1 January
2021
unaudited (84,593) (974) (60) (2,593) (157) (88,377)
Charge for the
period (3,763) (145) (4) (165) (11) (4,088)
Disposals 2,588 - - 6 - 2,594
Foreign
exchange
movements 711 7 - 27 1 746
At 30 June
2021
unaudited (85,057) (1,112) (64) (2,725) (167) (89,125)
---------------- ------------- ------------------- -------------- -------------------- --------
Charge for the
period (3,395) (99) (4) (131) (13) (3,642)
Disposals 3,664 - - 6 - 3,670
Foreign
exchange
movements (833) (8) - (17) (4) (862)
At 31 December
2021 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)
---------------- ------------- ------------------- -------------- -------------------- --------
Net book
value:
At 31 December
2020
unaudited 20,313 563 137 729 88 21,830
================ ============= =================== ============== ==================== ========
At 30 June
2021
unaudited 18,717 572 133 771 107 20,300
================ ============= =================== ============== ==================== ========
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
================ ============= =================== ============== ==================== ========
7. Goodwill and intangible assets
Customer Non-compete Computer
Goodwill relationships arrangements software Total
GBP000 GBP000 GBP000 GBP000 GBP000
Cost:
At 1
January
2021
unaudited 48,585 4,447 208 2,801 56,041
Additions - - - 457 457
Foreign exchange movements (36) (7) - 2 (41)
------------------- -------------------------- ---------------------------- -------------------------- ------------------------
At 30 June 2021 unaudited 48,549 4,440 208 3,260 56,457
------------------- -------------------------- ---------------------------- -------------------------- ------------------------
Additions - - - 509 509
Foreign exchange movements 102 7 - - 109
------------------- -------------------------- ---------------------------- -------------------------- ------------------------
At 31 December 2021
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
------------------- -------------------------- ---------------------------- -------------------------- ------------------------
Amortisation:
At 1 January 2021 unaudited - (2,261) (109) (2,627) (4,997)
Charge for the period - (726) (34) (66) (826)
Foreign exchange movements - - - (2) (2)
------------------- -------------------------- ---------------------------- -------------------------- ------------------------
At 30 June 2021 unaudited - (2,987) (143) (2,695) (5,825)
------------------- -------------------------- ---------------------------- -------------------------- ------------------------
Charge for the period - (723) (33) (82) (838)
Foreign exchange movements - - - (1) (1)
------------------- -------------------------- ---------------------------- -------------------------- ------------------------
At 31 December 2021
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)
------------------- -------------------------- ---------------------------- -------------------------- ------------------------
Net book value:
At 31 December 2020
unaudited 48,585 2,186 99 174 51,044
=================== ========================== ============================ ========================== ========================
At 30 June 2021 unaudited 48,549 1,453 65 565 50,632
=================== ========================== ============================ ========================== ========================
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
=================== ========================== ============================ ========================== ========================
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, and Underwater Cutting Solutions 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
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
GBP000 GBP000 GBP000
Raw materials and consumables 2,351 1,782 1,778
============= ==================== ===================
The cost of inventories recognised as an expense and included in cost of sales during the period was GBP1,690,000 (H1 2021: GBP1,422,000).
9. Trade and other receivables
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
GBP000 GBP000 GBP000
Trade receivables 18,295 11,564 14,212
Prepayments and accrued
income 3,453 3,378 3,012
Amounts due to related parties
(Note 16) - 1,293 -
21,748 16,235 17,224
============= ============= =================
The Directors consider that the carrying amount of trade and other receivables approximates to fair value. The amounts owed by related parties bear no interest and are due on demand.
10. Trade and other payables
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
GBP000 GBP000 GBP000
Trade payables 5,775 3,424 3,349
Accruals 8,298 5,903 5,682
Amounts due to related parties
(Note 16) 123 - 384
14,196 9,327 9,415
============= ============== =================
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. Loan and borrowings
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
GBP000 GBP000 GBP000
Bank loans (held at amortised
cost) - 38,901 -
- 38,901 -
============= ======================= ==================
Non-current
Bank loans (held at amortised
cost) 22,678 - 24,425
Related party loan notes
(Note 16) - 1,160 -
22,678 1,160 24,425
============= ====== ===================================
At 30 June 2022 the bank loans comprise a revolving credit facility of GBP23,121,000 (of which GBP11,430,000 denominated in USD) which carried interest at SONIA plus 2.2%. The lenders are HSBC Bank plc and Clydesdale Bank plc. The Facility Agreement is subject to a leverage covenant of 2.5x and an interest cover covenant of 4:1. The total commitments are GBP40,000,000 for the RCF and an additional GBP10,000,000 accordion facility. 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% is charged on the non-utilised element of the RCF facility. The revolving credit facility is fully repayable by November 2024, with an option to extend subject to credit approval.
Certain companies within the Group are party to cross guarantees with respect to bank loans totalling GBP23,121,000 (31 December 2021: GBP24,953,000) advanced to Ashtead Technology Limited and Ashtead Technology Offshore Inc. The lenders have a floating charge over certain assets of the Group.
At 30 June 2021 the bank loans comprised senior bank debt of GBP39,434,000 (of which GBP9,593,000 denominated in USD) and the senior A, B and revolving credit facility carried interest at LIBOR plus 3.5%, 4.0% and 5.0% respectively. The senior A, B and revolving credit facility were repaid in full in November 2021.
The related party loan notes carried interest at 7% which capitalised quarterly and was repaid in full in November 2021.
Bank loans are repayable as follows:
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
GBP000 GBP000 GBP000
Within one year - 39,434 -
Within one to two years - - -
Within two to three years 23,121 - 24,953
------------- ------------- -----------------
23,121 39,434 24,953
Deferred finance costs (443) (533) (528)
22,678 38,901 24,425
============= ============= =================
12. Financing liabilities reconciliation
Changes in Unaudited
Unaudited Interest Other exchange 30 June
1 January 2021 Cash flows paid non-cash changes rates 2021
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cash at bank
and in hand 10,958 (3,347) - - 91 7,702
--------------------- -------------------- ----------- --------------------- ---------- -----------
Bank loans (43,008) 4,326 - (345) 126 (38,901)
Related
party loan
notes (1,121) - - (39) - (1,160)
Lease
liabilities (3,052) 453 78 (647) (88) (3,256)
--------------------- -------------------- ----------- --------------------- ---------- -----------
Net debt (36,223) 1,432 78 (1,031) 129 (35,615)
===================== ==================== =========== ===================== ========== ===========
The non-cash movement relates to amortisation of deferred finance costs, accrual of finance costs on related party loan notes and lease liability, and addition of new leases during the period.
Other
Unaudited Cash Interest non-cash Changes in exchange Audited
30 June 2021 flows paid changes rates 31 December 2021
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Cash at bank
and in hand 7,702 (2,979) - - 134 4,857
------------------- --------- -------- -------- ---------------------- ----------------------------
Bank loans (38,901) 15,602 - (877) (249) (24,425)
Related
party loan
notes (1,160) 830 - 330 - -
Lease
liabilities (3,256) 559 73 (272) (238) (3,134)
------------------- --------- -------- -------- ---------------------- ----------------------------
Net debt (35,615) 14,012 73 (819) (353) (22,702)
=================== ========= ======== ======== ====================== ============================
The non-cash movement relates to the amortisation of deferred finance costs, accrual of finance costs on related party loan notes and lease liability, and the addition of new leases during the period.
Audited Other Changes in Unaudited
31 December 2021 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.
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 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 2021 unaudited 2,816
Additions to right-of-use assets 668
Depreciation charge for the period (418)
Effects of movements in exchange (24)
rates ------
3,042
Balance at 30 June 2021 unaudited ------
Additions to right-of-use assets 272
Depreciation charge for the period (417)
Effects of movements in exchange 26
rates ------
2,923
Balance at 31 December 2021 audited ------
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 ------
Audited
Unaudited Unaudited 31 December
30 June 2022 30 June 2021 2021
Lease liabilities: GBP000 GBP000 GBP000
Current 791 763 783
Non-current 2,164 2,493 2,351
Total lease liabilities 2,955 3,256 3,134
================================= ====================== ============
Lease liabilities are repayable as follows:
Audited
Unaudited Unaudited 31 December
30 June 2022 30 June 2021 2021
GBP000 GBP000 GBP000
Within one year 910 932 966
Within one to two years 690 823 767
Within two to three years 683 620 675
Within three to four years 460 587 568
Within four to five years 335 367 334
Beyond five years 198 481 362
------------- ------------- -------------
3,276 3,810 3,672
Effect of discounting (321) (554) (538)
Total lease liabilities 2,955 3,256 3,134
============= ============= =============
b) Amounts recognised in the income statement
Unaudited Unaudited
six months six months Audited
to 30 June to 30 June year ended 31 December
2022 2021 2021
GBP000 GBP000 GBP000
Depreciation
charge 432 418 835
Interest
expense on
lease
liability 69 78 151
Expenses
relating to
short-term
leases 100 83 165
Total amount
recognised
in the
income
statement 601 579 1,151
=========================== ========================== =======================================
c) Amounts recognised in the cash flow statement
Unaudited Unaudited
six months six months Audited
to 30 June to 30 June year ended 31
2022 2021 December 2021
GBP000 GBP000 GBP000
Total cash payments for leases 589 531 1,163
=========== =========== ==============
14. Capital commitments
Audited
Unaudited Unaudited 31 December
30 June 2022 30 June 2021 2021
GBP000 GBP000 GBP000
Capital expenditure contracted for
but not provided 2,720 1,900 2,825
============= ============= ============
15. Share capital and reserves
The Group considers its capital to comprise its invested capital, called up share capital, share premium, merger 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 2022 2021 2021
Allotted, called up
and fully paid No. GBP000 No. GBP000 No. GBP000
Ordinary shares of
GBP0.05 each 79,580,000 3,979 69,998,000 3,500 79,580,000 3,979
--------- --------- ------------
3,979 3,500 3,979
========= ========= ============
Ordinary share capital represents the number of shares in issue at their nominal value. On 23 November 2021 the share capital of the former Group has been replaced with the newly issued listed shares following the IPO. Ordinary Shares of 9,582,000 with a nominal value of GBP479,000 were issued on IPO. 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. Upon listing on 23 November 2021 the par value of the shares was GBP0.05 but the initial offering price was GBP1.62. 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.
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.
16. Related parties
In prior periods the Group transacted with entities which formerly had significant influence over the Group which are presented below. There were no transactions with these related parties in the six-month period ended 30 June 2022.
Transactions during the period with Unaudited Unaudited Audited
related parties: six months six months year ended
to 30 June to 30 June 31 December
2022 2021 2021
GBP000 GBP000 GBP000
Dividend expense*
BP INV2 Newco Limited - - 476
BP INV2B Bidco Limited - - 820
Interest expense
BP INV2B Bidco Limited - 39 71
============= =========== ============
*The dividend expense related to the pre-IPO group restructure.
Outstanding balances with related Unaudited Audited
parties as at period end: Unaudited 30 June 31 December
30 June 2022 2021 2021
GBP000 GBP000 GBP000
Receivables from:
BP INV2B Bidco Limited - 820 -
BP INV2 Holdco Limited - 422 -
BP INV2 Newco Limited - 51 -
- 1,293 -
=============== ========= ============
Payables to:
BP INV2B Bidco Limited (101) - (362)
BP INV2 Holdco Limited (20) - (20)
BP INV2 Newco Limited (2) - (2)
(123) - (384)
=============== ========= ==============
Related party loan notes payable to:
BP INV2B Bidco Limited - 1,160 -
=============== ========= ==============
Compensation of key management personnel: Unaudited Unaudited Audited
six months six months year ended
to 30 June to 30 June 31 December
2022 2021 2021
GBP000 GBP000 GBP000
Salaries and fees 407 238 503
Bonus(1) 200 - -
Additional payments(2) - 9 268
Other benefits 41 34 67
Total 648 281 838
============= =========== ============
(1) 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.
(2) Additional payment paid to fund purchase of MIP shares pre-IPO.
Key management personnel are also entitled to long-term investment plan awards which were due to be issued post IPO and have not as yet been awarded.
17. Reconciliation of Non-IFRS Profit Metrics
Reconciliation of Unaudited Unaudited Audited
Adjusted EBITDA six months six months year ended
to 30 June to 30 June 31 December
2022 2021 2021
Notes GBP000 GBP000 GBP000
Adjusted EBITDA 12,252 10,121 22,437
Cost associated with
IPO - (88) (3,332)
Restructuring costs - (329) (1,314)
One-off bad debts &
debt collection
costs - (27) (39)
One-off inventory
adjustment - - 205
One-off asset disposal - - 130
(92) (68) (35)
Other exceptional costs -------- -------- --------
Operating profit before
depreciation,
amortisation and
foreign exchange
gain/(loss) 12,160 9,609 18,052
Depreciation on
property, plant
and equipment 6 (3,646) (4,154) (7,878)
Depreciation on (432) (431) (835)
right-of-use asset 13 -------- -------- --------
Operating profit before
amortisation
and foreign exchange
gain/(loss) 8,082 5,024 9,339
Amortisation of
intangible assets 7 (758) (760) (1,516)
Foreign exchange 156 (232) (215)
gain/(loss) -------- -------- --------
Operating profit 7,480 4,032 7,608
================================== ==================== =================================
Reconciliation of Unaudited Unaudited Audited
Adjusted EBITA six months six months year ended
to 30 June to 30 June 31 December
2022 2021 2021
Notes GBP000 GBP000 GBP000
Adjusted EBITA 8,174 5,536 13,724
Cost associated with
IPO - (88) (3,332)
Restructuring costs - (329) (1,314)
One-off bad debts &
debt collection
costs - (27) (39)
One-off inventory
adjustment - - 205
One-off asset disposal - - 130
Other exceptional costs (92) (68) (35)
Amortisation of
intangible assets 7 (758) (760) (1,516)
Foreign exchange 156 (232) (215)
gain/(loss) -------- -------- --------
Operating profit 7,480 4,032 7,608
================================== ==================== =================================
Reconciliation Unaudited Unaudited Audited
of Adjusted six months six months year ended
Profit to 30 June to 30 June 31 December
Before Tax 2022 2021 2021
Notes GBP000 GBP000 GBP000
Adjusted Profit
Before Tax 7,595 3,889 10,822
Cost associated
with IPO - (88) (3,332)
Restructuring
costs - (329) (1,314)
One-off bad
debts & debt
collection
costs - (27) (39)
One-off
inventory
adjustment - - 205
One-off asset
disposal - - 130
One-off hedge
reserve
movement - (313) (313)
Loan repayment
fees - - (100)
Deferred
finance cost
write off - - (704)
Other
exceptional
costs (92) (68) (35)
Foreign
exchange
gain/(loss) 156 (232) (215)
Amortisation of
intangible (758) (760) (1,516)
assets 7 -------- -------- --------
Profit before
taxation 6,901 2,072 3,589
====================================== ============================= =================
Reconciliation Unaudited Audited
of Adjusted Unaudited six months year ended
Profit six months to 30 June 31 December
After Tax to 30 June 2022 2021 2021
Notes GBP000 GBP000 GBP000
Adjusted Profit
After Tax 6,581 2,836 9,385
Cost associated
with IPO - (88) (3,332)
Restructuring
costs - (329) (1,314)
One-off bad
debts & debt
collection
costs - (27) (39)
One-off
inventory
adjustment - - 205
One-off asset
disposal - - 130
One-off hedge
reserve
movement - (313) (313)
Loan repayment
fees - - (100)
Deferred
finance cost
write off - - (704)
Other
exceptional
costs (92) (68) (35)
Foreign
exchange
gain/(loss) 156 (232) (215)
Amortisation of
intangible
assets 7 (758) (760) (1,516)
Tax impact of
the
adjustments 17 345 377
above -------- -------- --------
Profit for the
financial
period 5,904 1,364 2,529
====================================== ============================= =================
Adjusted Profit After Tax is used to calculate the Adjusted basic earnings per share in Note 5.
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END
IR BKQBDDBKBFCK
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