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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END
IR SSLEDDEDSEFU
(END) Dow Jones Newswires
September 04, 2023 02:00 ET (06:00 GMT)
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