Audited Preliminary Results
Ashtead Group PLC
06 July 2004
ASHTEAD GROUP PLC
Audited preliminary results for the year ended 30 April 2004
and unaudited fourth quarter results
• 42% growth in Sunbelt's full year divisional operating profit* to $73.3m
(2003 - $51.5m) reflecting improved operating conditions in the US.
Sunbelt's fourth quarter profit was $20.2m (2003 - $3.0m).
• A-Plant's full year divisional operating profit* reduced to £4.0m (2003
- £7.9m) reflecting difficult trading during its refocusing programme which
was completed in January. Since then its fourth quarter profit improved to
£1.5m (2003 - loss of £2.4m).
• Full year Group EBITDA before exceptional items of £147.0m, up 4% at
constant exchange rates. Fourth quarter EBITDA on the same basis of £35.0m,
up 45% at constant rates.
• Full year Group profit before exceptional items, goodwill amortisation and
tax of £7.6m (2003 - £1.8m loss). For the fourth quarter, the profit on the
same basis was £3.1m (2003 - £10.6m loss)
• Full year loss before tax of £33.1m (2003 - £42.2m loss) and after tax loss
per share of 10.8p (2003 - 10.3p loss per share) reflecting goodwill
amortisation of £9.2m and exceptional charges of £31.5m. Of these, £20.6m
related to one time refinancing costs and the balance was mostly non-cash.
• Net free cash inflow** for the year of £56.6m up 46% from £38.9m in 2003
• Net debt*** at 30 April of £526.7m, £95.6m lower than last year's £622.3m.
At constant exchange rates, net debt reduced by £53.6m in the year.
* divisional operating profit is defined as the operating profit before
exceptional items and goodwill amortisation of our divisions
** net cash inflow from operating activities before exceptional items,
less interest paid, net capital expenditure and tax
*** debt plus non-recourse funding received under the account receivable
securitisation less cash at bank and in hand
Further details of these performance measures are given in the
section on supplemental financial information.
Ashtead's chief executive, George Burnett, commented:
The Group has made significant progress in the past year. Financial stability
has been achieved through the extension of our banking facilities to September
2007 and the issue of our ten year bond. Sunbelt, our US business, achieved
divisional operating profit growth in dollars of over 40% and continued to take
market share in improving trading conditions. Following the completion of its
refocusing programme in January 2004, we have seen encouraging signs of an
improvement in the trading performance of A-Plant, our UK business. We are
looking to build on this momentum in the coming year.
PRESS RELEASE
Overview
The Group closed its year to 30 April 2004 with a strong last quarter
performance. Operating profit before exceptional items and goodwill
amortisation for the quarter was £12.0m compared with a loss of £0.8m in the
previous year and the profit before exceptional items, goodwill amortisation and
tax for the quarter was £3.1m (2003 - loss of £10.6m). There were particularly
encouraging figures for both Sunbelt Rentals, the Group's US division, where
dollar revenues grew by 13.8% and divisional operating profits increased from
$3.0m to $20.2m (£1.8m to £11.0m in sterling terms) and for A-Plant whose
divisional operating profit was £1.5m compared with a loss of £2.4m in the
previous year.
For the full year to 30 April 2004, Group profits before exceptional items,
goodwill amortisation and tax were £7.6m (2003 - loss of £1.8m). At constant
exchange rates profits would have been 33.5% higher at £10.1m. Turnover before
exceptional effects, which declined by 1.6% at constant exchange rates, was
further reduced at actual exchange rates by the weakness of the dollar to
£500.3m (2003 - £539.5m), a 7.3% decline.
The Group, which started the year in default with its bankers, ended with the
achievement of financial stability through the closing of our ten year bond
issue in April and the extension of our facilities with existing banks until the
end of September 2007. Significant exceptional costs were incurred in this
process contributing to the FRS 3 loss before tax of £33.1m (2003 - £42.2m
loss).
Review of trading
Divisional operating
profit**
Turnover * EBITDA*
2004 2003 2004 2003 2004 2003
Sunbelt Rentals in $m 572.8 547.0 176.8 155.5 73.3 51.5
Sunbelt Rentals in £m 333.1 349.1 102.8 99.3 42.4 32.9
A-Plant 155.9 178.4 43.2 48.9 4.0 7.9
Ashtead Technology 11.3 12.0 5.7 6.1 2.7 2.5
Group central costs - - (4.7) (4.2) (4.9) (4.2)
500.3 539.5 147.0 150.1 44.2 39.1
* before exceptional items
** operating profit before goodwill amortisation and exceptional items
Sunbelt Rentals
Sunbelt enjoyed a strong recovery in the year with dollar revenues up $25.8m or
4.7% to $572.8m. Tight control of costs maximised the benefits of operational
gearing so that $21.8m of the increased revenue fell to the bottom line. As a
result divisional operating profit was up 42.3% to $73.3m (2003 - $51.5m).
Although the weakness of the dollar transformed the 4.7% increase in dollar
revenues into a 4.6% decline in sterling, divisional operating profits in
sterling were still up 28.9%. EBITDA margins improved from 28.4% to 30.9% and
operating margins from 9.4% to 12.8%.
Utilisation levels, which in the first half had trailed the previous year,
averaged 65.1% for the year as a whole, compared with 64.5% in the previous
year, thanks to a strong last quarter. Rental rates improved with an estimated
uplift of 4% for the year as a whole. As the year progressed and the US economy
strengthened there was also evidence of accelerating recovery in the
non-residential construction market, Sunbelt's principal customer base, and in
the equipment rental market itself. This coupled with improved utilisation and
pricing produced year on year growth in total quarterly revenues of -1.0%,
+3.2%, +4.0% and +13.8% over the four quarters indicating that Sunbelt continued
to take market share.
Capital expenditure in the year was kept under tight control, with fleet
investment being largely matched with disposals in a market where improving
second hand pricing gave further evidence of economic recovery. There were
three new profit centre openings in the year bringing the total number to 200.
As separately announced today following the strong profit performance in
Sunbelt, Cliff Miller has been appointed President and Chief Executive and
Brendan Horgan Chief Operating Officer, allowing George Burnett the Group chief
executive, who has also been acting CEO in the United States, to return to the
UK.
A-Plant
For A-Plant the past year was one of transition as its business refocusing
programme was completed. Three non-core activities were disposed of - Mast
Climbing, Big Air and its businesses in Ireland. In addition the final stages
of the move from five geographic regions to three product focused divisions,
Main Plant, Specialist and Tool Hire Shops, was put in place. These changes,
coupled with the network rationalisation begun in 2003 under which over 20
profit centres have been closed, contributed to a 12.6% decline in turnover to
£155.9m. Same store turnover was down 5.3% in the year. Costs excluding
exceptional items and amortisation were reduced by 10.9% so that the £22.5m
turnover decline was restricted to a £3.9m reduction in divisional operating
profit to £4.0m.
A-Plant enjoyed a much improved fourth quarter. Same store turnover was almost
in line with last year (down 0.9%) and utilisation rates, which for the year as
a whole averaged 59.9% compared with 60.7% in the previous year, were 63.6% in
the last quarter, significantly above the comparable 2003 figure of 59.6%. As
mentioned above, divisional operating profit for the quarter was £1.5m (prior
year loss £2.4m).
Ashtead Technology - Offshore and Environmental
Ashtead Technology achieved an 8.0% improvement in its divisional operating
profit in the year to 30 April 2004 despite difficult trading in many of its
markets. Tight cost controls saw operating margins increase to 23.9% from 20.8%
in 2003. The US businesses, both offshore and environmental, saw growth in the
year and a new environmental profit centre was opened in the San Francisco area.
Since the year end the first such business in the UK has been opened in
Hitchin and there are further planned openings in Atlanta and Chicago in the
coming twelve months.
Interest and exceptional items
Interest costs before exceptional items declined to £36.6m (2003 - £40.9m)
reflecting lower average borrowings and the weakness of the US dollar.
Exceptional items totalled £31.5m and principally related to costs incurred in
connection with the extension of the maturity of the Company's senior debt
facilities.
Cash flow
The Group continued to generate strong cash flow. Net free cash inflow for the
year (as defined) was £56.6m up 46% from £38.9m in the previous year. Net debt
was reduced by £95.6m reflecting this cash generation and the weakness of the
dollar. At constant exchange rates the reduction was £53.6m.
Capital expenditure during the year was reduced in line with market conditions.
The total for the year was £72.3m (2003 - £85.5m) of which £64.1m (2003 -
£71.0m) was spent on the rental fleet. It is anticipated that capital
expenditure in the coming year will rise to approximately £100m, in line with
the depreciation charge. The average age of the Group's fleet at 30 April 2004
was 46 months (43 months in the UK and 48 months in total for the US but, when
the longer-life aerial work platform fleet is excluded, the average fleet age
for the rest of the US fleet reduces to 35 months). Profits on disposal of
fixed assets were £6.2m up from £3.0m in the previous year.
Current trading and outlook
The improving turnover performance, seen in the last quarter of the financial
year, continued in the months of May and June. Sunbelt's dollar revenues grew
10.9% while A-Plant achieved like for like growth of 2.4%.
While a further weakening of the US dollar and the prospect of higher interest
rates could have some negative impact, the Board is encouraged by the improving
trends in its businesses and in the markets in which they operate, and believes
that further progress should be achieved in the coming year.
-o0o-
There will be a presentation today to equity analysts at 9.30am at the offices
of JPMorgan at 60 Victoria Embankment, London EC4 (entrance on John Carpenter
Street). A simultaneous webcast of the meeting and a copy of the slides will be
available through the Company's website, www.ashtead-group.com. A recorded
playback will also be available shortly after the meeting.
Contacts:
Cob Stenham Non-executive Chairman 020 7299 5562
George Burnett Chief executive ) 01372 362300
Ian Robson Finance director )
David Trenchard ) Tulchan Communications 020 7353 4200
William Davidson )
SUPPLEMENTAL FINANCIAL INFORMATION
Divisional performance
Fourth quarter Turnover EBITDA Profit
2004 2003 2004 2003 2004 2003
£m £m £m £m £m £m
Sunbelt Rentals in $m 143.1 125.7 45.2 29.5 20.2 3.0
Sunbelt Rentals in £m 78.1 79.1 24.7 18.5 11.0 1.8
A-Plant 37.5 41.3 10.0 7.8 1.5 (2.4)
Ashtead Technology 2.4 2.5 1.0 1.3 0.5 0.6
Group central costs - - (0.7) (0.6) (1.0) (0.8)
118.0 122.9 35.0 27.0 12.0 (0.8)
Interest (8.9) (9.8)
Profit/(loss) before exceptional items & goodwill amortisation 3.1 (10.6)
Exceptional items (13.0) (14.1)
Goodwill amortisation (2.4) (2.2)
Loss before tax (12.3) (26.9)
Full year Turnover EBITDA Profit
2004 2003 2004 2003 2004 2003
£m £m £m £m £m £m
Sunbelt Rentals in $m 572.8 547.0 176.8 155.5 73.3 51.5
Sunbelt Rentals in £m 333.1 349.1 102.8 99.3 42.4 32.9
A-Plant 155.9 178.4 43.2 48.9 4.0 7.9
Ashtead Technology 11.3 12.0 5.7 6.1 2.7 2.5
Group central costs - - (4.7) (4.2) (4.9) (4.2)
500.3 539.5 147.0 150.1 44.2 39.1
Interest (36.6) (40.9)
Profit/(loss) before exceptional items & goodwill amortisation 7.6 (1.8)
Exceptional items (31.5) (31.4)
Goodwill amortisation (9.2) (9.0)
Loss before tax (33.1) (42.2)
Fixed assets - rental equipment additions 2004 2003
£m £m
Sunbelt Rentals 31.8 45.8
A-Plant 29.8 22.4
Ashtead Technology 2.5 2.8
Total rental equipment 64.1 71.0
Other fixed assets 8.2 14.5
Total additions 72.3 85.5
SUPPLEMENTAL FINANCIAL INFORMATION
Summarised cash flow statement 2004 2003
£m £m
EBITDA before exceptional items 147.0 150.1
Cash inflow from operations before exceptional items 140.0 157.3
Cash efficiency ratio* 95.2% 104.8%
Capital expenditure (82.9) (107.1)
Proceeds from sale of used rental equipment 32.3 29.4
Tax received 0.1 0.7
Free cash flow before interest 89.5 80.3
Interest paid (excluding exceptional interest) (32.9) (41.4)
Free cash flow after interest 56.6 38.9
Acquisitions and disposals 15.2 (0.8)
Exceptional costs (18.2) (7.6)
Dividends paid - (9.3)
Reduction in total debt 53.6 21.2
* Cash inflow from operations before exceptional items as a percentage of EBITDA
Net debt 2004 2003
£m £m
First priority senior secured bank debt and overdraft 226.1 422.9
Finance lease obligations 12.1 22.4
12% second priority senior secured notes, due 2014 115.6 -
5.25% unsecured convertible loan note, due 2008 130.6 129.8
484.4 575.1
Cash at bank and in hand (9.9) (10.3)
474.5 564.8
Non-recourse finance received under debtors securitisation 52.2 57.5
526.7 622.3
Operating statistics at 30 April 2004
Profit centre numbers Staff numbers
2004 2003 2004 2003
Sunbelt Rentals 200 193 3,697 3,671
A-Plant 220 249 2,043 2,314
Ashtead Technology 8 7 79 81
Corporate office - - 14 12
Group 428 449 5,833 6,078
CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 30 APRIL
2004 2003
Before goodwill Goodwill Before goodwill Goodwill
amortisation & amortisation & amortisation & amortisation &
exceptional exceptional exceptional
items exceptional items items
items
Total Total
£m £m £m £m £m £m
(restated) (restated) (restated)
Turnover 500.3 (3.3) 497.0 539.5 - 539.5
Operating profit 44.2 (28.0) 16.2 39.1 (38.5) 0.6
Loss on sale of businesses - (3.8) (3.8) - - -
Interest payable and similar
charges
(36.6) (8.9) (45.5) (40.9) (1.9) (42.8)
Loss on ordinary activities
before taxation
7.6 (40.7) (33.1) (1.8) (40.4) (42.2)
Taxation on loss on
ordinary activities:
- current tax
0.3 - 0.3 (0.3) - (0.3)
- deferred tax (10.5) 8.5 (2.0) 0.7 8.6 9.3
(10.2) 8.5 (1.7) 0.4 8.6 9.0
Loss for the financial year
transferred from reserves (2.6) (32.2) (34.8) (1.4) (31.8) (33.2)
Basic and diluted loss per share (10.8p) (10.3p)
Reconciliation of operating
profit to EBITDA
Operating profit 44.2 (28.0) 16.2 39.1 (38.5) 0.6
Depreciation & amortisation 102.8 11.5 114.3 111.0 14.8 125.8
EBITDA 147.0 (16.5) 130.5 150.1 (23.7) 126.4
EBITDA is presented here as an additional performance measure as it is commonly
used by investors and lenders.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS 2004 2003
AND LOSSES FOR THE YEAR ENDED 30 APRIL £m £m
Loss for the financial year (34.8) (33.2)
Foreign currency translation differences 4.9 (0.4)
Total recognised gains and losses in the year (29.9) (33.6)
SUMMARY OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2004 2003
£m £m
Total recognised gains and losses in the year (29.9) (33.6)
Goodwill transferred to profit and loss account in respect of businesses sold 2.3 -
Share capital subscribed - 0.1
Net decrease in shareholders' funds in the year (27.6) (33.5)
Shareholders' funds at the beginning of the year as restated 159.4 192.9
Closing shareholders' funds 131.8 159.4
CONSOLIDATED BALANCE SHEET AT 30 APRIL
2004 2003
£m £m
(restated)
Fixed assets
Intangible assets:
- goodwill
Tangible fixed assets: 142.9 152.0
- rental equipment 469.7 577.5
- other fixed assets 65.8 74.0
535.5 651.5
Current assets 678.4 803.5
Stock 15.1 11.6
Trade debtors subject to non-recourse financing 82.4 88.0
Non-recourse financing received (52.2) (57.5)
Trade debtors net of non-recourse financing 30.2 30.5
Other trade debtors, prepayments & accrued income 11.7 16.3
Cash at bank and in hand 9.9 10.3
66.9 68.7
Creditors - amounts falling due within one year
Bank loans, overdrafts and finance lease obligations (15.6) (10.6)
Trade and other creditors (77.3) (92.2)
(92.9) (102.8)
Net current liabilities (26.0) (34.1)
Total assets less current liabilities 652.4 769.4
Creditors - amounts falling due after more than one year
5.25% unsecured convertible loan note, due 2008 (130.6) (129.8)
Bank and other loans (338.2) (434.7)
Trade and other creditors (9.4) -
(478.2) (564.5)
Provision for liabilities and charges
Deferred taxation (27.7) (28.6)
Other provisions (14.7) (16.9)
(42.4) (45.5)
Total net assets 131.8 159.4
Capital and reserves
Called up share capital 32.6 32.6
Share premium account 100.7 100.7
Revaluation reserve 0.5 0.5
Own shares held by ESOT (1.6) (1.6)
Profit and loss account (0.4) 27.2
Total equity shareholders' funds 131.8 159.4
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 APRIL
2004 2003
£m £m £m £m
Net cash inflow from operating activities
Cash inflow before exceptional items 140.0 157.3
Exceptional costs (11.1) (4.4)
Movement in non-recourse finance received
under trade debtors securitisation (2.2) 57.4
Net cash inflow from operating activities 126.7 210.3
Returns on investments and servicing of
Finance
Interest paid (32.9) (41.4)
Exceptional bank facility costs (7.1) (3.2)
Net cash outflow from returns on investments
and servicing of finance (40.0) (44.6)
Taxation inflow 0.1 0.7
Capital expenditure and financial investment
Purchase of tangible fixed assets (82.9) (107.1)
Sale of tangible fixed assets 32.3 29.4
Net cash outflow from capital expenditure and
financial investment (50.6) (77.7)
Acquisitions & disposals inflow/(outflow) 15.2 (0.8)
Equity dividends paid - (9.3)
Net cash inflow before management of
liquid resources and financing 51.4 78.6
Financing
Issue of ordinary share capital - 0.1
Drawdown of loans 115.6 11.9
Redemption of loans (156.6) (65.8)
Increase in cash collateral balances (2.6) (3.7)
Capital element of finance lease payments (8.6) (11.9)
Net cash outflow from financing (52.2) (69.4)
(Decrease)/increase in cash (0.8) 9.2
NOTES TO THE PRELIMINARY STATEMENT
1. This preliminary announcement of the results for the year ended 30 April
2004 is an excerpt from the forthcoming 2004 Annual Report & Accounts and
does not constitute the statutory accounts for either 2003/4 or 2002/3 for
the purposes of section 240 (3) of the Companies Act 1985. The 2003/4
figures are extracted from the audited accounts for that year which have
not yet been filed with Companies House. The comparative figures are
derived from the latest published financial statements that have been
delivered to the Registrar of Companies. The auditors' reports in respect
of both years were unqualified and do not contain a statement under section
237 of the Companies Act 1985.
2. The audited accounts for the year ended 30 April 2004 have been prepared
using consistent accounting policies to those applied in the statutory
accounts for the year ended 30 April 2003 except that the provisions of
UITF Abstract 38 'Accounting for ESOP Trusts' have been adopted in the year
with the effect that the cost of shares held by the employee share
ownership trust are now presented as a deduction from shareholders' equity.
Additionally the Group profit and loss account is now presented using the
type of expenditure format provided for by the Companies Act 1985 in order
to provide greater clarity about the main components of the Group's cost
base to users of the accounts.
3. The duly authorised Board committee has approved this preliminary
announcement.
4. Operating costs
2004 2003
Before Goodwill Before
goodwill amortisation goodwill Goodwill
amortisation & amortisation amortisation
& exceptional exceptional & exceptional & exceptional
items items Total items items Total
£m £m £m £m £m £m
Staff costs:
Salaries 153.7 0.5 154.2 167.1 0.5 167.6
Social security costs 13.1 - 13.1 15.2 - 15.2
Other pension costs 3.7 - 3.7 3.8 - 3.8
170.5 0.5 171.0 186.1 0.5 186.6
Depreciation and amortisation:
Depreciation 102.8 2.3 105.1 111.0 5.8 116.8
Goodwill amortisation - 9.2 9.2 - 9.0 9.0
102.8 11.5 114.3 111.0 14.8 125.8
Other costs:
Vehicle costs 47.5 - 47.5 50.8 - 50.8
Spares, consumables and
external repairs 36.3 - 36.3 41.6 - 41.6
Facilities costs 28.9 1.4 30.3 30.8 1.4 32.2
Refinancing costs - 10.9 10.9 - 5.6 5.6
Other external charges 75.3 1.4 76.7 82.8 16.5 99.3
188.0 13.7 201.7 206.0 23.5 229.5
Other operating income:
Profit on disposal of fixed
assets (5.2) (1.0) (6.2) (2.7) (0.3) (3.0)
456.1 24.7 480.8 500.4 38.5 538.9
5. Segmental analysis
Turnover Operating profit
Before goodwill Goodwill
amortisation & amortisation &
exceptional exceptional
Before Exceptional items items Net assets
exceptional items items Total Total
£m £m £m £m £m £m £m
2004
Sunbelt Rentals 333.1 (3.3) 329.8 42.4 (23.8) 18.6 490.2
A-Plant 155.9 - 155.9 4.0 (4.0) - 186.6
Technology 11.3 - 11.3 2.7 (0.2) 2.5 9.4
Corporate costs - - - (4.9) - (4.9) -
Central items* - - - - - - (554.4)
500.3 (3.3) 497.0 44.2 (28.0) 16.2 131.8
2003
Sunbelt Rentals 349.1 - 349.1 32.9 (28.8) 4.1 581.0
A-Plant 178.4 - 178.4 7.9 (8.9) (1.0) 218.0
Technology 12.0 - 12.0 2.5 (0.5) 2.0 11.3
Corporate costs - - - (4.2) (0.3) (4.5) -
Central items* - - - - - - (650.9)
539.5 - 539.5 39.1 (38.5) 0.6 159.4
* net borrowings, non recourse funding under the debtors securitisation and
deferred taxation
6. Interest payable and similar charges
2004 2003
£m £m
Bank interest payable 24.1 28.3
Funding cost on trade debtors' securitisation 3.2 2.7
Interest on 5.25% unsecured convertible loan note, due 2008 8.1 7.7
Interest payable on finance leases 1.2 2.2
Total interest payable before exceptional costs 36.6 40.9
Exceptional bank facility costs 8.9 1.9
45.5 42.8
7. Exceptional items
2004 2003
£m £m
Debt facility costs 20.6 7.5
UK business refocusing programme 6.1 7.4
Prior year impact of change in US estimation methods 5.3 7.4
Prior year impact of the US accounting issue - 9.4
US severance costs 0.5 -
Profit on sale of land and buildings (1.0) (0.3)
Total exceptional items 31.5 31.4
Goodwill amortisation 9.2 9.0
40.7 40.4
Debt facility costs of £20.6m consist of: (i) £8.9m payable to providers of
finance in connection with the waiver on 30 May 2003 by the bank group of the
default under our senior secured credit facility and other debt facilities as a
result of the accounting issues at Sunbelt Rentals; (ii) £2.2m of legal,
accounting and advisory fees related to the waiver of the default; (iii) £6.7m
of legal, accounting and advisory fees related to the partial refinancing of the
senior secured credit facility through the issue of second priority senior
secured notes; and (iv) £2.8m of other costs. Debt facility costs in 2003
comprised principally professional advisory costs related to resolving the
defaults under the Company's debt facilities.
The non cash impairment charge of £6.1m in the year ended 30 April 2004 for the
UK business refocusing programme is an adjustment to the charge of £7.4m
recorded at 30 April 2003 and resulted from A-Plant's non-core asset disposal
programme. The charge includes goodwill of £2.3m previously written off to
reserves.
The non cash charge of £5.3m for the prior year impact of changes in US
estimation methods in the year ended 30 April 2004 relates principally to
adjustments of £3.3m to the methods of determining accrued and deferred revenue
at 30 April 2003 and of £1.4m to recognise operating lease costs on a straight
line basis over the life of the lease at 30 April 2003. Application of the
revised methods had no impact on the Group's loss or cash flows for the year
ended 30 April 2004 and is not expected to have any significant impact on the
results of future periods. The charge of £7.4m in the year ended 30 April 2003
related to the adjustment arising from the refinement of the method of
estimating the provision for self insured retained risk under Sunbelt's
insurance policies at 30 April 2002.
The charge of £9.4m relating to the prior year impact of the US accounting issue
in the year ended 30 April 2003 is comprised of the errors in the balance sheet
at 30 April 2002. The US severance costs relate to the departure of the former
President and Chief Executive Officer of Sunbelt Rentals.
Exceptional items are presented in the profit and loss account as follows:
2004 2003
£m £m
Turnover 3.3 -
Staff costs 0.5 0.5
Depreciation 2.3 5.8
Other operating costs 13.7 23.5
Other operating income (1.0) (0.3)
Charged in arriving at operating profit 18.8 29.5
Loss on sale of businesses 3.8 -
Interest payable and similar charges 8.9 1.9
31.5 31.4
8. Taxation
2004 2003
£m £m
UK Corporation tax at 30% (2003 - 30%) - (0.2)
Overseas taxation (0.3) 0.5
Total current tax (credit)/charge (0.3) 0.3
Deferred taxation credit - current year charge/(credit) 0.9 (4.8)
- prior year charge/(credit) 1.1 (4.5)
2.0 (9.3)
1.7 (9.0)
9. Loss per share
Loss per share for the year ended 30 April 2004 has been calculated based on the
loss for the financial year and on 322,931,814 (2003: 322,716,194) ordinary
shares, being the weighted average number of ordinary shares in issue during the
year excluding the shares held by the ESOT. Diluted loss per share has been
calculated using the loss for the financial year and the diluted number of
shares (ignoring any potential issue of ordinary shares which would be
anti-dilutive). These are calculated as follows:
2004 2003
Loss for Weighted Per Loss for Weighted Per
the financial average no share the financial average no share
year of shares amount year of shares amount
£m million pence £m million pence
As used in the calculation of
basic earnings per share (34.8) 322.9 (10.8) (33.2) 322.7 (10.3)
Outstanding share options - - - - - -
As used in the calculation of
diluted earnings per share (34.8) 322.9 (10.8) (33.2) 322.7 (10.3)
10. Tangible fixed assets
Net book value Rental equipment Other fixed Total tangible
Held under finance leases Owned assets fixed assets
£m £m £m £m
At 1 May 2003 17.1 560.4 74.0 651.5
Reclassifications (1.1) 0.9 0.2 -
Exchange difference (1.6) (35.9) (3.2) (40.7)
Additions - 64.1 8.2 72.3
Disposals - (37.9) (4.6) (42.5)
Depreciation (1.8) (94.5) (8.8) (105.1)
At 30 April 2004 12.6 457.1 65.8 535.5
11. Provisions for liabilities and charges
Deferred Self
taxation insurance Other Total
£m £m £m £m
At 1 May 2003 28.6 13.4 3.5 45.5
Exchange differences (2.9) (1.3) - (4.2)
Transfer from/(to) other creditors - 0.7 (0.8) (0.1)
Utilised - (7.9) (1.7) (9.6)
Charged in the year 2.0 7.7 1.1 10.8
At 30 April 2004 27.7 12.6 2.1 42.4
At 30 April 2004 there was an unrecognised deferred tax asset of £28.7m (2003 -
£18.1m).
Self insurance provisions relate to the estimated liability in respect of costs
to be incurred under the Group's self insurance programmes for events occurring
up to the year end. The provision is established based on advice received from
independent consultants of the estimated total cost of self insured retained
risk based on historical claims experience. Other provisions relate primarily
to vacant property costs which are expected to be utilised over a period of up
to five years.
12. Notes to cash flow statement
a) Cash flow from operating activities 2004 2003
£m £m
Operating profit before exceptional items and amortisation 44.2 39.1
Depreciation (excluding exceptional impairment) 102.8 111.0
EBITDA 147.0 150.1
Gain on sale of tangible fixed assets (5.2) (2.7)
(Increase)/decrease in stocks (4.4) 1.3
Decrease in trade debtors 0.5 5.4
Increase in trade creditors 0.9 2.5
Exchange differences 1.2 0.7
Net cash inflow from operating activities before exceptional items 140.0 157.3
b) Reconciliation to net debt
Decrease/(increase) in cash in the period 0.8 (9.2)
Increase in cash collateral balances (2.6) (3.7)
Decrease in bank loans (41.0) (53.9)
Decrease in finance lease obligation (8.6) (11.9)
Change in net debt from cash flows (51.4) (78.7)
Translation difference (39.7) (38.3)
Non cash movement: - 5.25% unsecured convertible loan note 0.8 0.1
- obligation due on finance leases - 6.4
Movement in net debt in the period (90.3) (110.5)
Net bank debt at 1 May 564.8 675.3
Net debt at 30 April 474.5 564.8
c) Analysis of net debt 1 May Exchange Cash Non-cash 30 April
2003 movement flows Movement 2004
£m £m £m £m £m
Cash (6.6) 0.4 2.3 - (3.9)
Cash collateral balances (3.7) 0.3 (2.6) - (6.0)
Overdrafts 4.8 - (1.5) - 3.3
(5.5) 0.7 (1.8) - (6.6)
Debt due after 1 year 564.5 (36.7) (63.1) 0.8 465.5
Debt due within 1 year 5.8 (3.7) 13.5 - 15.6
Total net debt 564.8 (39.7) (51.4) 0.8 474.5
The non-cash movement relates to the accrued interest on the 5.25% unsecured
loan note, due 2008. The combined total of cash and cash collateral balances
(which are restricted cash held to secure letters of credit) of £9.9m is
classified in the balance sheet as cash at bank and in hand. Of the debt due
after 1 year, £9.7m is due between one and two years, £343.5m is due between two
and five years and £115.6m in more than five years.
d) Acquisitions and disposals 2004 2003
£m £m
Deferred consideration paid on prior year acquisitions (0.1) (0.8)
Net proceeds from the sale of non-core businesses 15.3 -
15.2 (0.8)
During the year the Group sold certain of A-Plant's non-core businesses
including its Irish business. Total net proceeds of £15.3m had been received at
30 April 2004. The businesses sold contributed turnover of £7.4m (2003 -
£13.2m) and operating profit of £0.1m (2003 - £1.0m) to the results for the
year.
e) Exceptional items
Exceptional costs paid in the year comprise £11.1m classified under operating
activities relating to advisory, accounting and legal costs incurred in
connection with the Group's debt facilities and a further £7.1m classified under
servicing of finance relating to amounts paid to providers of finance.
13. Pensions
The Group accounts for pensions in accordance with SSAP 24. Under the
methodology required by FRS 17, the proposed UK accounting standard for pension
plans, the deficit in the defined benefit plans was £12.5m compared with £14.5m
at 30 April 2003.
This information is provided by RNS
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