Interim Results

Speedy Hire PLC 29 November 2001 FOR RELEASE 7.00AM 29 November 2001 SPEEDY HIRE PLC (Hire Services) (Tool hire, site storage, portable accommodation, surveying and measurement instrumentation, pneumatic and electrical power generation equipment) Interim results for six months ended 30 September 2001 Unaudited Unaudited 2001 2000 (26 Weeks) (26 Weeks) Turnover £106.3m £171.5m Operating profit before exceptionals £9.7m £6.6m Pre-tax profit £8.0m £0.5m Basic earnings per share (pence) 13.5p 0.9p Hire Services earnings per share (pence) 12.1p 10.3p Dividends per share (pence) 3.0p 5.6p Gearing (%) 90.2% 45.1% Proforma gearing post Ryans disposal 68.6% - Interest cover (times) before exceptionals 5.7 4.1 Group now a focused tool hire business Dividend rebased to increase investment Speedy Hire Services o All Group hire businesses performing well o Operating profit up 13.8% at £9.4 million o Like-for-like tool hire turnover up 13.2% o 15 new depots in first half o 30 'greenfield' openings between October 2000 and September 2001 o Operating margins remain strong at 17.1% o £17.5 million invested in new plant o Long term agreements in place with national contractors o Currently 215 depots across the UK Ryan Utility Services o Sold to Alfred McAlpine on 27 November 2001 o Enterprise value of £12.9 million. o Proforma gearing reduces to 68.6% Outlook o Immediate future underpinned - High levels of activity across all geographical areas and sectors - Government remains committed to its spending plans. o Confident of meeting our expectations in current climate For further information: John Brown (Chief Executive) Thursday only: 020 7786 9600 Neil O'Brien (Group Finance Director) Friday onwards: 01942 720000 Brian Coleman-Smith / Philip Hewitt-Brown / Jacqui Graves 020 7786 9600 Binns & Co Public Relations SPEEDY HIRE PLC Interim Results for the six months ended 30 September 2001 Speedy Hire has achieved its objective of becoming a focused tool hire services business following the disposal of Building Contracting in June 2001 and Utility Services on 27 November 2001. The trading performance of Building Contracting to the date of disposal is included in the financial statement as a discontinued activity. The details of this disposal were contained in the Annual Report for the year ended 1 April 2001. Ryan Utility Services was sold to Alfred McAlpine Plc for an aggregate enterprise value of £12.9 million. The disposal proceeds have been used to reduce debt. This operation is reported as a discontinued activity in these results. Results. Group profit before tax in the six months to 30 September 2001 was £8.02 million (2000: £0.54 million) on turnover of £106.3million, (2000: £171.5 million). Earnings before interest, tax, depreciation and amortisation (EBITDA) were £18.7 million (2000: £9.3 million) and earnings per share were 13.5 pence (2000: 0.9 pence). Since 1 April 2001 our balance sheet has strengthened as a result of good trading, improved operational controls and asset disposals. Debt control and cashflow management has received even more focus. New systems of both reporting and collection of debt has resulted in improved cashflow. Group debt levels at 30 September, consisting of bank borrowings and hire purchase, stood at £58.4 million. This debt is financing a rental fleet with a net book value of just under £100m. As most of Speedy Hire's growth has been organic, less than 2% of these assets consist of goodwill. Gearing at 30 September was 90% (proforma post the Ryans disposal 69%), and given that this percentage was calculated against a substantive asset base, the Board considers this appropriate, at this time, for a company involved in the equipment rental sector. Interest was covered 5.7 times by operating profits. Since the start of the year surplus properties with a value of £4 million have been disposed of and in addition £5.5 million was received as part of the deferred consideration from the sale of Housebuilding in August 2000. £5 million remains outstanding to be paid to us in August 2002. Dividend. As indicated in the Annual Report and Accounts, the financing requirements of Speedy Hire as a focused growing hire services company are different from that of the former Allen Group. Accordingly the Board believes that a higher proportion of profits should be retained for investment within the business in order to fund growth. The Board therefore intends to pay an interim dividend of 3.0 pence per share (2000: 5.6 pence) on 31 January 2002 to shareholders on the register on 7 January 2002. As indicated in the Annual Report we would expect the full year dividend payment to be covered not less than three times by earnings per share. Half Year Review. Speedy Hire Services. Operating profit at Speedy Hire Services was £9.38 million, (2000: £8.24 million) an increase of 13.8%. Turnover was £54.8 million (2000: £47.2 million) with like-for-like turnover in tool hire increasing by 13.2%. 15 new depots opened in the half-year bringing the total to 215. During the period October 2000 to September 2001 over 30 new 'greenfield' depots opened. As these inevitably incur pre-opening costs and start up losses which are written off immediately, the achievement of an operating margin of 17.1% whilst undertaking a significant development programme, is particularly pleasing. Speedy Hire Services consists of eight companies focused not only on tool hire, which makes up around 80% of the business, but also site storage and portable accommodation, surveying and measurement instrumentation and pneumatic and electrical power generation equipment. Each of these businesses has experienced good growth. It is Speedy Hire's aim to be a full support service provider with a fast, reliable package solution for our customers supplying everything they need for a project, with the exception of heavy mechanical plant. Our success in meeting this aim was recently acknowledged at the Construction Industry awards when Speedy Hire was recognised as 'Hirer of the Year'. In the half year, Speedy Hire has made significant investment of £17.5 million in new equipment to maintain its competitive advantage. The Board has also considered a number of acquisition opportunities. However, it will continue to apply stringent financial, strategic and risk management criteria to all acquisition opportunities and only consider acquisitions where an appropriate level of value can be created for shareholders. The sectors in which our customers operate continue to consolidate and they increasingly seek to deal with suppliers who can provide national coverage. Speedy is well placed to meet their needs and has secured several long term agreements with a number of national contractors including Kier Plc, Carillion Plc, J Mowlem Plc, Interserve Plc, Morgan Sindall Plc and Galliford Try Plc. Ryan Utility Services. Ryan Utility Services traded well throughout the period, producing an operating profit of £0.78 million, on a turnover of £28.1 million. As described above, Ryan was sold on 27 November 2001. It is pleasing that despite the additional workload created by the disposal process management remained focused on running the business well. Mike Rowan and his team are to be congratulated on maintaining progress during a period of uncertainty and the Board offers its sincere thanks. Outlook. With the outlook for the global economy uncertain, the Board has considered a number of scenarios, such as a slowdown in the market or a fall in the utilisation of our assets. If this were the case, we would reduce capital expenditure on hire assets and review our branch opening plans. This would immediately result in lower borrowings and reduce the impact on profits of pre-opening costs and start up losses associated with greenfield sites. There are no long lead times for the products in which we invest and as a result we have no significant forward capital commitments In addition Speedy Hire's customer base is broadly spread across a range of industries, with 25,000 active accounts, taking in construction, utility contracting, civil engineering, local authorities and industrial companies. Construction customers range from the major national contractors, through maintenance engineers to the local jobbing builder. This diversity means that no single customer accounts for more than 3% of our business. We consider that the combination of speed of reaction to changes in the market, no significant forward capital commitments and an extensive and diverse customer base to be key strengths of the business. All are monitored carefully for changes in trend. To date, we have no indication of any such changes and utilisation rates remain high. The market remains busy with the majority of our customers enjoying high levels of activity. This is reflected across all geographical areas and sectors, including the public sector where the government has recently re-iterated its commitment to its spending plans. This underpins the immediate future. While this situation persists, we remain confident of meeting our expectations. David W Wallis John E Brown Chairman Chief Executive SPEEDY HIRE PLC PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2001 Unaudited Unaudited Audited 26 Weeks to 26 Weeks to Year to 30 September 1 October 1 April 2001 2000 2001 £'000 £'000 £'000 TURNOVER Continuing operations 54,930 47,304 100,079 Discontinued operations 51,394 124,196 221,399 _______ _______ _______ 106,324 171,500 321,478 ----------- ----------- ----------- OPERATING PROFIT/(LOSS) Continuing operations 9,444 8,437 17,553 Discontinued operations 769 (1,355) (17,953) Unrecovered central overheads (489) (529) (1,040) Exceptional items - (4,416) (9,385) ---------- ---------- ---------- 9,724 2,137 (10,825) Interest payable (1,700) (1,602) (3,074) ---------- ---------- ---------- Profit/(loss) on ordinary activities before taxation 8,024 535 (13,899) Taxation (2,409) (161) 1,913 ---------- ---------- ---------- Profit/(loss) on ordinary activities after 5,615 374 (11,986) taxation Equity minority interests - - (9) ---------- ---------- ---------- Profit/(loss) for the period attributable to 5,615 374 (11,995) the group Dividends (1,246) (2,326) (5,773) ---------- ---------- ---------- Profit retained/(loss) for the period 4,369 (1,952) (17,768) ====== ====== ====== Earnings/(loss) per share (pence) 13.52 0.90 (28.88) ---------- ---------- ---------- Dividends per share (pence) 3.00 5.60 13.90 ====== ====== ====== SPEEDY HIRE PLC BALANCE SHEET AS AT 30 SEPTEMBER 2001 Unaudited Unaudited Restated Audited As at As at As at 30 September 1 October 1 April 2001 2000 2001 £'000 £'000 £'000 Fixed assets Intangible assets 1,362 654 1,566 Tangible assets 108,987 95,432 106,801 ---------- ---------- ---------- 110,349 96,086 108,367 ---------- ---------- ---------- Current assets Stocks and work in progress 3,821 4,280 11,785 Debtors 56,602 96,996 88,135 Cash at bank and in hand - 1,021 - ---------- ---------- ---------- 60,423 102,297 99,920 Creditors: amounts falling within one year (74,776) (95,804) (118,876) ---------- ---------- ---------- Net current (liabilities)/assets (14,353) 6,493 (18,956) ---------- ---------- ---------- Total assets less current liabilities 95,996 102,579 89,411 Creditors: amounts falling due after more than one year (22,658) (16,206) (21,249) Provisions for liabilities and charges (8,587) (10,499) (8,087) ---------- ---------- ---------- Net Assets 64,751 75,874 60,075 ====== ====== ====== Capital and reserves Called-up share capital 2,127 2,077 2,077 Share premium 32,376 30,119 30,119 Merger reserve 3,660 3,660 3,660 Revaluation reserve 390 390 390 Investment property revaluation reserve 665 675 665 Capital redemption reserve 26 26 26 Profit and loss account 25,507 38,927 23,138 ---------- ---------- ---------- Equity shareholders' funds 64,751 75,874 60,075 ---------- ---------- ---------- SPEEDY HIRE PLC CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2001 Unaudited Unaudited Audited 26 Weeks 26 Weeks to Year to to 30 September 1 October 1 April 2001 2000 2001 £'000 £'000 £'000 Cash inflow from operating 16,567 4,121 15,706 activities ---------- ---------- ---------- Returns on investments and servicing of finance Interest received - - 14 Interest paid (509) (504) (836) Interest element of hire-purchase and finance lease rental payments (1,191) (1,098) (2,252) ---------- ---------- ---------- Net cash outflow from returns on Investments and servicing of (1,700) (1,602) (3,074) finance ---------- ---------- ---------- Taxation (1,448) (1,611) (2,695) ---------- ---------- ---------- Capital expenditure and financial investment Purchase of tangible fixed (4,362) (9,537) (11,551) assets Sale of tangible fixed assets 7,864 4,270 9,746 ---------- ---------- --------- Net cash inflow/(outflow) for capital expenditure and financial investment 3,502 (5,267) (1,805) ---------- ---------- ---------- Acquisitions and disposals Purchase of businesses - - (5,535) Disposal of subsidiaries (5,587) 20,728 19,017 Professional fees in connection with group restructuring - - (2,317) ---------- ---------- ---------- Net cash (outflow)/inflow from acquisitions and disposals (5,587) 20,728 11,165 ---------- ---------- ---------- Equity dividends paid (3,447) (3,447) (5,773) ---------- ---------- ---------- Cash inflow before financing 7,887 12,922 13,524 Financing Decrease in debt due within one year - repayments of amounts borrowed - (5,660) (8,057) Capital element of hire-purchase and finance lease rental payments (10,275) (8,717) (19,209) ---------- ---------- ---------- Net cash outflow from financing (10,275) (14,377) (27,266) ---------- ---------- ---------- Decrease in cash in the period (2,388) (1,455) (13,742) ====== ======= ======= NOTES 1. Basis of Accounting The interim statement has been prepared on the basis of the accounting policies as set out in the financial statements for the year ended 1 April 2001. The financial information contained in this interim report does not constitute statutory accounts for the Group for the relevant periods. Discontinued Operations The group's disposal of its building division was completed on 8 June 2001. Turnover and operating profit in respect of that division are included in the results for the period under discontinued operations. On 27 November 2001 the Board completed its disposal of Ryan Utility Services Limited. As the Disposal was completed within 3 months of the end of the accounting period, the results for the period have been shown as discontinued in accordance with FRS 3. Comparative information in respect of the 26 weeks ended 1 October 2000 and the year ended 1 April 2001 have been restated to comply with the current period presentation. Long Term Incentive Plan During the period, the company issued 1,003,000 shares to the Long Term Incentive Plan at a price of £2.30 per share. In accordance with Urgent Issues Task Force Abstracts 13 and 17, the cost of the shares is shown as a reserve movement. A charge has been made in the profit and loss account for the period in accordance with UITF 17. A corresponding credit is shown within reserves in respect of the current year charge. Deferred Taxation The group adopted FRS 19 'Deferred Taxation' in it 2001 Annual Report and Accounts. In accordance with FRS 19 a prior year adjustment was made to restate the amounts included in the consolidated balance sheets of previous years for deferred taxation. 2. Turnover and Operating Profit Unaudited Unaudited Audited 26 Weeks 26 Weeks Year to to 30 September to 1 October 1 April 2001 2000 2001 £'000 £'000 £'000 Turnover - Continuing Operations Hire Services 54,818 47,235 100,009 Other 112 69 70 ---------- ---------- ---------- 54,930 47,304 100,079 Turnover - Discontinued Operations Hire Services - 623 623 Utility Services 28,119 32,724 61,080 Housebuilding - 10,878 10,878 Building 23,275 79,971 148,818 ---------- --------- ---------- 51,394 124,196 221,399 ---------- ---------- ---------- Total 106,324 171,500 321,478 ====== ====== ====== Operating Profit - Continuing Operations Hire Services 9,375 8,237 17,153 Other 69 200 400 ---------- --------- ---------- 9,444 8,437 17,553 Operating Profit - Discontinued Operations Hire Services - 80 80 Utility Services 777 (410) (5,249) Housebuilding - 300 300 Building (8) (1,325) (13,084) ---------- --------- ---------- 769 (1,355) (17,953) ---------- --------- ---------- Total 10,213 7,082 (400) Unrecovered central overhead (489) (529) (1,040) ---------- ---------- ---------- 9,724 6,553 (1,440) ---------- --------- ---------- Exceptional items - (4,416) (9,385) ---------- --------- ---------- 9,724 2,137 (10,825) ---------- --------- ---------- 3. Movement in shareholders' funds Unaudited Unaudited 26 Weeks 26 Weeks Audited to 30 to 1 Year to September October 1 April 2001 2000 2001 £'000 £'000 £'000 Profit/(Loss) for the period attributable 5,615 374 (11,995) to the group Dividends (1,246) (2,326) (5,773) ---------- ---------- ---------- 4,369 (1,952) (17,768) Credit in respect of long term incentive plan charge 307 - - Unrealised surplus on revaluation of properties - - 17 ---------- ----------- ---------- Net increase/(decrease) in shareholders' funds 4,676 (1,952) (17,751) Opening shareholders' funds 60,075 77,826 77,826 ---------- ---------- --------- Closing shareholders' funds 64,751 75,874 60,075 ====== ====== ====== 4. Exceptional Items Unaudited Unaudited 26 Weeks 26 Weeks Audited to 30 to 1 Year to September October 1 April 2001 2000 2001 £'000 £'000 £'000 Loss on disposal of discontinued operation - (197) (5,623) Provision against loss on disposal or termination of discontinued operations - (4,416) (2,962) Release of provision against losses on a terminated activity - 197 - Unrecovered central overheads - - (800) ---------- --------- --------- - (4,416) (9,385) ====== ====== ===== 5. Reconciliation of operating profit to net cash flow from operating activities Unaudited 26 Weeks Unaudited Audited to 30 26 Weeks Year to September to 1 October 1 April 2001 2000 2001 £'000 £'000 £'000 Operating profit/(loss) 9,724 6,553 (2,240) Exceptional items - (1,791) - Depreciation 8,960 7,155 16,255 Amortisation 20 42 96 Profit on sale of tangible fixed assets (1,939) (1,354) (3,674) Increase in stocks (1,021) (887) (8,424) Decrease/(Increase) in debtors 4,834 (5,248) (3) (Decrease)/increase in creditors (4,011) (349) 13,696 ---------- ---------- ---------- 16,567 4,121 15,706 ====== ====== ====== 6. Reconciliation of net cash flow to movement in net debt Unaudited Unaudited 26 Weeks 26 Weeks Audited to 30 to 1 Year September October To 1 April 2001 2000 2001 £'000 £'000 £'000 Decrease in cash in the period (2,388) (1,455) (13,742) Cash outflow from decrease in debt and hire-purchase and lease financing 10,275 14,377 27,266 ---------- ---------- ---------- Change in net debt resulting from cash flows 7,887 12,922 13,524 On disposal of subsidiary undertakings (1,587) 12 - New hire-purchase and finance lease contracts (14,137) (9,232) (26,151) ---------- ---------- ---------- Movement in net debt in the period (7,837) 3,702 (12,627) Net debt at the start of the period (50,541) (37,914) (37,914) ---------- ---------- ---------- Net debt at the end of the period (58,378) (34,212) (50,541) ====== ====== ====== 7. The charge for taxation for the period is based on the estimated effective rate for the year of 30% (2000: 30%). 8. The calculation of earnings per share is based upon earnings of £ 5,615,000 (2000: £374,000) and the time weighted average number of shares in issue during the period and ranking for dividends of 41,535,835 (2000: 41,535,835). The table below reconciles earnings per share, earnings per share (pre-exceptionals) and earnings per share (continuing operations). Unaudited Unaudited 26 Weeks 26 Weeks to 30 September to 1 October 2001 2000 Pence Pence Earnings per share (continuing 12.72 10.17 operations) Profit on ordinary activities on discontinued and to be discontinued operations per share 1.16 (2.61) Tax on loss on discontinued and to be discontinued operations per share (0.36) 0.79 Minority interest on discontinued and to be discontinued operations per share - - ---------- --------- Earnings per share (pre-exceptionals) 13.52 8.35 Post tax exceptional items per share - (7.45) --------- -------- Earnings per share 13.52 0.90 ====== ====== 9. The Board has declared an interim dividend of 3.0 pence per share to be paid on (31 January 2002) to shareholders on the register on 7 January 2002. 10. Included in debtors are amounts falling due after more than one year of £ Nil (2000: £5,000,000) 11. The results for the year ended 1 April 2001 are extracts from the Annual Report and Accounts as filed with the Registrar of Companies. These were audited and reported upon without qualification by KPMG Audit Plc and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 12. The interim report will be posted to all shareholders on or about 14 December 2001 and copies of this and the last published Annual Report and Accounts are available from the Secretary, Speedy Hire Plc, Newmarket House, 20 The Parks, Newton-le-Willows, Merseyside, WA12 0JQ 13. Approval The interim statement for the six months ended 30 September 2001 was approved by the Board of Directors on 28 November 2001.

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