Interim Results

Speedy Hire PLC 26 November 2003 26 November 2003 SPEEDY HIRE Plc Interim results for the six months ended 27 September 2003 Speedy Hire is a leading provider of equipment hire services to UK contractors and builders, industry, utilities and the public sector, operating from over 275 depots throughout the country. The Group is focused primarily on tool hire, with complementary businesses specialising in portable accommodation, surveying and power generation equipment. HIGHLIGHTS Unaudited Unaudited 2003 2002 (26 Weeks) (26 Weeks) % Change Group Turnover Â£81.7m Â£69.3m +17.9 Group Operating Profit Â£10.7m Â£10.0m +6.2 Group Profit Before Taxation Â£9.0m Â£8.5m +6.8 Group Profit Before Goodwill Amortisation and Before Taxation Â£9.4m Â£8.8m +6.8 Earnings Per Share 1 17.9p 15.4p +16.8 Earnings Per Share 1 (with underlying tax rate 2) 16.7p 14.7p +13.5 Dividends Per Share 3.7p 3.3p +12.1 Gearing 74.5% 73.6% Interest Cover x6.6 x6.4 1 Before goodwill amortisation 2 Estimated effective tax rate 21.5% and underlying tax rate 27.2% â€¢ Like for like turnover in tool hire up 10% â€¢ Strong expansion of specialist businesses â€¢ 22 new depots added â€¢ New Â£100m banking facility in place â€¢ Investing to support future growth Outlook 'The business case for hire remains as compelling as ever. Forecasts for the construction sector remain strong and stable. Trading to date is in line with our expectations and, provided there is no change in the general economic outlook, the business remains on track to deliver a year of further progress.' - David Wallis - Chairman For further information: Speedy Hire Plc Hudson Sandler John Brown (Chief Executive) Nick Lyon, Keith Hann Neil O'Brien (Group Finance Director) Tel: 020 7796 4133 Wednesday only: 020 7796 4133 Thursday onwards: 01942 720000 There will be a meeting for analysts at 10am on Wednesday 26 November at the offices of Hudson Sandler, 29 Cloth Fair, London EC1A 7NN SPEEDY HIRE Plc Interim Results for the six months ended 27 September 2003 It has been another busy six months for Speedy Hire which has resulted in further solid progress. Our key objectives were to grow the business both organically and through acquisitions, continue to expand market share and to build on the foundations already laid in strengthening the organisation. We are pleased to report progress in all these areas. Financial Results Group turnover was Â£81.7 million (2002: Â£69.3 million) an increase over the same period last year of 17.9%, while operating profit was Â£10.7 million (2002: Â£10.0 million) an increase of 6.2%. Profit before goodwill amortisation and before tax rose to Â£9.4 million (2002: Â£8.8 million) an increase of 6.8% and earnings per share increased from 15.35 pence to 17.93 pence, up by 16.8%. Strong growth in turnover was driven by an excellent performance from our Specialist businesses, the addition of 22 new depots and a robust like for like turnover increase of 10% in the tool hire operations. Once again, this was well ahead of market growth and consolidates Speedy Hire's position as clear industry leader. Operating margins in Hire Services eased from 16% to 15%. This was mainly as a result of non-recoverable cost increases, principally the rise in National Insurance contributions, the increase in fuel costs, and the costs associated with establishing our new Scottish company. In June a new Â£100 million banking facility was arranged enabling us to manage our debt on a more structured basis, rather than use hire purchase agreements as we have done for many years. Net debt at the end of the half year stood at Â£63.6 million (2002: Â£54.6 million) producing gearing of 75% (2002: 74%). Working capital continues to be closely controlled. Interest was covered 6.6 times by operating profit (2002: 6.4 times). Gross capital expenditure in the half year was Â£28.2 million (2002: Â£16.2m) and in addition Â£7.3 million was spent in acquiring businesses (2002: Â£nil). Return on capital was 15.2% (2002: 15.8%), well above the sector average. Dividend On the strength of these results, the Board intends to pay an interim dividend of 3.7 pence per share (2002: 3.3 pence) a 12% increase on the same period last year. The interim dividend will be paid on 30 January 2004 to all those shareholders on the register on 5 January 2004. Board Changes We are constantly seeking to strengthen Speedy Hire and were delighted to welcome Andrew Simpson to the board as an executive director in August 2003. Andrew joins from Rothschild as Business Development Director. His background and skills complement those of the executive team and he is already making a valuable contribution. Business Review We added 22 new depots during the half year, bringing the total number of depots operated by the Group to 279, leaving us well placed to achieve our target number of openings for the year. Eight were greenfield openings and 14 were brought in through acquisitions. In July, we acquired Kingfisher Hire, adding seven tool hire depots in South Wales. Later in the same month, we acquired Ashtead Plant's Big Air division, specialising in portable, high capacity, high pressure compressed air systems, which provided an excellent fit for Speedy Power. In August, we acquired St. Vincent Plant, the hire business of the Clugston Group. This brought in a net six depots in Yorkshire and Lincolnshire and was a good fit with our existing network. We also signed a three year trading agreement with the Clugston Group. Since the half year we have acquired the construction surveying equipment hire division of Leica Geosystems, providing an excellent bolt-on opportunity for Speedy Survey. All four acquisitions have been acquired for sensible sums and are being successfully integrated within their respective divisions. Speedy Hire has been growing rapidly over recent years and we have a strategy to reach 400 depots in the medium term. To support this growth we are investing further in the support infrastructure such as marketing, business development and I.T. The market is demanding on-going improvements to meet changing demands and Speedy Hire is committed to meeting customers' expectations. Outlook The business case for hire remains as compelling as ever, given the ever tighter regulatory environment. Forecasts for the construction sector remain strong and stable and we re-iterate our key strengths of diversity of customers, diversity of activities and our national network and broad geographical spread. We continue to operate in a solid commercial environment and trading to date is in line with our expectations and, provided there is no change in the general economic outlook, the business remains on track to deliver a year of further progress. David W Wallis John E Brown Chairman Chief Executive SPEEDY HIRE Plc PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 27 SEPTEMBER 2003 Unaudited Unaudited Audited Note 26 Weeks 26 Weeks Year to to to 27 September 29 September 30 March 2003 2002 2003 Â£'000 Â£'000 Â£'000 Turnover 2 81,701 69,290 147,187 Operating profit 2 - Before goodwill amortisation 11,034 10,389 21,770 - Goodwill amortisation (369) (342) (684) ---------- ---------- ---------- 10,665 10,047 21,086 Interest payable (net) (1,627) (1,581) (2,879) ---------- ---------- ---------- Profit on ordinary activities before taxation 9,038 8,466 18,207 Taxation 6 (1,940) (2,424) (4,946) ---------- ---------- ---------- Profit on ordinary activities after taxation 3 7,098 6,042 13,261 Dividends 3, 8 (1,539) (1,372) (3,743) ---------- ---------- ---------- Retained profit for the period 3 5,559 4,670 9,518 ===== ===== ===== All turnover and operating profit has arisen from continuing operations. Earnings per share - Basic (pence) 7 17.07 14.53 31.89 ===== ===== ===== - Diluted (pence) 16.78 14.35 31.44 ===== ===== ===== - Pre-goodwill amortisation (pence) 7 17.93 15.35 33.53 ===== ===== ===== - Pre-goodwill amortisation with underlying tax rate (pence) 7 16.69 14.71 31.90 ===== ===== ===== Dividends per share (pence) 8 3.70 3.30 9.00 ===== ===== ==== SPEEDY HIRE Plc BALANCE SHEET AS AT 27 SEPTEMBER 2003 Unaudited Unaudited Audited Note As at As at As at 27 September 29 September 30 March 2003 2002 2003 Â£'000 Â£'000 Â£'000 Fixed assets Intangible assets 5,162 4,382 4,040 Tangible assets 146,941 122,862 129,466 ----------- ----------- ----------- 152,103 127,244 133,506 ----------- ----------- ----------- Current assets Stocks 3,477 3,174 3,217 Debtors 50,939 46,963 44,091 Cash at bank and in hand 3,631 - 7 ----------- ----------- ----------- 58,047 50,137 47,315 Creditors: amounts falling due within one year (45,297) (60,291) (63,577) ----------- ----------- ----------- Net current assets/(liabilities) 12,750 (10,154) (16,262) ----------- ----------- ----------- Total assets less current liabilities 164,853 117,090 117,244 Creditors: amounts falling due after more than one year (66,440) (32,676) (25,402) Provisions for liabilities and charges (13,151) (10,228) (12,447) ----------- ----------- ----------- Net Assets 85,262 74,186 79,395 ===== ===== ===== Capital and reserves Called-up share capital 2,130 2,130 2,130 Share premium account 32,537 32,537 32,537 Merger reserve 3,660 3,660 3,660 Revaluation reserve 51 390 51 Investment property revaluation reserve 140 665 177 Capital redemption reserve 26 26 26 Profit and loss account 46,718 34,778 40,814 ---------- ---------- ---------- Equity shareholders' funds 3 85,262 74,186 79,395 ===== ===== ===== SPEEDY HIRE Plc CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 27 SEPTEMBER 2003 Unaudited Unaudited Audited Note 26 Weeks to 26 Weeks to Year to 27 September 29 September 30 March 2003 2002 2003 Â£'000 Â£'000 Â£'000 Cash inflow from operating activities 4 23,259 17,321 39,066 ---------- ---------- ---------- Returns on investments and servicing of finance Interest received - - 76 Interest paid (804) (365) (771) Interest element of hire-purchase and finance lease rental payments (530) (1,216) (2,184) ---------- ---------- ---------- Net cash outflow from returns on investments and servicing of finance (1,334) (1,581) (2,879) ---------- ---------- ---------- Taxation (1,373) (3,179) (5,618) ---------- ---------- ---------- Capital expenditure Purchase of tangible fixed assets (23,219) (3,686) (12,597) Sale of tangible fixed assets 6,769 7,609 15,898 ---------- ---------- --------- Net cash (outflow)/inflow for capital expenditure (16,450) 3,923 3,301 ---------- ---------- ---------- Acquisitions and disposals Purchase of businesses 9 (7,269) - - ---------- ---------- ---------- Net cash outflow from acquisitions and disposals (7,269) - - ---------- ----------- ---------- Equity dividends paid (2,371) (2,079) (3,451) ---------- ---------- ---------- Cash (outflow)/inflow before financing (5,538) 14,405 30,419 Financing Issue of share capital - 51 51 New bank loans 5 65,399 - - Capital element of hire-purchase and finance lease rental payments 5 (52,190) (10,456) (22,700) ---------- ---------- ---------- Net cash inflow/(outflow) from financing 13,209 (10,405) (22,649) ---------- ---------- ---------- Increase in cash in the period 5 7,671 4,000 7,770 ===== ===== ===== 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 30 March 2003. The financial information contained in this interim report does not constitute statutory accounts for the Group for the relevant periods. 2. Turnover and Operating Profit Unaudited Unaudited Audited 26 Weeks to 26 Weeks to Year to 27 September 29 September 30 March 2003 2002 2003 Â£'000 Â£'000 Â£'000 Turnover Hire Services 81,678 69,156 147,003 Central including property income 23 134 184 ---------- ---------- ---------- Total 81,701 69,290 147,187 ===== ===== ===== Turnover is derived from activities within the UK. Operating Profit Hire Services 12,247 11,179 23,753 Central overheads net of property income (1,582) (1,132) (2,667) ---------- ---------- ---------- Total 10,665 10,047 21,086 ===== ===== ===== 3. Movement in shareholders' funds Unaudited Unaudited Audited 26 Weeks to 26 Weeks to Year to 27 September 29 September 30 March 2003 2002 2003 Â£'000 Â£'000 Â£'000 Profit for the period attributable to 7,098 6,042 13,261 the Group Dividends (1,539) (1,372) (3,743) ---------- ---------- ---------- 5,559 4,670 9,518 Unrealised surplus on revaluation of properties - - 54 Shares issued - 51 51 Credit in respect of share related awards 308 308 615 ---------- ---------- ---------- Net increase in shareholders' funds 5,867 5,029 10,238 Opening shareholders' funds 79,395 69,157 69,157 ---------- ---------- --------- Closing shareholders' funds 85,262 74,186 79,395 ===== ===== ===== 4. Reconciliation of operating profit to net cash flow from operating activities Unaudited Unaudited Audited 26 Weeks to 26 Weeks to Year to 27 September 29 September 30 March 2003 2002 2003 Â£'000 Â£'000 Â£'000 Operating profit 10,665 10,047 21,086 Depreciation charge 11,918 10,297 21,109 Amortisation charge 369 342 684 Profit on sale of tangible fixed assets (2,389) (1,769) (4,263) (Increase)/decrease in stocks (13) 190 147 (Increase)/decrease in debtors (6,848) (2,636) 235 Increase/(decrease) in creditors 9,249 542 (547) Charge in respect of share related awards 308 308 615 ---------- ---------- ---------- 23,259 17,321 39,066 ===== ===== ===== 5. Reconciliation of net cash flow to movement in net debt Unaudited Unaudited Audited 26 Weeks to 26 Weeks to Year to 27 September 29 September 30 March 2003 2002 2003 Â£'000 Â£'000 Â£'000 Increase in cash in the period 7,671 4,000 7,770 Cash inflow from increase in debt (65,399) - - Cash outflow from decrease in hire-purchase and lease financing 52,190 10,456 22,700 ---------- ---------- ---------- Change in net debt resulting from cash flows (5,538) 14,456 30,470 New hire-purchase and finance lease contracts (4,932) (12,528) (27,024) ---------- ---------- ---------- Movement in net debt in the period (10,470) 1,928 3,446 Net debt at the start of the period (53,082) (56,528) (56,528) ---------- ---------- ---------- Net debt at the end of the period (63,552) (54,600) (53,082) ====== ====== ====== 6. The charge for taxation for the period is based on the estimated effective rate for the year of 21.5% (2002: 28.6%). The underlying effective tax rate excluding adjustments in respect of prior years is estimated at 27.2% (2002: 31.8%). 7. The calculation of basic earnings per share is based on the profit after taxation of Â£7,098,000 (2002: Â£6,042,000) and the time weighted average number of shares in issue during the period and ranking for dividends of 41,590,678 (2002: 41,584,274). The weighted average number of shares used for the diluted earnings per share is calculated as follows: Unaudited Unaudited Audited 26 Weeks to 26 Weeks to Year to 27 September 29 September 30 March 2003 2002 2003 Number Number Number Weighted average number of ordinary shares in issue during the period 41,590,678 41,584,274 41,587,476 Diluting effect of options under Allen Plc Savings Related Share Option Scheme 9,260 5,056 - Diluting effect of LTIP shares 712,659 515,757 591,232 --------------- --------------- -------------- Diluted weighted average number of ordinary shares 42,312,597 42,105,087 42,178,708 ======== ======== ======== The table below reconciles basic earnings per share to both earnings per share pre-goodwill amortisation, and earnings per share pre-goodwill amortisation with underlying tax rate. Unaudited Unaudited Audited 26 Weeks to 26 Weeks to Year to 27 September 29 September 30 March 2003 2002 2003 Pence Pence Pence Basic earnings per share 17.07 14.53 31.89 Goodwill amortisation charge after tax per share 0.86 0.82 1.64 ---------- ---------- ---------- Earnings per share pre-goodwill amortisation 17.93 15.35 33.53 Adjustment to tax charge per share to reflect underlying current year tax rate (1.24) (0.64) (1.63) ---------- ---------- ---------- Earnings per share pre-goodwill amortisation with underlying tax rate 16.69 14.71 31.90 ====== ====== ====== 8. The Board has declared an interim dividend of 3.7 pence per share to be paid on 30 January 2004 to shareholders on the register on 5 January 2004 9. Acquisitions during the period totalled Â£7,269,000 including provisional goodwill of Â£1,491,000. Turnover and operating profits from acquisitions in the period were Â£891,000 and Â£48,000 respectively. 10. The results for the year ended 30 March 2003 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. 11. The interim report will be posted to all shareholders on or about 9 December 2003 and copies of this and the last published Annual Report and Accounts are available from the Secretary, Speedy Hire Plc, Chase House, 16 The Parks, Newton-le-Willows, Merseyside, WA12 0JQ. 12. Approval The interim statement for the six months ended 27 September 2003 was approved by the Board of Directors on Monday 24 November 2003. This information is provided by RNS The company news service from the London Stock Exchange IR BABRTMMBTBMJ

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