7th Jul 2005 07:01
Ashtead Group PLC07 July 2005 Audited results for the year ended 30 April 2005 and unaudited results for the fourth quarter Ashtead Group plc, the equipment rental group serving the US and UKconstruction, industrial and homeowner markets, announces its results for thefourth quarter and year ended 30 April 2005. Highlights • Group full year pre-tax profit before goodwill of £25.3m (2004* - £7.6m) • Group full year pre-tax profit of £16.4m (2004 - loss of £33.1m) • Group Q4 pre-tax profit before goodwill of £4.4m (2004* - £3.1m) • Group Q4 pre-tax profit of £2.1m (2004 - loss of £10.0m) • Sunbelt full year profit** up 48% to $108.2m (2004 - $73.3m) • A-Plant full year profit** nearly trebled to £11.7m (2004 - £4.0m) • Debt further reduced by £53.6m from cash flow despite 73% increase in capital expenditure to £125.5m*** • Proposed capital reorganisation announced today * in 2004, also before exceptional items ** Sunbelt's and A-Plant's profit comprises their operating profit before goodwill amortisation and, in 2004, exceptional items *** excluding lease capitalisation effects Ashtead's chief executive, George Burnett, commented: "Strong performances by all three of our divisions drove a significant recoveryin the Group's full year results. In the US, Sunbelt's profits rose 48% onrevenues up 15% as it continued to take market share in improving tradingconditions. In the UK, A-Plant delivered a near trebling of profits and asubstantially improved return on capital. Technology is now also benefitingstrongly from increased investment in offshore oil exploration globally with itsprofits up 26% to £3.4m. The capital reorganisation announced today will provide, when finalised, astable and appropriate long-term platform for the Group's future development. Itwill complete the renewal of all the Group's debt facilities and extend theaverage debt maturity to 7 years. The Board also expects the reorganisation willenable it to propose to shareholders the resumption of dividends in respect ofthe year ending 30 April 2006. In the US, the key private non-residential construction market is strong and isforecast to remain so. In addition, the shift from ownership to rentalcontinues. The outlook for Sunbelt therefore remains encouraging. Overall, UKmarkets continue to be stable. A-Plant's focus remains on improving returns andgrowing market share. Technology should benefit from increased investment in oilexploration and production. Accordingly, the Board anticipates reporting furtherprogress in the coming year." Contacts:Cob Stenham Non-executive chairman 020 7299 5562George Burnett Chief executive )Ian Robson Finance director ) 01372 362300 Brian Hudspith The Maitland Consultancy 020 7379 5151 -oOo- There will be a presentation to equity analysts at 9.30am this morning at theoffices of JPMorgan Cazenove, 20 Moorgate, London, EC2R 6DA. A simultaneousaudio webcast of this presentation will be available through the Company'swebsite, www.ashtead-group.com and there will also be a recorded playbackavailable from shortly after the call finishes. PRESS RELEASE Overview Strong performances by all three of our divisions drove a significant recoveryin the Group's results. In the US, Sunbelt's profits rose 48% on revenues up 15%as it continued to take market share in improving trading conditions. In the UK,A-Plant delivered a near trebling of profits and a substantially improved returnon capital. Technology is now also benefiting strongly from increased investmentin offshore oil exploration globally with its profits up 26% to £3.4m. For the year to 30 April 2005, Group profit before tax, goodwill amortisationand, in 2004, exceptional items increased to £25.3m from £7.6m in 2004 (£6.2m atconstant exchange rates). After goodwill amortisation and exceptional items,pre-tax profits were £16.4m compared with last year's loss of £33.1m. Cash taxearnings per share (1) were 7.6p (2004 - 2.4p). After goodwill amortisation and,in 2004, exceptional items, and the accounting tax charge, basic earnings pershare were 0.7p in 2005 compared to the loss of 10.8p in 2004. The fourth quarter profit before tax, goodwill amortisation and, in 2004,exceptional items was £4.4m (2004 - £3.1m). After goodwill amortisation andexceptional items, the pre-tax profit for the quarter was £2.1m compared withthe loss of £10.0m in 2004. (1) Cash tax earnings per share comprises earnings before goodwill amortisation,exceptional items and deferred tax divided by the weighted average number ofshares in issue. Cash tax earnings per share is considered to be a relevantmeasure of earnings per share for the Company as the deferred tax liability isnot expected to crystallise in the foreseeable future. Review of trading ------------------- Divisional operating Turnover* profit** -------- ------ 2005 2004 2005 2004 ---- ---- ---- ---- Sunbelt in $m 661.1 572.8 108.2 73.3 ====== ====== ====== ====== Sunbelt in £m 355.0 333.1 58.1 42.4A-Plant 156.3 155.9 11.7 4.0Ashtead Technology 12.4 11.3 3.4 2.7Group central costs - - (5.9) (4.9) ------ ------ ------ ------ 523.7 500.3 67.3 44.2 ====== ======Interest * (42.0) (36.6) ------ ------Profit before tax ** 25.3 7.6 ====== ====== * In 2004, before exceptional items. ** Before goodwill amortisation and, in 2004, exceptional items. Despite an 8% year on year decline in the US dollar, Group turnover increased by4.7% to £523.7m and divisional operating profit by 52.3% to £67.3m. Theunderlying growth, measured at constant exchange rates, was greater withturnover up 10.4% and divisional operating profit up 64.0%. The Group'sdivisional operating profit margin also improved significantly from 8.8% to12.9%. The Group's return on operating capital employed (excluding goodwill)increased to 12.6% (2004 - 7.4%). Sunbelt Sunbelt performed strongly in the year with both rental rates and utilisationrising substantially. Turnover grew 15.4% to $661.1m (2004 - $572.8m) reflectinggrowth of approximately 8% in average rental rates and an increase in averageutilisation from 65.1% to 69.0%. There was also a modest return to growth in itsaverage fleet size, arising almost entirely from fourth quarter capitalexpenditure. Turnover growth was broadly based with all regions and all majorproduct areas trading ahead of last year. In the fourth quarter, turnover increased 11.5% to $159.5m (2004 - $143.1m), agood performance bearing in mind that quarterly comparatives are now with aperiod last year which had already started to benefit from the recovery innon-residential construction. Rental rates grew 7% in the quarter. The newprofit centres opened in the first half continued to progress and further newlocations in Miami and Phoenix were opened in the fourth quarter. Sunbelt's turnover improvement reflected market share gains and growth inprivate non-residential construction activity (which rose 5.3% in the year toApril 2005 according to figures published by the US Department of Commerce) aswell as the continued shift from ownership to rental. Sunbelt's divisionaloperating profit was up 16.3% in the fourth quarter from $20.2m to $23.5m. Salesof used rental equipment were concentrated in the fourth quarter of last yeargiving rise to an unusually high incidence of gains on disposal. Excluding thisand the lease capitalisation effect explained below, the underlying rate ofgrowth in divisional operating profit was 37.0%. For the year as a wholeSunbelt's divisional operating profit grew 47.6% to $108.2m representing amargin of 16.4% (2004 - 12.8%). Investments to enhance the network of stores and the mix of our businesscontinue. The acquisition of 5 stores in the Miami area for consideration of$1.7m at an EBITDA multiple of 2.5 times from HSS RentX announced in Maytogether with our plan to open approximately 10 new general tool and equipmentstores across the US on a greenfield basis in the coming financial year willincrease fleet investment in higher return areas. Additional infill acquisitionopportunities are also under consideration to increase further our share inattractive markets. We anticipate generally strong trading conditions in Sunbelt's key USnon-residential market in coming years. According to the Dodge AnalyticsDivision of McGraw-Hill Construction, a leading industry research source, USnon-residential construction spending is projected to grow by 6.6%, 9.5% and7.3% in 2005, 2006 and 2007, respectively. This compares with their estimate of3.9% growth in 2004. A-Plant A-Plant has seen significant benefits this year from the refocusing programmecompleted in January 2004. Although total turnover for the year rose onlymarginally to £156.3m from £155.9m in 2004, when 2003/4 non-core disposals areexcluded same store turnover grew by 5.2%. This growth was achieved despite afleet size which was approximately 4.1% smaller than in the equivalent periodlast year. Increases in utilisation from 59.9% to 64.9% and growth in rentalrates of approximately 2% increased A-Plant's efficiency. The growth in rentalrates in the fourth quarter was approximately 7%. As a result of these improvements, A-Plant's fourth quarter divisional operatingprofit was £3.2m, more than double the £1.5m earned in 2004 and its full yearprofit virtually trebled to £11.7m (2004 - £4.0m), representing a margin of 7.5%(2004 - 2.6%). The initiative announced earlier this year to increase furtherreturns through continuing investment in tool hire equipment is on track with 8additional locations already carrying the tool hire range. Over the course ofthe next twelve months the tool hire range will be introduced to a further 18plant locations. A-Plant's major account business continues to benefit from the breadth of itsproduct offering and its geographic coverage. As a result its top 100 customersprovided 35% of A-Plant's revenue in the year. New five-year contracts wereagreed in the year with Balfour Beatty Utilities Limited, McNicholas plc andSkanska UK plc, with the latter being a two-year extension to an existingthree-year agreement. Most recently we have been awarded a new five year solesupply contract by Birse Group plc for all their plant and tool requirements.Together these new contracts are estimated to secure revenues of more than £50mover the next five years. Ashtead Technology For the year as a whole, turnover grew 9.7% to £12.4m (2004 - £11.3m) anddivisional operating profit rose 25.9% to £3.4m (2004 - £2.7m). The first UKenvironmental rental store was opened in Hitchin at the beginning of the yearand the US environmental rentals expansion continued with the opening of a newstore in Atlanta last October. Both stores developed well in their first year.Ashtead Technology also substantially improved its performance in the fourthquarter with revenues up 45.8% from £2.4m to £3.5m in the quarter. The fourthquarter divisional operating profit increased from £0.5m to £1.3m continuing theearly signs of recovery in its offshore markets seen in the third quarter. Capital expenditure and net debt Capital expenditure in the year was £157.8m. This included £32.3m resulting fromour decision to reclassify certain leases (mainly relating to our deliveryvehicle fleet) previously accounted for as operating leases as capital leases.Treating these leases as capital leases increased reported capital expenditureand finance lease debt. It also resulted in the reclassification of leasepayments of £7.8m from EBITDA to depreciation (£6.7m) and interest (£1.4m) thusreducing pre-tax profits by £0.3m. Excluding this lease effect, capital expenditure rose from £72.3m in 2004 to£125.5m of which £120.0m was on the rental fleet. Capital expenditure wasincreased significantly in the year to enable Sunbelt to take advantage of theimproving economic conditions in the US. £27.2m of the fleet expenditure was forgrowth with the remainder being spent to replace existing equipment. Expenditureon A-Plant's rental fleet was also increased from £29.8m to £35.4m as itsperformance improved. Disposals amounted to £37.6m (2004 - £32.6m) in the year,generating a profit on disposal of £7.1m (2004 - £5.2m) at a margin of 23.2%(2004 - 19.0%) above book value. The markets we use for disposing of used rentalequipment continue to be healthy. In the coming year capital expenditure isexpected to increase to approximately £160m. Cash tax payments were again minimal and are expected to remain so. On a like for like basis, underlying net debt at 30 April 2005 was £467.4m, areduction of £59.3m from last year's £526.7m principally reflecting the pay downof debt from cash flow generated in the last twelve months of £53.6m (2004 -£53.6m). This underlying net debt figure ignores the non-cash impact of thelease capitalisation discussed above which increased reported year end net debtby £25.8m to £493.2m. £82.0m ($156.7m) was available under the new firstpriority senior debt facility based on the April 2005 borrowing base. EBITDA for the year was £169.7m (2004 - £147.0m before exceptional items).Conversion of EBITDA into net cash inflow from operations was again high at97.1% (2004 - 95.2% before exceptional items). As a result of both the growth inEBITDA and the net paydown of debt from cash flow in the year of £53.6 million,the ratio of net debt to EBITDA improved from 3.6 times a year ago to 2.9 timesat 30 April 2005. Capital reorganisation We have also announced today a placing and open offer of 73,350,352 new ordinary shares at 95.5p per share to raise approximately £66.2m after issue costs. The purpose of the placing and open offer in conjunction with the substantially concurrent issue of $250m of new senior secured notes is to provide the finance to enable the Company to redeem early the outstanding 5.25% convertible loan note, due 2008 held by Rentokil Initial plc and also to reduce interest costs by exercising the option to redeem early the maximum 35% of the £120m 12% senior secured notes, due 2014. Full details of these transactions which are interconditional are provided in the separate announcement released today. Assuming a successful completion, all of our debt facilities will have beenrefinanced since April 2004 and the pro forma average maturity of our debt at 30April 2005 will be approximately 7 years. Additionally, so long as we maintainavailability of more than $50m on our asset based senior debt facility(availability was $156.7m based on the April 2005 borrowing base), none of thesedebt facilities is subject to quarterly financial performance covenants. Broker appointment JPMorgan Cazenove were appointed on 28 June 2005 as joint brokers to the Companyalongside Evolution Securities Limited. Current trading and outlook Last year's momentum has continued into the current year. Group turnover for thetwo months ended 30 June 2005 was up 12.5% over the previous year. Sunbelt'srevenues in dollars rose 17% in the same period. The capital reorganisation announced today will provide a stable and appropriatelong-term platform for the Group's future development. It completes the renewalof all the Group's debt facilities and extends the average debt maturity to 7years. The Board also expects the reorganisation will enable it to propose toshareholders the resumption of dividends in respect of the year ending 30 April2006. In the US, the key private non-residential construction market is strong and isforecast to remain so. In addition, the shift from ownership to rentalcontinues. The outlook for Sunbelt therefore remains encouraging. Overall, UKmarkets continue to be stable. A-Plant's focus remains on improving returns andgrowing market share. Technology should benefit from increased investment in oilexploration and production. Accordingly, the Board anticipates reporting furtherprogress in the coming year." CONSOLIDATED PROFIT & LOSS ACCOUNT Unaudited Audited --------- ------- Three months to 30 April Year to 30 April -------- ---------------- 2005 2004 2005 2004 ---- ---- ---- ---- £m £m £m £m Turnover 125.6 115.9 523.7 497.0 ====== ====== ====== ====== Operating profit 13.1 - 58.4 16.2Loss on sale of business - - - (3.8)Interest payable and similar charges (11.0) (10.0) (42.0) (45.5) ------ ------ ------ ------Profit/(loss) on ordinaryactivities before taxation 2.1 (10.0) 16.4 (33.1) ------ ------ ------ ------Profit before taxation, exceptionalitems and goodwill amortisation 4.4 3.1 25.3 7.6Exceptional items - (10.7) - (31.5)Goodwill amortisation (2.3) (2.4) (8.9) (9.2) ------ ------ ------ ------Profit/(loss) on ordinaryactivities before taxation 2.1 (10.0) 16.4 (33.1)-------------------------- ------ ------ ------ ------ Taxation on profit/(loss) on ordinaryactivities: - current tax (0.1) 0.4 (0.7) 0.3- deferred tax (3.7) 0.2 (13.3) (2.0) ------ ------ ------ ------ (3.8) 0.6 (14.0) (1.7) ------ ------ ------ ------ Profit/(loss) for the financial periodtransferred to/(from) reserves (1.7) (9.4) 2.4 (34.8) ====== ====== ====== ======Basic and diluted earnings/(loss) per (0.6p) (2.9p) 0.7p (10.8p)share ====== ====== ====== ====== Reconciliation of operating profit to EBITDA before exceptional items Operating profit 13.1 - 58.4 16.2Exceptional items - 9.6 - 18.8Goodwill amortisation 2.3 2.4 8.9 9.2Depreciation excluding exceptional impairment 28.4 23.0 102.4 102.8 ------ ------ ------ ------ EBITDA before exceptional items 43.8 35.0 169.7 147.0 ====== ====== ====== ====== EBITDA is presented here as an additional performance measure as it is commonlyused by investors and lenders CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Unaudited Audited --------- ------- Three months to 30 April Year to 30 April 2005 2004 2005 2004 ---- ---- ---- ---- £m £m £m £m Profit/(loss) for the financial period (1.7) (9.4) 2.4 (34.8)Foreign currency translation differences (1.0) 3.6 (7.8) 4.9 ------ ------ ------ ------Total recognised gains and losses in theperiod (2.7) (5.8) (5.4) (29.9) ====== ====== ====== ====== SUMMARY OF MOVEMENTS IN SHAREHOLDERS' FUNDS Unaudited Audited --------- ------- Three months to 30 April Year to 30 April 2005 2004 2005 2004 ---- ---- ---- ---- £m £m £m £m Total recognised gains and losses inthe period (2.7) (5.8) (5.4) (29.9)Charge for incentive share plan awards 0.2 - 0.4 -Share capital subscribed 0.1 - 0.1 -Goodwill transferred to profit and lossaccount in respect of businesses sold - - - 2.3 ------ ------ ------ ------ Net decrease in shareholders' funds inthe period (2.4) (5.8) (4.9) (27.6)Opening shareholders' funds 129.3 137.6 131.8 159.4 ------ ------ ------ ------ Closing shareholders' funds 126.9 131.8 126.9 131.8 ====== ====== ====== ====== CONSOLIDATED BALANCE SHEET Audited ------- At 30 April 2005 2004 ---- ----Fixed assets £m £mIntangible assets:- goodwill 134.0 142.9Tangible fixed assets:- rental equipment 452.9 469.7- other fixed assets 84.2 65.8 ------ ------ 537.1 535.5 ------ ------ 671.1 678.4 ------ ------Current assetsStock 13.8 15.1Trade debtors subject to non-recourse financing - 82.4Non-recourse financing received - (52.2) ------ ------Trade debtors net of non-recourse financing - 30.2Other trade debtors 80.6 0.5Prepayments & accrued income 11.2 11.2Cash at bank and in hand 2.1 9.9 ------ ------ 107.7 66.9 ------ ------Creditors - amounts falling due within one yearBank loans, overdrafts and finance lease obligations (12.2) (15.6)Trade and other creditors (95.1) (77.3) ------ ------ (107.3) (92.9) ------ ------ Net current assets/(liabilities) 0.4 (26.0) ------ ------Total assets less current liabilities 671.5 652.4 Creditors - amounts falling due after more than one year5.25% unsecured convertible loan note, due 2008 (131.3) (130.6)Bank and other loans and finance lease obligations (351.8) (338.2)Other creditors (7.9) (9.4) ------ ------ (491.0) (478.2) ------ ------Provision for liabilities and chargesDeferred taxation (38.6) (27.7)Other provisions (15.0) (14.7) ------ ------ (53.6) (42.4) ------ ------ Total net assets 126.9 131.8 ====== ====== Capital and reservesCalled up share capital 32.6 32.6Share premium account 100.8 100.7Revaluation reserve 0.4 0.5Own shares held by ESOT (1.6) (1.6)Profit and loss account (5.3) (0.4) ------ ------ Total equity shareholders' funds 126.9 131.8 ====== ====== CONSOLIDATED CASH FLOW STATEMENT Audited ------- Year to 30 April 2005 2004 ---- ---- £m £mNet cash inflow from operating activitiesCash inflow before exceptional items 164.8 140.0Exceptional costs (5.7) (11.1)Movement in non-recourse finance receivedunder trade debtors securitisation (51.6) (2.2) ------ ------Net cash inflow from operating activities 107.5 126.7 ------ ------ Returns on investments and servicing of financeInterest paid (30.2) (32.9)Exceptional finance costs - (7.1) ------ ------Net cash outflow from returns on investments and servicingof finance (30.2) (40.0) ------ ------ Taxation (outflow)/inflow (0.6) 0.1 ------ ------Capital expenditure and financial investmentPurchase of tangible fixed assets (111.2) (82.9)Sale of tangible fixed assets 35.9 32.3 ------ ------Net cash outflow from capital expenditure and financialinvestment (75.3) (50.6) ------ ------Acquisitions & disposals inflow 0.5 15.2 ------ ------Net cash inflow before management ofliquid resources and financing 1.9 51.4 Financing Issue of ordinary share capital 0.1 -Drawdown of loans 244.6 115.6Redemption of loans (241.7) (156.6)Decrease/(increase) in cash collateral balances 5.8 (2.6)Capital element of finance lease payments (12.3) (8.6) ------ ------Net cash outflow from financing (3.5) (52.2) ------ ------ Decrease in cash (1.6) (0.8) ------ ------ NOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation This preliminary announcement of the results for the year ended 30 April 2005 isan excerpt from the forthcoming 2005 Annual Report & Accounts and does notconstitute the statutory accounts for either 2004/5 or 2003/4 for the purposesof section 240(3) of the Companies Act 1985. The 2004/5 results are extractedfrom the audited accounts for that year which have not yet been filed withCompanies House. The comparative figures for 2003/4 have been extracted from theaccounts for that year which have been delivered to Companies House. Theauditors' reports in respect of both years were unqualified and do not contain astatement under section 237 of the Companies Act. The results for the year endedand quarter ended 30 April 2005 have been prepared using accounting policiesconsistent with those applied in the statutory accounts for the year ended 30April 2004. The figures for the fourth quarter are unaudited. The dulyauthorised Board committee has approved this preliminary announcement. 2. Segmental analysis Turnover Operating profit -------- ---------------- Before goodwill Goodwill Before amortisation & amortisation & exceptional Exceptional exceptional exceptional Net items items Total items items Total assets ----- ----- ----- ----- ----- ----- ------ £m £m £m £m £m £m £mThree months to 30 April 2005----SunbeltRentals 83.4 - 83.4 12.3 (2.1) 10.2 459.2A-Plant 38.7 - 38.7 3.2 (0.1) 3.1 188.2Technology 3.5 - 3.5 1.3 (0.1) 1.2 11.3Corporate costs - - - (1.4) - (1.4) -Central items* - - - - - - (531.8) ------ ------ ------ ------ ------ ----- ------ 125.6 - 125.6 15.4 (2.3) 13.1 126.9 ====== ====== ====== ====== ====== ====== ======2004----SunbeltRentals 78.1 (2.1) 76.0 11.0 (11.5) (0.5) 490.2A-Plant 37.5 - 37.5 1.5 (0.4) 1.1 186.6Technology 2.4 - 2.4 0.5 (0.1) 0.4 9.4Corporate costs - - - (1.0) - (1.0) -Central items* - - - - - - (554.4) ------ ------ ------ ------ ------ ------ ------ 118.0 (2.1) 115.9 12.0 (12.0) - 131.8 ====== ====== ====== ====== ====== ====== ======Year to 30 April2005----SunbeltRentals 355.0 - 355.0 58.1 (8.5) 49.6 459.2A-Plant 156.3 - 156.3 11.7 (0.2) 11.5 188.2Technology 12.4 - 12.4 3.4 (0.2) 3.2 11.3Corporate costs - - - (5.9) - (5.9) -Central items* - - - - - - (531.8) ------ ------ ------ ------ ------ ------ ------ 523.7 - 23.7 67.3 (8.9) 58.4 126.9 ====== ====== ====== ====== ------ ====== ======2004----SunbeltRentals 333.1 (3.3) 329.8 42.4 (23.8) 18.6 490.2A-Plant 155.9 - 155.9 4.0 (4.0) - 186.6Technology 11.3 - 11.3 2.7 (0.2) 2.5 9.4Corporate costs - - - (4.9) - (4.9) -Central items* - - - - - - (554.4) ------ ------ ------ ------ ------ ------ ------ 500.3 (3.3) 497.0 44.2 (28.0) 16.2 131.8 ====== ====== ====== ====== ====== ====== ======* Net debt, non-recourse funding in 2004 under the accounts receivable securitisation and deferred taxation. 3. Operating costs Three months to Three months to 30 April 2005 30 April 2004 ------------- ------------- Before Before goodwill Goodwill goodwill Goodwill amortisation & mortisation & amortisation amortisation Total exceptional items exceptional items Total ------------ ------------ ----- ----------------- ----------------- ----- £m £m £m £m £m £mStaff costs:Salaries 37.5 - 37.5 37.0 0.5 37.5Socialsecurity costs 4.2 - 4.2 3.8 - 3.8Other pension costs 0.4 - 0.4 0.7 - 0.7 ------ ------ ------ ------ ----- ------ 42.1 - 42.1 41.5 0.5 42.0 ------ ------ ------ ------ ----- ------Depreciation andamortisation:Depreciation 28.4 - 28.4 23.0 (0.6) 22.4Goodwillamortisation - 2.3 2.3 - 2.4 2.4 ------ ----- ------ ------ ------ ------ 28.4 2.3 30.7 23.0 1.8 24.8 ------ ----- ------ ------ ------ ------Other costs:Vehicle costs 5.9 - 5.9 12.8 - 12.8Spares,consumables andexternal repairs 9.9 - 9.9 8.7 - 8.7Facilities costs 7.0 - 7.0 6.9 1.4 8.3Refinancing costs - - - - 6.0 6.0Other externalcharges 20.4 - 20.4 17.3 0.6 17.9 ------ ------ ------ ------ ------ ------ 43.2 - 43.2 45.7 8.0 53.7 ------ ------ ------ ------ ------ ------Profit on disposalof fixed assets (3.5) - (3.5) (4.2) (0.4) (4.6) ------ ------ ------- ------ ------ ------ 110.2 2.3 112.5 106.0 9.9 115.9 ====== ====== ======= ====== ====== ====== Year to Year to 30 April 2005 30 April 2004 ------------- -------------Staff costs:Salaries 155.8 - 155.8 153.7 0.5 154.2Socialsecurity costs 13.4 - 13.4 13.1 - 13.1Other pensioncosts 3.5 - 3.5 3.7 - 3.7 ------ ------ ------ ------ ------ ------ 172.7 - 172.7 170.5 0.5 171.0 ------ ------ ------ ------ ------ ------Depreciation andamortisation:Depreciation 102.4 - 102.4 102.8 2.3 105.1Goodwillamortisation - 8.9 8.9 - 9.2 9.2 ------ ------ ------ ------ ----- ------ 102.4 8.9 111.3 102.8 11.5 114.3 ------- ------ ------ ------- ------ ------Other costs:Vehicle costs 42.0 - 42.0 47.5 - 47.5Spares,consumables andexternal repairs 39.7 - 39.7 36.3 - 36.3Facilities costs 27.8 - 27.8 28.9 1.4 30.3Refinancing costs - - - - 10.9 10.9Other externalcharges 78.9 - 78.9 75.3 1.4 76.7 ------ ------ ------ ------ ------ ------ 188.4 - 188.4 188.0 13.7 201.7 ------ ------ ------- ------ ------ ------Profit on disposalof fixed assets (7.1) - (7.1) (5.2) (1.0) (6.2) ------ ------ ------- ------ ------ ------ 456.4 8.9 465.3 456.1 24.7 480.8 ====== ====== ======= ======= ====== ====== 4. Exceptional items Three months to 30 April Year to 30 April 2005 2004 2005 2004 ---- ---- ---- ---- £m £m £m £m Debt facility costs - 7.1 - 20.6UK business refocusing programme - (0.6) - 6.1Prior year impact of change in USestimation methods - 4.1 - 5.3US severence costs - 0.5 - 0.5Profit on sale of land and buildings - (0.4) - (1.0) ------ ------ ------ ------ - 10.7 - 31.5 ====== ====== ====== ======Presented in the profit and loss account as follows:Turnover - 2.1 - 3.3Depreciation - (0.6) - 2.3Other operating costs - 8.1 - 13.2 ------ ------ ------ ------Charged in arriving at operating profits - 9.6 - 18.8Loss on sale of business - - - 3.8Interest payable and similar charges - 1.1 - 8.9 ------ ------ ------ ------ - 10.7 - 31.5 ====== ====== ====== ======5. Interest payable and similar charges Three months to 30 April Year to 30 April 2005 2004 2005 2004 ---- ---- ---- ---- £m £m £m £m Bank interest payable 4.0 5.8 14.8 24.1Funding cost on trade debtors' securitisation - 0.8 2.3 3.2Interest on 5.25% unsecured convertibleloan note, due 2008 2.0 2.1 8.3 8.1Interest on 12% senior secured notes, due 2014 3.7 - 14.7 -Interest payable on finance leases 1.3 0.2 1.9 1.2 ------ ------ ------ ------Total interest payable before exceptional costs 11.0 8.9 2.0 36.6Exceptional costs re debt facilities - 1.1 - 8.9 ------ ------ ------ ------ 11.0 10.0 42.0 45.5 ====== ====== ====== ======6. Taxation The effective rate of current year tax for the year ended 30 April 2005 is nil%(2004 - nil%) in the UK and 38.3% (2004 - 50.0%) in the US. 7. Earnings/(loss) per share Basic and diluted earnings/(loss) per share for the three months and year ended30 April 2005 have been calculated based on the profit/(loss) for the relevantperiod and on the weighted average number of ordinary shares in issue duringthat period which excludes the 2,723,461 shares held by the ESOT in respect ofwhich dividends have been waived. Diluted earnings/(loss) per share is computed using the result for the relevantperiod and the diluted number of shares (ignoring any potential issue ofordinary shares which would be anti-dilutive). Three months to 30 April Year to 30 April 2005 2004 2005 2004 ---- ---- ---- ---- Profit/(loss) for the financial period (£m) (1.7) (9.4) 2.4 (34.8) ====== ====== ====== =======Weighted average number of shares (m) - basic 323.0 322.9 323.0 322.9 ====== ====== ====== ====== - diluted 326.3 322.9 326.3 322.9 ====== ====== ====== ====== Basic and diluted earnings/(loss) per share(p) (0.6p) (2.9p) 0.7p (10.8p) ====== ====== ====== ====== Cash tax earnings per share (defined in any period as the earnings/(loss) beforeexceptional items, goodwill amortisation and deferred taxation for that perioddivided by weighted average number of shares in issue in that period) may bereconciled to the basic earnings/(loss) per share as follows: Three months to 30 April Year to 30 April 2005 2004 2005 2004 ---- ---- ---- ---- Basic earnings/(loss) per share (0.6p) (2.9p) 0.7p (10.8p)Exceptional items - 3.3p - 9.8pGoodwill amortisation 0.8p 0.7p 2.8p 2.8pDeferred tax 1.1p (0.1p) 4.1p 0.6p ------ ------ ------ ------Cash tax earnings per share 1.3p 1.0p 7.6p 2.4p ====== ====== ====== ====== 8. Tangible fixed assets 2005 2004 ---- ---- Rental RentalNet book value equipment Total equipment Total-------------- --------- ----- --------- ----- £m £m £m £m At 1 May 469.7 535.5 577.5 651.5Exchange difference (21.5) (23.3) (37.5) (40.7)Additions 120.0 157.8 64.1 72.3Disposals (28.6) (30.5) (37.9) (42.5)Reclassification (0.1) - (0.2) -Depreciation - excluding impairment (86.6) (102.4) (94.0) (102.8) - UK refocusing programme - - (2.3) (2.3) ------ ------ ------ ------At 30 April 452.9 537.1 469.7 535.5 ====== ====== ====== ====== Additions include £32.3m as a result of reclassifying as finance leases, certainleases previously accounted for as operating leases. Of this, £19.4m relates toleases which had commenced prior to 30 April 2004. 9. Notes to cash flow statement Year to 30 April 2005 2004 ---- ----a) Cash flow from operating activities £m £m-------------------------------------- Operating profit 58.4 16.2Exceptional items - 18.8Depreciation excluding exceptional impairment 102.4 102.8Goodwill amortisation 8.9 9.2 ------ ------EBITDA before exceptional items 169.7 147.0Gain on sale of tangible fixed assets (7.1) (5.2)Decrease/(increase) in stocks 0.4 (4.4)(Increase)/decrease in debtors (0.3) 0.5Increase in creditors 1.5 0.9Exchange differences 0.4 1.2Other non-cash movement 0.2 - ------ ------Net cash inflow from operating activities beforeexceptional items 164.8 140.0 ======= ====== b) Reconciliation to net debt----------------------------- Decrease in cash in the period 1.6 0.8Decrease/(increase) in cash collateral balances 5.8 (2.6)Increase/(decrease) in bank loans (net) 2.9 (156.6)Increase in senior secured notes due 2014 - 115.6Decrease in finance lease obligation (12.3) (8.6) ------ ------Change in net debt from cash flows (2.0) (51.4)Exchange differences (14.5) (39.7)Non cash movement:- 5.25% unsecured convertible loan note 0.8 0.8- First priority asset based senior debt facility 1.0 -- 12% second priority senior secured notes 0.2 -- obligation due on new finance leases 33.2 - ------ ------Movement in net debt in the period 18.7 (90.3)Opening net debt 474.5 564.8 ------- -------Closing net debt 493.2 474.5 ======= ======= c) Analysis of net debt ----------------------- 1 May Exchange Cash Non-cash 30 April 2004 movement flow movements 2005 ---- -------- ---- --------- ---- £m £m £m £m £m Cash (3.9) 0.2 1.6 - (2.1)Cash collateral balances (6.0) 0.2 5.8 - -Overdrafts 3.3 - - (3.3) - ------ ------ ------ ------ ------ (6.6) 0.4 7.4 (3.3) (2.1)Debt due after 1 year 465.5 (14.1) 12.4 19.3 483.1Debt due within 1 year 15.6 (0.8) (21.8) 19.2 12.2 ------ ------- ------ ------ ------Total net debt 474.5 (14.5) (2.0) 35.2 493.2 ====== ====== ====== ====== ====== APPENDIX: OPERATING AND FINANCIAL REVIEW Fourth quarter (to 30 April) results compared with prior year Overview 2005 2004 ---- ---- Before goodwill Goodwill Before amortisation amortisation goodwill Goodwill & exceptional & exceptional amortisation amortisation Total items items Total ------------- ------------ ----- ----- ----- ----- £m £m £m £m £m £m Turnover 125.6 - 125.6 118.0 (2.1) 115.9Staff costs (42.1) - (42.1) (44.5) (0.5) (45.0)Otheroperatingcosts (net) (39.7) - (39.7) (38.5) (7.6) (46.1) ------ ------ ------ ------ ------ ------EBITDA* 43.8 - 43.8 35.0 (10.2) 24.8Depreciation &amortisation (28.4) (2.3) (30.7) (23.0) (1.8) (24.8) ------ ------ ------ ------ ------ ------Operating profit 15.4 (2.3) 13.1 12.0 (12.0) -Interest payable (11.0) - (11.0) (8.9) (1.1) (10.0) ------ ------ ------ ------ ------ ------Profit/(loss)before taxation 4.4 (2.3) 2.1 3.1 (13.1) (10.0)Taxation (3.8) - (3.8) (3.2) 3.8 0.6 ------ ------ ------ ------ ------ ------Loss for thequarter 0.6 (2.3) (1.7) (0.1) (9.3) (9.4) ====== ====== ====== ====== ====== ====== * EBITDA is presented here as an additional performance measure as it iscommonly used by investors and lenders. Fourth quarter turnover increased 9.6% at constant 2005 exchange rates to£125.6m and by 6.4% at actual rates due to the weak US dollar. EBITDA beforeexceptional items grew by 28.4% at constant exchange rates to £43.8m and by25.1% at actual rates. Reported EBITDA for the quarter was enhanced by a changein classification of certain leases from operating leases to finance leaseswhich enhanced reported EBITDA by £6.1m. Excluding this effect, EBITDA beforeexceptionals grew 11.0% at constant rates and 7.7% at actual rates and theEBITDA margin was 30.0% (2004 - 29.7%). Total EBITDA increased 76.6% at actualrates. Operating profit of £13.1m in the quarter compared to £nil in 2004. Beforegoodwill amortisation and exceptional items, operating profit increased 32.9% to£15.4m at constant exchange rates and by 28.3% at actual rates. Divisional performance Divisional results are summarised below and are stated before goodwillamortisation and exceptional items: Divisional operating Turnover EBITDA profit -------- ------ ------ 2005 2004 2005 2004 2005 2004 ---- ---- ---- ---- ---- ---- Sunbelt in $m 159.5 143.1 57.3 45.2 23.5 20.2 ====== ====== ====== ====== ====== ====== Sunbelt in £m 83.4 78.1 30.1 24.7 12.3 11.0A-Plant 38.7 37.5 13.0 10.0 3.2 1.5Ashtead Technology 3.5 2.4 2.1 1.0 1.3 0.5Group central costs - - (1.4) (0.7) (1.4) (1.0) ------- ------ ------ ------ ------ ------ 125.6 118.0 43.8 35.0 15.4 12.0 ======= ====== ====== ====== ====== ====== Sunbelt Turnover increased 11.5% to $159.5m in the quarter, a good performance againstthe same period last year when Sunbelt had already started to benefit from therecovery in non-residential construction. Turnover growth reflected improvedrental rates up approximately 7% over 2004, equipment utilisation levels up to64.8% this year from 63.9% a year ago and a fleet size which grew 3.7% over theRelated Shares:
Ashtead Group