Speedy Hire PLC · LSE:SDY
Speedy Hire — FY2023 Earnings Presentation
30 slides from Speedy Hire's earnings presentation, May 2023
Slide 1: Full year results to 31 March 2023
Full year results to 31 March 2023 Strong foundations, launching our new growth strategy, Velocity
Slide 2: Presentation team
Presentation team Dan Evans Paul Rayner Chief Executive Chief Financial Officer 2
Slide 3: Highlights
Highlights • Strong full year performance with continued revenue growth • PBT1 up 7% to £32.1m (FY22: £30.1m) • EPS1 up 24% to 5.25p (FY22: 4.24p) • Strong free cash flow of £10.6m (FY22: outflow of £18.5m) • Completion of £30m share buy back • Net debt of £92.4m (FY22: £67.5m) • Bank facilities of
Slide 4: Financial update
Financial update Paul Rayner, Chief Financial Officer
Slide 5: Strong financial performance
Strong financial performance FY23 FY22 % variance vs • Mix of revenue impact on net margins £m £m FY22 • Rate increases offset overhead growth Revenue 440.6 386.8 13.9% • EBITDA up 4.4% to £103.7m EBITDA1 103.7 99.3 4.4% • Strong performance from joint venture EBITDA1 margin 23.5% 25.7% - • PBT up 6
Slide 6: P&L summary
P&L summary FY23 FY22 % variance vs • Continued revenue growth across hire and £m £m FY22 services Revenue 441 387 13.9% • Rate increases to maintain total hire margin Hire 258 243 6.0% Services 176 138 27.4% • Mix of revenue reduced overall gross margin % Gross profit 239 221 8.3% • Increased overh
Slide 7: Customer and revenue analysis
Customer and revenue analysis Hire revenue analysis Price and volume analysis National Managed Trade & Retail Revenue Rate Volume • Regular pricing reviews and significant asset • Volume influenced by macro-economic factors, positive investment delivered revenue growth H2 positioning the business we
Slide 8: Joint venture
Joint venture FY23 FY22 £m £m Share of after tax results 6.6 3.2 Cash flow 5.6 1.9 Investment on balance sheet 9.2 7.8 • Record performance following contract wins in FY22 • Cash backed profits • Dividends received of £5m and loan repayments of £0.6m • Quarterly operating meetings 8
Slide 9: Adjusted profit bridge
Adjusted profit bridge • Hire revenue increase and margin improvement following rate increases • Depot overheads increased £13m - primarily pay increases £6m, fuel & utilities £4m and vehicles £3m • Central overheads increased £4m - primarily pay increases £1m, marketing £1m and ESG £1m 1 Before amo
Slide 10: Balance sheet summary
Balance sheet summary FY23 FY22 • Hire fleet £m £m • Itemised £172m Intangibles and JV 34.2 33.7 • Non itemised £36m Hire fleet 207.9 226.9 • Strong working capital performance in H2 – improved Other assets 23.3 20.5 cash collections with refined controls • Reassessed dilapidations provision, prior
Slide 11: Assets and controls
Assets and controls • Non-cash £20.4m write down of assets identified in February 2023 • Investigation into cause of loss launched and reported on 18 May 2023 • Key findings: Issue was control and accounting procedure based, not result of underlying systematic fraud • Total number of non itemised as
Slide 12: Cash flow bridge
Cash flow bridge • Strong operating cash of £89m, 86% conversion from EBITDA consistent with FY22 • Working capital - fuel c.£5m, net debtor/ creditor movement c.£2.5m, balance provisions • Significant improvement in debtor days facilitated a reduction in creditors • Net capex £46m – gross capex of
Slide 13: Key metrics and shareholder returns
Key metrics and shareholder returns FY23 FY22 % variance vs • Utilisation calculated on itemised assets £m £m FY22 only Utilisation (itemised) 54.4% 57.0% (2.6pp) • Improved controls will support greater detail on utilisation moving forward ROCE 14.5% 13.6% 0.9pp • Strong EPS growth EPS1 5.25p 4.24p
Slide 14: Business update
Business update Dan Evans, Chief Executive
Slide 15: Business update
Business update • Agreement reached with B&Q on exciting partnership evolution: • Extended offering onto trade-point.co.uk and diy.com in 2023, exclusive to Speedy • During FY24 extended coverage to digitally hire selected products in c.300 B&Q stores nationally • Delighted with the record year in o
Slide 16: Customers
Customers • Key customer highlights: • Significant pipeline of year 1-3 opportunities • Business development resource aligned to key sectors • Chief Executive visit to Kazakhstan joint venture during February 2023 • Over 120 customers made up of over 1,500 of their people visited the Speedy Innovati
Slide 17: People and Health & Safety
People and Health & Safety People • Investment in early and late careers • Focus on internal promotions in the year, supporting our career line of sight • ESG Director and HSSEQ Director promoted to Executive Team • First female Managing Director • Introduction of flexible working trials across the
Slide 18: Industry leading ESG
Industry leading ESG The Decade to Deliver - A Hire Revolution: Inspiring People to make Hire their First Choice Accelerating Innovation Climate Solutions Including Everyone Part of the Community What we Continued investment in eco First SBTi Net Zero by 2040 Delivering on our People Delivering soci
Slide 19: Velocity, our new growth strategy
Velocity, our new growth strategy Dan Evans, Chief Executive
Slide 20: Velocity - Our five year strategy for growth
Velocity - Our five year strategy for growth • Velocity is a five year transformation and growth strategy • There are two defined stages to drive sustainable long-term growth: Enable growth Deliver growth Deliver foundational improvements across Become the most efficient and technology and operation
Slide 21: Transforming Speedy
Transforming Speedy We are building a digital and data led business to step change our efficiency and power our growth We have mobilised a group-wide transformation programme to deliver the technical and operational changes required to establish our future platform People Digitally andPowered data d
Slide 22: Our growth engines
Our growth engines Core hire Specialist Trade and products products and retail markets services Grow our market share with all A focus on niche products and services with Grow trade and retail customers, customer segments across all significant growth and margin opportunities through conversion of s
Slide 23: Strategic pillars
Strategic pillars Foundational elements that will support everything we do to accelerate sustainable growth People First ESG Digital Modern workplace experience Aim to be a Top 100 employer by Our “Decade to deliver,” Easy to do business with Intuitive user systems with AI 2029 encouraging people to
Slide 24: Summary and outlook
Summary and outlook
Slide 25: Summary and outlook
Summary and outlook • Strong revenue growth • Adjusted profit before tax up 7% • Strong free cash flow including completion of share buyback • Dividend up 18% • Recent key contract wins and extensions, as well as strong pipeline, gives confidence in meeting our expectations for the coming year • We
Slide 26: Q&A
Q&A
Slide 27: Appendices
Appendices
Slide 28: Capital allocation policy
Capital allocation policy Organic growth Paying dividends M&A Efficient balance activity sheet Committed to maintaining net Policy Investments to better enable us to Regular dividend payments in Funds available for acquisition serve our customers the range between 33% and with a focus on specialist
Slide 29: Exceptional items
Exceptional items FY23 • Comprehensive count of all hire equipment £m identified a £20.4m deficiency in non-itemised assets Asset impairment (20.4) • £1.4m of professional fees to support the Other (1.4) review of controls and accounting procedures Restructuring costs (6.7) • Operational efficiency
Slide 30: Disclaimer
Disclaimer The information, opinions and statements contained in this presentation and any associated discussion (this “Presentation”) has been prepared by Speedy Hire PLC (the “Company”) and has not been independently verified. The Presentation is only intended for information and reference purpose