Speedy Hire Plc Annual Report and 2013 Accounts Delivering on a consistent strategy Speedy Hire Plc Annual Report and Accounts 2013 www.speedyhire.plc.com Contents Overview Governance 72 Consolidated cash flow statement 01 Delivering on a consistent strategy 36 Strong stewardship 73 Notes to the financial statements 02 Driving success together 37 Performance evaluation process 97 Company balance sheet 04 Resilient performance through 38 Board of Directors 98 Company statement of changes challenging cycles 40 Corporate governance in equity 08 Chairman’s statement 46 Audit Committee report 99 Company cash flow statement 48 Nomination Committee report 100 Notes to the Company financial Printing and paper: this report has been printed in the UK by The Colourhouse. Business review 50 Remuneration report statements Our printers are accredited with the ISO14001 and hold full FSC chain of custody, 10 The marketplace 62 Directors’ report 103 Five-year summary they are also carbon neutral. All inks used are vegetable-based. The paper used is Heaven 42 which is fully recyclable and biodegradable and is an FSC mixed 12 Our unique business model 66 Independent auditor’s report sources accredited material, using an Elemental Chlorine Free (ECF) process and 16 Chief Executive’s review Corporate information partly bleached using a Totally Chlorine Free (TCF) process. 20 Our strategy Financial statements 104 Shareholder information 22 Our strategy in action 68 Consolidated income statement 105 Registered office and advisers If you have finished reading this report and no longer wish to retain it, please pass 24 Group financial review 69 Consolidated statement of 106 Awards it on to other interested readers, return it to Speedy Hire Plc or recycle it. Thank you. 26 One Plan comprehensive income 107 Accreditations 30 Principal risks and uncertainties 70 Consolidated balance sheet 108 Memberships This annual report is available at www.speedyhire.plc.uk 32 UK & Ireland Asset Services 71 Consolidated statement of Designed and produced by The College www.the-college.com 35 International Asset Services changes in equity Delivering on a Overview consistent strategy The past few years have been very tough and financial year 2013 was no exception. We have prepared well during this challenging period and built a foundation that can weather the current economic climate. But to emerge from this cycle as a more valuable company requires an unflinching commitment to execute our long-term objectives. We have a robust efficiency programme, a strong cash flow which is funding capital expenditure and a vision to be the leading integrated services provider in our chosen markets. We are delivering on a consistent strategy that marks a step-change in how and where we operate. For our business this is the new norm, and we are confident that with our progressive momentum we will continue to build a more valuable company over the long term. Speedy Hire Plc Annual Report and Accounts 2013 / 01 Overview Driving success together Who we are Speedy is the UK’s leading provider of integrated equipment rental and support services to a broad range of clients across the infrastructure, industrial, construction and event markets both in the UK and internationally. Our purpose Our vision Our mission Optimise assets, reduce risk, To be the leading integrated To grow sustainable profit enable delivery services provider in our year-on-year chosen markets Our enablers Our spirit Our people As one Our systems Safe Our brand Innovative Driven Our strategic activities To achieve our purpose, vision and mission we need: Service Operational Differentiated Market excellence effectiveness proposition focus One clear set of processes The right channels to Unrivalled premium service Growing revenue and profit combined with an optimum market, efficient back-office offerings that understand with existing and new key asset base, delivering operations, and improved the needs of future key clients as their partner of consistent, efficient and processes and reporting, clients, alongside a robust choice, while growing high-quality service at the underpinned by one set of category management market share across our right time, every time. effective measures for all. process, delivered through chosen markets and sectors. integrated services. 02 / Speedy Hire Plc Annual Report and Accounts 2013 We are a £340m turnover Overview organisation with over 65,000 customers, around 3,700 employees and a network of over 260 depots across the UK. Our divisions UK & Ireland Asset Services International Asset Services Our UK operation provides integrated end-to-end solutions We support our customers in delivering major international beyond our core proposition of equipment rental. It is structured projects and facilities management contracts by providing to incorporate our four other specialist disciplines of partnered a managed site support service, which combines our core services, training, direct sales and engineering and project expertise in equipment hire with asset management, site management. Partnered services supports our clients by infrastructure and logistics services. We help our customers providing products and services not available directly through manage risk on major international projects and contracts by Speedy. Our statutory and compliance training courses enable delivering the highest safety and quality standards, often in customers to fulfil their duties under the Health & Safety at challenging environments, and by tracking and controlling Work Act and other legislation, whilst accessing our experience assets through our in-house management information and and knowledge to maximise the productivity of their workforce control systems. We also work with our customers to help them when using our equipment. Our direct sales product portfolio make more efficient and effective use of their own assets. includes personal protection equipment and consumables, and our engineering and project management services assist our On major contracts, we frequently implant experienced teams customers in programme delivery. into our customers’ operations to work in partnership with their management teams to apply our expertise and innovation in Our customers choose Speedy on the basis that this allows driving measurable efficiency savings. Our strategy is to be able them to focus on their core skills and understand the value that to support our customers on any major project, anywhere within Speedy can bring in delivering their projects. We in turn seek our chosen markets, and by following our existing customers to build strong relationships with bespoke, integrated solutions, into new markets we can then reach out to new customers tailored to each customer’s needs using our detailed knowledge who will benefit from our services. and understanding of our customers’ markets and sectors, supported by our expertise in integrated product and service solution delivery. Speedy Hire Plc Annual Report and Accounts 2013 / 03 Overview Resilient performance through challenging cycles Highlights Adjusted profit before tax# of £16.8m up 35.5% Second half-year adjusted profit before tax# of £10.2m, compared to first half-year profit of £6.6m Underlying* revenue increased by 4.3% to £340.4m (2012: £326.4m) EBITA # up 24.5% to £24.4m (2012: £19.6m) Profit before tax (post amortisation and exceptional items) of £12.8m (2012: £3.2m) Net debt reduced to £72.4m (2012: £76.3m), improving net debt/EBITDA to 0.99x (2012: 1.21x) Investment in the hire fleet continues, net book value increasing to £214.5m (2012: £210.3m), whilst continuing to reduce net debt Final dividend proposed of 0.31 pence per share (2012: 0.26 pence per share) resulting in total dividend per share for the year increasing by 15.2% * Excluding the accommodation operation disposed of in April 2011. # Before amortisation and exceptional items. 04 / Speedy Hire Plc Annual Report and Accounts 2013 Overview Speedy has had publicly reported non-financial KPIs in place since 2007. These KPIs have been consolidated into our One Plan roadmap, which can be found at www.speedyhire.plc.uk/kpis. Below are our top five non-financial KPIs: Non-financial KPIs Why it’s important KPI to our strategy FY2013 Target How we’ve done Achieved Improving We recognise that great Depot service score 90.0% Depot service score 91.9% customer service customer service is a key factor Calls taken 90.0% Calls taken 90.5% 3 in ensuring that we deliver Kit in available status 75.0% Kit in available status 78.5% an optimum level of new Perfect working kit 94.0% Perfect working kit 95.6% and repeat business. Perfect invoices 95.0% Perfect invoices 97.2% Fleet available The level of available assets for 7.5% improvement in pre-hire 26.7% improvement in pre-hire for hire hire is fundamental to providing testing downtime testing downtime 3 the optimum level of service for our customers, ensuring that we have the right product in the right location at the right point in time. Influencing We must ensure that skills Employee engagement In FY2013 we achieved 75% our people and experience are retained score of 69% 3 within the business and attract new employees, providing the workforce of the future. Keeping We recognise that we and 0.09 accidents per In FY2013 we achieved 0.09 people safe our customers work in some 100,000 hours worked 3 of the UK’s most dangerous industry sectors and therefore we have a responsibility towards keeping people safe. Impact on We recognise we must play 7.5 tonnes In FY2013 we achieved climate change our part in the low-carbon 6.95 tonnes* 3 economy, create efficiencies – CO2e per capita within our business and be a responsible business to invest in, work for and do business with. * Figure excludes hazardous waste. Electricity consumption for March 2013 is estimated due to final figures being unavailable at the time of print. Number of employees used in calculation is 3,460 based on UK employees only (excluding Ireland and MENA).