Sustainable
growth
Speedy Hire Plc
Annual Report and Accounts 2021
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Speedy Hire Plc
Chase House
16 The Parks
Newton-le-Willows
Merseyside WA12 0JQ
speedyservices.com/investors
trust us to deliver
Speedy is the UK’s leading provider of tools and
equipment hire, and services to the construction,
infrastructure and industrial markets.
Our hire and services business operates
from 200 locations in the UK and Ireland.
We also operate internationally through
a joint venture in Kazakhstan.
CONTENTS
Strategic Report
Who we are
What we do
Our network
Governance
Chairman’s letter
to shareholders
Directors’ Report
IFC
02
03
61
62
65
66
68
Statement of Directors’
Responsibilities
Board of Directors
Corporate Governance
Audit & Risk Committee Report 74
Nomination Committee Report 78
80
Remuneration Report
Independent auditor’s report 101
Financial Statements
Consolidated Income
Statement
Consolidated Statement of
Comprehensive Income
111
112
Consolidated Balance Sheet 113
Consolidated Statement
of Changes in Equity
Consolidated Cash
Flow Statement
114
115
04
Where we operate
Our customer value proposition 06
07
Why invest in Speedy
Our ESG strategy
Chairman’s statement
COVID-19: Supporting
colleagues and customers
through the pandemic
Chief Executive’s Review
Financial KPIs
Our strategy
Simplify
Standardise
08
10
12
14
17
18
19
20
21
Grow
Speedy and B&Q trial new outlets 22
24
ESG Report
40
Financial Review
Principal risks and uncertainties 45
55
Viability Statement
Board engagement
with our stakeholders
56
Notes to the
Financial Statements
Company Balance Sheet
Company Statement
of Changes in Equity
Company Cash Flow
Statement
Notes to the Company
Financial Statements
Five-year summary
Corporate Information
Shareholder Information
Registered office
and advisers
116
147
148
149
150
154
155
156
All paper from sustainable and controlled sources.
This Annual Report is available at:
www.speedyservices.com/investors
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Printed by 4-Print Limited | 4-print.co.uk
OUR VISION
Trusted to be the best company
in our sector to do business with
and the best to work for.
OUR MISSION
To provide safe, reliable products
and services to enable successful
delivery of customer projects.
OUR VALUES
'Safe' the first priority in everything we do
' As One' working together to collectively achieve our goals
'Innovative' to continuously improve
' Driven' to deliver a first class customer experience
COMPANY FACTS
3,843
total employees
(3,806 FTE)
c.2,250
hire product lines and
approximately 300,000
itemised assets for hire
c.23%
of our hire fleet are ECO
products providing a range
of environmental benefits
40,000
consumable products
in our extensive range
c.50,000
customers in the UK and Ireland,
ranging from large national
contractors to local trades
Customer satisfaction
we have high levels of customer
advocacy with a 92% customer
satisfaction score*
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* Based on average monthly responses
to customer surveys
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 1
What we do
Services
Hire
41%*
59%*
Our services revenues fall into
the following categories:
Rehire
We provide a single hire destination service for customers,
offering a complete plant, accommodation and equipment range
through our partnerships with the industry’s leading suppliers.
Testing, inspection and certification
Through our Lloyds British business we ensure our customers
remain compliant by providing testing, inspection and
certification services for a broad range of market sectors.
Powered access specialist servicing and refurbishment
Through our national Speedy Powered Access division,
we provide specialist servicing and refurbishment services
for powered access equipment.
Retail sales
We offer c.40,000 consumable products in our extensive range
both through a centrally managed procurement team, and at a
local level through our network of Speedy Service Centres and
within certain B&Q stores.
Fuel Management
Speedy is the only UK plant hire company with its own fully
integrated fuel division, providing a competitive fuel supply
service. This includes low emission Green D+ HVO (Hydrotreated
Vegetable Oil) fuel through a fully managed service, including
products that can help customers reduce consumption, minimise
deliveries and reduce overall costs.
Training
We provide apprenticeships, NVQs, professional skills and safety
training along with other progressive end-to-end training courses.
We hire approximately 2,250 products
through our core tools and specialist
businesses, which include lifting, survey,
power, rail and powered access.
Tools
The latest hand tools and accessories including our extensive
range of environmental next generation ‘Energise’ approved
ECO products.
Lifting
A broad range of equipment for any lifting requirements,
including hoists, winches, hydraulic cylinders and jacks supported
by our Lloyds British business.
Survey
The most technologically advanced and accurate instruments
from leading manufacturers in the industry, all fully maintained
and calibrated by expert teams at our approved service centres.
Power
An industry leading fleet of the latest energy efficient hybrid and
solar generators, compressors and pumps for every size of project,
alongside our fuel management service.
Rail
RISQS accredited, providing a range of industry compliant
assets that are supported by a project management service.
Powered access
The newly formed ‘Speedy Powered Access’ division provides
an industry leading range of equipment including sustainable
hybrid boom lifts, specialist platforms and cherry pickers.
*Approximate Group revenue
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Our network
Our network
Our aim is to make it easy
for customers to do business
with us, through providing a
choice of different contact
options to suit their needs:
Image:
During FY2021 we
opened new Regional
Service Centres as
part of our network
upgrade programme
B&Q outlets
Through a growing
number of B&Q stores
across the UK
Service
Centre
Network
Through 200
operational centres
across the UK
and Ireland
Speedy Direct
Through our central call centre in
the North West, with dedicated
desks for our major customers
Regional Hubs
Our regional call centres
are located throughout the
country, with dedicated
staff servicing our regional
customer base
CUSTOMER
CONTACT
OPTIONS
Online
Through our website
and mobile app
Customer
Relationship
Centre
Through our central hub in
South Wales, dedicated to
servicing our SME customers
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 3
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Where we operate
INFRASTRUCTURE
• New Build Highways, Rail,
Energy, Harbours and Airports
• Frameworks in Water and
Sewerage (AMP7), Roads
(Highways England), Rail
(CP6) and Communications
RESIDENTIAL
CONSTRUCTION
• New Build Housing
COMMERCIAL
CONSTRUCTION
• New Build Offices and
Retail Shopping Centres
* Repair Maintenance Improvement
(housing and construction)
OTHER CONSTRUCTION
• New Build Education,
Health, Warehouses,
Leisure and Entertainment,
Libraries and Prisons
RMI AND SUPPORT
SERVICES*
• Building and
Asset Maintenance
• Facilities Management,
Building Maintenance,
Manufacturing, Production,
Industrial Services,
Environmental Services,
Engineering Services,
Defence and Media
4 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
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Corporate InformationGovernanceFinancial Statements
Our customer
value proposition
PROVIDING A FIRST CLASS CUSTOMER
EXPERIENCE IS CORE TO OUR SERVICE OFFERING
We offer customers a single destination to access the most
innovative, safe, sustainable and compliant tools and equipment
to hire or buy. In addition we have the ability to test and inspect
products to maintain compliance, and provide expert training.
As a result, we protect customers against commercial risk,
enable the successful delivery of their projects and ensure
their people are operating safely on-site.
Hire
We make life easy for our customers with
the industry’s leading hire product range
and nationwide delivery options, ensuring
we can support them with all their project
needs, wherever they are working.
• 2,250 product lines, including the latest
in sustainable ECO tools and equipment
• Specialist plant and equipment hire
• Available from our retail network
across the UK and certain B&Q stores
• Four-hour nationwide delivery on
350 of our most popular products
Buy
We provide our customers with
quality retail products, tools and
accessories from market leading brands.
• c.40,000 products in our
extensive range
• 450 essential hire accessories
held nationally
• Available from our retail network
across the UK and certain B&Q stores
• Central distribution function for
bulk orders
HIRE
No capital
outlay
BUY
Long term
ownership
PRODUCTS
AND
SERVICES
TRAIN
People
competence
TEST
Regulatory
needs
Train
We provide a wide range of training
programmes ensuring our customers
are confident their people are working
effectively and safely.
• More than 30 audited training
locations across the UK
• Flexible delivery for on-site,
off-site and remote learning
• Bespoke vocational and short-course
training design and development
• More than 200 off the shelf
accredited and certified courses
6 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Test
We ensure equipment remains safe to
use and is legally compliant through
the provision of testing, inspection and
certification services by Lloyds British.
• Testing and inspection including
structural and proof load
• Height safety testing, certification
and installation
• Examination of equipment covering
LOLER, PSSR, COSHH, PUWER
• Crane services including installation,
repairs and breakdown
Why invest
in Speedy
WE ARE A MARKET LEADING HIRE
AND SERVICES COMPANY
We have a clear customer focused growth strategy
underpinned by an ambitious award winning Environment,
Social, Governance (ESG) programme that drives innovation
and sustainability in our sector.
We supply large national customers, including 86 of the UK’s
top 100 contractors, as well as local trades and industries.
Strong balance sheet
We have a strong balance sheet
and significant banking facility
headroom, with which to grow the
business organically and through
value enhancing acquisitions
UK Infrastructure sector
We have significant exposure to
the UK Infrastructure sector that
the UK government is increasingly
committed to supporting following
Brexit and the COVID-19 pandemic
Industry leading
We are improving asset
utilisation and availability,
fundamental to ensuring
that we provide great
customer service
Customer
satisfaction
We have high levels
of customer advocacy,
with a 92%** customer
satisfaction score, and
an ‘Excellent’ rating on
INDUSTRY
LEADER
Support
services
We operate in RMI* and
Support Services that create
a visible, resilient, less
cyclical revenue stream
Diversification
We aim to grow our
services businesses;
this diversification
will result in us being
more resilient to
economic downturn
Innovation
We embrace state of the art
technology through digital
and product innovation,
actively working with our
suppliers through ‘Energise’
to deliver award winning,
sustainable solutions
for customers
ESG Programme
Our ESG programme ‘Energise’ drives
our commitment to keeping our
people and customers safe, reducing
our impact on the environment,
supporting our employees and local
communities and operating as an
industry leading sustainable company
Unique delivery
promise
We provide a unique industry
leading national four-hour
delivery promise on our
350 most popular products
*Repair Maintenance Improvement (housing and construction)
**Based on average monthly responses to customer surveys
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 7
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Our ESG strategy
Energise, working together
as a responsible business
Responsibility and sustainability
have always been at the heart of
everything we do at Speedy.
We are refining our approach to sustainability, through our
environmental, social and governance (ESG) programme,
and how we connect with our people, customers and suppliers,
to build a sustainable future.
Aligned with the UN’s Sustainable Development Goals (SDGs),
our ESG programme ‘Energise’ represents our ongoing
commitment to:
- operating as a responsible business.
- operating as an industry leading sustainable company,
by focusing on safety, clear governance and building on
our strong track record of product innovation.
- reducing carbon, driving efficiencies, and helping our
customers achieve their environmental aspirations and targets.
- our people and local communities, from looking after their
wellbeing and improving diversity and gender equality in
our business, to supporting charity and community projects
across the UK and Ireland.
Energise brings the three core pillars of environmental impact,
social responsibility and governance together. It underpins our
mission to provide safe, reliable equipment and services to
enable the successful delivery of customer projects, and our
vision of being trusted as the best company in our sector to
do business with and the best to work for.
It’s an ambitious ten-year plan with individual key performance
indicators (KPIs) that will track our progress, highlight our
successes and the need for improvements, and map out
our journey for the future.
By harnessing the power of our culture – our Speedy Spirit –
Energise is inspiring our people, customers and suppliers to
build a more sustainable future. It is enhancing our reputation
in our sector as a market leading responsible business.
During FY2021 Speedy was the first hire provider to launch a new
line of high-performance battery powered lighting towers, the
first of their type in the UK, which helps customers to reduce
on-site emissions and make significant savings in fuel costs.
8 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
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During FY2021 Speedy invested
over £10m in sustainable
products across categories
including Lighting, Power,
Fuel and Powered Access.
Chairman’s Statement
Results
Group revenue, excluding disposals, fell to £359.4m (2020:
£402.5m). Whilst revenue declined in the first half of the year,
it recovered strongly in the second half as customers returned
to work. We have secured new work and contract renewals from
larger customers and are growing revenue in the SME market.
We are trialling outlets in B&Q stores around the UK with the
objective of increasing our exposure to the B2C market.
The Group sold its Middle East assets to our major customer
ADNOC Logistics and Services LLC (ADNOC), for a consideration
of $18m in March 2021, after successfully turning round that
business over the last few years during which time it has been
a positive contributor to Group profits. On conclusion of a
Transitional Services Agreement (TSA) with ADNOC the Group’s
operations in the Middle East will be terminated. The Group
continues to operate internationally through the Kazakhstan JV.
Our net debt position remains historically low with significant
headroom against our committed banking facilities. The strength
of our balance sheet and available financial resources will allow
us to invest to meet increasing demand and capitalise on growth
opportunities as activity levels continue to recover.
Dividend
As a result of the COVID-19 pandemic the Group utilised
Government support schemes and implemented cost reduction
measures across the business that affected colleagues and other
stakeholders. As a consequence the Board resolved not to pay a
final dividend for FY2020 nor an interim dividend for FY2021.
Following the strong performance in the second half of the year
and the robust balance sheet, the Board is recommending a final
dividend of 1.40 pence per share for the year ended 31 March
2021. If approved at the forthcoming Annual General Meeting
the dividend will be paid on 24 September 2021 to shareholders
on the register at close of business on 13 August 2021.
Board and people
During the course of the last year we have made a number
of changes to the Board which have enhanced its diversity,
broadened its skill base and improved the average tenure of
the Board to manage future succession.
Chris Morgan resigned from the Board on 31 July 2020 and we
welcomed James Bunn as Chief Financial Officer with effect from
14 September 2020. James has extensive experience in senior
finance positions with a particular focus on digital business.
David Shearer
Chairman
I am pleased with these results
which demonstrate a strong
performance in the second half of
the year following the challenges
in the first half dealing with the
impact of the pandemic.
The Group has adapted well this year continuing to support
customers and colleagues in what have been very challenging
conditions. We close the year with both revenue and asset
utilisation ahead of the corresponding period in 2019 and
positioned strongly in both financial and operational terms
to meet the needs of our customers as we move into a post
COVID world.
COVID-19
The Group managed its cost base and cash resources throughout
the COVID-19 pandemic, reducing staff costs through the use of
Government support schemes. We froze all capital expenditure
unless specifically needed to meet customer requirements and
managed working capital tightly. As customers returned to work
we resumed our capital expenditure to meet increasing customer
demand, taking the opportunity to make significant investments
in new sustainable hybrid and electric equipment. We initially
closed two thirds of our network in April 2020, by September
the network was operating once again at full capacity following
a review of our depot footprint. This resulted in the permanent
closure of 13 depots and the consolidation of a further 22 depots
into larger scale units to meet our customer requirements.
10 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Bob Contreras stepped down from the Board on 17 February
2021, to allow him to exclusively pursue his full-time executive
role. On behalf of the Board I would like to express my thanks
to both Chris and Bob for their contributions over the last few
years and wish them every success in the future.
Shatish Dasani was appointed as a Non-Executive Director
and Chairman of the Audit & Risk Committee and a member of
the Nomination Committee on 1 February 2021. Shatish has
significant experience in senior public company finance roles
and will add to the Board's skill set as we implement the next
stage of our growth strategy.
Carol Kavanagh will join the Board as a Non-Executive Director
and member of the Remuneration Committee with effect
from 1 June 2021. Carol has extensive experience in business
transformation and people related matters across relevant sectors
which will further strengthen the expertise of the Board and
broaden its diversity. I am delighted to welcome both Shatish
and Carol to the Board.
This year has proved challenging for all of my colleagues,
including many who were on furlough leave for a period. I would
like to take this opportunity to thank each and every one of the
Speedy family for their hard work, dedication, support to the
business and each other, and positive spirit throughout this
challenging time.
Future
I am pleased that the business has responded well to the
challenges of the past year. Through strong leadership, effective
management, dedication and resilience the business is able to
move forward from a position of strength to take advantage of
opportunities as the UK emerges from the pandemic and markets
continue to recover.
David Shearer
Chairman
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Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 11
2021 review
COVID-19: Supporting
colleagues and customers
through the pandemic
Throughout the COVID-19 pandemic,
our first priority was to keep our people
and customers safe. We adapted our
business to safely support our people,
customers and Government frontline
services such as the NHS, MOD and
emergency services.
In March 2020 we took decisive action to manage the changing
situation, embedding new technology to enable colleagues
to work from home, and adapting our operational network to
continue to support our customers and frontline services.
We initially closed two thirds of our depots, and furloughed up
to 50% of staff in order to protect jobs following a significant
reduction in customer demand. With all of our retail areas closed,
we quickly rolled out our ‘call, click, collect’ service to enable
customers to order online or by phone for delivery or controlled
collection from our depot forecourts at pre-arranged time slots.
Following updated Government guidelines we began to safely
re-open our depot network in June 2020.
During the pandemic we mobilised our teams to source new
products essential to supporting our customers, including
emergency PPE and safety equipment for our customers
to make their sites safe, often stepping in where the customers’
regular supplier was unable to assist.
We also supported the mobilisation of Nightingale Hospitals
around the UK.
We implemented a robust wellbeing programme specifically
designed to support our colleagues through the pandemic. This
included weekly Chief Executive communications to ensure all
colleagues, working and furloughed, were engaged and up to date
on how Speedy were managing through the pandemic. Managers
across the business also made regular telephone calls to every
furloughed colleague to check in with them and offer support.
Demonstrating our colleagues renowned ‘Speedy Spirit’, we
began to receive spontaneous inspiring stories of how they and
their families were supporting their customers and communities
during the height of the pandemic. To celebrate this we launched
our ‘Pride of Speedy’ campaign to recognise those who were
going above and beyond to support the national effort during
this most challenging period.
We were acutely aware of the impact the pandemic could have
on the mental health of our colleagues. To support them, we
ensured they had access to our range of employee support
services, including our 50+ strong Mental Health First Aid
volunteers who are trained to support colleagues at any time of
crisis, and who we are immensely proud of. In January 2021 we
conducted a wellbeing survey with resounding feedback from
colleagues saying that the measures we had taken had made
them feel safe and supported throughout the pandemic.
By 30 September 2020, no colleagues remained on furlough,
and our network was fully operational, supporting customers
and government frontline services.
We adapted our business to safely support our people, customers
and Government frontline services such as the NHS, MOD and
emergency services.
12 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
"
The resilient performance
of our business during this
unprecedented period is
testament to the dedication
and hard work of all my
colleagues, the strength
of our model, and strong
operational delivery"
Russell Down
Chief Executive
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Chief Executive’s Review
Russell Down
Chief Executive
I am pleased to report results that are
ahead of our expectations in what has
been an exceptionally challenging year
for customers and colleagues alike.
These results are testament to the hard
work of all our colleagues in supporting us
throughout this period whilst maintaining
excellent service levels to our customers.
The Group continued to serve customers through the pandemic
supporting the NHS and other essential services whilst prioritising
the safety and wellbeing of all stakeholders. In April 2020 up
to 50% of staff were placed on furlough leave and, whilst we
maintained our national coverage, 66% of our depots were initially
closed. Following a detailed operational review of trading during
the first lockdown, 13 depots were permanently closed and a further
22 depots are being consolidated into six larger improved locations.
No colleagues were on furlough beyond 30 September, although
c.200 roles were regrettably made redundant during the year.
Our revenues declined initially, falling by 35% in April 2020,
but recovered strongly following the first lockdown as existing
customers returned to work and we secured work from new
customers. In the fourth quarter UK and Ireland core hire revenue
was 4% ahead of the prior year. In April and May 2021 core hire
revenue was c.2% higher than the comparative period in 2019.
The young age profile of the Group's hire fleet allowed us to
significantly reduce capital expenditure in the first half year; asset
utilisation for the second half year increased to 58.8% (2020: 55.9%).
Infrastructure spending has grown and prospects are strong,
particularly on major projects including HS2; our investment
in equipment and new colleagues in the rail sector resulted in
revenues growing significantly. Our SME revenue has continued
to grow, up 10% on the prior year in the second half.
14 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
We have entered into a trial with B&Q to grow this segment further
and are currently trading out of 16 B&Q stores with significant
opportunities for growth. Revenue from regional customers
has declined slightly, primarily due to pricing pressure in this
competitive segment.
The Group sold its Middle East equipment fleet, stock and other
fixed assets to its principal customer, ADNOC, on 1 March 2021 for
$18m. Outstanding trade receivables of c.$12m were paid in full
on 31 March 2021. The Group entered into a Transitional Services
Agreement (TSA) with ADNOC, which will expire on 30 June 2021,
to support the transfer of the assets, during which time it is
anticipated that the Group's c.600 UAE-based employees' contracts
will be terminated and all colleagues offered re-employment by
ADNOC. The successful exit from the Middle East operations is an
important strategic step for the Group leaving us well positioned to
take advantage of the market opportunities in the UK and Ireland as
activity levels continue to improve.
Financing and liquidity
Our business model provided strong cash generation and improved
liquidity during the pandemic; operating cash flow of £72.9m was
13.0% ahead of prior year (2020: £64.5m). Net debt, excluding
lease liabilities, as at 31 March 2021 reduced to £33.2m (2020:
£79.3m), following the sale of our operations in the Middle East
and excellent cash collections. The Group has significant headroom
against its committed banking facilities totalling £180m; leverage
at 31 March 2021 was 0.5 times.
Results
Group revenue fell by 10.6% to £363.6m (2020: £406.7m)
reflecting the impact of the first lockdown in April and May 2020
and the recovery in activity levels thereafter. Group revenues,
excluding disposals, fell by 10.7% to £359.4m (2020: £402.5m).
In the UK and Ireland core hire revenue fell by 11.0%, with first
half revenues down 20.5%. In the second half core hire revenue
was broadly flat. Services revenue fell by 10.2% reflecting a strong
performance from our rehire business offset by lower training
revenue due to COVID-19 restrictions.
Gross margin decreased to 53.0% (2020: 55.1%), primarily as a
result of lower core hire revenues in the first half year and services
mix. Overheads remained tightly controlled reducing in the year
as a result of lower activity levels and Government support. EBITA
decreased by 35.0% to £25.4m (2020: £39.1m). EBITDA decreased
by 15.7% to £90.5m (2020: £107.4m).
There were £7.6m of net exceptional expenses incurred during the
year (2020: £12.9m) principally in relation to the depot realignment
programme and costs associated with Geason Training.
Adjusted profit before tax decreased to £20.7m (2019: £34.9m).
Adjusted earnings per share decreased to 3.22 pence (2020: 5.54 pence).
The Group has a 45% share in a joint venture in Kazakhstan serving
the oil and gas market. Share of profits fell to £1.2m (2020: £2.8m)
reflecting reduced activity levels in the year due to COVID-19.
The net book value of the Group’s hire fleet decreased to £207.2m
(2020: £227.1m). The reduction in the size of the fleet reflects the
disposal of the Middle East equipment in March 2021 and lower
capital expenditure in the first half year. The average fleet age
remains low, increasing slightly to 3.6 years (2020: 3.4 years).
Asset utilisation in the second half in the UK and Ireland was
58.8% (2020: 55.9%), reflecting continued use of artificial
intelligence to manage stocking levels and lower capital
expenditure in the first half year. The Group will continue to
invest in sustainable products in line with its strategy to reduce
the carbon output of the hire fleet through investment in solar,
hybrid, electric and hydrogen technology.
Dividend
The Board is committed to a progressive dividend policy with a pay-
out ratio of between 33% and 50% of underlying profit after tax.
The Group utilised Government support during the first half year
including use of the Coronavirus Job Retention Scheme and the
deferral of tax payments and has benefitted from rates relief.
In addition, substantial cost reduction measures were implemented
during the first half which affected colleagues, landlords and
other stakeholders. The Group has no intention of further utilising
Government COVID-19 support schemes, no staff were on furlough
post 30 September 2020, and all tax deferrals were paid by 30
September 2020. Nevertheless the Board resolved not to pay a
final dividend for FY2020 or an interim dividend for FY2021.
The Board is pleased with the recovery of the business post the
initial lockdown and has therefore recommended a final dividend
of 1.40 pence per share for the year ended 31 March 2021.
Strategy and operational review
Our vision is to be the best company in our sector to do business
with and the best to work for. We have continued to win new
customers and renew contracts with our existing customers over
the past year which is testament to the excellent customer
service we provide. We are constantly striving to improve the
customer journey and further differentiate our service offering.
We are actively listening and communicating with our people
and enhancing the employee value proposition in order to attract
and retain the best talent.
UK and Ireland
We serve approximately 50,000 customers in the UK and Ireland,
including 86 of the UK’s 100 largest contractors. Our customers
include major infrastructure contractors, housebuilders, industrials
and SMEs. More recently we have entered the B2C market through
our partnership with B&Q where we are currently trading through
16 stores across the UK. During the year we have extended our
contracts with Murphy, Osborne and Balfour Beatty, and won a
number of significant new contracts including with Network Plus
and MWH. We have also further grown our SME revenues by over
20% in the fourth quarter compared with the same period last
year through continued growth in our Customer Relationship
Centre (CRC) in South Wales. We have restructured our sales teams
and their ways of working to better address customers’ needs
following the pandemic.
Our customers’ key priority is the prompt availability of products
for hire. We offer an industry leading unique four-hour delivery
service on our most popular products, ‘Capital Commitment’.
This four-hour promise was originally launched within the M25
in November 2018, has subsequently been extended nationally
and now covers our 350 most popular products. The success of
Capital Commitment reflects our customer service culture, and the
investment we have made in equipment, systems and processes.
We will continue to evolve this service promise to ensure that
we remain the best company in our sector to do business with.
Services revenues are less capital intensive, have greater visibility
and are more recurring in nature than hire revenues. As a result,
they are ROCE enhancing for the Group. Our Services categories
consist of: rehire; training; testing, inspection and certification;
product and consumable sales; and fuel management services.
Services revenue has been less affected by the pandemic
than our hire business primarily due to an increase in rehire of
accommodation and consumable sales including of PPE. Geason
Training has performed below expectations during the year due to
lower than expected learner enrolments as a result of the pandemic.
During the year we resolved the claim from the funding agency and
implemented a number of management changes. We are reviewing
further initiatives to improve the Group’s financial position.
We have extended the use of artificial intelligence to optimise
our asset holdings and now produce a dynamic forecast which is
updated monthly. Optimal stocking levels are set to ensure we
have the right assets, at the right locations, at the right time to
satisfy customer demand in the most efficient way. Utilisation
rates have consequently increased to record levels with specialist
products yet to be added into the system. Our aim is to optimise
all elements of the operational support process through data led
intelligence.
During the year significant improvements were made to the digital
customer journey including more accurate allocation of orders
to locations, better online pricing capability, Hand Arm Vibration
(HAV) product selector enhancements, online inspection, and the
ability to place digital orders for collection from our B&Q locations
(including at weekends). We also launched a new cross platform
App which makes development quicker and provides a single
code base to maintain. Functionality available on the App now
includes a mini “MySpeedy” customer dashboard, the ability to
view and download invoices, and pay through the App, off hire
by scanning the barcode on the asset, and delivery and collection
tracking capability.
We anticipate further increases in digital take up following the
implementation of automated on-boarding for pay as you go
customers (primarily SME and B2C customers) and order approval
workflow for customers requiring transaction approvals (regional
and major customers).
Our online capability is supported by an omni-channel approach
to servicing customers. During the year we completed the rollout
of VOIP telephony across our network which provides additional
customer facing capability.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 15
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Chief Executive’s Review continued
ESG
We are committed to reaching net zero emissions before 2050
and during the current financial year will set science-based targets
to provide a clearly defined pathway on how we will achieve this.
Our Energise programme, which was launched in October 2019,
encompasses our objectives to reduce environmental impacts,
improve social responsibility and operate robust governance
programmes. A new ESG Director, and an Innovation Director
were appointed in April 2021, both of whom are working
alongside our HR Director who joined in October 2020 to
progress our ESG strategy.
Our principal objective is to reduce the carbon output of our
hire and vehicle fleet through the use of solar, hybrid, electric
and hydrogen technology. We are working with equipment
manufacturers to increase the volume of sustainable products
within our hire fleet with this year’s capital expenditure budget
being weighted towards such products; sustainable products
already generate more than 25% of our revenue. Our company
car list now consists almost entirely of hybrid and electric vehicles
and we are working closely with commercial vehicle manufacturers
to introduce hybrid and electric vehicles as soon as practicable.
We are already operating a number of electric delivery vehicles
on a trial basis including two converted electric London taxis.
The carbon output of our equipment fleet is affected by the use
of fossil fuels. We are working closely with customers and suppliers
to trial the use of hydrogenated vegetable oil (HVO) within our
products as a substitute for diesel. Initial trials have shown
carbon output to be reduced by up to 90% from the use of
HVO and hence we are working with customers to further roll
out this product within our network.
We are progressing the people agenda with a focus on wellbeing
as well as prioritising equality, diversity and inclusion within the
workplace. A significant investment is planned this financial year
on graduates and apprentices and we are proud to have joined
the 5% club; working towards having 5% of our employees on
earn and learn programmes within 5 years.
People
The Group's headcount at 31 March 2021 was 3,843 (2020: 4,065).
In the UK and Ireland underlying headcount reduced to 3,253
following c.200 redundancies in the first half year resulting from
the operational review undertaken during the first lockdown
(2020: 3,464); in addition a further 50 colleagues joined our B&Q
instore offering during the year. Modest increases in colleague
numbers are expected during the current year as revenue growth
continues. The Middle East headcount at 31 March 2021 was 540;
it is anticipated that all colleagues will be transferred to ADNOC
by the conclusion of the TSA period on 30 June 2021.
We undertook a full survey of all colleagues in March and April
2021. I am pleased to report that once again our response rate
(74%) and engagement scores (77%) were strong. Detailed
action plans to address the results of the survey are being
prepared and will be communicated to colleagues during May.
16 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Our web and App based communications tool, ‘The Hub’, was
introduced following previous surveys and has proved invaluable for
communicating with staff during the pandemic. Regional employee
forums have been held during the year, with the Chairpersons meeting
me and the HR Director in order to address any matters raised.
The Board is committed to ensuring there is regular communication
with, and support for colleagues who are participating in the long-
term success of the business. I would like to take this opportunity
to thank all my colleagues for their ongoing support and dedication
during this most challenging of years.
Summary and outlook
I am pleased to report results that are ahead of our expectations
in what has been an exceptionally challenging year for customers
and colleagues alike. The resilient performance of our business
during this unprecedented period is testament to the strength of
our model, hard work of all my colleagues and strong operational
delivery. Our excellent customer service, including our four-hour
commitment, has facilitated a strong recovery in the second half.
We have had an encouraging start to FY2022 with revenue in April
and May c.2% ahead of the equivalent period in 2019. Our strong
balance sheet and the actions we have taken to develop our digital
and ESG offerings give us confidence for the future.
Russell Down
Chief Executive
FY2021 Recognition and achievements
DVSA HS2 accreditation
First UK company to be awarded, recognising
our commitment to sustainability in
delivering major logistics operations
HAE Hire Awards of Excellence
Best Sustainability and CSR Initiative
for the 2nd year running
Network Rail
Route to Gold
RoSPA
Gold Award for Occupational Health
and Safety for the 6th year running
Fleet Operators Recognition Scheme (FORS)
Gold Status for the 5th consecutive year
Shortlisted at the UK Fleet Champions Awards
in the ‘Company Driver Safety Award’ category
Shortlisted for the Operational Excellence Award
at the 2020 Motor Transport Awards
MOTOR TRANSPORT
AWARDS 2020
Achieved an ‘Excellent’ rating
as 4.4 out of 5 on Trustpilot
Financial KPIs
Explanatory notes:
1 Before exceptional items, see Note 12 to the Financial Statements
2 Return on Capital Employed: Profit before tax, amortisation and exceptional items divided by the average
capital employed (where capital employed equals shareholders’ funds and net debt3), for the last 12 months
3 See Note 21 to the Financial Statements
4 See Note 10 to the Financial Statements
KPI
Revenue
£m
Why this KPI is important
to our strategy
How we have done
FY2020 performance*
A measure of the work
we are undertaking.
£363.6m
£406.7m
Revenue
(excluding disposals)
£m
A measure of our underlying
activity with customers having
removed planned hire fleet
asset disposal income
£359.4m
EBITA1
£m
EBITA1 margin
%
EBITDA1
£m
EBITDA1 margin
%
Adjusted profit before tax1
£m
Utilisation*
%
ROCE2
%
Net debt3
£m
£402.5m
£39.1m
A measure of the profit we
generate from our revenue. £25.4m
Highlights how successful
Speedy is in maximising its
return from the revenue
generated.
A measure of operating
return before depreciation
and amortisation.
Highlights value generated
either through operational
efficiency or the quality of
the revenue.
A measure of profit we
generate from our revenue
activity having accounted for
all costs before taxation.
7.0%
9.6%
£90.5m
£107.4m
24.9%
26.4%
£20.7m
£34.9m
A measure of how many of
our assets are on hire to
customers by net book value. 58.8%
A measure of how well
Speedy is delivering a return
from the capital invested.
A measure of the
Company’s borrowings.
7.6%
£33.2m
0.5x
55.9%
12.0%
£79.3m
1.0x
Net debt3 to EBITDA1
x
A measure of how leveraged
the balance sheet is.
NBV of property,
plant and equipment
£m
Adjusted earnings
per share4
pence
As assets are our core
revenue generator, this
effectively measures the
scale of investment to
support revenue.
A measure of the return
generated for each holder
of our ordinary shares.
£233.1m
£257.6m
3.22p
5.54p
*Utilisation is calculated for the second half of the financial year, we have restated the comparative figure for consistency
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 17
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Our strategy
During 2020 we launched a clear customer
focused growth strategy; Simplify; Standardise;
Grow. This strategy is underpinned by our
ambitious award winning Environment, Social,
Governance (ESG) programme, Energise.
Simplify
Simplify our business to work
smarter and make us the easiest
company to do business with
Standardise
Standardise our approach
in order to deliver excellent,
consistent customer service
Grow
Grow through our market
leading service promise
and developing winning
customer propositions
in all our markets
SIMPLIFY
STANDARDISE
GROW
KEY STRATEGIC PRIORITIES FOR FY2022:
• Grow revenue in the B2C market
• Become a more digital business to meet changing
customer demand and increase efficiency
• Lead the sustainability agenda through our
ambitious ESG programme ‘Energise’ to build on
our strong track record in safety and sustainability
• Invest in diversity programmes, learning and
development, to attract and retain the best people
• Proactively identify value enhancing hire and service acquisitions
Our strategy continued
Simplify
Our ‘Simplify’ strategic pillar is making
our business work smarter through
improving our systems and simplifying
our processes.
We are utilising technology to improve the customer and user
experience through closely reviewing the customer journey,
including on a digital basis, from point of enquiry through to
delivery, collection, invoicing and cash collection.
Simplifying internal processes through new technology will also
make us more efficient. State of the art systems, increasing use
of artificial intelligence and dynamic management information
will improve our performance and colleagues’ user experience.
It will also enable better decision making to further enhance our
service to customers through improved product availability to
meet demand.
Upgrading our systems
In the last year we have undertaken a number of system
upgrades. We have implemented a new Group telephony system,
upgrading all sites across the network to a VOIP (Voice Over
Internet Protocol) operated telephone system, enabling an
improvement in the user experience and a significant reduction
in our telephony costs. The new system allows calls to be re-
routed centrally within the Service Centre network to ensure
customer calls are dealt with promptly. Using IP (Internet Protocol)
technology, the new telephony system provides management
information to identify call volumes to monitor Service Level
Agreement (SLA) rates to identify future improvements. During
this unprecedented year, the system was key to quickly enabling
colleagues within our call centres and sales and support functions
to work efficiently from home throughout the pandemic.
We have also upgraded our existing credit management system
to improve the system speed and performance, and improve the
user experience both centrally within our Credit Control team and
locally across our Service Centre network. This upgrade allows us
to quickly manage customer invoice queries and resolve payment
issues, ensuring a higher percentage of invoices are paid on time.
Our new Group telephony system, upgrading
all sites across the network to a VOIP
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Our current ERP (Enterprise Resource Planning) system, Microsoft
AX12 was implemented in 2014. In order to take advantage of
recent technological advances and further simplify our processes
we are currently upgrading the system to cloud based Microsoft
Dynamics365. We have adopted the change management model
called PROSCI to engage our people in this change and improve
user adoption and maximise Return on Investment (ROI) on this
platform. The project includes support from colleagues across
the operational, sales and support functions to ensure all risks
and issues are captured and addressed through robust testing.
The new system is scheduled to go live in FY2022 and brings the
benefits of simplifying some of our key business processes and
significantly improving the user experience. Later phases will
focus on reviewing and digitising our key processes to maximise
the full potential of the new system.
Improving our digital offering
During FY2021 we made significant improvements to the digital
customer experience on the web and App. We re-configured
our website to enable our customers to make more informed
buying decisions, and utilised our new state of the art photo
capture studio to digitise our top 500 assets and provide the
most accurate product and pricing data for our customers online.
We have also introduced significant developments and further
improvements to the Speedy mobile App including:
• Digital customer onboarding for Pay As You Go customers
• A Service Centre locator
• HAV (Hand Arm Vibration) product selector
• Click and Collect functionality
• Dynamic delivery tracking
• Asset scanning for compliance data and off-hire of equipment
• Ability to check and pay invoices for account customers
These developments are a significant step forward in our web
and App functionality, with further enhancements planned during
FY2022 to ensure we continue to provide an industry leading
digital customer experience.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 19
Our strategy continued
Standardise
We aim to continuously improve our
service, such that a first class customer
experience comes as standard.
Our aim is that whenever and wherever our customers do
business with us, they can expect a consistent level of quality
standards, and receive the same level of experience from point
of order through to delivery and collection.
Re-aligning the network
During FY2021 we closed a number of our depots temporarily as
a result of the COVID-19 pandemic. This allowed us to review our
operations and critically examine the efficiency of our footprint.
In the summer of 2020 as our operations began to re-open we
began the process of assessing the location of our depots and
their product offerings and as a consequence we re-aligned our
network to better reflect customer demand and our portfolio of
products and services. The re-alignment categorises locations
based on customer demand, products and services and physical
infrastructure, all within geographical areas. This makes each
location more efficient and productive, by optimising product
stocking requirements and delivery miles and time. It also
reduces our overhead and stocking costs, improves utilisation
and the environmental impact of transportation.
Each type of location has a standardised management structure
and holds a specific product range. This enables customers to
clearly identify the product range by Service Centre type, and
ensures colleagues within the location have the right knowledge
and expertise to advise on that range. Products are automatically
replenished using artificial intelligence that ascertains the level
of stock required to fulfil customer demand at any one time
by location. This means that the right type of products
are increasingly available for customers to collect from each
Service Centre.
With dedicated products and services the new footprint,
comprising Local Service Centres, Regional Service Centres,
Specialist Service Centres and National Support Centres,
makes it easier for customers to do business with us.
Supporting this strategy, during FY2021 we opened new state
of the art Service Centres in Swindon, Doncaster and Anglia,
consolidating smaller Local Service Centre’s into bigger
locations, providing better service and a broader service
offering to customers.
20 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Speedy Powered Access
In November 2020 we merged our existing powered access
businesses, Prolift, Platform Sales & Hire and Lifterz, to create
a single national offering; Speedy Powered Access, providing
customers with a comprehensive range of over 8,500 machines,
from 11 dedicated powered access Specialist Service Centres
across the UK.
The restructure brings all powered access products and
hire processes into our main operating system, making all
products available through one new dedicated website:
speedypoweredaccess.com, creating an industry leading simpler,
standardised powered access proposition for customers.
In addition to core equipment hire, the new business provides
training, fleet sales, and maintenance packages to give customers
a full end-to-end powered access service.
During the year we completed the full re-branding of the
powered access Specialist Service Centres, and are in the process
of re-branding our powered access vehicles and extensive fleet of
combined assets.
To support customer demand, during FY2021 we invested over
£10m. This includes a significant investment in hybrid equipment
to help customers reduce pollution and meet carbon zero targets.
Speedy Powered Access is now one of the largest powered access
businesses in the UK which, as part of the wider Speedy family,
brings wide-ranging benefits for our people and our customers.
Our strategy continued
Grow
Our business has won customers
and secured new work with existing
customers during the pandemic.
We have developed our people, products and services to provide
innovation and support customers as their demands change.
During FY2021 we launched further value adding initiatives
specifically designed to drive revenue and profit growth.
Our unique four-hour delivery promise
In May 2018, Speedy became the first hire business to promise
same-day delivery on our top 52 products hired before 3pm
through the launch of our Capital Commitment service in London.
This was enhanced to a national four-hour delivery promise in
January 2020.
During September 2020 we significantly enhanced this unique
four-hour delivery commitment by extending the product range
from our top 52, to our 350 most popular products.
The service was relaunched with this wider product offering
after it was paused to customers in March to focus on supporting
the NHS throughout the initial stages of the COVID-19 pandemic.
Extending the unique four-hour delivery promise is designed
to meet the changing demands from customers and provide
an enhanced offering as activity and the economy recovers.
Access and lifting products, compressors, generators, hand
tools, survey and lighting equipment have all been added to the
service, which includes zero and low-emission lighting towers
to help customers reduce carbon emissions and cut fuel costs.
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Regional customer focus
We supply large national customers, including 86 of the UK’s
top 100 contractors, as well as local trades and industries.
During FY2021 we grew our network of regional hubs, moving
relevant customer accounts from our central call centre into
regional trading desks across the UK, as we recognise that not
all of our customers want to trade with us in the same way.
The regional trading desks complement our multi-channel
service capability, adding a valuable contact option for regional
customers and major accounts in addition to our network of
Service Centres, central call centres, Speedy Direct, the Customer
Relationship Centre and trading online.
The regional trading desks have dedicated teams acting as a
single point of contact to manage our customers’ day-to-day
transactions. They are proving to play a key part in our growth
strategy, by enabling us to consistently deliver high levels
of service for our existing customers, as well as attracting
new customers.
By focusing on our regional customers and major accounts,
who have bespoke buying behaviours, whilst standardising the
customer experience they can expect nationally from the hubs,
we will grow our revenue share within these customer groups
in the coming months and years.
"
Before the COVID-19 pandemic,
thousands of our customers across
the UK relied on our four-hour
delivery promise to ensure they
could keep projects on track.
Now more than ever, product
delivery and collection are critical
capabilities that the industry needs
in its supply chain, as projects
demand tools and equipment
quickly and at short notice"
Russell Down
Chief Executive
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 21
Our strategy continued
Speedy and
B&Q trial
new outlets
During July 2020 we commenced a trial
to open Speedy outlets within a number
of B&Q stores.
The outlets give B&Q retail and TradePoint customers the option
to hire tools and equipment from Speedy as part of their B&Q
shopping trip. The offer includes our four-hour national delivery
promise on our top 350 products. All Speedy customers can now
order and collect products seven days a week, complementing
our own national Service Centre network. We offer a wide range
of products in store with an offering designed specifically for
the retail market.
By 31 March 2021 we were trading from 16 outlets, which
combined with our existing retail offering will significantly
accelerate our entry into the B2C market during FY2022.
Customers now have the option to hire tools and equipment
from Speedy in several B&Q stores.
22 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
"
Our customers are continuing to
adapt and change to new ways of
living and shopping, and these new
concessions with Speedy are just one
way in which we’re making it easier
for people to improve their homes."
Chris Bargate
Director of Business Development,
B&Q
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ESG Report
The Energise KPIs we have committed to
are aligned with the United Nations Sustainable
Development Goals (UNSDG’s 2030).
ENERGISE: Working together
as a responsible business
We conduct our business in a socially and
environmentally responsible manner. We
encourage creativity and diversity, respect the law
and aim to benefit the communities we work in.
From the introduction of the first electric taxi
van in the construction industry and joining the
Supply Chain Sustainability School Board, to rolling
out our Collective Responsibility safety programme,
we’re accelerating our approach by embracing
new opportunities and leading ground-breaking
initiatives.
Our ESG programme is sponsored by Chief
Executive, Russell Down. We have appointed an
ESG Committee made up of senior members from
across the business, who meet regularly to drive
continuous improvement in our ESG KPIs, which
are aligned with the United Nations Sustainable
Development Goals 2030 (UNSDGs).
24 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Leading the industry in
safety and sustainability
Responsibility and
sustainability have
always been at the
heart of everything
we do at Speedy
We have developed an Environmental,
Social and Governance (ESG)
framework under our sustainability
brand ‘Energise’, in order to help us
deliver sustainable growth.
It underpins our commitment to strong governance,
trading safely and ethically, and supports our Code
of Conduct, robust audit functions and processes.
By harnessing the power of our culture, the Speedy
Spirit, this comprehensive ESG framework will drive
positive change not only across Speedy, but across
the wider industry and supply chain.
The ESG framework aligns with our vision of being
trusted to be the best company in our industry to do
business with and the best to work for.
The commitment to operating efficiently as an
industry leading sustainable company builds on
our strong track record of safety and carbon-saving
innovation. It re-enforces our commitment to
people and local communities, from looking after
their wellbeing and boosting diversity, equality and
inclusivity, to supporting charity and community
projects wherever we operate.
This report outlines our commitment to reaching net
zero emissions before 2050 and setting science-based
targets to provide a clearly defined pathway on how we
will achieve this. Our Energise programme encompasses
our objectives to reduce environmental impacts,
improve social responsibility and operate robust
governance programmes.
Russell Down
Chief Executive
Training, development and looking after
the welfare of our employees is a key part
of our ESG programme
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 25
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Our aim is for ECO products
to account for the majority
of our itemised equipment
fleet by 2024.
ESG Report continued
We won the Hire Award of
Excellence (HAE) for sustainability
for the second consecutive year.
Minimising our impact
on the environment
We have long been committed to
providing the energy efficient
equipment, logistics and progressive
ways of working to aid the construction
industry in its quest for a net zero
carbon built environment.
In line with the UK Government’s commitment to achieve zero net
carbon by 2050, we are focused on significantly reducing carbon
emissions within our business and throughout the supply chain.
We refer to this approach as being ‘carbon smart’.
Our move to commit to a SBT reinforces our commitment to
be a market leader in sustainability.
The majority of our carbon footprint, at 79% is related to fuel
consumption. We already have several initiatives in place to
reduce these emissions, which include:
• We have switched our company car fleet list to be mostly
Ultra Low Emission Vehicles (ULEVs), with the aim of being
100% electric/hybrid vehicles by 2025.
• Rolling out a low carbon commercial fleet with the majority
of our vehicles being electric/hybrid by 2025.
• Switching from diesel to HVO D+, a standard low emission
fuel, across parts of our business.
In FY2021, our key carbon reduction achievements include:
Sustainable products and services
As a key supplier to the sector, we have long recognised the
significant role we play in creating a greener supply chain.
During the year, Speedy’s Chief Operating Officer, Dan Evans,
joined the Supply Chain Sustainability School Board to
work with industry stakeholders on meeting challenging
sustainability targets.
Like us, many of our major national and regional customers
have committed to the United Nations Sustainability
Development Goals 2030 (UNSDG’s) and there is an increasing
demand for energy efficient equipment. We are working with
our supply chain to develop new cordless, hybrid, solar and
hydrogen technologies to meet these needs, along with
providing renewable fuel to minimise pollution.
• A reduction in carbon output from 26,606 tonnes in 2015 to
19,388 tonnes in FY2021 which equates to an 8% reduction
per employee
• A carbon reduction on a per capita basis from approximately
11.00 tonnes in 2015 to 5.00 tonnes in FY2021
• Accreditated under the ESOS Government energy savings scheme
• Attained ISO 50001:2018 for Energy Management in FY2021
• Gold Standard Members of the Supply Chain Sustainability School
Net zero carbon before 2050
At Speedy we recognise the part we play in supporting a
transition to a zero-carbon world. As part of our commitment to
significantly reduce our carbon emissions, in FY2022 we will set
science-based targets to achieve net zero emissions before 2050.
A science-based target (SBT) provides a clearly defined pathway
for Speedy to reduce its greenhouse gas emissions, in line with
the Paris Agreement to limit climate warming by 1.5oC by 2050,
thereby helping to prevent the impacts of climate change and
ensuring sustainable business growth. Our SBT will be verified
by the Science Based Targets Initiative and will be published
over the coming year.
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Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 27
ESG Report continued
We invested a further
£2.8 million investment in our
lighting fleet to boost our low
emission offering, which now
includes 300 solar-powered
lighting towers.
In the last year, we have made
significant progress in supporting
our customers to meet this demand:
• All of our equipment has been classified according to its
environmental (ECO) credentials
• Our ECO products represent approximately 23% of our itemised
equipment fleet, providing our customers with innovative
solutions to reduce carbon. Our aim is for ECO products to
account for the majority of our itemised equipment fleet by 2024.
• We have invested over £10m in new electric and hybrid
powered access products including new mast booms, scissor
lifts and hybrid boom lifts. These products can run for a full day
on a single charge in electric-only mode and are suited to indoor
or outdoor operation, noise-sensitive sites, or when ultra-low
emissions are required.
• We added 200 new generators to create a 2,500-strong fleet,
which are all compatible with Hydrotreated Vegetable Oil (HVO
D+) fuel. Customers who choose to operate their equipment
with HVO D+ fuel have the opportunity to reduce carbon
emissions by up to 90% compared to using standard red diesel.
• HVO D+ fuel became our standard low emission fuel.
For every 500 litres used, one tonne of CO2 is saved
compared to fossil fuels.
• We were the first UK hire company to launch a new line of
high-performance outdoor battery powered lighting towers,
which will help contractors reduce on-site emissions and make
significant savings in fuel costs. The new Milwaukee fleet will
enable customers to save up to £37,000 annually on fuel and
repair costs, and up to 62 tonnes of CO2, for every 20 standard
diesel models they replace with these battery-powered tower
light alternatives.
• We invested a further £2.5 million investment in our lighting
fleet to boost our low emission offering, which now includes
300 solar-powered lighting towers.
Strategy in action:
Speedy and Galliford Try partner to
bypass emissions on highway scheme
During the year we partnered with Galliford Try Infrastructure to
provide an environmentally friendly temporary power solution
to a major highway improvement scheme in Leicester.
Speedy teamed up with hybrid power specialists Off-Grid
Energy, to provide the contractor with a bespoke site power
solution utilising two diesel generators each linked to a hybrid
unit, to help reduce fuel consumption and CO2 emissions.
In the first 12 months the solution reduced fuel consumption
by over 35,000 litres, and cut CO2 emissions by over 94 tonnes;
the approximate annual emissions of 59 diesel cars in the UK.
Compared to using a standard generator the solution has
also provided a net saving to Galliford Try of over £6,000
over the period.
The site can be powered without the need of a generator when
fewer people are using the base. The bespoke configuration
also allows the opportunity for at least one of the hybrid units
to provide power when certain areas of the site offices are
unoccupied.
The power solution provided by Speedy and Off-Grid Energy
also benefits from remote monitoring, reducing travel to and
from site by engineers to inspect and maintain equipment.
“
The system does everything promised by Speedy. We have
found this an excellent solution to a generator based system.
The product has allowed us to find a commercially viable,
and environmentally sustainable alternative. We have been
provided with excellent recommendations and service
in maximising the product efficiency.”
Shaun Beales
Senior Site Agent at Galliford Try Infrastructure
28 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
ESG Report continued
DVSA HS2 accreditation
Recognising our commitment to sustainability
in delivering major logistics operations.
Sustainable transport and logistics
We aim to lead the industry in running a low carbon fleet, with
a target of ensuring that the majority of our vehicles are electric
or hybrid by 2025.
This commitment will play a key role in meeting our own carbon
reduction targets, and our commitment to our customers as a
key part of their supply chain.
During FY2021 we launched the first electric taxi van used in the
construction industry to deliver products across London. We also
invested in 64 new hybrid transit vans and are trialling a number
of electric vehicles.
Our company car list now consists almost entirely of Ultra Low
Emission Vehicles (ULEVs), up from 20% last year. We have a
fleet of 450 company cars and estimate future savings of up to
260 tonnes of CO2 annually from replacing diesel and petrol
models. Our aim is for our company car fleet to be 100% hybrid/
electric by 2025. To support the transition we are also rolling out
electric vehicle charging points across our UK Regional Service
Centre network.
We invested in 150 fuel pods (fPod®) that customers can use as
temporary fuel stations on-site. The fPod® can hold 5,300 litres
to 17,880 litres, depending on the model and is designed to
support customers in cutting fuel deliveries and reducing the
risk of spills. It uses an intelligent monitoring system that
notifies the user and Speedy when refilling is required.
During the year we were awarded the first DVSA HS2
accreditation, recognising our commitment to sustainability
in delivering major logistics operations.
Charging point at Speedy's Doncaster Service Centre
Strategy in action:
Hailing the first electric taxi delivery van
During August 2020 we partnered with The London Electric
Vehicle Company (LEVC) to trial the first electric taxi delivery
van to be used in the construction industry.
The prototype vehicle, which is based on LEVC’s VN5 and TX
Taxi models, delivers a range of products to customers at sites
across London, from power tools and safety equipment to
generators and concrete mixers.
The trial aims to prove the new electric taxi van can meet the
growing demand for one-tonne, zero emission commercial
vehicles across the construction industry, where the market
is currently dominated by diesel models.
Speedy and LEVC developed the vehicle at the manufacturer’s
purpose-built factory in Coventry. The design incorporated a
full interior van conversion to accommodate two Euro-sized
pallets with a gross payload of over 800kg.
The new electric van will set a new standard for small electric
commercial vehicles. LEVC’s powertrain technology has already
saved 36,000 tonnes of CO2 from entering the atmosphere
through its use in the taxi and shuttle market.
“
We are pleased to be joining forces with Speedy, adding another
high-profile name to our growing roster of VN5 trial partners.
Speedy delivers tools and equipment to construction and
infrastructure sites, often in and around large cities: the kind of
working day our new flexible, zero-emission capable one-tonne
van was built for. We are looking forward to developing our
relationship with Speedy.”
Joerg Hofmann
LEVC CEO
Our aim is for ECO
products to account
for the majority of our
itemised equipment
fleet by 2024.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 29
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ESG Report continued
Total CO2e emissions
per employee for 2020 was 5.00 tonnes.
Improving air quality
In helping customers reduce project carbon emissions and
improve air quality, we have supplied a number of major projects
with Green D+ Hydrotreated Vegetable Oil (HVO D+) fuel,
Speedy’s standard low emission fuel which is the only HVO
fuel approved for use in Speedy equipment.
HVO D+ is a renewable fuel that has been produced from
vegetable fats, oil and a byproduct of the waste and fish industry.
It reduces carbon emissions by up to 90% compared to regular
fossil fuel. It can be used in modern vehicles, generators,
construction machinery and industrial power systems. For every
500 litres of Green D+ HVO fuel used, one tonne of CO2 is saved
versus fossil fuel. Green D+ HVO fuel is now provided as our
standard low emission fuel.
In support of the UK Government commitment to reduce emissions
from transport to improve air quality and to support our customers
air quality objectives HVO D+ also helps to reduce NOx (Nitrous
Oxides) levels by up to 30% and PM (Particulate Matter, PM25
and PM10) by over 86% helping to improve air quality.
95% of our fleet now meets the EuroCat6 standard helping to reduce
air pollutant emissions from our vehicles and improve air quality.
Strategy in action:
Carnell partner with Speedy
During the year, Speedy worked with highways maintenance
contractor Carnell to trial Speedy HVO D+ fuel, to power
lighting equipment and the site compound for a Highways
England central reserve barrier upgrade project on the M6.
The scheme, which spans six kilometres between junction 42
and 43, used almost 7,000 litres of the renewable fuel between
October 2020 and March 2021, emitting just 0.25 tonnes of
CO2 compared to the 17.73 tonnes expected from standard
diesel – the equivalent of three average cars running for a year.
Carnell now expects to increase the use of Speedy HVO
D+ fuel on further projects as it works to protect air quality
for communities near its schemes.
“
Our responsibility for safety extends beyond the physical
infrastructure that we’re contracted to build and maintain.
Switching to low-emission renewable fuel will minimise the impact
we have on the communities we build for by ensuring we contribute
towards reducing local air pollution. The trial with Speedy has
delivered a significant impact on reducing emissions output and we
look forward to rolling it out across our project portfolio – powering
us to build safer roads while contributing to cleaner air.”
Lee Gill
Plant and Transport Director
Carnell
30 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
HVO is now provided as our standard low emission fuel
Energy usage
Speedy were first awarded ISO50001 accreditation in 2015 and
certified to the 2018 standard in 2020, as a result of our robust
energy management systems.
The annual quantity of carbon dioxide equivalent resulting from
activities for which the company is responsible, including the
combustion of fuel or the operation of any facility, during FY2021
was 19,010 tonnes.
The annual quantity of carbon dioxide equivalent resulting from
the purchase of electricity, heat, steam or cooling by the company
for its own use during FY2021 was 2,359 tonnes, with 89% of our
energy coming from renewable sources.
Figures in kWh, representing the aggregate of the annual quantity
of energy consumed from the company’s operations, involving
the combustion of fuel and the operation of any facility is as
follows by region:
UK Mainland: 18,653 tonnes
Northern Ireland and Republic of Ireland: 229 tonnes
MENA: 58 tonnes
Kazakhstan: 70 tonnes
Total: 19,010 tonnes
The methodologies used to calculate the information provided
on emissions and energy consumption adopted by Speedy to
calculate carbon emissions for FY2021 was provided using the
DEFRA calculation for UK and IEA for international figures.
Speedy is continuing to roll out many energy saving initiatives
throughout the Service Centre estate including the introduction
of LED lighting and improving the energy efficiency of heating
systems in buildings. ‘Toolbox Talks’ are also undertaken with
colleagues to ensure they understand the impact of energy usage,
waste and savings.
Regular energy audits are conducted on an annual basis as
required for the ISO50001 accreditation.
Total CO2e emissions per employee for FY2021 was 5.00 tonnes.
ESG Report continued
Recycling and waste reduction
We reduce our waste generation through utilising the waste
hierarchy of prevention, reduction, recycling and re-use for
our key waste streams such as cardboard, wood, metal, plastic,
paper, waste oils, and food waste.
We work with our suppliers to reduce or, in some cases, eliminate
packaging which would otherwise be passed on to us to dispose
of. We are also reducing our paper use across the Service Centre
network through the introduction of electronic PDAs and
transacting electronically. We also encourage customers to
use the MySpeedy App for paperless transactions.
We participate in the circular economy, working with our
suppliers to design out waste and pollution and keep products
and materials in use thus reducing resource use, increasing re-
use minimising waste disposal. Examples of circular economy
approaches include:
• By segregating at source, hard plastics such as barriers, pump
action bottles and damaged bowsers have been removed from
our DMR (Dry Mixed Recycling) waste stream and are pelletised
and sold on as a commodity, in partnership with our suppliers.
• Air filter cleaning enables us to wash and then reuse filters
up to three times.
We are also committed to water conservation, working with
suppliers to reduce water consumption throughout the business.
In FY2022 we will implement measures to accurately measure
and report our water consumption to establish a water baseline
and therefore set water reduction targets in FY2023.
Speedy Hire Plc Corporate
Greenhouse Gas (GHG) Report
Introduction
This GHG Report has been compiled covering the fuels
combusted directly by Speedy operations, fugitive refrigerant
gases, energy consumed in our UK Mainland activities,
Northern and Republic of Ireland operations and our
International businesses and includes the business travel and
waste disposal activities of our UK Mainland offices and depots.
Combustion of Fuel and Operation of Facilities
Whilst Speedy has been a key supplier to essential services
during the pandemic the overall reduction in travel has
reduced our mileage and fuel use over the past year.
Electricity, Heat, Steam and Cooling purchased for own use
There has been a significant reduction in the use of electricity
and gas over the past 12 months. This is due to the pandemic
(depot closures, furloughing of staff and home-working) and
continued roll out of energy efficient initiatives such as installing
LED lighting at several of our Service Centres. Many operational
Support Centres are also part of the lighting exchange scheme.
CO2e reduction
We have seen a reduction in
our CO2e per employee of 8%.
Our electricity purchased is also 89% renewable and
consists of hydro, wind and solar sources.
Scope 3 Business Travel – Rail and Air
There has been a significant reduction in the use of rail and
air travel due to the Pandemic. Moving forward we will be
encouraging colleagues to reduce travel where possible through
optimising video-conferencing and when required to use rail
more frequently as a more sustainable source of travel. This year’s
reporting includes usage from all sources including both direct
company bookings and expenses claims.
Waste disposal
Working in partnership with our suppliers, waste mapping
exercises have been undertaken to identify our key waste streams
to maximise waste reduction and increase recycling and reuse
through circular economy principles.
Speedy have achieved zero waste to landfill in FY2021. All our
general waste is sent to transfer stations for further processing
and the non-recyclables are transported to Refuse-Derived Fuel
(RDF) plants for incineration. Incineration from RDF plants is
not harmful to the environment as the steam heats low-income
houses in the areas (district heating).
In FY2022 we will be working with our waste broker and suppliers
to further integrate circular economy principles to reduce waste
and maximise recycling and reuse.
The overall CO2 emitted per employee has reduced to 5.00 tonnes
(2019: 5.41 tonnes) in line with our objective of reducing our
carbon footprint.
Our electricity purchased is
also 89% renewable and
consists of hydro, wind and
solar sources.
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ESG Report continued
Methodology
Global GHG emissions
We have reported on all of the emission sources required
under the Companies Act 2006 (Strategic and Directors’ Report)
Regulations 2013. We do not have any responsibility for any
sources that are not included in our consolidated statement
except those quoted in the Omissions section. We have used
the GHG Protocol Corporate Accounting and Reporting Standard
(revised edition), Scopes 1, 2 and 3, and emission factors from
the UK Government’s GHG Conversion Factors for Company
Reporting FY2020. This year’s report includes Well to Tank,
Transmission and Distribution, and Waste factors also.
Omissions
The combustion of diesel for the testing of equipment/
machinery could not be established for this reporting period.
Data confidence
The data used to report the GHG emissions was reviewed
and examined and gives a ‘High’ level of confidence +/- 4.0%.
This was established using the ‘GHG Protocol guidance on
uncertainty assessment in GHG inventories and calculating
statistical parameter uncertainty’, and has been
independently verified.
Investing in hybrid technology
The GHG emissions are from 1st April 2020 to 31st March 2021.
We have seen a reduction in our CO2e per employee of 8%.
A detailed breakdown is provided in the table below compared
against the prior year:
Tonnes of CO2e
Current Reporting
Year
Current Reporting
Comparison
Emissions From:
FY2021*
2019
Combustion of Fuel and
Operation of Facilities
Electricity, Heat, Steam
and Cooling purchased
for own use
16,650.11
18,735.62
2,359.84
2,985.95
Total Scope 1 and 2 Emissions 19,009.95
21,721.57
Scope 3
Business Travel – Rail and Air
108.92
373.33
Scope 3
Waste – Recycled / Recovered 44.81
40.53
Scope 3
Waste – Landfill
0.00
0.04
Scope 3
Transmission and
Distribution of Electricity
224.69
Total Scope 3 Emissions
378.42
Tonnes CO2e per employee
5.00
*Aligned to financial reporting period
267.05
680.95
5.41
ESG Report continued
Safety and wellbeing of our
people and communities
Supporting colleagues
through COVID-19.
Throughout the COVID-19 pandemic, our first priority was to
keep our people and customers safe. We adapted our business
to safely support our people, customers and Government
frontline services such as the NHS, police and armed services.
At the end of March 2020 we took immediate and proactive
measures to cope with the changing situation. We introduced
new technology to enable colleagues to work from home,
and adapted the operational network to continue to support
customers and frontline services.
Having initially closed two thirds of our depots, and with up to
50% of staff on furlough, in line with customer demand and
operating strictly within government guidelines, we began to
safely re-open the depot network.
We put into place a robust wellbeing programme specifically
designed to support our colleagues through the pandemic.
This included weekly communications from Chief Executive
Russell Down to ensure all colleagues, working and furloughed,
were engaged and up to date on how Speedy were performing.
Managers across the business also made regular telephone
calls to every single one of our furloughed colleagues to check
in with them and offer support.
Demonstrating the renowned ‘Speedy Spirit’, we began to receive
spontaneous and inspiring stories of how colleagues and their
families were supporting customers and communities during
the height of the pandemic. To celebrate this we launched our
‘Pride of Speedy’ campaign to recognise those who were going
above and beyond to support the national effort during this
most challenging period.
We were acutely aware of the potential impact the pandemic
would have on the mental health of our colleagues. To support
them, we ensured they had access to our range of employee
support services, including our 50+ strong Mental Health First
Aid volunteers who are trained to support colleagues at any
time of crisis, and who we are immensely proud of.
In January 2021 we conducted a wellbeing survey with
resounding feedback from colleagues saying they had
felt safe and supported throughout the pandemic.
Safety
Our commitment to safety sits at the heart of our business.
Our Health and Safety Policy is constructed with the clear
objective of eliminating accidents and injuries at work. This
is critical to all of our stakeholders, from our people to our
customers, which is why we adopt a ‘collective responsibility’
mind-set across our operations. This encompasses risk awareness,
protocols and training, and making the safety of the workplace
and our customers’ sites our employees’ responsibility.
Through our new Collective Responsibility safety programme,
we are delivering effective risk management and leading the
way in raising safety standards across the industry by:
• Collaborating with suppliers to develop safe, innovative
products. This includes our new App functionality launched
with tool manufacturer Hilti, which advises users of the most
productive tool for specific tasks that would minimise exposure
to harmful vibration levels.
• Increasing awareness of occupational hazards including dust
inhalation, hand-arm vibration syndrome and musculoskeletal
disorders, providing expert guidance in our Service Centres
and through our on-site Toolbox Talks.
• Creating a new event management system ‘AVA AIRSWEB’, to
manage safety incidents, accidents, environmental incidents
and hazardous and near miss reporting. Alongside this, it enables
us to drive continual improvement through corrective action
logging and root cause analysis, in addition to the ability to manage
our carbon data and deliver reductions across the business.
• Rolling-out new bespoke training courses in Manual Handling
and Certified Authorisation Professional (CAP) in powered access.
Health and safety reporting
We have a robust reporting programme in place, which
includes regular audits, reviews and monitoring. This includes:
• Setting annual health and safety performance targets
• Providing monthly reports to the Executive Board on
safety performance
• Reporting regularly to key stakeholders on safety performance
• Monitoring safety performance standards through safety
inspections, audits and reviews
• Recording and investigating accidents, dangerous occurrences
and near misses
• Implementing effective measures to prevent the re-occurrence
of incidents
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 33
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Safety standards
Recognised by Network Rail
and RoSPA.
Strategy in action:
Safety innovation through collaboration
Our Supplier Partnership Programme has been in place for over
10 years, and is a key instrument in bringing suppliers together
with customers to discuss key issues facing the industry, and
developing solutions in collaboration to address them.
Hand Arm Vibration is a major issue challenging the construction
industry and we have a track record in helping minimise this risk
from the construction arena by offering help and training around
behavioural solutions, and practical help to reduce these hazards.
During FY2021 we were able to take this one step further through
digital safety innovation. In conjunction with Balfour Beatty who
led the initiative with Speedy, and a number of our key product
suppliers, we developed our new HAV Product Selector,
a revolutionary service that enables customers to choose the
safest and most productive equipment based on the type of
activity they are carrying out and the materials being worked with.
The HAV Product Selector is a significant new feature introduced
to our mobile App and on our website.
When selecting a power tool it is common practice to
automatically opt for the tool with the lowest vibration, which
will allow users the maximum amount of time to get the job
done. With the new HAV Product Selector customers, and more
specifically the end user can now make a more informed choice,
selecting their equipment based on their exposure action value
(EAV), measured specifically for the task in hand, along with
the ability to view a short video demonstrating best practice
for each piece of kit.
The HAV Product Selector currently features 125 products, some
of which sit in multiple activities such as Drilling and Breaking,
and additional products are regularly being added such as
Routers, Sanders, Rail Drills, and Rail Saws.
In addition to the safety benefits, the HAV Product Selector will
also enable customers to increase productivity and reduce costs
by having up to the minute access at their fingertips to the latest
technological product innovations. Supporting our ambitious
ESG agenda in significantly cutting carbon emissions through our
product fleet, we are now working on developing data on new
safety and sustainability features for the Product Selector in
areas including dust, noise pollution and carbon emissions.
ESG Report continued
Key reporting measures
0.13
RIDDOR accidents per
100,000 hours worked
(FY2020: 0.31)
0.09
Specified Injury
Frequency Rate per
100,000 hours worked
(FY2020: 0.06)
It is recognised that our Specified Injury Frequency Rate has
increased, whilst our RIDDOR frequency rate has decreased,
providing for an overall reduction in reportable injuries in
the period. This is a reflection of the good work that is being
undertaken in reviewing our lifting and handling methods,
improved vehicle safety standards, reviewing our PPE provision as
well as implementing a new accident incident reporting software.
Recognition in safety
FY2021 was another successful year for Speedy. For the
sixth consecutive year we were awarded a RoSPA Gold Award,
for achieving a high level of safety performance and
demonstrating well-developed occupational health and
safety management systems.
During the last year our safety standards were recognised by:
• Network Rail – Route to Gold
• RoSPA – Gold Award for Occupational Health and Safety
- sixth consecutive year
Strategy in action:
Launch of new accident and
incident reporting system
During FY2021 we launched a brand new accident and incident
reporting system ‘AVA AIRSWEB’. The live App has been auto-
uploaded on all company devices, and is also available to
colleagues to download onto their own personal devices.
It’s improved live accident and incident reporting is designed
such that colleagues can easily report hazards, near misses,
accidents, and promote good safety practice. At Speedy, our
people understand that we all play a role in making Speedy
safe, and how we report and monitor incidents is an important
part of this. Through the delivery of improved incident
reporting through the new AVA AIRSWEB system, we will be
able to take further preventative measures to enhance the
safety of our colleagues.
34 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
ESG Report continued
Our people: Driving forward
a progressive, inclusive culture
Our people are committed and highly trained colleagues who
want to be part of a progressive, inclusive and sustainable
organisation. We aim to provide a good work life balance
and support the communities we work in.
Colleague engagement
As a people focused business, colleague engagement is central
to our success. We conducted our colleague engagement survey
‘People Matters’ during March and April this year and were
pleased to achieve a response rate of 74%. Our UK engagement
score was 77% which is 5% higher than the external benchmark,
significantly above the industry average in the UK of 61%, and a
1% improvement on our 2018 survey results.
Our highest areas of engagement versus the benchmark included:
trust, performance monitoring, understanding expectations to
complete the job and recommending Speedy’s products and services.
We saw an increase in scores regarding: communication to the
frontline, pay and reward, collaboration across businesses and
career development, endorsing the delivery on commitments
we made to our colleagues following the last survey in 2018.
Following this year’s survey we have refreshed our action plan
to further increase colleague engagement. Having launched our
internal communications intranet site ‘The Hub’ in January 2020,
we are refreshing the platform to improve content and the user
experience. We have also invested in base pay, rolled out simpler
incentive plans and have introduced a new talent management
and succession planning process that is underpinned by a series
of Career Line of Sight programmes.
The survey also captured equality, diversity and inclusivity (EDI)
data which our EDI Committee and Speedy Ladies working group
will be using to develop new initiatives, which includes our
gender diversity commitment of 30% female by 2030.
Our regional employee forums enable an inclusive culture
within our business. The forums meet regularly and consist
of a representative cross section of colleagues. Meetings are
held regularly with the Chief Executive, HR Director and the
chairperson of each forum to discuss business performance
and address any issues raised by each regional forum.
Rob Barclay, the designated Non-Executive Director responsible
for employee engagement, also periodically attends this meeting.
His attendance ensures the employee voice is heard in the
main boardroom.
The Hub:
Number of news articles posted: 1,324
Visits: 400,310
Pages viewed: 994,465
In January 2020 we launched a brand new online internal
communications platform ‘The Hub’ in order to provide a single
destination for every colleague to access all the latest important
Speedy company information, business updates and people news.
Throughout FY2021, as a secure, online cloud based platform,
The Hub has enabled all Speedy colleagues, whether office, depot
or field based to receive company news and information directly,
via their work and/or personal mobile phones, laptops, desktops
and tablets. The Hub has proved extremely valuable throughout
the COVID-19 pandemic in ensuring essential safety information
is communicated effectively and is easily accessible. It has also
promoted the inspirational work undertaken by our colleagues
to support their communities and customers.
During FY2021, nine in ten of our colleagues have logged on to The
Hub (92%), with the average frequency reaching 11 visits per month.
Mental health and wellbeing
We recognise that mental health and wellbeing is a key issue
within the construction industry, particularly as we continue to
navigate our way through the COVID-19 pandemic.
Our people feel passionate about the mental health and
wellbeing of their colleagues. We have over 50 volunteer Mental
Health First Aiders throughout the business, trained to identify
potential mental health issues in the workplace, and proactively
promote strategies for positive mental health and wellbeing
amongst our colleagues. Further support is available
to colleagues through our Employee Assistance Programme.
We have set up a Wellbeing Committee which is Chaired by our
HR Director and consists of colleagues from across the business
to consider all aspects of employee welfare. During FY2021 the
committee has developed a number of campaigns and initiatives
promoting a healthy approach to mind and body. Here are just
some of the initiatives we’re delivering:
• Launching an easy-to-access Wellbeing Calendar
• Providing guidance and coaching to employees
and managers regarding coping with workload
• Providing mental health and wellbeing training for managers
• Creating fresh wellbeing content on our internal
communications platform ‘The Hub’
During FY2021, nine in ten of our
colleagues have logged on to The Hub
(92%), with the average frequency
reaching 11 visits per month.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 35
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ESG Report continued
Our regional employee forums, which are joined by our Chief
Executive and other Executive Board members, also provide a
vital feedback loop and help develop new wellbeing focused
programmes.
In October 2020, we conducted our first well-being employee
survey, receiving positive feedback on the work we are doing
from colleagues. The recommendations resulted in an action plan
designed to drive continuous improvement in each area of our
company. Actions included:
• Providing mental health and wellbeing training for managers.
• Providing guidance and coaching to employees to help
manage workloads and reduce stress.
• Launching an easy-to-access wellbeing events calendar for
colleagues to participate in.
• Build on the success of our internal communications through The Hub.
In January 2021 we conducted a second wellbeing survey with
resounding feedback from colleagues saying they had felt safe
and supported throughout the pandemic.
Personal development
During FY2021 we developed and launched our new ‘Career
Line of Sight’ scheme, which is supporting the learning and
development of our people at all levels of seniority.
Career Line of Sight is our promise to colleagues that we will:
• Provide a framework to demonstrate what good looks like.
• Invest in people development through supporting colleagues
in progressing their career at Speedy.
• Ensure colleagues who are happy in their current roles are
able to continually develop their skills to attain maximum
performance within their areas of responsibility.
By supporting and developing our people, we will further
strengthen our strategy to Simplify, Standardise and Grow
the business. The programme is already in place across our
commercial teams, and is now being rolled out across operations.
“
Career Line of Sight allows internal progression which has always
been close to my heart. As part of our Personal Development
Review process, it helps me to support not only those who want to
progress to other areas or levels within the business, but also team
members to be the best in class in their current job role”.
Tony Green
Regional Manager West London
We are committed to developing our skills base, and our internal
Training Academy delivers a comprehensive schedule of online,
classroom and practical training courses. The training team offers
a full range of technical training courses which makes sure our
employees are carrying out their roles effectively and safely.
Our learning and development courses are designed to help our
employees reach their full potential, and also build the skills and
behaviours which will help support Speedy’s customer led culture.
36 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
People’s Charter
We are committed to the People’s Charter with the Supply Chain
Sustainability School, which we are audited against annually.
All employees have access to a range of externally provided
courses, in the form of apprenticeships, which are funded using
either the apprenticeship levy or other government funding
across the UK. These courses are across Level 2 – Level 7
and examples include:
• Management
• Team Leading
• Customer Service
• Contact Centre Operations
• Improvement Technician
There is an appetite from our people to play an active part in our ESG
programme ‘Energise’ and to meet this, we are developing eLearning
courses in ESG for employees at every level of the business.
We are committed to the People’s Charter with the Supply Chain
Sustainability School, which we are audited against annually.
High potential programme
Employees who have been identified as having the potential, ability
and aspiration for leadership positions are invited to join our High
Potential Programme. The programme consists of three main strands,
two of which provide a management qualification accredited by the
Institution of Leadership and Management. The three strands ensure
employees at all levels, and stages of their career, have access to
development which supports our approach to succession planning for all
roles. During FY2021 54 employees took part in these programmes.
This year we introduced a new Senior Leadership Programme which
is being delivered by two external providers. The programme is being
attended by 12 talented leaders from across the business. The 12
month programme is closely linked to our business strategy, and has
been designed to enhance the skills, knowledge and behaviours of
those taking part. The programme is made up of a number of modules
around leadership and self-awareness, and delegates are required to
complete a business project, the outcomes of which will be delivered
to the Executive Board in September 2021.
Graduate and apprenticeship schemes
In January 2021 we joined the 5% Club, a group of employers
working to create a shared prosperity across the UK, committing to
raising the number of apprentices, graduates and sponsored students
on formal programmes to 5% of the total workforce by 2025.
This commitment will help ensure that the business has a
sustainable future, creating opportunities for young people
with new skills that will become the leaders of tomorrow.
“
Joining the 5% Club gives us access to lots of fantastic learning
and development material and a wealth of best practice from
other businesses that share in our commitment to learning. Speedy’s
increasing pool of trainees, comprising of current colleagues, new
recruits and future ‘year in industry’ students will all reap the benefits
of this membership. In return they will support us in driving a culture of
continuous learning so every colleague can reach their full potential.”
Ellie Armour
Human Resources Director
ESG Report continued
During the year we have taken on new graduates on a two
year programme. This provides a range of training, personal
development and experience to develop a thorough
understanding of Speedy and our business in its entirety.
The aim for our graduates is to learn relevant skills, knowledge
and behaviours to develop a successful career, assisting in
effective succession planning for the future growth of the
Company. The scheme provides on the job training which includes:
• The chance to study for relevant qualifications where necessary
• Completing business experience modules
• A tailored learning and development programme
• The opportunity to complete projects set by the Executive Board
• Integration onto the High Potential Programme in year two to
develop first time manager and leadership skills
In March 2021 we recruited our first graduates onto our new
Rotational Graduate Scheme. This three year programme leads
on a specialist area with graduates completing 6 x six month
placements made up of core, mandatory placements and
optional placements that the graduate themselves can select.
It includes all the benefits of the two year programme, and
through the exposure and experience of working across the
business, identifies which area each participant can start
building their Speedy career.
Additionally we have c.70 colleagues participating in apprenticeship
schemes across the business made up of a mix of new apprentices,
who are primarily in engineer based roles, and existing colleagues
who are using apprenticeships to up-skill and progress their careers.
Our apprentices range from 16-40+ years old and follow various
pathways; we don’t have a one size fits all approach.
Developing retail skills
We provide a retail offering within our Service Centre network,
and during FY2021 commenced a trial to open Speedy outlets
within a number of B&Q stores.
Under the leadership of a new UK Managing Director and an
Operations Director that both joined Speedy with a wealth of
experience from the retail sector, we have successfully developed
a people strategy for retail that is attracting both full and part-
time colleagues with a background in sales.
We established new ways of resourcing, revised contracts
of employment, benefits and pay scales to compliment B&Q
arrangements. Flexible working hours are a key component to this
success, which has enabled part-time students, returning parents
and retirees to consider careers with Speedy. We have also
developed a bespoke digital on-boarding and training experience
for colleagues that join the retail business.
Career Line of Sight
Our new ‘Career Line of Sight’ scheme supports the learning
and development of our people at all levels of seniority.
Working with the B&Q team we have been able to combine our
leadership values to ensure we create a one-team culture in stores.
Performance and recognition
We have a consistent Personal Development Review (PDR)
process for all colleagues which measures performance against
pre-defined objectives, and identifies areas for training and
development. The process includes a formal one to one meeting
with the colleague’s line manager which supports enhanced
individual performance and career aspirations.
We run an employee recognition scheme ‘Celebrating
Excellence’. The scheme empowers all employees to nominate
their colleagues for a spot award in recognition of excellent
performance. 680 employees received an award during FY2021.
We host an annual Excellence Awards event where outstanding
teams and individuals are publicly recognised for their
performance. The awards are made over a number of categories
including Customer Experience, Leader of the Year and Rising
Star, and nominations are received from colleagues within the
business. During FY2021 we were unable to run the event due
to the COVID-19 pandemic. However, we will be celebrating our
people at the event again in July 2021.
Our long service recognition scheme celebrates loyalty for those
who have 10, 20 and 25 years’ service with the Company. 124
employees reached these milestones during this financial year.
Rewards and benefits
We aim to provide competitive reward and benefits packages that
attract, motivate and retain people in the most efficient manner.
During FY2021 we benchmarked and adjusted the salaries of
further roles across the business which helped to retain the key
skills required to compete in the marketplace.
We run a number of incentive and recognition schemes which
span all colleagues, most of which are performance related.
We also regularly review and update our employee benefits
package as we recognise that salary is not the only component
that motivates employees.
Group headcount
3,843 employees
(31 March 2020: 4,065).
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 37
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ESG Report continued
Charity and community
With over 3,300 colleagues spread across 200 UK locations, we
touch the lives of thousands of families and hundreds of local
communities. It’s a responsibility we don’t take lightly, and we
recognise our position as an opportunity to be a real force for good.
We are committed to supporting national causes alongside those
important to the communities we work in.
Our Charity Committee was set up in 2015; during FY2021 we
altered the scope and launched the Communities Committee,
bringing together newly nominated ‘Community Ambassadors’ from
across the business to shape our charity and community agenda
moving forward. Speedy uses the HACT model, which provides a
basic assessment of social impact and evidence of value for money
to calculate the Social Value Impact (SVI) in the communities we
work, employ and train. Our SVI for FY2021 is £3,028,634.24.
From HACT the following gives us our SVI breakdown:
Associated outcome/value
Total
Value (minus deadweight)
Apprentices
Graduates
Staff upskilling
Garth prison part
time engineers
81
10
33
25
Garth prison full time engineers
2
Classroom based training
– Speedy people
Geason training
1,370
861
£151,125
£122,681
£31,524
£24,997
£24,535
£1,764,166
£883,101
In addition, during FY2021 our people helped to raise more than
£21,000 for more than 37 charities, while contributing time and
manpower to a wide range of worthy community causes.
In December 2020 we supported the Cash for Kids Christmas
appeal through raising c.£8,000 in employee and company
donations for children across the UK.
During March 2021 we provided a further £12,000 of donations
for colleagues to nominate local charities and community projects
that were affected by the pandemic. Colleagues nominated their
chosen charities or organisation, outlining how the donation
would benefit the organisation. Submissions were reviewed by the
Communities Committee and a total of 39 charities and community
groups from across the UK shared in the donation sum.
We are proud to support two nominated charity partners; WellChild
and The Lighthouse Club. We support WellChild through its Helping
Hands programme, which renovates homes and gardens for sick
children, helping to make them fun and safe areas for the whole
family to enjoy. To help tackle issues in the construction industry
we support The Lighthouse Club, the only charity dedicated to
providing financial and emotional support to the construction
community and their families.
We have been active in the rehabilitation of prisoners since 2006.
We currently run a training workshop at HMP Garth in Lancashire
for up to 25 inmates with two full time engineers.
38 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Operating as
an industry
leading
sustainable
business
The United Nations’ Sustainable
Development Goals 2030 (UNSDGs)
act as a blueprint to achieve a
better and more sustainable future
for all, with a view of addressing
poverty, inequality, climate change,
environmental degradation, peace
and justice. For businesses, strong
corporate governance plays a vital role
in this agenda, which is something that
Speedy are committed to.
As a business we strive to maintain high standards, reporting
with accuracy and transparency and maintaining compliance
with the laws, rules and regulations that govern our business,
which is also of key importance to us as a publicly listed company.
Our business has robust governance controls and processes
in place covering structure and oversight, code of conduct,
reporting and the integrity and security of systems. This
enables us to make effective decisions, comply with relevant
law, rules and regulations whilst meeting the needs of our
external stakeholders. We also believe in promoting equality
and diversity within the workforce and we work hard to foster
that culture within all areas of our business.
ESG Report continued
We work to leading industry certifications and accreditations
to ensure best practice, while maintaining the standards our
people, customers and suppliers demand.
Our current certifications include:
• ISO 9001 for quality management
• ISO 17020* for the operation of various types of bodies
performing inspections
• ISO 27001 for information security
• ISO 14001 for environmental management
• ISO 50001 for energy management
• OHSAS 18001 for health and safety management
We also remain accredited to schemes that enable us to
trade with specific clients and sectors, including:
• Achilles Building Confidence for the construction industry
• Achilles FPal for the oil and gas industry
• Achilles UVBD for the utilities sector
• RISQS for rail industry customers
• LEEA for lifting equipment engineers
• SafeHire for standards in tool and equipment hire
Integral to supporting good governance practices, all relevant
colleagues are required to complete Speedy Code of Conduct
and cyber security training to ensure working practices across
the business are robust and secure. Similarly our practices
regarding engagement with third parties maintain a zero tolerance
approach to modern slavery and human trafficking. We have in
place appropriate policies and procedures to support ethical
trading and regularly monitor and audit our suppliers’ network,
whilst also producing a modern slavery statement each financial
year in support of this.
Our Directors’ Remuneration Policy was last approved at our
2020 Annual General Meeting with the intention that it operates
for a three year period. The primary objective of this policy is to
promote the long-term success of the Group which is important
for good governance, however, our Remuneration Committee
continues to review the policy to ensure it takes due account of
remuneration best practice and that it remains aligned with our
shareholders’ interests.
The business has a robust, independent internal audit function
in place and its tax strategy is well publicised.
“
We are committed to the delivery of quality
standards, and have the governance processes
and protocols in place to ensure them.”
Sam Westran
Group Head of Quality and Environment
Equality, Diversity and Inclusion
At Speedy, we believe in providing fair and equal reward and
recognition for our peoples’ contribution, no matter what part
of our business they work in, and in promoting equality and
diversity, to encourage inclusivity across every aspect of our
business. Our recruitment team works to attract applicants
from a wide variety of backgrounds, increasing diversity at
all levels and in all roles.
During FY2021 we introduced a new Equality, Diversity and
Inclusion (EDI) working group. We also introduced a range of EDI
questions into our People Matters survey to help us identify how
we can move this agenda forward during the coming year.
Under The Equality Act 2010 (Gender Pay Gap Information)
Regulations 2017 we publish our Gender Pay Gap report. We are
pleased to report that as a Group we have no significant gender
pay bias. We will continue to ensure that employees are rewarded
and recognised fairly for their contribution and that they have
equal access to opportunities within all areas of the business.
Below is a breakdown by gender of the number of people who
were Directors of the Company, senior managers and other
employees as at the end of the reporting period:
• Directors – female 16.7%, male 83.3%;
• Senior management team – female 19.8%, male 80.2%;
• All Speedy employees (UK and Ireland) – female 20.1%,
male 79.9%.
Our objective is to have 30% female colleagues by 2030.
Within our head office at Haydock the breakdown by gender
is female 54.7%, male 45.3%.
Human rights and modern slavery
Our Human Rights Policy and Anti-Slavery Policy applies to all
employees and commits Speedy to upholding the provision of
basic human rights and eliminate any discriminatory practices.
The policies emphasise our commitment to human rights in
the way we do business, seeking to create and maintain a work
culture which allows equal human rights to all persons whilst
prohibiting actions contrary to this, such as forced or child labour.
We believe in providing
fair and equal reward
and recognition for our
peoples’ contribution –
no matter what part of our
business they work in.
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*Lloyds British National Contracts
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 39
Financial Review
James Bunn
Chief Financial Officer
It has been a challenging year
for the business as we responded
to COVID-19. The financial results
have been heavily impacted by the
pandemic; however they are testament
to the hard work of all our colleagues
in supporting the business throughout
this period. The start to the new financial
year is encouraging; in April and May
2021 revenue is c.2% ahead of the
comparative period (April 2019).
Revenues declined initially during the first lockdown, recovering
strongly as our customers returned to work. Despite revenue
falling by as much as 35% in April 2020, by the fourth quarter
like for like core hire revenue was trading ahead of prior year
by 4%. Activity recovered across our Major accounts and the
mobilisations of recent contract wins including Network Plus,
MWH and Horbury increased our market share. Our SME customer
base has continued to grow, with revenue up 10% in the second
half; we continue to explore further opportunities to grow in this
sector which includes a trial with B&Q.
We proactively managed our cost base in the first half with
decisive actions including a freeze on discretionary spend, the
use of Government support schemes, as well as reducing capital
expenditure to the level necessary to meet customer demand.
Investment in hire fleet resumed as activity levels recovered
during the second half. Following a detailed operational review
during the first lockdown 13 depots have been permanently
closed and c.200 roles made redundant.The Group entered
40 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
FY2021 with conservative debt levels. The cautious action taken
to preserve cash, including reduced capex and no dividend
payments combined with strong cash collections from customers,
the Group has operated throughout the year well within existing
banking facilities and without any covenant tests being triggered.
The disposal of the Middle East assets on 1 March 2021 has
further strengthened the Group’s net debt position.
We continue to monitor the COVID-19 situation and will
respond accordingly. The Group’s strong balance sheet and the
encouraging trading at the start of the new financial year allows
us to take advantage of strategic opportunities as markets
emerge from the pandemic.
Group financial performance
Revenue (excluding disposals) for the year to 31 March 2021
decreased by 10.7% to £359.4m (2020: £402.5m). Revenue from
disposals was £4.2m (2020: £4.2m); total revenue for the period
decreased by 10.6% to £363.6m (2020: £406.7m).
Gross profit was £192.6m (2020: £224.2m), a decrease of 14.1%.
The gross margin fell to 53.0% (2020: 55.1%), reflecting reduced hire
revenue with largely fixed depreciation charge, the mix impact from
reductions in training revenues, and competitive price pressures.
EBITA1 decreased by 35.0% to £25.4m (2020: £39.1m) and profit
before taxation, amortisation and exceptional costs decreased to
£20.7m (2020: £34.9m).
The share of profit from the joint venture in Kazakhstan decreased
to £1.2m (2020: £2.8m) as result of COVID-19 related reductions
in activity.
The Group incurred net exceptional expenses before taxation
of £7.6m (2020: £12.9m). Further details are included below.
After taxation, amortisation and exceptional items, the Group
made a profit of £9.5m, compared to a profit of £16.8m in 2020.
Segmental analysis
The Group’s segmental reporting is split into continuing operations
- UK and Ireland, and discontinued operations - International. The
figures in the tables below are presented before corporate costs
of £4.6m (2020: £3.9m), which have increased 17.9% due to
management compensation payments and additional audit fees.
UK and Ireland
Revenue
(excluding disposals)
EBITDA1
EBITA1
Year ended
31 March
2021
£m
Year ended
31 March
2020
£m
328.1
367.3
89.5
26.3
102.7
37.3
Change
%
(10.7)
(12.9)
(29.5)
Excluding disposals, revenue decreased by 10.7% to £328.1m
Headcount has reduced to 3,303, compared to 3,464 at 31 March
(2020: £367.3m) with a fall across both Hire and Services.
Hire revenue decreased by 11.0%. Hire revenue was significantly
impacted by the national lockdown imposed at the end of
2020 with redundancies from the operational restructure in the
first half year and 50 colleagues joining our B&Q instore offering
during the year.
March 2020, initially falling by 35% in April. Activity levels then
Asset utilisation in the second half has increased to 58.8% (2020:
progressively recovered as the construction sector reopened
55.9%), as a result of continued use of artificial intelligence to
with trading ahead of prior year by the fourth quarter. Major
connect customer demand with asset availability and lower capex
and Local sectors both now exceed prior year levels following
in the first half. Utilisation rates for the core range of products have
contract renewals and new contract wins. The Regional sector
improved on prior year as the replenishment and asset rebalancing
remains challenging, with competitive pricing.
programme that uses machine learning was launched across the
Services revenues declined by 10.2% in the year as all areas
of the business were initially impacted by the first lockdown.
A strong performance from the rehire, fuel and consumables
businesses throughout the second half resulted in Services
entire network during the first half. Our strategy to simplify and
standardise processes within the depot network has enabled
utilisation improvement and the expansion of our four-hour
customer promise.
revenue for that period being ahead of prior year.
The business recovered well in the second half with EBITA for
Our training business Geason has continued to perform below
expectations during the year due to lower than expected learner
enrolments as a result of the pandemic and social distancing
that period of £17.9m, 5.3% down on prior year. It continues to
perform well into FY2022 in a competitive market despite the
pandemic related disruptions associated with COVID-19.
impacting course delivery. During the year we resolved the
International
Year ended
31 March
2021
£m
Year ended
31 March
2020
£m
31.3
5.2
3.7
35.2
8.2
5.7
Change
%
(11.1)
(36.6)
(35.1)
Revenue
EBITDA1
EBITA1
claim from the funding agency and implemented a number
of management changes. We are reviewing further initiatives
to improve the Group’s financial position.
Gross margins reduced from 57.7% to 55.6%. Hire margin
decreased to 75.7% (2020: 77.0%) due to reduced activity in the
first half with a largely fixed depreciation charge; margin in the first
half was 74.8%, increasing to 76.4% in the second half. Expansion
of our powered access fleet has improved the national offering
to major customers and reduced reliance on lower margin rehire
partners. Services margin was impacted by sales mix with strong
revenue performance in lower margin services such as rehire and
fuel reducing overall margin to 23.2% (2020: 26.0%).
Overheads have reduced due to the mitigating actions taken to
manage the cost base in response to the COVID-19 pandemic
including the permanent closure of 13 depots and c.200 roles
being made redundant, temporary freezing of discretionary spend,
alongside Government support received from furlough schemes in
the first half (£8.9m) and rates relief (£4.8m). As a result of these
actions, there has been an overall 10.0% reduction in overheads
compared to the prior year.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 41
Strategic ReportCorporate InformationGovernanceFinancial Statements
Financial Review continued
The Group sold its equipment fleet, stock and other fixed
assets relating to its Middle East business to its principal
customer ADNOC Logistics and Services LLC (ADNOC), on
1 March 2021, for consideration of $18m. The consideration
was paid in cash in full on completion with trade receivables
from ADNOC of c.$12m subsequently paid on 31 March.
The net proceeds, after working capital payments, have reduced
Group borrowings. The transaction included the Group entering
into a Transitional Services Agreement (TSA) with ADNOC to
30 June 2021, to support the transfer of the assets, during
which time it is anticipated that the Group's c.600 UAE-based
employees' contracts will be terminated and all colleagues
offered re-employment by ADNOC. On conclusion of the TSA
the Group intends to wind up its operations in the Middle East.
International revenue in the Middle East decreased by 11.1%
due to the disposal of the assets, COVID-19 related disruptions
and the full year effect of contract negotiations in the prior year.
Consequently, EBITA fell by 35.1%.
Exceptional items
There were £7.6m net exceptional items incurred during the year (2020: £12.9m).
Property related costs
Restructuring costs
Disposal of Middle East assets
Training provision
Total
£m
(5.6)
(1.9)
0.8
(0.9)
(7.6)
Action has been taken to manage the Group's cost base
following the COVID-19 pandemic, and consequently the
network has been restructured; 13 depots have been closed
and further consolidation of 22 depots is underway to create
six larger, customer focused service centres. As a result, £5.6m
of property related costs and £1.9m redundancy costs have
been incurred during the year.
As noted above, the Group sold its equipment fleet, stock and
other fixed assets relating to its Middle East business to its
principal customer ADNOC, for a consideration of $18m (£13.0m).
The transaction resulted in a gain on disposal of £0.8m.
The training business, Geason, which was acquired in December
2018, was subject to an assurance visit from a funding agency
in early 2020, and a subsequent claim was received for amounts
overpaid. The claim was settled in October 2020, within the
provision held at 31 March 2020. An additional provision has
been made for £0.9m to cover legal and other costs associated
with ongoing initiatives to improve the Group’s financial position.
Interest
The Group’s net financial expense, including interest on lease
liabilities and before exceptional items, decreased to £5.9m
(2020: £7.0m) reflecting lower average gross borrowings
throughout the year.
Net debt, excluding lease liabilities, as at 31 March 2021 reduced
to £33.2m (2020: £79.3m), following the sale of the Middle
East assets and excellent cash collections. Borrowings under
the Group’s bank facility are priced on the basis of LIBOR plus
a variable margin, while any unutilised commitment is charged
at 35% of the applicable margin. During the year, the margin
payable over LIBOR on the outstanding debt fluctuated between
1.50% and 2.00% dependent on the Group’s performance in
relation to leverage and the weighting of borrowings between
receivables and plant and machinery. The effective average
margin in the period was 1.80% (2020: 1.84%).
The Group utilises interest rate hedges to manage fluctuations
in LIBOR with varying maturity dates to October 2022. The fair
value of these hedges was not material at 31 March 2021.
42 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Financial Review continued
Taxation
The Group seeks to protect its reputation as a responsible
taxpayer, and adopts an appropriate attitude to arranging its
tax affairs, aiming to ensure effective, sustainable and active
management of tax matters in support of business performance.
The Group utilised Government deferral schemes for tax
payments of £7.6m during the first half; all amounts deferred
were paid prior to 30 September 2020.
The tax charge for the period was £2.8m (2020: £3.9m), with an
effective tax rate of 22.7% (2020: 18.8%); the increase in the
effective rate includes the impact of exceptional items in the year.
The underlying effective tax rate for the continuing operations is
19.6% (2020: 19.7%).
Shares, earnings per share2 and dividends
At 31 March 2021, 528,180,280 Speedy Hire Plc ordinary shares
were outstanding, of which 4,413,516 were held in the Employee
Benefits Trust.
Adjusted earnings per share was 3.22 pence (2020: 5.54 pence),
a decrease of 41.9%. Basic earnings per share was 1.82 pence
(2020: 3.23 pence).
The decision to not pay a FY2020 final dividend reflected our
priority at that time of preserving cash. No interim dividend
was declared during FY2021 (2020: 0.70 pence). In light of the
improvement in trading in the second half of the year, and in
recognition of the strength of the balance sheet and cash position
at the year end, the Board is recommending a 2021 final dividend
of 1.40p per share. The cash cost of this dividend is expected to
be c.£7.4m.
Capital expenditure and disposals
Total capital expenditure during the year amounted to £43.7m
(2020: £63.2m), of which £36.0m (2020: £55.3m) related to
equipment for hire, and £7.7m to other property, plant and
equipment (2020: £7.9m).
The Group entered the pandemic with a young fleet age, which
allowed for immediate cut-back on discretionary spend without
impacting service delivery. Capital expenditure on hire fleet was
reduced initially to £7.2m, a level necessary to meet customer
demand. The investment in fleet increased to £28.8m in the
second half in response to increases in customer activity.
This expenditure reflects further investment in the core range
ensuring the UK and Ireland business can continue to execute
our four-hour delivery promise. Throughout the year the Group
has continued to invest in sustainable products in line with its
strategy to reduce the carbon output of the hire fleet through
investment in solar, hybrid, electric and hydrogen technology.
Despite the capital expenditure constraints during the year,
the average age of the fleet remains young in comparison to
the industry; 3.6 years (2020: 3.4 years). Total disposal proceeds
were £12.2m (2020: £11.7m). During the year we further
optimised our stockholdings across the network, applying
machine learning to inform decisions on returns and asset
utilisation, which highlighted those areas requiring investment.
The number of product lines has further reduced, and this has
enabled us to continually improve the efficiency of our supply
chain. This forward demand planning will help mitigate the
potential risk from lead time delays and price inflation.
Balance sheet
The Group continues to have a strong balance sheet, which
reflects the decisive action taken during COVID-19, proactive
management of the asset fleet and effective control over
working capital.
Net assets at 31 March 2021 were £219.2m (2020: £209.9m),
equivalent to 41.5 pence per share.
Net property, plant and equipment (excluding IFRS 16 right of
use assets) was £233.1m at 31 March 2021 (2020: £257.6m),
of which equipment for hire represents 88.9% (2020: 88.2%).
Following the disposal of the Middle East assets, the International
hire fleet is £nil at 31 March 2021, (2020: £11.4m).
Intangibles increased to £24.7m (2020: £23.1m), due to
increased IT development expenditure.
Right of use assets of £59.1m (2020: £64.7m) and corresponding
lease liabilities of £65.8m (2020: £72.9m) are recognised at
31 March 2021 following the implementation of IFRS 16 in the
prior year.
Throughout the year the business has had a clear focus on cash,
in particular customer collections. The successful collaboration
between sales and credit control functions, leveraging strong
customer relationships, resulted in excellent cash collections.
Gross trade receivables totaled £93.3m at 31 March 2021 (2020:
£100.7m). Bad debt provisions were £3.5m at 31 March 2021
(2020: £3.9m), equivalent to 3.8% of gross trade receivables
(2020: 3.9%). Debtor days were 58.9 (2020: 69.6), of which UK
and Ireland were 59.4 (2020: 66.0). Overdue debt has reduced
by 26% over the year.
Trade payables were £49.6m (2020: £52.3m). Creditor days
were 86.6 (2020: 103.7).
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 43
Strategic ReportCorporate InformationGovernanceFinancial Statements The Group has a strong pipeline of organic growth and acquisition
opportunities, which it continues to evaluate on an ongoing basis.
Capital structure and treasury
Speedy’s long term funding is provided through a combination of
shareholders’ funds and bank debt.
The Group’s £180m asset based finance facility and uncommitted
accordion of £220m, expire in October 2022. Discussions with
a syndicate of banks are at an advanced stage in relation to
renewing the facility on largely similar terms.
The average gross borrowings under the facility during the year
ended 31 March 2021 decreased to £79.5m (2020: £110.2m).
The facility includes leverage and fixed charge cover covenant
tests which are only applied if headroom in the facility falls below
£18m. The Group had significant headroom against these tests
throughout the year.
Return on capital
ROCE4 is a key performance measure for the Group and decreased
to 7.6% (2020: 12.0%) due to the impact of COVID-19 partially
offset with lower levels of net debt. The strength of the balance
sheet and available financial resources will allow us to invest in
growth opportunities as markets continue to recover.
James Bunn
Chief Financial Officer
Financial Review continued
Cash flow and net debt3
Cash generated from operations for the year was £72.9m
(2020: £64.5m). Free cash flow (being net cash flow before
financing activities) increased to £69.7m (2020: £45.2m).
Net debt decreased by £46.1m from £79.3m at the beginning
of the year to £33.2m at 31 March 2021. Excluding the impact
of IFRS 16, leverage5 reduced to 0.5x (2020: 1.0x).
The Group’s strong cash position resulted in substantial
headroom within the Group’s bank facility throughout the year
with cash and undrawn facility availability of £142.3m at 31
March 2021 (2020: £99.0m). Discussions with a syndicate of
banks are at an advanced stage in relation to renewing the
facility, which expires in October 2022, on largely similar terms.
Capital allocation policy
The Board intends to continue to invest in the business in order
to grow revenue, profit and ROCE. This investment is expected
to include capital expenditure within existing operations, as well
as value enhancing acquisitions that fit with the Group’s strategy
and are returns accretive.
The Board’s objective is to maximise long term shareholder
returns through a disciplined deployment of cash generated, and
it has adopted the following capital allocation policy in support
of this:
- Organic growth: the Board will invest in capital equipment to
support demand in our chosen markets. This investment will
be in hire fleet and IT systems to better enable us to serve our
customers;
- Regular returns to shareholders: the Board intends to pay a
regular dividend to shareholders, with a policy of growing
dividends through the business cycle, and a payment in the
range of between 33% and 50% adjusted earnings per share;
- Acquisitions: the Board will continue to explore value enhancing
acquisition opportunities in specialist hire and services
businesses consistent with the Group’s existing operations;
- Gearing and treatment of excess capital: the Board is committed
to maintaining an efficient balance sheet. The Board has
adopted a target gearing in the region of 1.5x net debt to EBITDA
through the business cycle, although it is prepared to move
outside this if circumstances warrant. The Board will continue
to review the Group’s balance sheet in light of the policy, and
medium term investment requirements, and will return excess
capital to shareholders if and when appropriate.
Explanatory notes:
1 Before exceptional items, see Note 12 to the Financial Statements
2 See Note 10 to the Financial Statements
3 See Note 21 to the Financial Statements
4 Return on Capital Employed: Profit before tax, amortisation and exceptional items
divided by the average capital employed (where capital employed equals shareholders’
funds and net debt3), for the last 12 months
5 Leverage: Net debt3 covered by EBITDA1. This metric excludes the impact of IFRS 16.
44 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Principal risks and uncertainties
The business strategy in place and the nature of the industry in
which we operate expose the Group to a number of risks. As part
of the risk management framework in place, the Board considers
on an ongoing basis the nature, likelihood and potential impact of
each of the significant risks it is willing to accept in achieving its
strategic objectives.
The Board has delegated to the Audit & Risk Committee
responsibility for reviewing the effectiveness of the Group’s
internal controls, including the systems established to identify,
assess, manage and monitor risks. These systems, which ensure
that risk is managed at the appropriate level within the business,
can only mitigate risk rather than eliminate it completely.
Direct ownership of risk management within the Group lies with
the senior management teams. Each individual is responsible
for maintaining a risk register for their area of the business and
is required to update this on a regular basis. The key items are
consolidated into a Group risk register which has been used by
the Board to carry out a robust assessment of the principal risks.
The principal risks and mitigating controls in place are
summarised below.
Risk
Description and potential impact
Strategy for mitigation
COVID-19 pandemic continued
Trading performance
The UK and Ireland lockdowns have
reduced economic activity. The first of
these in 2020 affected Group revenues.
Whilst the indications for the future are
promising in the UK, the uncertainty
leads to difficulty in forecasting.
People
The COVID-19 pandemic may lead to
shortages in the workforce as a direct
result of illness, social shielding or
isolation measures, along with depot
closures. This may result in an inability
to effectively service our customers’
requirements.
As a supplier to industries that have
continued to operate, the Group has
also continued to trade. Entering
the new financial year a significant
proportion of revenues have been
retained, with trading through the
Group’s digital platform and by
telephone. During the lockdown we
suspended hire charges for equipment
not in use in order that the impact
was minimised.
We acted quickly to contain costs and
preserve cash, including halting all
discretionary spend and consolidating
our depot network, temporarily closing
sites and servicing our clients from
alternative locations, thus ensuring
we maintain a national coverage.
We previously utilised the Government’s
coronavirus job retention scheme,
furloughing up to 50% of our workforce.
We continue to monitor Government
guidance and take action to ensure the
safety of our colleagues, as we support
customers continuing to operate.
We have introduced COVID-19 safe
ways of working, restricting access
to our premises and maintaining
social distance. We have increased
opportunity for employees who can
perform duties from home doing so
and intend for this to be offered
as a flexible working option where
appropriate. This involves the utilisation
of our secure and robust infrastructure
and technology platforms.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 45
Strategic ReportCorporate InformationGovernanceFinancial Statements Principal risks and uncertainties continued
Risk
Description and potential impact
Strategy for mitigation
COVID-19 pandemic continued
Supply chain
The supply of goods, services and assets
(including the availability of spares)
may be disrupted. This may also result
in an inability to effectively service our
customers’ requirements.
Speedy operates one of the youngest
hire fleets in the industry and is well
placed to provide asset availability as
a result of better reliability. The age
profile also allows us to optimise
capital expenditure management
during this period, whilst maintaining
customer service.
Based on various revenue downturn
scenarios, and the measures outlined
above, the Board remains confident
that the Group can operate within its
existing debt facilities and covenant
tests during a prolonged period of
reduced trading activity, including
in the event of a further national
lockdown.
46 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Principal risks and uncertainties continued
Risk
Description and potential impact
Strategy for mitigation
Safety, health
and environment
Serious injury or death
Speedy operates, transports and
provides for rental a wide range of
machinery. Without rigorous safety
regimes in place there is a risk of injury
or death to employees, customers or
members of the public.
Environmental hazard
The provision of such machinery
includes handling, transport and
dispensing of substances, including
fuel, that are hazardous to the
environment in the event of spillage.
Climate change
There is a risk that Speedy will fail to
meet climate change targets generally
which in turn may limit our ability to
trade with some of our customers.
Specifically, the delivery locations
for many of our customers require
Speedy to operate in designated low
emission zones.
The Group is recognised for its
industry-leading position in promoting
enhanced health and safety compliance,
together with a commitment to
product innovation. This is achieved
by the Group’s health, safety, and
environmental teams measuring and
promoting employee understanding of,
and compliance with, procedures that
affect safety and protection of
the environment.
We maintain systems that enable us to
hold appropriate industry recognised
accreditations which have been
enhanced further this year with the
introduction of a specialist platform for
managing data and reporting in relation
to Health, Safety and Environment.
The Group has built on its strong
position by embracing the ESG agenda
with the creation of our Energise
programme demonstrating our firm
commitment to our responsibility in
each of these areas. Robust targets
have been set and a director has been
appointed to lead the programme,
reporting to the Chief Executive.
Speedy has incorporated hybrid
and fully electric vehicles into the
commercial fleet to ensure we meet
and in some cases exceed emission
requirements.
All operatives who handle hazardous
substances are trained and provided
with appropriate equipment to manage
small scale spills. In the case of more
serious accidents, we have a contract
with a third party specialist who would
undertake any clean-up operation
as necessary.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 47
Strategic ReportCorporate InformationGovernanceFinancial Statements Principal risks and uncertainties continued
Risk
Service
Description and potential impact
Strategy for mitigation
Provision of equipment
Speedy’s commitment is to provide well
maintained equipment to its customers
on a consistent and dependable basis.
Back office services
It is important that Speedy is able
to provide timely and accurate
management information to its
customers, along with accurate invoices
and supporting documentation.
In both cases, a failure to provide such
service could lead to a failure to attract
or retain customers, or to diminish
the level of business such customers
undertake with Speedy.
During the year we have successfully
extended our nationwide four-hour
service promise under “Trust Speedy
to Deliver” to cover a wider range of
our assets.
Our use of personal digital assistants
(PDAs) and online based customer
feedback system are fully embedded
into our business and these are used
to improve the on-site customer
experience.
Speedy liaises with its customer base
and takes into account feedback where
particular issues are noted, to ensure
that work on resolving those issues
is prioritised accordingly. We have
introduced a Net Promoter Score
metric into our business to drive
improvement through dashboard
reporting at depot level.
During the year we have actively
progressed our Enable project to
upgrade our AX12 ERP system and plan
to move to Microsoft’s Dynamics365.
This will strengthen our customer service
functionality, our back office services and
also provides a range of opportunities for
future enhancements.
48 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Principal risks and uncertainties continued
Risk
Description and potential impact
Strategy for mitigation
Revenue and trading
performance
Competitive pressure
The hire market is fragmented and
highly competitive. We are continuing
to develop strategic relationships with
larger customers and also working
hard to grow our local and regional
accounts.
There is a risk that the Group does
not have an effective route to market
for consumer rentals and this could
lead to a missed opportunity that is
capitalised upon by our competition.
Reliance on high value customers
There is a risk to future revenues
should preferred supplier status with
larger customers be lost when such
agreements may individually represent
a material element of our revenues.
The Group monitors its competitive
position closely, to ensure that it is able
to offer customers the best solution.
The Group provides a wide breadth of
offerings, supplemented by its rehire
division for specialist equipment. The
Group monitors the performance of
its major accounts against forecasts,
strength of client future order books
and individual expectations with a view
to ensuring that the opportunities for
the Group are maximised. Market share
is measured and competitors’ activities
are reported on and addressed where
appropriate. The Group’s integrated
services offering further mitigates
against this risk as it demonstrates
value to our customers, setting us apart
from purely asset hire companies.
No single customer currently accounts
for more than 10% of revenue or
receivables. We have been successful in
growing our SME customer base, which
also helps to mitigate this risk.
We have entered a trial within B&Q
stores which allows the Group to
directly access a marketplace that
provides significant potential for
growth. The Group has restructured
its operational management team to
include a managing director dedicated
to retail based routes to market.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 49
Strategic ReportCorporate InformationGovernanceFinancial Statements Principal risks and uncertainties continued
Risk
Description and potential impact
Strategy for mitigation
Project and change
management
Acquisitions
Our strategy includes selective
acquisitions that complement or
extend our existing business in
specialised markets. There is a risk that
suitable targets are not identified, that
acquired businesses do not perform to
expectations or they are not effectively
integrated into the existing Group.
People
Employee excellence
In order to achieve our strategic
objectives, it is imperative that we are
able to recruit, retain, develop and
motivate employees who possess the
right skills for the Group.
50 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
The Group has a defined process for
monitoring and filtering potential
targets, with input from advisors and
other third parties.
All potential business combinations
are presented to the Board, with an
associated business case, for approval.
Once a decision in principle is made, a
detailed due diligence process covering
a range of criteria is undertaken. Where
necessary, this includes the use of
specialist external support. The results
of due diligence are presented to the
Board prior to formal approval being
granted.
The use of a cross functional project
team ensures effective integration into
the Group. These teams work with a
blueprint plan, modified as needed to
specifically address any risks identified
during the due diligence phase.
A Programme Management Office
function is established with clearly
defined governance in place to oversee
all change initiatives.
Skill and resource requirements for
meeting the Group’s objectives are
actively monitored and action is taken
to address identified gaps. Succession
planning aims to identify talent within
the Group and is formally reviewed
on an annual basis by the Nomination
Committee, focusing on both short and
long-term successors for the key roles
within the Group.
Programmes are in place for employee
induction, retention and career
development, which are tailored to the
requirements of the various business
units within the Group.
The Group regularly reviews
remuneration packages and aims to
offer competitive reward and benefit
packages, including appropriate short
and long-term incentive schemes.
Principal risks and uncertainties continued
Risk
Description and potential impact
Strategy for mitigation
Partner and supplier
service levels
Operating costs
Supply chain
Speedy procures assets and services
from a wide range of sources, both UK
and internationally based. Within the
supply chain there are risks of non-
fulfilment.
Partner reputation
A significant amount of our revenues
come from our rehire offering, where
the delivery or performance is effected
through a third party partner.
Speedy’s ability to supply assets with
the expected customer service is
therefore reliant on the performance
of others with the risk that if this is not
effectively managed, the reputation of
Speedy and hence future revenues may
be adversely impacted.
Fixed cost base
Speedy has a fixed cost base including
people, transport and property.
When revenues fluctuate this can
have a disproportionate effect on the
Group’s financial results.
A dedicated and experienced supply
chain function is in place to negotiate
all contracts and maximise the
Group’s commercial position. Supplier
accreditations are recorded and tracked
centrally through a supplier portal
where relevant and set service related
KPIs are included within standard
contract terms. Regular reviews take
place with all supply chain partners.
Where practical, agreements with
alternative suppliers are in place for
key ranges, diluting reliance on
individual suppliers.
The Group has a purchasing policy in
place to negotiate supply contracts
that, wherever possible, determine
fixed prices for a period of time. In
most cases, multiple sources exist for
each supply, decreasing the risk of
supplier dependency and creating a
competitive supply-side environment.
All significant purchase decisions are
overseen by a dedicated supply chain
team with structured supplier selection
procedures in place. Property costs
are managed by an in-house team of
specialists who manage the estate.
We operate a dedicated fleet of
commercial vehicles that are maintained
to support our brand image. Fuel
is purchased through agreements
controlled by our supply chain
processes.
The growth of our services offering
will help to mitigate this risk as these
activities have overheads that are
more flexible
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 51
Strategic ReportCorporate InformationGovernanceFinancial Statements Principal risks and uncertainties continued
Risk
Description and potential impact
Strategy for mitigation
Cyber Security and
data integrity
IT system availability
Speedy is increasingly reliant on
IT systems to support our business
activities. Interruption in availability
or a failure to innovate will reduce
current and future trading opportunities
respectively.
Data accuracy
The quality of data held has a direct
impact on how both strategic and
operational decisions are made.
If decisions are made based on
erroneous data there could be a direct
impact on the performance of the Group.
Data security
Speedy, as with any organisation, holds
data that is commercially sensitive and in
some cases personal in nature. There is
a risk that disclosure or loss of such data
is detrimental to the business, either as a
reduction in competitive advantage or as
a breach of law or regulation.
Annual and medium-term planning
processes are in place to provide visibility
as to the level and type of IT infrastructure
and services required to support the
business strategy. Business cases are
prepared for any new/upgraded systems,
and require formal approval.
Our planned move to Microsoft’s
Dynamics 365 cloud based platform
reduces the likelihood of system
unavailability and will also improve
system performance levels.
Management information is provided
in all key areas from dashboards that
are based on real time data drawn from
central systems. We have a dedicated data
management team which is responsible
for putting in place procedures to maintain
accuracy of the information provided by
data owners across the business.
Mitigations for IT data recovery are
described below under business
continuity as these risks are linked.
We have formed a data security
governance committee which meets
regularly to monitor our control framework
and reports on a routine basis to the
Audit & Risk Committee.
Speedy’s IT systems are protected against
external unauthorised access. These
protections are tested regularly by an
independent provider. All mobile devices
have access restrictions and, where
appropriate, data encryption is applied.
52 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Principal risks and uncertainties continued
Risk
Funding
Description and potential impact
Strategy for mitigation
Sufficient capital
Should the Group not be able to obtain
sufficient capital in the future, it might
not be able to take advantage of
strategic opportunities or it might be
required to reduce or delay expenditure,
resulting in the ageing of the fleet
and/or non-availability. This could
disadvantage the Group relative to its
competitors and might adversely impact
its ability to command acceptable levels
of pricing.
Economic
vulnerability
Economy
Any changes in construction/industrial
market conditions could affect activity
levels and consequently the prices
that the Group can charge for its
services. Any reduction in Government
expenditure which is not offset by an
increase in private sector expenditure
could adversely affect the Group.
The Board has established a treasury
policy regarding the nature, amount and
maturity of committed funding facilities
that should be in place to support the
Group’s activities.
The £180m asset based finance facility
including an additional uncommitted
accordion of £220m, is available
through to October 2022. Discussions
with a syndicate of banks are at an
advanced stage in relation to renewing
the facility on largely similar terms.
In line with the treasury policy, the
Group’s capital requirements, forecast
and actual financial performance
and potential sources of finance are
reviewed at Board level on a regular
basis in order that its requirements
can be managed with appropriate
levels of spare capacity.
The Group assesses changes in both
Government and private sector
spending as part of its wider market
analysis. The impact on the Group of
any such change is assessed as part of
the ongoing financial and operational
budgeting and forecasting process.
Our strategy is to develop a
differentiated proposition in our chosen
markets and to ensure that we are well
positioned with clients and contractors
who are likely to benefit from those
areas in which increased activity is
forecast. We consistently monitor our
share in each market segment and
seek to balance our risk between
cyclical areas and those which are
more predictable.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 53
Strategic ReportCorporate InformationGovernanceFinancial Statements Principal risks and uncertainties continued
Risk
Business
continuity
Description and potential impact
Strategy for mitigation
Business interruption
Any significant interruption to Speedy’s
operational capability, whether IT
systems, physical restrictions or
personnel, could adversely impact
current and future trading as customers
could readily migrate to competitors.
This could range from short-term
impact in processing of invoices that
would affect cash flows to the loss of
a major site.
Asset holding
and integrity
Asset range and availability
Speedy’s business model relies on
providing assets for hire to customers,
when they want to hire them. In order
to maximise profitability and returns on
deployed capital, demand is balanced
with the requirement to hold a range
of assets that is optimally utilised.
54 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
As described in the paragraph above,
the Group has continued to operate
effectively throughout the COVID-19
pandemic. Management acted promptly
in line with our documented plan to
establish a crisis management team
which co-ordinated the activities
required in a rapidly changing
environment.
Preventative controls, back-up and
recovery procedures are in place for
key IT systems. Changes to Group
systems are considered as part of wider
change management programmes
and implemented in phases wherever
possible. The Group has critical incident
plans in place for all its sites. Insurance
cover is reviewed at regular intervals
to ensure appropriate coverage in the
event of a business continuity issue.
Our understanding of customer
expectation of the relative timescales
for delivery across our range of assets
allows us to reduce holdings of less
time critical assets by centralising the
storage locations, whilst at the same
time increasing the breadth of holding
across our customer trading locations of
those assets most likely to be required
on a short notice basis.
We regularly monitor our asset status
information and use this to optimise
our asset holdings.
We constantly review our range of
assets and introduce innovative
solutions to our customers as new
products come to market, under our
Energise programme.
Viability Statement
The Group operates an annual planning process which includes
a five year strategic plan and a one year financial budget. These
plans, and risks to their achievement, are reviewed by the Board
as part of its strategy review and budget approval processes.
The Board has considered the impact of the principal risks to the
Group’s business model, performance, solvency and liquidity as
set out above.
The Directors have determined that three years is an appropriate
period over which to assess the Viability statement. The
projections for the first three years of the strategic plan are
based on detailed action plans developed by the Group with
specific initiatives and accountabilities. There is inherently less
certainty in the projections for years four and five. The Group
has a £180m asset-based finance facility in place through to
October 2022. The Strategic Plan makes certain assumptions
about the adequacy of facilities and expected renewal on
broadly similar terms to meet the Group’s capital investment
and acquisition strategies.
In making this statement, the Directors have considered the
resilience of the Group, its current position, the principal risks
facing the business in distressed but reasonable scenarios,
including various risks associated with additional global
pandemics as set out above, and the effectiveness of any
mitigating actions.
Based on this assessment, the Directors have a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
period to March 2024.
The going concern statement and further information can
be found in Note 1 of the financial statements.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 55
Strategic ReportCorporate InformationGovernanceFinancial Statements Board engagement
with our stakeholders
Section 172(1) statement
Stakeholder engagement
Section 172 of the Companies Act 2006 requires a director of
a company to act in the way he or she considers, in good faith,
would most likely promote the success of the company for the
benefit of its members as a whole, and in doing so have regard
(amongst other matters) to:
• the likely consequences of any decisions in the long-term;
• the interests of the company’s employees;
• the need to foster the company’s business relationships
with suppliers, customers and others;
• the impact of the company’s operations on the community
and environment;
• the desirability of the company maintaining a reputation
for high standards of business conduct; and
• the need to act fairly as between members of the company.
Each Director and the Board collectively gives careful
consideration to the factors set out above and have acted in a
way they consider complies in all respects with their Section
172(1) duties. Details of how the Board discharged its duties
are set out in the Strategic Report pages 56 to 59 and should be
read in conjunction with information disclosed in the Governance
section, on pages 61 to 100.
To help facilitate this before each scheduled Board meeting all
Directors receive appropriate reports addressing key matters
concerning its customers, suppliers, investors, employees,
regulators and the environment and also information regarding
the Group, comprising a financial report and briefings from senior
executives. The Chief Executive and Chief Financial Officer also
brief Directors on results, key issues and strategy. During Board
meetings, the Non-Executive Directors regularly make further
enquiries of the Executive Directors and seek further information
which is provided either at the relevant meeting or subsequently.
This information and any related reports (provided either before
or after meetings) are considered in the Board’s discussions and
in its decision making process when having regard to Section 172
of the Companies Act 2006.
Engagement with relevant stakeholders is a key consideration
of the Board which varies depending on the subject at hand.
Pages 57 to 59 detail Speedy’s key stakeholders and how we
engage with them.
As mentioned above the Board receives reports from
management concerning its customers, suppliers and others in
a business relationship with the Company which it takes into
account in its discussions and also in the Section 172(1) decision
making process. The Board has also received training relating
to its obligations under Section 172(1) and the consideration of
the Company’s stakeholders.
Employee engagement
In addition to the Board receiving reports from management
concerning its employees the Board engages directly with its
employees in a variety of ways. This includes via its Employee
Forum (attended periodically by Non-Executive Director,
Rob Barclay), via Chief Executive and Chief Financial Officer
‘Up to Speed’ and ‘The Hub’ communications and updates.
Also in a typical year where COVID-19 restrictions do not
apply engagement with employees would additionally be via
the Company’s annual Expo and Excellence Awards. Further
information on employee engagement can be found at pages
33 to 37.
Board decisions and stakeholders
We set out on page 33 an example of how the Directors have had
regard to Section 172(1) when discharging their duties and the
effect that this regard had on the decisions being made. Speedy’s
approach to connecting with our people, customers and suppliers,
is to build a sustainable future, as detailed on pages 24 to 39
through the Company’s Energise programme, whose mission is
to provide safe, reliable equipment and services to enable the
successful delivery of customer projects, and our vision of being
trusted as the best company in our sector to do business with and
the best to work for.
Our key stakeholders
Engagement with our key stakeholders plays an essential role
throughout the business. It is a multi-layered process with
engagement touching all levels of our business from front line
operations to the Board and its Committees.
Our key stakeholders and examples of how we engage is detailed
in the tables on the following pages. Relevant information from
these interactions informs judgements and decision making.
56 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Board engagement with our stakeholders continued
Key stakeholder
Ways we engage
Areas discussed
Customers
• Face to face meetings (where possible),
• Availability of products and services
video-conferencing and calls
(including use of AI)
• Speedy website and mobile apps
• Improved customer service
• Social media
• Range of products and services
• Tendering and RfP processes
• Value for money
• Monitoring of hires, sales and services
• Access to good services
e.g. Speedy App and tracking
• Same day service commitment to
customers on our top selling products
(including Capital Commitment)
• ‘One Speedy’ for first class
customer experience
• Sustainability solutions
• Product development
• Customer services centres
– Speedy Direct
• Regional Hubs
– our regional call centres are
located throughout the country,
with dedicated staff servicing our
regional customer base
• Customer Relationship Centre
– through our central hub in South
Wales, dedicated to servicing our
SME customers
• Service Centre network
– through 200 operational centres
across the UK and Ireland
• B&Q
– through a presence in a growing
number of stores across the UK
• Real time customer satisfaction surveys
• Product videos and peer reviews
• Advertising campaigns
• Speedy Expo1
1 Due to UK Government social distancing restrictions during
FY2021 these events could not take place, however, they are
key events in the annual calendar which will be continued
COVID-19 restrictions permitting.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 57
Strategic ReportCorporate InformationGovernanceFinancial Statements Board engagement with our stakeholders continued
Key stakeholder
Ways we engage
Areas discussed
Employees
• Employee forums (including
• Career opportunities
• Wellbeing (including mental health)
• Training and development
(including safety)
• Pay and conditions
• Colleague engagement
NED attendance)
• Annual People Matters Survey
and pulse surveys
• Launch of Wellbeing surveys
• Apprenticeship and graduate
programmes (Joining the 5%
Club initiative)
• Launch of Career Line of Sight
• Benchmarking of key roles within
the business
• ‘The Hub’ communications platform
to enhance employee intranet and
engagement
• ‘Up to Speed’ e-communications
• Mobile phone and PDA text messaging
• Roadshows and senior management
meetings held at various UK and
Ireland locations
• Training Academy schedule of online,
classroom and practical training
courses
• Personal Development Reviews
• ‘Celebrating Excellence’ scheme
and Excellence Awards1
• Long service recognition scheme
at 10, 20 and 25 years’ service
• Speedy Expo1
• Inclusion in cross functional project
teams to inform project development
1 Due to UK Government social distancing restrictions during
FY2021 these events could not take place, however, they are
key events in the annual calendar which will be continued
COVID-19 restrictions permitting.
58 Strategic Report Speedy Hire Plc Annual Report and Accounts 2021
Board engagement with our stakeholders continued
Key stakeholder
Ways we engage
Areas discussed
Suppliers
Investors
• Tendering processes
• Quality management
• Visits and meetings
• Cost efficiency
(including via video conference)
• Supplier conferences
• Partnership Programme engages
customers, suppliers and peer groups
on key sustainability issues
• Pioneering use of electric vans
• Ethical Trading policy
• Long-term relationships
• Sustainability as part of our
ESG programme
• Product development
reducing CO2
• Industry trade shows
• Product innovation days
• Speedy Expo1
• Annual report
• Financial and operating performance
• Annual General Meeting
• Dividends
• RNS announcements
• Risk information
• Investor presentations and roadshows
• Access to Management
• Corporate website
• Future strategy information
• One-on-one meetings
• Information requests
1 Due to UK Government social distancing restrictions during
FY2021 these events could not take place, however, they are
key events in the annual calendar which will be continued
COVID-19 restrictions permitting.
Strategic Report Speedy Hire Plc Annual Report and Accounts 2021 59
Strategic ReportCorporate InformationGovernanceFinancial Statements Governance
CONTENTS
61
62
Governance
Chairman’s letter
to shareholders
Directors’ Report
Statement of Directors’
65
Responsibilities
66
Board of Directors
68
Corporate Governance
Audit & Risk Committee Report 74
Nomination Committee Report 78
80
Remuneration Report
Independent auditor’s report 101
Chairman’s letter to shareholders
There are a number of changes to report at Board level during
the year: James Bunn was appointed as Chief Financial Officer on
14 September 2020, following Chris Morgan stepping down as
Group Finance Director from 31 July 2020. David Garman took
over as Senior Independent Director from Bob Contreras from
1 August 2021, Shatish Dasani was appointed as Non-Executive
Director and Chairman of the Audit & Risk Committee on 1
February 2021 with Bob Contreras stepping down from the Board
on 17 February 2021. Additionally during the year the search
and selection for a new Non-Executive Director was undertaken
which resulted in the appointment of Carol Kavanagh. Whilst this
appointment will take effect on 1 June 2021, I am pleased that
it will further strengthen our skills and diversity at Board level
moving forwards and am happy to welcome Carol to the Board.
The Board undertook an externally facilitated evaluation last year
and reports further on the implementation and effectiveness of
its recommendations on page 71. This also takes into account this
year’s internal Board evaluation led by David Garman, the Senior
Independent Director.
In accordance with the Code and the Company’s Articles of
Association, all Directors serving at the time of the Annual
General Meeting will be submitting themselves to annual
re-election or where they are a new Director appointed to the
Board since the last Annual General Meeting they will retire
and seek election. This will include the election of James Bunn,
Shatish Dasani and Carol Kavanagh, it being their first AGM
following appointment.
The Annual General Meeting will be held at the offices of
Addleshaw Goddard LLP, One St Peter’s Square, Manchester,
M2 3DE on 9 September 2021 at 11:00am and I would like
to invite our shareholders to attend (subject to any new UK
Government COVID-19 guidance in place at the time of the
meeting).
David Shearer
Chairman
Dear Shareholder
On behalf of the Board I am pleased to present the Governance
Report for FY2021. This section of the Annual Report highlights
the Company’s corporate governance processes (alongside the
work of the Board and Board Committees).
During the year Speedy and many other companies have been
tested in ways that nobody could have foreseen. This has been
reflected in the Board’s activities over the last twelve months
with more frequent ad-hoc meetings and time devoted to both
operational updates and considering the impact of COVID-19
on the business. Overall the inherent strength of Speedy and
the swift and decisive action taken by the Board in response to
COVID-19 along with the great effort and determination of our
staff have ensured we rose to the challenges presented and
are well positioned for future growth.
Throughout the COVID-19 crisis, the Board remained committed
to high standards of corporate governance, with alternative
approaches to meetings via video conference and necessary
changes to how the AGM was held allowing us to accommodate
the full annual programme. This is essential for effective
management and maintenance of investor confidence. I am
satisfied that our approach delivers this and will continue
to evolve in line with changes in best practice and regulation.
I am pleased to confirm, as noted on page 68, that we have
been in full compliance with the provisions of the UK
Corporate Governance Code 2018 throughout the year.
Governance Speedy Hire Plc Annual Report and Accounts 2021 61
Corporate InformationFinancial StatementsStrategic ReportGovernance
Directors’ Report
This section contains additional information which the Directors
are required by law and regulation to include within the Annual
Report and Accounts. This section along with the Chairman’s
statement on pages 10 and 11, the Strategic Report on pages
1 to 59, the Corporate Governance review on pages 68 to 73 and
the reports of the Audit & Risk, Nomination and Remuneration
Committees on pages 74 to 100, which are incorporated by
reference into this report and are deemed to form part of this
report, constitutes the Directors’ Report in accordance with the
Companies Act 2006.
The Strategic Report was approved by the Board and authorised
for issue on 24 May 2021.
The Directors believe that contingency plans against known risks,
and strong progress against strategic goals, will allow the Company
to continue to maximise growth opportunities. Accordingly, as
detailed in Note 1 to the Financial Statements (Accounting policies),
the Directors continue to adopt the going concern basis in preparing
the Annual Report and Accounts.
Substantial shareholders
As at 20 May 2021, the latest practicable date before the
publication of this Annual Report and Accounts, the Company had
been notified under the Disclosure Guidance and Transparency
Rules of the following holders of shares with 3% or more of the
total voting rights in the issued share capital of the Company.
Results and dividends
The consolidated profit after taxation for the year was £9.5m
(2020: £16.8m). This is after a taxation charge of £2.8m (2020:
£3.9m) representing an effective rate of 22.8% (2020: 18.8%).
No interim dividend was paid during the year, given the
disruption from COVID-19. The Directors propose that a final
dividend of 1.4 pence per share be paid, which, if approved at
the forthcoming Annual General Meeting, would make a total
dividend distribution in respect of the year of 1.4 pence per share
(2020: 0.7 pence). The final dividend, if approved, will be paid
on 24 September 2021 to all shareholders on the register at 13
August 2021.
Related party transactions
Except for Directors’ service contracts, the Company did not have
any material transactions or transactions of an unusual nature
with, and did not make loans to, related parties in the period in
which any Director is or was materially interested.
Buy-back of shares
At the Annual General Meeting held on 10 September 2020, a
special resolution was passed to authorise the Company to make
purchases on the London Stock Exchange of up to 10% of its
ordinary shares.
As at 24 May 2021, no shares had been purchased under this
authority. Shareholders will be requested to renew this authority
at the forthcoming Annual General Meeting on 9 September 2021.
Financial instruments
The Group holds and uses financial instruments to finance
its operations and manage its interest rate and liquidity risks.
Full details of the Group’s arrangements are contained in
Note 20 to the Financial Statements.
Going concern
The Directors consider that the Group has adequate financial
resources and has access to sufficient borrowing facilities to
continue operating for the foreseeable future. The Directors
continue to assess the various risks and potential impact
associated with the COVID-19 pandemic, and recognise the
uncertainty of any resultant market impact.
Shareholder name
Schroders Plc
Polar Capital LLP
Standard Life Aberdeen Plc
M&G Plc
Jupiter Fund Management Plc
Aberforth Partners LLP
Directors
Percentage of
voting rights
12.44
7.03
6.98
4.97
4.93
3.87
The Directors who served during the year and the interests of
Directors in the share capital of the Company are set out on page 98.
In accordance with the Company’s Articles of Association and
in compliance with the UK Corporate Governance Code, all new
Directors submit for election at the first Annual General Meeting
following their appointment and all other Directors submit for
annual re-election at each Annual General Meeting.
No Director had any interest, either during or at the end of the year,
in any disclosable contracts or arrangements, other than a contract
of service, with the Company or any subsidiary company. No
Director had any interest in the shares of any subsidiary company
during the year.
Equal opportunities
The Group employed 3,303 people in the UK and Ireland, and
540 people internationally as at 31 March 2021. Following the
sale of the Group’s equipment fleet, stock and other fixed assets
on 1 March 2021 relating to its Middle East business to ADNOC
Logistics and Services LLC (‘ADNOC’) a transitional services
agreement was entered into with ADNOC. This was to support the
transfer of the assets over a four month period, during which time
it is anticipated that the Group's UAE-based employees' contracts
will be terminated and all colleagues be offered re-employment
by ADNOC.
The Group has a clear policy that employees are recruited and
promoted solely based on aptitude and ability. The Group does
not discriminate in any way in respect of race, sex, marital status,
age, religion, disability or any other characteristic of a similar
62 Governance Speedy Hire Plc Annual Report and Accounts 2021
nature. In the case of disability, bearing in mind the aptitude
of the applicant concerned, all reasonable adjustments are
considered to enable employment or continued employment
as well as to ensure that any disabled employees receive equal
treatment in matters such as career development, promotion
and training. Managers at all levels are trained and developed
to adhere to and promote this goal, including receiving training
specifically on diversity matters. Further information on equal
opportunities within the Group is set out on page 39 in the
Strategic Report, along with details of the gender balance of
those personnel in senior management and their reports.
Employee involvement
The Group actively aims to promote employee involvement in
order to achieve a shared commitment from all employees to the
success of the businesses in which they are employed. To support
this, seven regional employee forums meet quarterly with the
chair of each reporting to a group employee forum, again on a
quarterly basis. Rob Barclay in his capacity as the designated
Non-Executive Director for employee engagement periodically
attends the group employee forum quarterly meetings. His
attendance has helped ensure the employee voice is heard in the
boardroom. This enables a greater understanding of workforce
concerns and their consideration in Board decisions, which is
illustrated on pages 56 and 58 along with other methods of
engagement with the workforce.
The Board believes in the effectiveness of financial incentives.
It is the Group’s policy that employees should generally be
eligible to participate in some form of incentive scheme as soon
as practicable after joining the Group, following the conclusion
of any relevant probationary period. Details of annual incentive
arrangements for Executive Directors are summarised in the
Remuneration Committee’s Report on pages 80 to 100.
The Group has a people strategy in place aimed at being an
employer of choice, as can be seen on pages 35 to 37 of the
Strategic Report. The Group makes a number of commitments
to its employees, including pay, engagement and development.
The Board sees employee engagement as a key part of its success.
Further details of how the Board engages with employees and
how it has regard for their interests and views can be seen on
pages 56 to 58 of the Strategic Report.
Exercise of Board powers
In performing its duty to promote the success of the Company
and the wider Group, the Board is committed to effective
engagement and the fostering of relationships with all relevant
stakeholders which is illustrated on pages 56 to 59. To help
facilitate this, monthly management reporting to the Board
addresses key matters concerning relevant customers, suppliers,
investors, employees, regulators and the environment. These
reports are considered in its discussions and influence the Board
decision making process allowing regard to the matters within
Section 172 of the Companies Act 2006. Further information and
a statement on how the Directors have had regard to the matters
set out in Section 172 when discharging their duties is disclosed
on page 56 of the Strategic Report.
Disclosure of information to auditors
The Directors who held office at the date of approval of this
Directors’ Report confirm that, so far as they are each aware, there
is no relevant audit information of which the Company’s auditors
are unaware and each Director has taken all the steps that he
or she ought to have taken as a Director to make himself or
herself aware of any relevant audit information and to establish
that the Company’s auditors are aware of that information. This
confirmation is given and should be interpreted in accordance
with the provisions of Section 418 of the Companies Act 2006.
Auditors
KPMG LLP was reappointed at the Annual General Meeting of
the Company held on 10 September 2020 and its appointment
expires at the conclusion of this year’s Annual General Meeting.
KPMG LLP has expressed its willingness to continue in office.
The Board is recommending KPMG LLP be reappointed as auditors
and resolutions concerning this and to authorise the Directors
to determine the auditors’ remuneration will be put to the
forthcoming Annual General Meeting on 9 September 2021.
The Audit & Risk Committee intends that external audit services
will be retendered in FY2022, for commencement of services
in FY2023.
Takeover Directive information
Where not provided elsewhere in this report, the additional
information required for shareholders as a result of the
implementation of the Takeover Directive into English law is
set out below.
Share capital
As at 31 March 2021, the Company’s share capital comprised a
single class of ordinary shares of 5 pence each. As at 31 March
2021 the issued share capital was 528,180,280 comprising
ordinary shares of 5 pence each. There are no special rights or
obligations attaching to the ordinary shares.
Restrictions on share transfers
The Company’s Articles of Association provide that the Company
may refuse to transfer shares in the following customary
circumstances:
• where the share is not a fully paid share;
• where the share transfer has not been duly stamped with the
correct amount of stamp duty;
• where the transfer is in favour of more than four joint transferees;
• where the share is a certificated share and is not accompanied
by the relevant share certificate(s) and such other evidence
as the Board may reasonably require to prove the title of the
transferor; or
• in certain circumstances where the shareholder in question has
been issued with a notice under Section 793 of the Companies
Act 2006.
These restrictions are in addition to any which are applicable
to all UK listed companies imposed by law or regulation.
Governance Speedy Hire Plc Annual Report and Accounts 2021 63
Corporate InformationFinancial StatementsStrategic ReportGovernance Directors’ Report continued
Shares with special rights
Compensation for loss of office
There are no shares in the Company with special rights with
regard to control of the Company.
Restrictions on voting rights
The Notice of Annual General Meeting specifies deadlines for
exercising voting rights and appointing a proxy or proxies to vote
in relation to resolutions to be passed at the Annual General
Meeting. All proxy votes are counted and the numbers for, against
or withheld in relation to each resolution are announced at the
Annual General Meeting and published on the Company’s website
after the meeting.
Agreements which may result in restrictions on share transfers
The Company is not aware of any agreements between
shareholders which may result in restrictions on the transfer of
securities and/or on voting rights.
Appointment and replacement of Directors
The Company’s Articles of Association provide that all Directors
must stand for election at the first Annual General Meeting after
having been appointed by the Board. Thereafter a Director will
retire from office at each annual general meeting and submit to
re-election.
Articles of Association
The Company’s Articles of Association may be amended by
special resolution of the Company’s shareholders.
There are no agreements between the Company and its
Directors or employees providing for compensation for loss of
office or employment (whether through resignation, purported
redundancy or otherwise) that occurs in the event of a bid for
the Company or takeover.
Statements made as required under s.430(2B) of the Companies
Act 2006 are available on the Company’s website.
Directors’ indemnities
Throughout the financial year and at the date of approval of
the Financial Statements, the Company has purchased and
maintained Directors’ and Officers’ liability insurance in respect
of itself and its Directors. As permitted by the Companies
Act 2006 and the Company's articles of association, it is the
Company’s policy to indemnify its Directors. Qualifying deeds
of indemnity are put in place for all Directors on appointment.
Political contributions
No political donations were made during the year (2020: nil).
Carbon and Energy Reporting
All disclosures concerning the Group’s carbon and energy
consumption (as required under The Companies (Directors’
Report) and Limited Liability Partnerships (Energy and Carbon
Report) Regulations 2018) are included in the ESG section of
the Strategic Report on pages 24 to 39.
Directors’ powers
Annual General Meeting
At the Annual General Meeting to be held on 9 September 2021,
shareholders will be asked to renew the Directors’ power to allot
shares and buy back shares in the Company and to renew the
disapplication of pre-emption rights.
Change of control – significant agreements
There are no significant agreements to which the Company is
a party that may take effect, alter or terminate upon a change
of control following a takeover bid other than in relation to: (i)
employee share schemes; and (ii) the Company’s borrowings,
which would become repayable on a takeover being completed.
Shares in the Company are held in the Speedy Hire Employee
Benefits Trust (‘Trust’) for the purpose of satisfying awards made
under the Company’s Performance Share Plan. Unless otherwise
directed by the Company, the Trustees of the Trust abstain from
voting on any shares held in the Trust in respect of which the
beneficial interest has not vested in any beneficiary. In relation to
shares held in the Trust where the beneficial interest has vested
in a beneficiary, the beneficiary can direct the Trustees how to
vote. As at 24 May 2021 the Trust held 4,413,516 shares in the
Company (0.84% of the issued share capital).
Subject to the UK Government’s guidance and restrictions on
travel and public gatherings in relation to COVID-19 in place at
that time, the Annual General Meeting will be held at the offices
of Addleshaw Goddard LLP, One St Peter’s Square, Manchester,
M2 3DE on 9 September 2021 at 11:00am. A formal Notice of
Meeting, an explanatory circular and a form of proxy will be sent
separately to shareholders.
This report was approved by the Board and signed on its behalf
by James Bunn, Chief Financial Officer. By Order of the Board on
24 May 2021.
James Bunn
Chief Financial Officer
64 Governance Speedy Hire Plc Annual Report and Accounts 2021
Statement of Directors’ Responsibilities
in respect of the Annual Report and Financial Statements
The Directors are responsible for preparing the Annual Report
and the Group and parent Company financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and
parent Company financial statements for each financial year.
Under that law they are required to prepare the Group financial
statements in accordance with international accounting standards
in conformity with the requirements of the Companies Act 2006
and applicable law and have elected to prepare the parent
Company financial statements on the same basis. In addition the
Group financial statements are required under the UK Disclosure
Guidance and Transparency Rules to be prepared in accordance
with International Financial Reporting Standards in conformity with
the requirements of the Companies Act 2006 (“Adopted IFRS”).
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and parent Company and
of the Group’s profit or loss for that period. In preparing each of
the Group and parent Company financial statements,
the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable,
relevant and reliable;
• state whether they have been prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and, as regards the
group financial statements, International Financial Reporting
Standards in conformity with the requirements of the
Companies Act 2006 (“Adopted IFRS”);
• assess the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern; and
• use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
enable them to ensure that its financial statements comply with
the Companies Act 2006. They are responsible for such internal
control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to safeguard
the assets of the Group and to prevent and detect fraud and other
irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Responsibility statement of the Directors in respect
of the Annual Financial Report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of
the company and the undertakings included in the consolidation
taken as a whole; and
• the strategic report includes a fair review of the development
and performance of the business and the position of the issuer
and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole,
is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position and
performance, business model and strategy.
Approved by the Board on 24 May 2021 and signed on its
behalf by:
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the parent Company and
David Shearer
Chairman
Governance Speedy Hire Plc Annual Report and Accounts 2021 65
Corporate InformationFinancial StatementsStrategic ReportGovernance
Board of Directors
1
2
3
4
1. David Shearer
Non-Executive Chairman
3. James Bunn
Chief Financial Officer
Appointment to the Board and Committee memberships
Appointment to the Board
Appointed to the Board as Chief Financial Officer on
14 September 2020.
Skills and experience
James was formerly Chief Financial Officer for the UK Digital
division of GVC Holdings PLC (‘GVC’) based in Gibraltar.
He joined Ladbrokes PLC in 2012 as Finance Director for its
UK Digital business and has subsequently held senior finance
positions within Ladbrokes Coral PLC and then, following its
acquisition, within GVC. Prior to this, James was employed by
TUI Travel PLC from 2001, including as Finance Director:
Commercial from 2008 to 2012. He is a member of the Institute
of Chartered Accountants in England and Wales.
4. David Garman
Senior Independent Director
Appointment to the Board and Committee memberships
Appointed to the Board in June 2017 as Non-Executive Director
and member of the Nomination Committee. Appointed a member
of the Remuneration Committee from 9 November 2017.
Appointed as Senior Independent Director from 1 August 2020.
Skills and experience
David is currently Senior Independent Director at John Menzies plc,
a Non-Executive Director at Troy Income & Growth Trust plc and a
Director of several private companies. David has a broad range of
industrial experience and was previously Chief Executive of TDG
plc (now TDG Limited), a European contract logistics and supply
chain management business, an Executive Director of Associated
British Foods plc and held a variety of management roles at
United Biscuits. He was also the Senior Independent Director at
St Modwen Properties Plc and Phoenix IT plc, and a Non-Executive
Director at Kewill plc and Victoria plc.
N R
Appointed to the Board as Non-Executive Chairman on 1 October
2018. Prior to this appointment David was a Non-Executive Director
of Speedy from 9 September 2016. David is also Chairman of the
Nomination Committee and has previously been a member of each of
Speedy’s Audit & Risk, Nomination, and Remuneration Committees.
Skills and experience
David is an experienced independent director, corporate financier
and turnaround specialist. He is currently Executive Chairman of
Esken Limited on an interim basis, and Non-Executive Chairman of
Socium Group Holdings Limited and the Scottish Edge Fund. David
was previously senior partner for Scotland & Northern Ireland and
a UK Executive Board member of Deloitte LLP, Co-Chairman of
Martin Currie (Holdings) Limited, Chairman of Mouchel Group plc
and Crest Nicholson plc and a Non-Executive Director of City Inn
Limited in each case standing down after completing the successful
restructuring of these businesses. He was also Non-Executive
Chairman of Aberdeen New Dawn Investment Trust plc, Liberty
Living Group Plc and Liberty Living Finance plc: Senior Independent
Director of Renold plc, STV Group plc, Superglass Holdings plc and
Scottish Financial Enterprise, a Non-Executive Director of Mithras
Investment Trust plc and a Governor of The Glasgow School of Art.
N
2. Russell Down
Chief Executive
Appointment to the Board
Appointed to the Board as Group Finance Director in April 2015
and promoted to Chief Executive in July 2015.
Skills and experience
Russell was formerly Group Finance Director (from 2008 to 2015)
at Hyder Consulting Plc (‘Hyder’), the multinational design and
engineering consultancy. He spent 17 years in total at Hyder in
a number of senior roles, including five years as Group Financial
Controller and six years as Regional Finance and Commercial
Director for the Middle East operations based in Dubai. Russell is
a Fellow of the Institute of Chartered Accountants in England and
Wales, having qualified with KPMG LLP, and has previously worked
for container leasing company Cronos as Director of Accounting.
66 Governance Speedy Hire Plc Annual Report and Accounts 2021
Key to Committees:
A Audit & Risk
N Nomination
R Remuneration
Committee Chair
5
6
7
5. Rob Barclay
Independent Non-Executive Director
7. Shatish Dasani
Independent Non-Executive Director
Appointment to the Board and Committee memberships
Appointment to the Board and Committee memberships
Appointed to the Board in April 2016 as Non-Executive Director
and Chairman of the Remuneration Committee and a member of
the Audit & Risk Committee.
Appointed to the Board on 1 February 2021 as Non-Executive
Director. Shatish is Chairman of the Audit & Risk Committee
and a member of the Nomination Committee.
Skills and experience
Skills and experience
Rob is currently the CEO for the National Timber Group (‘NTG’),
the UK’s leading Independent sawmilling and distribution
business. Private equity backed NTG is made up of a number of
market leading brands providing valued added solutions to the
construction industry. He was formerly the Managing Director UK,
Ireland and Middle East of SIG plc, the FTSE 250 market leading
supplier of specialist products to the building and construction
industry between January 2013 and March 2018. Rob joined SIG
in 1997 and held various senior management roles within the
business including Managing Director of SIG Distribution, having
led its creation by bringing together the Group’s UK insulations,
interiors, construction accessories and fixings businesses. Prior to
joining SIG, Rob was a Regional Manager for a global wood products
company based in New Zealand, from where he originates.
Shatish is currently a Non-Executive Director and Audit Committee
Chair of Renew Holdings plc and SIG plc. He is also a Trustee and
Chair of UNICEF UK, the children's charity. Shatish has over 20
years' experience in senior public company finance roles across
various sectors, including building materials, general industrial
and business services. He was Chief Financial Officer of Forterra
plc from 2015 to 2019, during which the company successfully
listed on the Main Market in London. Prior to this, he was CFO
at TT Electronics plc and has also been alternate Non-Executive
Director of Camelot Group plc and Public Member at Network Rail
plc. Shatish is a Fellow of the Institute of Chartered Accountants
in England and Wales, and has extensive international experience
including as regional CFO based in South America.
A N
A R
6. Rhian Bartlett
Independent Non-Executive Director
Appointment to the Board and Committee memberships
Appointed to the Board on 1 June 2019 as Non-Executive
Director and a member of the Audit & Risk, Nomination and
Remuneration Committees.
Skills and experience
Rhian is currently Food Commercial Director at J Sainsbury plc,
having previously held the position of Director of Fresh Foods.
Prior to joining Sainsbury’s she worked at Screwfix Direct, a
Kingfisher plc Group company, as Customer and Digital Director
having previously held the position of Commercial Director. Prior
to Screwfix Rhian was Director UK Trading at eBay, held various
positions with J Sainsbury plc (including Business Unit Director
and Head of On-line Merchandising) and was a Category Manager
and Head of Online Marketing at Homebase.
A N R
Governance Speedy Hire Plc Annual Report and Accounts 2021 67
Corporate InformationFinancial StatementsStrategic ReportGovernance
Corporate Governance
Governance progress
Board and Committee attendance at scheduled meetings
During the year the Company continued to build upon its
governance practices in light of the UK Corporate Governance
Code 2018 and the agreed key actions from its external Board
evaluation in FY2020, to ensure they remain in line with
developing best practice and are suitable for a company of its
size. These key actions and their status following review at this
year’s internal evaluation is reported on at page 71.
The Board appointments during the year of James Bunn as
Chief Financial Officer and Shatish Dasani as Non-Executive
Director and Audit & Risk Committee Chair, together with the
subsequent appointment of Carol Kavanagh as a Non-Executive
Director with effect from 1 June 2021, will further enhance the
Board’s diversity and skills, and help balance Board tenure and
succession planning.
UK Corporate Governance Code compliance
The Board is committed to maintaining high standards of corporate
governance. The Board first reported its compliance with the
Combined Code in 2004. Since then, other than as explained in
previous annual reports and accounts, it has complied in full with
the Combined Code (now the UK Corporate Governance Code)
and continued to develop its approach to corporate governance
and the effective management of risk in the context of an evolving
business. This year the Company is reporting against the UK
Corporate Governance Code 2018 (the ‘Code’). A copy of the 2018
edition of the Code is available to view on the website of the
Financial Reporting Council at www.frc.org.uk. Throughout the year
ended 31 March 2021, the Company has been in full compliance
with the provisions set out in the Code.
Directors
The Board
The Board comprises a Non-Executive Chairman, the two Executive
Directors and four independent Non-Executive Directors.
In the year ended 31 March 2021, the Board met eight times across
the annual scheduled programme. The Board also met as required
for ad hoc meetings to consider the effects of the pandemic and to
deal with other urgent business, including the consideration and
approval of matters that are reserved to the Board. The table above
lists the Directors’ attendance at the scheduled Board meetings
and Committee meetings during the year ended 31 March 2021.
During the year, James Bunn was appointed as Chief Financial
Officer on 14 September 2020. Chris Morgan stepped down as
Group Finance Director on 31 July 2020.
Bob Contreras stepped down from the Board and as Chairman of
the Audit & Risk Committee on 17 February 2021, with Shatish
Dasani being appointed with effect from 1 February 2021 as Non-
Executive Director, Chairman of the Audit & Risk Committee and a
member of the Nomination Committee.
Board
Audit & Risk
(8) Committee (6)
Nomination Remuneration
Committee (2) Committee (5)
Executive Directors
Russell Down
James Bunn1
8/8
5/5
Chris Morgan2
1/2
Non-Executive Directors
David Shearer
8/8
David Garman3
8/8
Rob Barclay4
8/8
Rhian Bartlett
8/8
Shatish Dasani5
2/2
Bob Contreras6
5/6
–
–
–
0/0
3/3
6/6
6/6
0/0
6/6
–
–
–
2/2
2/2
1/1
2/2
0/0
2/2
–
–
–
0/0
5/5
5/5
5/5
0/0
1/1
1 James Bunn was appointed as Chief Financial Officer on 14 September 2020.
2 Chris Morgan stepped down as Group Finance Director on 31 July 2020.
3 David Garman stepped down as a member of the Audit & Risk Committee effective
from 1 August 2020.
4 Rob Barclay stepped down as a member of the Nomination Committee effective
from 1 August 2020.
5 Shatish Dasani was appointed as Non-Executive Director, Chairman of the Audit & Risk
Committee and a member of the Nomination Committee on 1 February 2021.
6 Bob Contreras stepped down as a member of the Remuneration Committee effective
from 1 August 2020 and stepped down from the Board on 17 February 2021.
Directors who are not a member of a Board Committee may attend
meetings at the invitation of the relevant Committee Chair.
The Board has approved a schedule of matters reserved for
decision by it. That schedule is available for inspection at the
Company’s registered office and on the Company’s website. The
matters reserved for decision by the Board can be subdivided into
a number of key areas including, but not limited to:
• financial reporting (including the approval of interim and final
Financial Statements, interim management statements and
dividends);
• approving the form and content of the Group’s Annual Report and
Financial Statements (following appropriate recommendations
from the Audit & Risk Committee) to ensure that it is fair, balanced
and understandable overall and provides the information
necessary for shareholders to assess the Company’s position and
performance, business model and strategy;
• the Group’s finance, banking and capital structure arrangements;
• Group strategy and key transactions (including major acquisitions
and disposals);
• Stock Exchange/Listing Authority matters (including the issue of
shares, the approval of circulars and communications to the market);
68 Governance Speedy Hire Plc Annual Report and Accounts 2021
• approval of the policies and framework in relation to
Board Committees
The Audit & Risk Committee is chaired by Shatish Dasani. Its
other members are Rob Barclay and Rhian Bartlett. Details of
its activities during the year are detailed in the Audit & Risk
Committee Report on pages 74 to 77.
The Remuneration Committee is chaired by Rob Barclay. The other
members are David Garman and Rhian Bartlett. The Committee
Chairman’s Statement, summary Directors’ Remuneration Policy
and Directors Remuneration Report are on pages 80 to 100.
The Nomination Committee is chaired by David Shearer. The
other members are David Garman, Rhian Bartlett and Shatish
Dasani. The Committee therefore satisfies the requirement of
Provision 11 of the Code that a majority of its members are to be
independent Non-Executive Directors. The report on the activities
of the Committee is contained on pages 78 and 79.
The Chairman and other Non-Executive Directors meet after
every Board meeting without the Executive Directors present.
In addition, the Chairman regularly briefs the other Non-Executive
Directors on relevant developments regarding the Company and
Group as necessary. The Senior Independent Director and the
other Non-Executive Directors generally meet after every Board
meeting without the Chairman present, and also undertake an
annual appraisal of the Chairman’s performance as part of the
Board annual appraisal process.
The minutes of all meetings of the Board and each Committee
are taken by the Company Secretary or Assistant Company
Secretary. In addition to constituting a record of decisions taken,
the minutes reflect questions raised by the Directors relating to
the Company’s businesses and, in particular, issues raised from
the reports included in the Board or Committee papers circulated
prior to the relevant meeting. Any unresolved concerns are
recorded in the minutes.
On resignation, written concerns (if any) provided by an outgoing
Non-Executive Director are circulated by the Chairman to the
remaining members of the Board.
Appropriate Directors’ and Officers’ insurance cover is arranged
and maintained via the Company’s insurance brokers, Marsh Ltd,
and is reviewed annually.
remuneration across the Group (following appropriate
recommendations from the Remuneration Committee);
• oversight of the Group’s risk appetite, risk acceptance and
programmes for risk mitigation;
• approval of the Group’s risk management and internal control
processes (following appropriate recommendations from the
Audit & Risk Committee);
• approving the Company’s annual Viability Statement;
• the constitution of the Board itself, including its various
Committees, and succession planning (following appropriate
recommendations from the Nomination Committee); and
• approving the Group’s policies in relation to, inter alia, the
Group’s Code of Conduct and whistleblowing, the Bribery Act,
the environment, health and safety and corporate responsibility.
Matters requiring Board or Committee approval are generally the
subject of a proposal by the Executive Directors, which is formally
submitted to the Board, together with supporting information, as
part of the Board or Committee papers made available prior to the
relevant meeting. Where practicable, papers are generally made
available via an electronic platform at least five days in advance of
such meetings, to allow proper time for review and ensure the best
use of the Directors’ time. The implementation of matters approved
by the Board, particularly in relation to matters such as significant
acquisitions or other material projects, sometimes includes the
establishment of a sub-committee comprising at least one Non-
Executive Director, where relevant.
Chairman and Chief Executive
The posts of Chairman and Chief Executive are held by
David Shearer and Russell Down, respectively.
A statement as to the division of the responsibilities between
the Chairman and Chief Executive is available on the Company’s
website. The Board considered that the Chairman, on his
appointment, met the independence criteria set out in Provision
10 of the Code. The Board has an established policy that the
Chief Executive should not go on to become Chairman.
Board balance and independence
The Board currently comprises the Chairman, two Executive
Directors and four independent Non-Executive Directors: David
Garman, Rob Barclay, Rhian Bartlett and Shatish Dasani. The four
Non-Executive Directors bring a strong and independent non-
executive element to the Board. The Senior Independent Director is
David Garman. The independent Non-Executive Directors and their
respective experience, details of which are set out on pages 66 and
67, clearly indicates that they are of sufficient calibre and number
for their views to carry appropriate weight in the Board’s decisions.
The Board considers that each of David Garman, Rob Barclay, Rhian
Bartlett and Shatish Dasani are independent on the basis of the
criteria specified in Provision 10 of the Code and are free from any
business or other relationship which could materially interfere with
the exercise of their independent judgement.
Governance Speedy Hire Plc Annual Report and Accounts 2021 69
Corporate InformationFinancial StatementsStrategic ReportGovernance Corporate Governance continued
The Companies Act 2006 allows directors of public companies
to authorise conflicts, and potential conflicts of interest of
directors, where the Articles of Association contain a provision to
that effect. The Company’s Articles of Association give the Board
authority to authorise matters which may otherwise result in
the Directors breaching their duty to avoid a conflict of interest.
Directors who have an interest in matters under discussion at
a Board meeting must declare that interest and abstain from
voting. Only Directors who have no interest in the matter being
considered are able to approve a conflict of interest and, in taking
that decision, the Directors must act in a way they consider, in
good faith, would be most likely to promote the success of the
Company. The Directors are able to impose limits or conditions
when giving authorisation if they feel this is appropriate. Any
conflicts considered by the Board and any authorisations given
are recorded in the Board minutes and in the register of conflicts
which is reviewed annually by the Board. The Board considers
that its procedures to approve conflicts of interest and potential
conflicts of interest are operating effectively.
The Board is both balanced and diverse in respect of its
experience and skills. The Board remains committed to
maintaining and building on its diversity and encouraging that
within senior management levels as recruitment opportunities
arise. Any succession planning for the Board recognises this and
diversity in all its aspects is considered in the shortlisting of
candidates.
Appointments to the Board
The Board has established a Nomination Committee. The terms
of reference of the Nomination Committee are published on
the Company’s website. The Committee meets formally as
necessary, but at least twice a year. This is detailed in more depth
in the Nomination Committee Report on pages 78 and 79. The
principal functions of the Nomination Committee are to consider
and review the structure and composition of the Board and
membership of Board Committees. It also considers candidates
for Board nomination including job description, election and
re-election to the Board for those candidates standing for annual
election or re-election at the Annual General Meeting and
succession planning generally, plus ensuring a diverse pipeline.
A specification for the role of Chairman, including anticipated
time commitment, is included as part of the written statement
of division of responsibilities between the Chairman and Chief
Executive. Details of the Chairman’s other material commitments
are set out on page 66 and are disclosed to the Board in advance
and included in a register of the same maintained by the
Company Secretary.
The terms and conditions of appointment of all the Non-Executive
Directors, and those of the Chairman, are available for inspection
at the Company’s registered office during normal business hours.
Each letter of appointment specifies the anticipated level of time
commitment including, where relevant, additional responsibilities
derived from involvement with the Audit & Risk, Remuneration or
Nomination Committees. Details of other material commitments
are disclosed to the Board and a register of the same is
maintained by the Company Secretary.
During the year James Bunn and Shatish Dasani were appointed
to the Board as Chief Financial Officer and a Non-Executive
Director respectively. The search and selection of James Bunn
and Shatish Dasani was supported by external recruitment
consultants Russell Reynolds Associates who have no other
connection with the Company or any of its Directors.
No Director is a Non-Executive Director or Chairman of a FTSE
100 company.
Diversity
The Board recognises the value of diversity in the boardroom
and the benefit to the Group’s overall performance that diversity
across backgrounds, experience, knowledge, skills and gender
can bring. In new appointments, the Nomination Committee
seeks to select individuals who are best able to meet the
recommended requirements of the role and improve overall
diversity of the Board.
70 Governance Speedy Hire Plc Annual Report and Accounts 2021
Corporate Governance continued
Information and professional development
Before each scheduled Board meeting all Directors receive
reports from the Chief Executive and Chief Financial Officer on
results, key issues and strategy. Additionally these reports (and
where relevant additional reports from senior executives) address
key matters concerning the Company’s customers, suppliers,
investors, employees, regulators and the environment. During
Board meetings, the Non-Executive Directors regularly make
further enquiries of the Executive Directors and seek further
information which is provided either at the relevant meeting or
subsequently. This information and any related reports (provided
either before or after meetings) are considered in the Board’s
discussions and in its decision making process when having
regard to Section 172 of the Companies Act 2006.
The Board recognises the importance of tailored induction
training on joining the Board and ongoing training and education,
particularly regarding new laws and regulations which relate to or
affect the Group. Such training and education is obtained by the
Directors individually through the Company, including briefings
from external advisers, through other companies of which they
are Directors or through associated professional firms or as
members of their professional bodies.
Procedures are in place to enable Directors to take independent
professional advice, if necessary, at the Company’s expense,
in the furtherance of their duties. The procedure to enable
such advice to be obtained is available for inspection on the
Company’s website.
All Directors have access to the advice and services of the
Company Secretary, whose role is to ensure that information
is received by the Board in a timely manner, all procedures are
followed and applicable rules and regulations are complied with.
The appointment or removal of the Company Secretary is a matter
specifically reserved for decision by the Board.
Performance evaluation
Following the triennial externally facilitated Board evaluation
in FY2020, the Board evaluation was conducted internally this
year. This was led by the Senior Independent Director. Each of
the Directors completed an evaluation questionnaire and the
results were reviewed by the Senior Independent Director in
a one-to-one meeting with the relevant Board member. The
Senior Independent Director presented his findings to the Board
for discussion led by the Chairman. The internal evaluation
concluded that overall that the Board and its Committees were
effective. The evaluation noted that last year’s external evaluation
had been comprehensive with the agreed recommendations
either being implemented during the year or as agreed still to
be considered as below.
The reduction in the membership of all Board Committees
to three Non-Executive Directors (effective 1 August 2020),
would continue to be evaluated, as with the changes in Board
membership during the year it was too early to determine the
effectiveness of the interaction between the relevant Committee
and the balance of the Board. Other changes relating to the:
• Consideration of appointment of a new Chair for the Nomination
Committee to increase effective allocation of Chairman of the
Board’s time; and
• Review of Rhian Bartlett’s membership of the Remuneration
Committee (to maintain the membership at three),
would both be further reviewed allowing a period for the recently
appointed Non-Executive Directors joining the Board and Board
Committees to settle into their roles.
The Chairman reviewed the performance and development
needs of each of the Executive and Non-Executive Directors.
The Non-Executive Directors, led by the Senior Independent
Director conducted an evaluation of the Chairman, and the Senior
Independent Director discussed the results of that assessment
with the Chairman. No actions were considered necessary as
a result of the evaluation, and the Board is satisfied with the
Chairman’s commitment and performance.
Re-election
Pursuant to the Code and under the Company’s Articles of
Association all Directors must submit to annual re-election (or
where they are a new Director appointed to the Board since the
last Annual General Meeting they will retire and seek election)
at each Annual General Meeting. Biographical details of all
the Directors are included in this report in order to enable
shareholders to take an informed decision on any election/
re-election resolution. The letters of appointment of each of
the Non-Executive Directors and the Chairman confirm that
appointments are for specified terms and that reappointment
is not automatic.
Governance Speedy Hire Plc Annual Report and Accounts 2021 71
Corporate InformationFinancial StatementsStrategic ReportGovernance Corporate Governance continued
Directors’ remuneration
Procedure
The performance related elements of the remuneration of the
Executive Directors form a significant proportion of their potential
total remuneration packages. The performance related schemes
in which the Executive Directors are entitled to participate are set
out in more detail in the Remuneration Report. The Remuneration
Committee, with the advice of FIT Remuneration Consultants LLP
(succeeding Alvarez and Marsal LLP and appointed on 1 October
2020 following the Remuneration Committee’s retender of the
provision of remuneration advisory services) (‘FIT’), reviews the
Company’s Remuneration Policy on a regular basis including
the design of performance related remuneration schemes. Such
performance related elements have been designed with a view
to aligning the interests of the Executive Directors with those of
shareholders and to incentivise performance at the highest level.
The Board has constituted a Remuneration Committee which
met five times during the year. The terms of reference of the
Remuneration Committee are published on the Company’s
website and are fully compatible with Provision 33 of the Code.
The Remuneration Committee members are Rob Barclay, David
Garman and Rhian Bartlett who are independent of management
and free from any business or other relationship which could
materially interfere with the exercise of their independent
judgement. The Chairman, Chief Executive and HR Director attend
by invitation but are not present for discussions relating to their
own remuneration. The Remuneration Committee has appointed
FIT to advise it in relation to the design of appropriate executive
remuneration structures. FIT has no other connection with the
Company or any of its Directors.
The service contracts for Russell Down and James Bunn provide
for termination by the Company on one year’s and nine months’
notice respectively. It is the Company’s current policy that notice
periods on termination of Directors’ contracts should not exceed
12 months.
The policy of the Board is that the remuneration of the Non-
Executive Directors should be consistent with the levels
of remuneration paid by companies of a similar size. The
levels of remuneration also reflect the time commitment and
responsibilities of each role, including Chairmanship of Board
Committees. It is the policy of the Board that remuneration for
Non-Executive Directors should not include share options or any
other share based incentives.
The remuneration of the Non-Executive Chairman is dealt with by
the Remuneration Committee. The remuneration of other Non-
Executive Directors is dealt with by a Committee of the Board
specifically established for this purpose, normally comprising
the Chief Executive and the Chief Financial Officer, without the
presence of the Non-Executive Directors. The remuneration of all
Non-Executive Directors is reviewed annually. The remuneration
of Non-Executive Directors was scheduled to be reviewed at the
end of FY2021 but on agreement by the Non-Executive Directors
this has been postponed for a further 12 months. During the
year, all Directors, including the Non-Executive Directors, agreed
to a 20% reduction in salaries and fees for three months from 1
April 2020. Further details of the remuneration of Non-Executive
Directors are set out on page 93.
The responsibilities of the Remuneration Committee include
setting Remuneration Policy, ensuring that remuneration
(including pension rights and compensation payments) and the
terms of service of the Executive Directors are appropriate and
that Executive Directors are fairly rewarded for the contribution
which they make to the Group’s overall performance. It is also
responsible for the allocation of shares under long-term incentive
arrangements approved by shareholders and in accordance with
agreed criteria. In addition, it monitors current best practice in
remuneration and related issues.
The Board’s policy is that all new long-term incentive schemes
(as defined in the Listing Rules) and significant changes to existing
schemes should be specifically approved by shareholders,
while recognising that the Remuneration Committee must have
appropriate flexibility to alter the operation of these arrangements
to reflect changing circumstances. The Company’s current long-
term incentive scheme was approved by shareholders in 2014.
A more detailed summary of the work of the Remuneration
Committee during the year and the Group’s Remuneration Policy,
which was approved at the Company’s 2020 Annual General
Meeting and which will apply until its Annual General Meeting
in 2023 is contained on pages 80 to 100.
72 Governance Speedy Hire Plc Annual Report and Accounts 2021
Corporate Governance continued
Accountability and audit
Financial reporting
The Directors’ Report and independent auditor’s report appear
on pages 62 to 64 and pages 101 to 109 respectively and comply
with Provisions 27 and 30 of the Code.
Audit & Risk Committee and auditors
The Board has established an Audit & Risk Committee which met
six times during the year. The terms of reference of the Audit &
Risk Committee are published on the Company’s website. Such
terms of reference comply with Provision 25 of the Code. The
Board is satisfied that the Chairman of the Audit & Risk Committee,
Shatish Dasani, has appropriate recent and relevant financial
experience and that the Committee as a whole has competence
relevant to the sector in which the Company operates.
In addition to responsibility for the Group’s systems of internal
control, the Committee is responsible for reviewing the integrity
of the Company’s accounts, including the half and full-year results,
and recommending their approval to the Board.
The Committee meets on a regular basis with the external auditors
and internal audit function to review and discuss issues arising
from internal and external audits and to agree the scope and
planning of future work. The effectiveness of the Group’s internal
audit function is one of the matters reviewed in conjunction with
the external auditors.
The Audit & Risk Committee has primary responsibility for making
a recommendation on the appointment, reappointment and
removal of the external auditors. The policy of the Audit & Risk
Committee is to ensure auditor objectivity and independence is
safeguarded at all times. As further detailed on page 77, the Audit
& Risk Committee considers that the Company’s auditors are
independent.
A more detailed description of the work of the Audit & Risk
Committee during the year is contained in the separate report
of the Committee on pages 74 to 77.
Internal control
The Board is responsible for the Company’s internal control
procedures and processes and for reviewing the effectiveness
of such systems.
The Board, via the Audit & Risk Committee, conducts a review,
at least annually, of the Group’s systems of internal control.
Such a review considers all material controls, including financial,
operational and compliance controls and risk management
systems, and accords with the recommendations contained in the
FRC’s guidance on Risk Management, Internal Control and Related
Financial and Business Reporting (formerly the Turnbull Guidance).
A formal report is prepared by the external auditors, KPMG LLP,
highlighting matters identified in the course of its statutory audit
work, and is reviewed by the Audit & Risk Committee in the
presence of KPMG LLP and, by invitation, the Chief Executive, the
Chief Financial Officer, the Director of Finance and the Head of
Risk and Assurance. The Committee also considers formal reports
prepared and presented by the internal audit function. The
findings and recommendations of the Committee are then formally
reported to the Board for detailed consideration.
Relations with shareholders
Dialogue with institutional shareholders
The Chief Executive and Chief Financial Officer routinely
attend brokers’ and analysts’ presentations, which include
the Company’s half and full-year results. The Chairman, Chief
Executive and Chief Financial Officer, with assistance from the
Company’s brokers, collate feedback from such presentations
and report the findings to the next meeting of the Board.
The Chairman is also available to discuss matters with major
shareholders in relation to, inter alia, results, strategy and
corporate governance issues. The Senior Independent Director,
David Garman, is available to attend meetings with major
shareholders in order to understand their issues and concerns
should the normal communication channels with the Chairman,
Chief Executive or Chief Financial Officer be considered
ineffective or inappropriate.
Constructive use of the Annual General Meeting
The Company’s Annual General Meeting procedures include, as a
matter of course, specifying the level of proxies lodged on each
resolution and the balance for and against each resolution and
votes withheld after each has been dealt with on a show of hands.
It is also the Company’s policy to propose a separate resolution at
the Annual General Meeting on each substantive separate issue,
including in relation to the Annual Report and Accounts and the
Directors’ Remuneration Report.
All Committee Chairmen will be available for shareholders’
questions at the Annual General Meeting subject to the UK
Government’s guidance and restrictions on travel and public
gatherings in relation to COVID-19 in place at the date of the
meeting.
The Company’s standard procedure is to ensure that the Notice
of Annual General Meeting and related papers are sent to
shareholders at least 20 working days before the meeting.
Governance Speedy Hire Plc Annual Report and Accounts 2021 73
Corporate InformationFinancial StatementsStrategic ReportGovernance Audit & Risk Committee Report
general industrial and business services. His biography is set out on
page 67. The Board is satisfied that Shatish Dasani has recent and
relevant financial experience and that the Committee as a whole has
an appropriate balance of skills, experience, qualifications and sector
related knowledge.
Attendance
The Audit & Risk Committee’s agenda is linked to events in the
Group’s financial calendar, and the Committee met on six occasions
during the year. Two of these meetings were scheduled in June 2020,
specifically to consider the FY2020 annual results. Details of the
attendance at Audit & Risk Committee meetings are set out below.
Audit & Risk Committee members and meetings attended
Name
Position
Shatish Dasani1
(Chairman)
Non-Executive Director
David Garman2
Non-Executive Director
Rob Barclay
Non-Executive Director
Rhian Bartlett
Non-Executive Director
Bob Contreras3
Non-Executive Director
Meetings
attended
0/0
3/3
6/6
6/6
6/6
1 Shatish Dasani was appointed on 1 February 2021 as a Non-Executive Director and
Chairman of the Audit & Risk Committee.
2 David Garman stepped down effective from 1 August 2020 as a member of the Committee.
3 Bob Contreras stepped down on 17 February 2021 from both the Audit & Risk Committee
and the Board.
Operation and responsibilities of the Audit & Risk Committee
The Chairman, Chief Executive and Chief Financial Officer, together
with representatives from the external auditors, the Director of
Finance and the Head of Risk and Assurance, are invited to attend
meetings of the Audit & Risk Committee, although the Committee
reserves time for discussions without any invitees being present. The
external auditors and the Head of Risk and Assurance meet privately
with the Audit & Risk Committee to advise the Committee of any
matters which they consider should be brought to their attention
without the Executive Directors present. The external auditors and
the Head of Risk and Assurance may also request a meeting with
the Committee if they consider it necessary. The Risk and Assurance
department carries out the Group’s internal audit work. The Chairman
of the Committee also holds private meetings both with the Head of
Risk and Assurance and the external auditors.
The Company Secretary acts as secretary to the Audit & Risk
Committee. The members of the Committee can, where they judge
it necessary to discharge their responsibilities, obtain independent
professional advice at the Company’s expense.
The Committee undertakes its activities in line with an annual programme
of business. The Audit & Risk Committee’s principal duties are:
Internal controls and risk
• monitoring the effectiveness and appropriateness of internal controls;
• evaluating the Board’s process for identifying and managing
significant risk in the business;
• considering the effectiveness and resourcing of the internal audit function;
Shatish Dasani
Chairman of the Audit & Risk Committee
The Audit & Risk Committee presents its report in relation
to the financial year ended 31 March 2021.
Objectives and terms of reference
The Audit & Risk Committee’s key objectives are to provide oversight
and governance over the effectiveness of the Group’s financial
reporting and internal controls, together with the procedures for
identification, evaluation and management of key risks. The role of
the Audit & Risk Committee in monitoring the integrity of the Group’s
financial affairs is important to shareholders and other stakeholders,
both internal and external. Accordingly, the Committee works closely
with management and external and internal auditors to ensure a best
practice approach to policies and controls. In addition, a key objective
of the Committee is to ensure all financial reporting is fair, balanced
and understandable.
The Audit & Risk Committee is satisfied that the Group’s internal and
external processes are robust and appropriately aligned to delivering
good financial reporting and governance. The Directors confirm that
they have carried out a comprehensive assessment of the principal
risks facing the Group, including those that would threaten its
business model, future performance, solvency or liquidity.
The terms of reference of the Audit & Risk Committee, which include all
matters referred to in the UK Corporate Governance Code, are reviewed
annually by the Committee and changes proposed to the Board. The
current terms of reference can be found at speedyservices.com/investors
and are also available in hard copy from the Company Secretary.
During the year, the Committee was renamed as the Audit & Risk
Committee in order to highlight its role in relation to risk management.
Composition of the Audit & Risk Committee
The Audit & Risk Committee comprises three Non-Executive
Directors: Shatish Dasani (Chairman), Rob Barclay and Rhian Bartlett.
All members are considered by the Board to be independent.
Biographies of each of the members of the Audit & Risk Committee
are set out on page 67. During the year Bob Contreras served as the
Chairman of the Audit & Risk Committee before stepping down on
17 February 2021. David Garman stepped down as a member of the
Committee on 1 August 2020 following the recommendations from
the externally facilitated Board evaluation conducted in FY2020.
The Audit & Risk Committee is chaired by Shatish Dasani, a chartered
accountant with over 20 years’ experience in senior public company
finance roles across various sectors, including building materials,
74 Governance Speedy Hire Plc Annual Report and Accounts 2021
Audit & Risk Committee Report continued
• determining and directing the scope of the internal audit programme;
• appointing or replacing the Head of Risk and Assurance;
• reviewing matters reported through the Group’s whistleblowing
The role and response of the Audit & Risk Committee to these, along
with any corresponding impact on the Group’s Financial Statements,
are discussed in more detail in this report.
policy; and
Existence and valuation of hire equipment
• monitoring performance of the Group’s senior finance personnel
and ensuring their development.
External auditors
• monitoring the effectiveness of the external audit process, including
recommending the appointment, re-appointment and remuneration
of the external auditors;
• liaising with the external auditors in respect of the rotation of audit
partners at appropriate junctures;
• considering and, if appropriate, approving the use of the external
auditors for non-audit work in line with its policy;
• considering the independence of the external auditors, taking into
account: (i) non-audit work undertaken by them; (ii) feedback from
various stakeholders; and (iii) the Audit & Risk Committee’s own
assessment; and
• monitoring and considering the provisions and recommendations
of the UK Corporate Governance Code in respect of external
auditors. This involves a review of the scope of the audit, the auditor’s
assessment of risk, appropriateness of materiality and the key findings.
Financial Statements
• monitoring the integrity of the Group’s Financial Statements and
formal announcements relating to the Group’s performance;
• reviewing the Company’s Viability Statement, challenging
assumptions made with management and, if thought appropriate,
recommending this for approval by the Board and inclusion in the
Annual Report and Financial Statements;
• considering liquidity risk and the use of the going concern basis for
preparing the Group’s Financial Statements; and
• evaluating the content of the Annual Report and Financial
Statements, to advise the Board as to whether it may reasonably
conclude that the Annual Report and Financial Statements is fair,
balanced and understandable overall and provides the information
necessary to enable shareholders to assess the performance,
business model and strategy of the Group.
As part of its annual programme of business the Audit & Risk
Committee regularly receives updates from the external auditors
as to developing accounting standards, and members are expected
to participate personally in relevant briefing and training sessions
during the year.
Significant areas considered during FY2021
During the year, the Audit & Risk Committee considered and
discussed with the external auditors the following items:
• the existence and valuation of hire equipment;
• the going concern basis for the preparation of the
Financial Statements;
• the estimation and disclosure of exceptional items; and
• the valuation of trade receivables.
The hire fleet comprises several million individual assets, represents
the largest asset on the balance sheet, and underpins the Group’s key
revenue streams.
The control environment surrounding the management of the hire
fleet is critical to maintaining an up to date record of the assets
and ensuring that they are correctly valued within the Financial
Statements. In order to gain assurance that the control environment
is operating in a satisfactory manner, the Committee requires internal
audit to review the asset management processes. The findings of
these reviews are considered by the Committee at each meeting.
In addition to considering the appropriateness of the Group’s depreciation
policies, the Committee reviews the valuation of hire equipment taking
into consideration a consistent track record of the Group in disposing of
hire equipment at close to book value. This also incorporates a thorough
review of useful economic lives and residual values.
As a result of the work performed and in conjunction with the
assessment made by the external auditors, the Audit & Risk Committee
is satisfied that hire equipment assets are appropriately valued.
Going concern basis for the preparation of the Financial Statements
The Group has adopted a going concern basis for the preparation
of the Financial Statements. Judgement over the future cash flows
of the business (for a period of at least 12 months from signing the
accounts) and the available headroom from the Group’s borrowing
facilities must be applied in concluding whether to adopt a going
concern basis of preparation. The Audit & Risk Committee has
challenged forecast cash flows, the assumptions applied to derive
the cash flows and availability of finance from existing facilities.
Whilst the Group responded robustly to the COVID-19 pandemic,
the Committee has considered the risks associated with a possible
“third wave” in the UK and the resultant market impact. The
Committee is satisfied that management will respond robustly if
this occurs, as it has done over the last year.
The Group has a £180m asset based finance facility (the ‘facility’)
and an additional uncommitted accordion (£220m) which mature in
October 2022 and has no prior scheduled repayment requirements.
Discussions with the syndicate of banks are at an advanced stage in
relation to renewing the facility on largely similar terms. Throughout
the year, the Group has remained in compliance with its financial
covenants under the Group’s banking facilities.
Based on the expectations of future cash flows and the continued
availability of the banking facilities, the Audit & Risk Committee has
concluded that the available borrowing facilities are adequate for
both existing and future levels of business activity. The Committee
therefore considers that it is appropriate to continue to adopt a
going concern basis in the preparation of the Financial Statements.
Governance Speedy Hire Plc Annual Report and Accounts 2021 75
Corporate InformationFinancial StatementsStrategic ReportGovernance Audit & Risk Committee Report continued
Exceptional items
Action was taken during the year to manage the Group’s cost base
during the COVID-19 pandemic and consequently the network has
been restructured, with a number of depot closures. As a result, costs
associated with property provisions and redundancies have been
recognised as exceptional items. Additional costs associated with
further depot consolidations as management have realigned the
network in the second half of the year have similarly been recognised
as exceptional items.
The Group sold its equipment fleet, stock and other fixed assets
relating to its Middle East business to its principal customer ADNOC
during the year. Taking into consideration the sale proceeds and
carrying values, this generated a gain on disposal which has been
recognised as exceptional.
Geason Training was subject to an assurance visit from a funding
agency in early 2020, and a subsequent claim for amounts overpaid.
The claim was settled in October 2020, within the provision created
in FY2020. During the current year an additional provision has been
made to cover legal and other costs associated with the matter and
ongoing initiatives to improve the business’s position. These costs
have been included as exceptional items.
The Audit & Risk Committee has reviewed the assumptions made
by management and is satisfied, in conjunction with the assessment
made by the external auditors, that the values and associated
disclosures presented in the Financial Statements in respect of
these items are consistent with accounting policies.
Valuation of trade receivables
The Group trades with a large number of customers across a number
of sectors and the carrying amount of receivables from these
customers comprises a substantial current asset. Judgement is
required in determining the extent to which these current assets
will prove irrecoverable, and a provision for this is reflected in the
carrying value of those current assets.
The Audit & Risk Committee considers the levels of provisions
against receivables and any changes to the provisioning policy
recommended by management, taking into account trends within the
ageing profile of the receivables balance, levels of non-collectability
experienced by the business and the economic climate in which the
customers operate including the impact of COVID-19.
As a result of the work performed, the Committee is satisfied that
trade receivables are appropriately valued.
Internal control and risk management
The Board is responsible for the Group’s system of internal control
and risk management and for reviewing its effectiveness. The detailed
review of internal controls has been delegated by the Board to the
Audit & Risk Committee.
The Risk and Assurance Department incorporates the Group’s internal
audit function. The Head of Risk and Assurance reports to the Board
and to the Audit & Risk Committee. The internal audit function
is involved in the assessment of the quality of risk management
and internal controls. It helps to promote and develop further
effective risk management in all areas of the business, including the
embedding of risk registers and risk management procedures within
individual business areas.
The Committee receives detailed reports from the Risk and
Assurance Department at each meeting. The Committee ensured that
questionnaires were circulated to senior management requesting
they notify internal audit of any significant irregularities
in information provided for inclusion in the Financial Statements.
None have been reported.
The Audit & Risk Committee has reviewed the effectiveness of
internal controls and risk management during the year taking
into consideration the framework and risk register maintained by
management, in addition to reports from both internal and external
auditors. The Committee has concluded that internal controls have
operated effectively during FY2021.
Review of the work, effectiveness and independence
of internal audit
The Audit & Risk Committee reviews the effectiveness of the Group’s
internal audit function. This review includes the audit plan and the
level of resource devoted to internal audit, as well as the degree to
which the function can operate free from management restrictions.
The Committee considered the results of the audits undertaken by
the internal audit function and in particular considered the response
of management to issues raised by internal audit, including the time
taken to resolve matters reported. Although internal audit has raised
recommendations for improvement in the normal course of business,
the Audit & Risk Committee is satisfied that none of these constituted
significant control failings during FY2021.
Attribute Standard 1312 of the Chartered Institute of Internal
Auditors (‘CIIA’) International Professional Practices Framework
requires an external quality assessment of internal audit to be
undertaken every five years. The review undertaken in FY2017
concluded that the Group’s internal audit function ‘Generally
Conforms’ to the CIIA standards (the highest possible rating).
In accordance with the standard, it is the intention of the Committee
to commission an external quality assessment during FY2022.
In addition to this, the Head of Risk and Assurance is required to
undertake an annual self-assessment of adherence
to this framework. This self-assessment is considered by the
Audit & Risk Committee during its review of internal audit.
On an annual basis the Audit & Risk Committee circulates a
questionnaire to Directors and senior management inviting
comments on the Risk and Assurance function. The responses
are considered by the Audit & Risk Committee and are used in
conjunction with the other review processes described to determine
whether internal audit is working effectively.
Section E24 of the Chartered Institute of Internal Auditors (‘CIIA’)
Internal Audit Code of Practice requires the Audit & Risk Committee
to explicitly discuss annually the chair’s assessment of the
independence and objectivity of the Head of Risk and Assurance.
The Committee is satisfied that the Head of Risk and Assurance is
independent and will robustly challenge management appropriately.
76 Governance Speedy Hire Plc Annual Report and Accounts 2021
Audit & Risk Committee Report continued
Following the review, the Committee concluded that the Group’s
internal audit function remains effective.
The Internal Audit Charter was reviewed by the Audit & Risk
Committee during the financial year and it was determined
that this remained fit for purpose.
Review of the work, effectiveness and independence
of the external auditors
The Audit & Risk Committee reviews annually the relationship
between the Group and the external auditors and has responsibility
for monitoring the external auditors’ independence and objectivity.
This work includes an assessment of their performance and cost
effectiveness, a review of the scope of their work, as well as their
compliance with ethical, professional and regulatory requirements.
The Committee also reviews any major issues which arise during the
course of the audit and their resolution, key accounting and audit
judgements, and any recommendations made to the Board by the
auditors and the Board’s response. The Committee is responsible for
ensuring that an appropriate relationship is maintained between the
Group and the external auditors.
The policy for the use of the external auditors for non-audit related
purposes was reviewed by the Committee during the financial year
and it was determined that this remained appropriate and no changes
were made. The policy is designed to control the provision of non-
audit services by the external auditors in order to ensure that their
objectivity and independence are safeguarded. The policy provides
that preference should be given to retaining consultants other than
from the external auditors unless strong reasons exist to the contrary,
and that non-audit fees paid to the auditor should not exceed 100%
of the audit related fees paid in that year, and the three-year average
of non-audit fees paid to the auditor should not exceed 50% of the
annual audit fees. The policy further requires that the provision of
any non-audit services by the external auditors is subject to prior
approval by the Audit & Risk Committee. The Committee closely
monitors the amount the Company spends with the external auditors
on non-audit services.
The only non-audit service provided by the auditors in the year relate
to the review of the Company’s half-year results which the Committee
accepted was work best undertaken by the external auditors. These
fees represented 7.2% of the annual audit fees and the three-year
average was 9.6%. Details of the fees, split between audit and non-
audit services, payable to the external auditors are given in Note 5 to
the Financial Statements.
The Audit & Risk Committee considered the external auditor's
performance during the year and reviewed the level of fees charged,
which are considered appropriate given the size of the Group.
Appointment of auditors
Having considered the results of the Audit & Risk Committee’s
work, the Board is recommending the re-appointment of KPMG
LLP as auditors of the Group for FY2022. PricewaterhouseCoopers
will continue to perform the audit of the Group’s Middle Eastern
operations until the business is closed. KPMG LLP has expressed its
willingness to continue as external auditors of the Group. Separate
resolutions proposing its reappointment and the determination of its
remuneration will be proposed at the Annual General Meeting to be
held on 9 September 2021.
As noted previously, the Group’s external audit contract was last
tendered in April 2001. The Audit & Risk Committee recognises
the change made by the UK Financial Reporting Council regarding
the retendering of audit services at least once every ten years for
companies in the FTSE 350 and above. This, alongside the transition
arrangements available under the Companies Act 2006, requires that
a new auditor be appointed for services to commence for the FY2024
audit at the latest. KPMG LLP’s own procedures require the rotation
of the lead audit partner after five years, which took place during
FY2021 with Nick Plumb appointed as lead partner. The Committee
intends that external audit services will be retendered during
FY2022, with the new auditor carrying out the audit for FY2023
following a transition period. In the meantime, the Committee
has recommended that KPMG LLP should remain as auditors as
it is satisfied that KPMG will continue to robustly challenge
management appropriately.
Code of Conduct
The Company remains committed to the highest standards of
business conduct and expects its Directors, employees, consultants
and other stakeholders to act accordingly. The Company has a well-
established Code of Conduct which incorporates a whistleblowing
policy. These policies are actively promoted within the Group. Code
of Conduct training is covered in our induction programme for new
employees and where appropriate, this is reinforced on an annual
basis via an online training course for existing employees.
Communicating with shareholders
The Company places considerable importance on communication
with its shareholders, including both institutions and private
shareholders. The Group’s Chief Executive and Chief Financial Officer
are closely involved with investor relations. The Group’s Chairman
also regularly meets with investors. The views of the Company’s
major shareholders are reported to the Board and are regularly
discussed at meetings of the Board and at the various committees of
the Board, including, where appropriate, the Audit & Risk Committee.
Approval of Annual Report and Financial Statements
Having reviewed the Annual Report and Financial Statements and
made inquiries of management and the external auditors, the
Audit & Risk Committee advised the Board that in its opinion the
Annual Report and Financial Statements was fair, balanced and
understandable overall and provides all the information necessary
to enable shareholders to assess the performance, business model
and strategy of the Group.
This report was approved by the Board on 24 May 2021.
Shatish Dasani
Chairman of the Audit & Risk Committee
Governance Speedy Hire Plc Annual Report and Accounts 2021 77
Corporate InformationFinancial StatementsStrategic ReportGovernance Nomination Committee Report
Nomination Committee members and scheduled meetings
attended during the year:
Name
Position
Meetings
attended
David Shearer
(Chairman)
Non-Executive Chairman
2/2
David Garman
Non-Executive Director
Rob Barclay1
Non-Executive Director
Rhian Bartlett
Non-Executive Director
Bob Contreras2
Non-Executive Director
Shatish Dasani3
Non-Executive Director
2/2
1/1
2/2
2/2
0/0
1 Rob Barclay stepped down as member of the Nomination Committee on 1 August 2020.
2 Bob Contreras stepped down from the Board and Nomination Committee on 17 February 2021.
3 Shatish Dasani was appointed on 1 February 2021 as member of the Nomination Committee.
Operation of the Nomination Committee
The Company Secretary acts as secretary to the Nomination
Committee. The members of the Nomination Committee can,
where they judge it necessary to discharge their responsibilities,
obtain independent professional advice at the Company’s expense.
The Nomination Committee’s duties include, inter alia:
• ensuring that there is a formal and transparent procedure for the
appointment of new Executive and Non-Executive Directors to
the Board and making recommendations to the Board on such
appointments;
• reviewing the size and composition of the Board along with
membership of Board Committees;
• evaluating the balance of skills, knowledge and experience
on the Board;
• ensuring that succession planning is in place for the Board
and senior management;
• ensuring that Non-Executive Directors are able to devote
sufficient time to discharge their duties;
• making recommendations to the Board in respect of Directors
standing for re-election; and
• overseeing the development of a diverse pipeline for
succession to the Board.
David Shearer
Chairman of the Nomination Committee
The Nomination Committee presents its report in relation to the
financial year ended 31 March 2021. Chaired by David Shearer,
the key functions of the Nomination Committee are to review
the structure and composition of the Board, to identify and
propose to the Board suitable candidates to fill Board vacancies,
and to undertake succession planning for Board and senior
management positions.
Composition of the Nomination Committee
The Nomination Committee comprises the Chairman, David
Shearer, and three independent Non-Executive Directors,
David Garman, Rhian Bartlett and Shatish Dasani. Appointments
and attendance at meetings during the year are set out above.
Biographies of the members of the Nomination Committee
are set out on pages 66 and 67.
The terms of reference of the Nomination Committee are
reviewed annually by the Committee and proposed changes
are made to the Board. The current terms are published on
the Company’s website at speedyservices.com/investors and
are also available in hard copy form on application to the
Company Secretary.
Attendance
The Nomination Committee met on two scheduled occasions
during the year but can meet more regularly if required. This
year the Committee also met on two further ad hoc occasions
to deal with the appointments of James Bunn and Shatish
Dasani to the Board. Details of the attendance at scheduled
Nomination Committee meetings are set out in the table above.
At the invitation of the Chairman, the Chief Executive may attend
meetings. The Group’s HR and Transformation Director may also be
invited to attend, particularly where discussions are taking place
around succession planning within the Group.
78 Governance Speedy Hire Plc Annual Report and Accounts 2021
Nomination Committee Report continued
The Nomination Committee leads the process for all Board
appointments, carefully evaluating the skills available on the
Board and how these may be best balanced and enhanced
by agreeing the person specification, selecting external
recruitment consultants, considering all candidates and making
recommendations to the Board for appointment. In selecting
candidates, the Nomination Committee gives due consideration
to the benefits of diversity. All recommendations made are on
merit against objective criteria.
During the year the Nomination Committee undertook all of the
duties set out above and additionally managed the search and
selection process of:
• James Bunn as Chief Financial Officer, appointed on 14
September 2020, following Chris Morgan stepping down as
Group Finance Director on 31 July 2020; and
• Shatish Dasani as Non-Executive Director and Chairman of
the Audit & Risk Committee and member of the Nomination
Committee, appointed on 1 February 2021, with Bob Contreras
stepping down from the Board on 17 February 2021.
The Committee also managed the search and selection process
of Carol Kavanagh who has been appointed as Non-Executive
Director and member of the Remuneration Committee with
effect from 1 June 2021.
The Committee retained Russell Reynolds Associates to support
each of the above search and selection activities, which included
agreement with the Committee of the role scope and the
proposed capability specification for each of the appointments.
Additionally the Committee also reviewed the leadership needs
of the organisation and succession planning for key individuals,
including Executive Directors and Non-Executive Directors.
The review included the identification of talented individuals
for key management roles and development across the Group.
Following the external Board evaluation in FY2020 it was
reported in last year’s annual report and accounts that a number
of changes had been agreed by the Nomination Committee
and would be made to the composition of the Board and its
Committees. The status of those key changes is detailed on
page 71 along with the outcome of this year’s Board and Board
Committee evaluations. The appointment of Shatish Dasani and
Carol Kavanagh as Non-Executive Directors and the appointment
of James Bunn as Chief Financial Officer support the Committee’s
aim to increase diversity at Board level as stated in last year’s
annual report. Additionally, the appointments further enhance
the breadth of skills and size of the Board, whilst balancing
Board tenure to allow for routine review of succession planning
over the coming years.
Diversity
Continuing to develop an increasingly diverse and inclusive
workforce is an important factor in supporting the Company’s
strategy which additionally helps create a sustainable and
prosperous business. The appointment of Carol Kavanagh,
effective 1 June 2021, as an additional Non-Executive Director,
with her extensive experience in business transformation and
people related matters (reported as targeted experience in last
year’s annual report and accounts), will further strengthen the
expertise of the Board in these areas and further broaden its
diversity. More generally the Group’s approach to equality and
diversity can be seen on page 39 of the Strategic Report, along
with details of the gender balance of those personnel in senior
management and their direct reports.
The Nomination Committee has recommended the re-election
of all Directors standing for re-election at the forthcoming
Annual General Meeting.
This report was approved by the Board on 24 May 2021.
David Shearer
Chairman of the Nomination Committee
Governance Speedy Hire Plc Annual Report and Accounts 2021 79
Corporate InformationFinancial StatementsStrategic ReportGovernance Remuneration Report
Rob Barclay
Chairman of the Remuneration Committee
Annual Statement
The Remuneration Committee presents its report in relation to
the financial year ended 31 March 2021. This year’s report has
been split into three sections:
• this Annual Chair’s Statement summarising major decisions
and any relevant changes to remuneration;
• a summary of the Remuneration Policy Report, which sets out
the Group’s policy on the remuneration of the Executive and
Non-Executive Directors; and
• the Annual Report on Remuneration outlining how the
Group’s Remuneration Policy was implemented in FY2021.
As the Committee is not proposing any changes to the three year
Remuneration Policy (originally approved by the Shareholders
at the 2020 Annual General Meeting (‘AGM’)) only this Annual
Statement and the Annual Remuneration Report will be subject
to an advisory vote at the 2021 AGM.
Performance for FY2021
The Group managed its cost base and cash resources tightly
throughout the COVID-19 pandemic. In the first half year up to
66% of our depot network was closed and up to 50% of staff
were furloughed; all capital expenditure was suspended, unless
specifically required to meet customer orders. By September
revenue had substantially recovered as customers returned to
work, new work was secured and existing contracts renewed;
consequently no staff remained on furlough into the second half
year. Despite prolonged periods of lockdown, in the fourth quarter
UK and Ireland core hire revenue was 4% ahead of the prior year.
80 Governance Speedy Hire Plc Annual Report and Accounts 2021
Remuneration for FY2021 and the Committee’s
response to Covid-19
In response to the challenges presented by the Covid-19 pandemic:
• Executive Director salary levels were not increased from 1 April
2020 and it was agreed that the salary review date be deferred
(and this was ultimately cancelled);
• All Directors (and senior management) agreed to a 20% reduction
in salaries/fees for three months from 1 April 2020;
• The introduction of the annual bonus plan was delayed and then
ultimately withdrawn for the first six months of the year to reflect
the uncertainty surrounding the impact of Covid-19 and that the
Company had relied on Government support for some of this
period. Once Government support in respect of Job Retention
Schemes had ceased and tax deferrals had been paid, a bonus
plan was introduced for the second half of the year, albeit the
maximum potential was reduced to 50% of salary to reflect the
shortened performance period and stretch PBT targets were set;
and
• PSP awards were delayed until November 2020 and given the
difficulty in setting robust three-year EPS targets at that time and
the Committee’s desire to see the share price return to pre-Covid
levels, rather than the normal EPS and relative Total Shareholder
Return targets, the awards were 100% based on absolute Total
Shareholder Return targets.
In respect of the variable pay out-turns for the year ended
31 March 2021:
• A bonus opportunity was introduced for the second half of the
financial year only, limited to a maximum target of 50% of annual
salary. Due to a strong second half to the financial year it resulted
in a bonus award of 70.54% of the maximum potential (equating
to 35.27% of annual salary) which was based on challenging
Group PBT targets. On the basis that the Company had not utilised
Job Retention Schemes (and no staff were on furlough) post 30
September 2020, all tax deferrals were paid by this date, and in
the context of the Company’s strong share price recovery, the
Committee concluded that a bonus award for the six months to
31 March 2021 was appropriate in the circumstances; and
• The Performance Share Plan (‘PSP’) awards granted in 2018
vested on 24 May 2021 at 48.51% of the maximum based on
below threshold performance against the EPS targets (50% of
awards) and significantly above median Total Shareholder Return
(50% of awards) as measured against the FTE 250 (excluding
investment trusts).
The Committee is satisfied that total remuneration paid to the
Executive Directors in respect of FY2021 was appropriate
when the approach to mitigating the impact of Covid-19 and
the Company’s performance in the second half of the year to
31 March 2021 are considered.
Remuneration Report continued
Discretion
PSP
The Committee did not apply discretion (positive or negative)
during the year ended 31 March 2021.
Application of the Remuneration Policy
in FY2022
Base salary
Following a detailed review of Russell Down’s base salary of
£387,700 in advance of the normal 1 April 2021 review date
(noting that the 1 April 2020 review date was ultimately cancelled),
the Remuneration Committee has concluded that it is significantly
below market levels. However, the Committee does not consider
that it would be appropriate to make an award above workforce
inflationary increase from 1 April 2021 in light of the ongoing
pandemic. As such, a workforce aligned increase of 2% was
awarded from 1 April 2021.
However, the Remuneration Committee does intend to move
Russell’s salary to the market level on a phased basis over the
next two years, with above workforce increases from 1 April 2022
and 1 April 2023, subject to ongoing individual and Company
performance. Major shareholders will be consulted in advance
of any increase being agreed and full disclosure of the intended
salary increase from 1 April 2022 will be set out in next year’s
Directors’ Remuneration Report.
Following the recruitment of James Bunn during the year ended
31 March 2021, his salary of £325,000, which is considered to be
market aligned, was increased by 1% from 1 April 2021 which is
in line with the general workforce (based on James’ appointment
commencing approximately mid-way through the financial year).
The PSP will continue to operate as the Company’s primary
long-term incentive arrangement, whereby awards over shares
will normally vest three years from grant, subject to continued
employment and performance.
PSP awards for FY2022 will be granted over shares equal to no
more than 100% of salary (i.e. below the normal 150% of salary
maximum) and the Committee will consider the prevailing share
price at the time of grant. Performance metrics are expected to be
based on EPS and Total Shareholder Return and full details of the
targets will be set out in the RNS which will be issued immediately
following grant.
Pay and practices in the wider Group
When considering the Remuneration Policy for the Executive
Directors, the Remuneration Committee takes into account pay and
employment conditions across the Company. Every employee in
Speedy participates in a discretionary bonus scheme relevant to
their role, ensuring all employees are able to share in the success
of the organisation. In addition, alongside the annual Company
wide salary review process, which continues to ensure that all
employees are paid above the National Living Wage, further
increases have been given to employees in key roles where
recruitment and retention is a priority. Our apprentices are paid
well above the relevant apprentice minimum wage during their
first year and then at least the relevant minimum or living wage
until they transfer off the apprenticeship scheme, at which point
they are paid above the National Living Wage. As required by
the Regulations, we have disclosed the ratio between the Chief
Executive’s remuneration and that of the median, lower and upper
quartile of UK employees. Further details can be found on page 100.
Pension
Shareholder engagement
Russell Down’s pension allowance of 15% will reduce to be fully
aligned to the level of the majority of the UK workforce by the end
of the current policy period to the 2023 AGM.
The annual Company pension allowance for James Bunn will
continue to be set at a UK workforce aligned 3% of base salary.
Annual bonus
For the financial year beginning 1 April 2021, notwithstanding
that the maximum annual bonus opportunity in the Remuneration
Policy was increased to 125% of salary at the 2020 AGM,
potential will be set at 100% of salary in line with past practice.
Performance metrics will be based on group profit before tax
(70%), strategic (15%) and ESG (15%) targets to reflect Speedy’s
financial and strategic priorities for the year ahead. Outstanding
performance will be required for the maximum bonus to become
payable. The performance targets are deemed to be commercially
sensitive at the current time but full details of the targets and the
actual performance against those targets will be disclosed on a
retrospective basis in next year’s Annual Report and Accounts.
The Committee takes an active interest in any shareholder views
on the Company’s executive remuneration and is mindful of the
concerns of shareholders and other stakeholders. We will continue
to take into account the views of our shareholders as appropriate.
The Committee was pleased by the strong support received from
shareholders for the new Remuneration Policy and Annual Report
on Remuneration at the 2020 AGM.
Conclusion
Our Directors’ Remuneration Policy continues to drive the intended
performance from the Executive Directors in challenging market
conditions.
I hope you find this report clear and helpful in understanding our
remuneration policy and practices, and I look forward to receiving
continued shareholder support for the related shareholder
resolution at our AGM.
This report was prepared by the Remuneration Committee
and approved by the Board on 24 May 2021.
Rob Barclay
Chairman of the Remuneration Committee
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Directors’ Remuneration Policy Report
The key principles of the policy are:
This part of the Directors’ Remuneration Report sets out a
summary of the Directors’ Remuneration Policy which was
approved at the 10 September 2020 AGM. The full Remuneration
Policy as approved by shareholders can be found in the 2020
Annual Report. The Remuneration Committee’s current intention
is that the revised policy will operate for the balance of the three
year period to the 2023 AGM.
Policy overview
The primary objective of the Remuneration Policy is to promote
the long-term success of the Group. In working towards the
fulfilment of this objective the Remuneration Committee takes
into account a number of factors when setting the Remuneration
Policy for the Executive Directors including the following:
• the need to attract, retain and motivate high calibre Executive
Directors and senior management;
• internal pay and benefits levels, and practice and employment
conditions within the Group as a whole;
• the recommendations set out in the UK Corporate Governance
Code and the views of shareholders and their representative
bodies; and
• periodic external comparisons to examine current market trends
and practices and equivalent roles in similar companies taking
into account their size, business complexity, international scope
and relative performance.
Our remuneration structure is intended to be simple and
transparent, and to contribute to the building of a sustainable
performance culture. The main elements of the remuneration
package for Executive Directors are a base salary, benefits
and pension provision and, subject to stretching performance
conditions, an annual bonus plan and shares awarded under a
Performance Share Plan (‘PSP’).
• Clarity: maintain transparency of our competitive total
remuneration structure that is driven by our business strategy
and model, focuses on sustained long-term value creation and
is aligned with the interests of shareholders;
• Predictability: to ensure that targets set each year result
in stretching ambitions and that the scale of the reward is
proportionate;
• Simplicity: ensure the remuneration structure avoids
unnecessary complexity, with a reward package that balances
short and long-term performance, rewarding Company and
personal performance;
• Risk is appropriately managed: the remuneration of Executive
Directors provides an appropriate balance between fixed and
performance related pay elements: restraint on fixed pay, with a
substantial proportion of total remuneration based on variable
pay linked to performance;
• Alignment to culture: the remuneration principles encourage
behaviour that the Committee expects; and
• Proportionality: the link between individual awards, the delivery
of strategy and the long-term performance of the Group is clear.
As a result, the Remuneration Committee has determined
that the remuneration of Executive Directors will provide an
appropriate balance between fixed and performance related
pay elements. The Remuneration Committee will continue to
review the Remuneration Policy to ensure it takes due account
of remuneration best practice and that it remains aligned with
shareholders’ interests.
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Directors’ Remuneration Policy table
Salary
Purpose and
link to strategy
Recognises the knowledge, skills and experience, as well as the size and scope of the role.
Provides an appropriate level of basic fixed income avoiding excessive risk arising from over
reliance on variable income.
Operation
Normally reviewed annually with changes typically effective 1 April.
Paid in cash on a monthly basis.
Pensionable.
Comparison against companies with similar characteristics and sector peers are taken into
account in review.
Internal reference points, the responsibilities of the individual role, progression within the role
and individual performance are also taken into account.
Maximum
There is no prescribed maximum annual basic salary or salary increase.
Salary increases are awarded at the discretion of the Committee. Salary increases (in percentage
of salary terms) will ordinarily be considered in relation to those applied to the broader employee
population.
The Committee retains discretion to award a lower or a higher increase to recognise, for example,
the performance and contribution of an individual; an increase in the scale, scope or responsibility
of the role and/or to take account of relevant market movements.
Where an Executive Director’s salary is set below market levels at appointment, a series of
increases may be given (in addition to the factors listed above) in order to achieve the desired
salary positioning, subject to satisfactory individual performance.
Performance targets
None, although the overall performance of the individual is considered as part of the
review process alongside the factors described in how we operate the salary policy.
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Directors’ Remuneration Policy table
Benefits
Purpose and
link to strategy
To provide a competitive benefits package.
To promote recruitment and retention.
Operation
Benefits may include a car or car allowance, health benefits including permanent incapacity
and life insurance.
Other benefits including relocation allowances may be offered if considered appropriate and
reasonable by the Committee. Executive Directors may be eligible for other benefits which are
introduced for the wider workforce on broadly similar terms.
Any reasonable business related expenses can be reimbursed (including the tax thereon if
determined to be a taxable benefit).
Executive Directors are also eligible to participate in any all employee share plans operated by
the Company, in line with prevailing HMRC guidelines (where relevant), on the same basis as for
other eligible employees.
Defined contribution and/or pension allowance.
Maximum
There is no maximum limit, but the Committee reviews the cost of the benefits provision on a
regular basis to ensure that it remains appropriate. The value of benefits is based on the cost to
the Company and varies according to individual circumstances.
The maximum level of participation is subject to the limits imposed by HMRC from time to time
(or a lower cap set by the Company).
Performance targets
N/A
Pension
Purpose and
link to strategy
Provide market competitive retirement benefits, to reward sustained contribution.
Operation
Defined contribution and/or pension allowance.
Maximum
For new Executive Directors appointed after the 2020 AGM, Company contribution levels will be
aligned to those available to the majority of the UK workforce, from time to time, currently 3% of salary.
For incumbent Executive Directors the maximum pension is 15% of basic salary p.a. which will
be further reduced to be fully aligned to the level of the majority of the UK workforce by the end
of the policy.
Performance targets
N/A
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Directors’ Remuneration Policy table
Bonus
Purpose and
link to strategy
Incentivise delivery of specific strategic objectives, including financial performance
and personal annual goals.
Maximum bonus only payable for achieving demanding targets.
Operation
Annual awards based on targets set by the Committee normally at the beginning of each
financial year.
The extent to which the performance measures have been achieved is determined by the
Committee after the end of the performance period. The level of bonus for each measure is
determined by reference to the actual performance relative to that measure’s performance targets,
on a pro-rata basis.
All bonus payments are at the ultimate discretion of the Committee and the Committee retains an
overriding ability to ensure that overall bonus payments reflect its view of corporate performance
during the year when determining the final bonus amount to be awarded.
Annual bonus awards up to 100% of salary are normally payable in cash (although the Committee
reserves the right to deliver some or all of the bonus in shares which may be deferred).
For financial years commencing after the policy is approved, the portion of any bonus paid,
in excess of 100% of salary, will normally be compulsorily deferred into shares, for two years.
Malus and clawback provisions apply to allow recoupment of bonus (including as to any deferred
portion) for three years from the bonus payment date in the event of material misstatement of
performance, a significant failure of risk management, serious misconduct, corporate failure or
reputational damage.
Participants may also be entitled to receive dividend equivalents on vested shares.
Any dividend equivalents would normally be delivered in shares.
Maximum
The annual bonus policy maximum is 125% of salary in any financial year.
Performance targets
Performance metrics will be set for each financial year by the Committee aligned to the
Company’s key strategic objectives.
Group financial measures (e.g. profit before tax) will apply.
Personal and/or strategic KPIs may apply for a minority of the bonus.
The performance metrics and targets are reviewed annually to ensure they remain appropriate.
The Committee retains the discretion to set alternative metrics as appropriate.
Performance measured over one financial year.
No more than 50% of the maximum opportunity will be payable for on-target performance.
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Directors’ Remuneration Policy table
Performance Share Plan
Purpose and
link to strategy
Aligned to main strategic objectives of delivering long term value creation.
Align Executive Directors’ interests with those of shareholders.
To recruit and retain Executive Directors.
Operation
Discretionary conditional awards or nil or nominal cost options are normally granted annually.
The Committee reviews the quantum of awards annually and monitors the continuing suitability
of the performance measures.
Awards vest subject to performance conditions normally measured over three financial years.
A two-year post vesting holding period requirement, which continues to apply post employment
for shares that vest, net of sales to settle tax or other withholding due on the vesting or exercise
of awards.
Malus and clawback provisions apply to allow recoupment for a period of three years following the
vesting of an award, in the event that the value of a vested award is subsequently found to have
been overstated as a result of a material misstatement of performance, a significant failure of risk
management, serious misconduct, corporate failure, reputational damage, or any other matter which
the Committee deems relevant.
Participants may also be entitled to receive dividend equivalents on shares which vest.
Any dividend equivalents accrued will normally be delivered in shares.
All awards are subject to the discretions contained in the relevant plan rules.
Maximum
Maximum annual awards of 150% of salary in any financial year may be granted.
Performance targets
Performance normally measured over three years.
Awards currently vest based on performance against stretching relative Total Shareholder Return
targets and/or absolute Earnings Per Share targets set and assessed by the Committee. However,
different measures may be set for future award cycles, as appropriate, to reflect the strategic
priorities of the business at that time.
Performance underpins may also apply.
A maximum of 25% vests at threshold increasing to 100% vesting at maximum on a straight
line basis.
The Committee retains discretion to override formulaic outcomes in deciding the level of vesting to
reflect wider Company performance. Any exercise of discretion will be fully disclosed to shareholders.
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Directors’ Remuneration Policy table
Shareholding requirements
Purpose and
link to strategy
To strengthen the alignment between the interests of the Executive Directors and those
of shareholders.
Operation
In accordance with best practice, share ownership requirements apply during and after employment.
In-employment shareholding requirement
Executive Directors will normally be required to retain at least 50% of the shares acquired on
the vesting of share awards, net of tax, until the required level of shareholding is achieved.
Deferred bonus shares, vested PSP shares, shares subject to a holding period and open market
purchase shares, including shares held by a spouse or children under 18 count towards this limit,
on a net of tax basis.
Newly appointed Executive Directors would normally be expected to achieve the required
shareholding within five years of the date of appointment.
Existing Executive Directors would normally be expected to achieve the increased requirement
within a reasonable timeframe of the adoption of the policy.
Post-employment shareholding requirement
Executive Directors will normally be required to retain a shareholding until the second anniversary
of the date they ceased to be an Executive Director.
The post-cessation shareholding requirement will apply to shares acquired (net-of-tax) under awards
granted under this policy. Shares acquired under all employee share plans or purchased from the
Executive Directors’ own funds would not be included.
Maximum
Executive Directors are required to build up and maintain an in employment shareholding worth
at least 200% of base salary.
Executive Directors will normally be required to retain a shareholding at the level of the
in employment shareholding requirement, or the actual shareholding on cessation if lower,
for a period of 12 months post employment; reducing to 50% of the year one holding for the
subsequent 12 months.
Performance targets
N/A
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Directors’ Remuneration Policy table
Non-Executive Directors
Purpose and
link to strategy
Operation
To attract and retain high calibre Non-Executive Directors.
The Non-Executive Directors’ fees are set by the Board on the recommendation of the
Executive Directors. No Director takes part in discussions relating to their own remuneration.
The fees are set taking into account the time commitment and responsibilities of the role.
Additional fees may be payable in relation to extra responsibilities undertaken such as chairing
a Board Committee and/or a Senior Independent Director or other designated role or being a
member of a committee.
If there is a temporary yet material increase in the time commitments for Non-Executive Directors,
the Board may pay extra fees on a pro-rata basis to recognise the additional workload.
Fees are normally paid monthly in cash and are normally reviewed annually.
Expectation that individuals build and maintain a shareholding equal to 100% of fees.
Non-Executive Directors can be reimbursed for any reasonable business related expenses
(including the tax thereon, if determined to be a taxable benefit).
Non-Executive Directors do not participate in incentive or pension plans and are not eligible
to receive benefits.
Maximum
There is no prescribed maximum fee or fee increase. Total fees for the Non-Executive Directors
are subject to the overall limit set out in the Company’s Articles of Association.
Any increase will be guided by changes in market rates, time commitments and responsibility levels.
Performance targets
N/A
Notes:
1 The choice of the performance metrics applicable to the annual bonus scheme reflect the Remuneration Committee’s belief that any incentive compensation should be appropriately
challenging and tied to both the delivery of key financial targets and individual and/or strategic performance measures intended to ensure that Executive Directors are incentivised to deliver
across a range of objectives for which they are accountable. The Remuneration Committee has retained some flexibility on the specific measures which will be used to ensure that any
measures are fully aligned with the strategic imperatives prevailing at the time they are set.
2 The performance conditions applicable to the PSP awards were selected by the Remuneration Committee on the basis that a combination of relative TSR and key financial objectives provides
strong alignment with the delivery of long-term returns to shareholders and incentivises strong Group financial performance – consistent with the Company’s objective of delivering superior
levels of long-term value to shareholders. The Remuneration Committee has retained flexibility on the measures which will be used for future award cycles to ensure that the measures are
fully aligned with the strategy prevailing at the time the awards are granted. Notwithstanding this, the Remuneration Committee would seek to consult with major shareholders in advance of
any material change to the choice or weighting of the PSP performance measures.
3 The Remuneration Committee operates the annual bonus, PSP and all employee share plans in accordance with the relevant plan rules and where appropriate, the Listing Rules and HMRC
legislation. The Remuneration Committee, consistent with market practice, retains discretion over a number of areas relating to the operation and administration of the plans. These include,
for example, selecting the participants, the timing and quantum of awards and setting performance criteria each year, determining “good leaver” status, determining the extent of vesting
based on the assessment of performance, form of payment, discretion to retrospectively amend performance targets in exceptional circumstances (providing the new targets are no less
challenging than originally envisaged) and in respect of share awards, to adjust the number of shares subject to an award in the event of a variation in the share capital of the Company.
4 Consistent with HMRC legislation, the all employee Sharesave scheme does not have performance conditions.
5 Directors are eligible to receive payment, and any existing award may vest, in accordance with the terms of any such award made prior to the approval of the Remuneration Policy detailed
in this report, and in accordance with the provisions of the Remuneration Policy in force at the time such award or right to receive payment was made or granted.
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How employees’ pay is taken into account
The Remuneration Committee does not directly consult with
employees regarding the remuneration of Executive Directors.
However, the Chairman of the Committee is the designated
employee Non-Executive Director and is involved in employee
forum meetings and matters concerning employees across the
UK. Pay and conditions across the Group are considered when
designing the policy for Executive Directors and continue to
be considered in relation to implementation of the policy. The
Remuneration Committee regularly interacts with the HR function
and senior operational executives and monitors pay trends across
the workforce. Salary increases will ordinarily be (in percentage
of salary terms) in line with those of the wider workforce. The
requirement to consider wider pay and employment conditions
elsewhere in the Group is considered by the Remuneration
Committee to be a key objective and is embedded in the
Remuneration Committee’s terms of reference. Speedy discloses
the pay ratio for the Chief Executive, compared to that of UK
employees at the median, lower and upper quartile and the
year-on-year trends will be considered in the wider context of
employee pay at Speedy.
How the Executive Directors’ Remuneration Policy
relates to the wider Group
The Remuneration Policy described above provides an overview
of the structure that operates for the most senior executives
in the Group. Employees below executive level have a lower
proportion of their total remuneration made up of incentive
based remuneration, with remuneration driven by market
comparators and the impact of the role in question. Long-term
incentives are reserved for those judged as having the greatest
potential to influence the Group’s strategic direction, earnings
growth and share price performance.
Consistent with the Group’s approach of recognising the
contribution of its employees at all levels in the business, the
Group operates bonus incentives throughout the Group, a long-
term service award scheme under which employees serving 10,
20 and 25 years receive a range of additional benefits, including
additional days of annual holiday entitlement. These benefits are
popular amongst employees and the Group believes that they
fulfil a business need by encouraging and rewarding the loyalty
and motivation of long serving employees and by rewarding
those employees with higher levels of experience.
How shareholders’ views are taken into account
The Remuneration Committee considers shareholder feedback
received in relation to the AGM each year and shareholder
views on our executive remuneration policy more generally.
The Committee consulted proactively with our major shareholders
on the Remuneration Policy and revisions were made to take
account of the feedback received where appropriate. Outside of
this, the Remuneration Committee seeks to engage with its major
shareholders when any significant changes to the Remuneration
Policy are proposed. The Remuneration Committee will consider
shareholder feedback received in relation to the Directors’
Remuneration Report each year. The Remuneration Committee
also has regard to additional feedback received from time to time,
and closely monitors developments in institutional investors’ best
practice expectations.
Approach to recruitment and promotions
The remuneration package for a new Executive Director would be
set in accordance with the terms of the approved Remuneration
Policy prevailing at the time of appointment and take into account
the skills and experience of the individual, the market rate for a
candidate of that experience and the importance of securing the
relevant individual.
The overarching principles applied by the Remuneration
Committee in developing the remuneration package will be to set
an appropriate base salary together with benefits and short and
long-term variable pay that takes into account the complexity of
the role. Salary would be provided at such a level as required to
attract the most appropriate candidate and may be set initially at
a below market level on the basis that it may progress towards a
competitive market level once expertise and performance have
been proven and sustained. Salary will be considered in the
context of the total remuneration package.
The maximum level of variable pay which may be awarded to
new Executive Directors, excluding the value of any buy-out
arrangements, will be in line with the policy set above. In
addition, the Remuneration Committee may offer additional cash
and/or share-based elements to replace deferred or incentive pay
forfeited by an executive leaving a previous employer when it
considers these to be in the best interests of the Company and its
shareholders. It will, where possible, ensure that these awards are
consistent with awards forfeited in terms of the form of award,
vesting periods and expected value. Such elements may be
made under Section 9.4.2 of the Listing Rules where necessary.
Shareholders will be informed of any such arrangements at the
time of appointment.
The Remuneration Committee may apply different performance
measures, performance periods and/or vesting periods for
initial awards made following appointment under the annual
bonus and/or long-term incentive arrangements, subject to the
rules of the plan, if it determines that the circumstances of the
recruitment merit such alteration. A PSP award can be made
shortly following an appointment (assuming the Company is not
in a closed period).
For an internal Executive Director appointment, any variable pay
element awarded in respect of the prior role may be allowed to
pay out according to its original terms, adjusted, if appropriate to
take account of the new appointment. For external and internal
appointments, the Remuneration Committee may agree that the
Company will meet certain relocation and/or incidental expenses
as appropriate.
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The fee structure and quantum for Non-Executive Director
appointments will be based on the prevailing Non-Executive
Director fee policy taking into account the experience and calibre
of the individual.
The Board evaluation and succession planning processes in place
are designed to ensure there is the correct balance of skills,
experience and knowledge on the Board. The activities of the
Nomination Committee overseeing these matters are disclosed
in the Nomination Committee Report.
Service contracts and approach to leavers
The Company’s policy is for Executive Directors to have service
contracts which may be terminated with no more than 12
months’ notice from either party. The Executive Directors’ service
contracts are available for inspection by shareholders at the
Company’s registered office.
The relevant dates of service contracts and notice periods for
the current Executive Directors are set out as follows:
Executive Director
Date of contract
Notice period
Russell Down
James Bunn
8 January 2015
26 August 2020
12 months
9 months
No Executive Director has the benefit of provisions in his or her
service contract for the payment of pre-determined compensation
in the event of termination of employment. It is the Remuneration
Committee’s policy that the service contracts of Executive Directors
will provide for termination of employment by giving notice or by
making a payment of an amount equal to the monthly basic salary
and pension contributions in lieu of notice.
The policy also provides that no Executive Director should
be entitled to a notice period or payment on termination of
employment in excess of the levels set out in his or her service
contract and in determining amounts payable on termination, the
Remuneration Committee will take into consideration the Executive
Director’s duty to mitigate his or her loss when determining the
amount of compensation.
Annual bonus may be payable with respect to the period of the
financial year served although it will be pro-rated for time and paid
at the normal pay out date. Different performance targets may be
set for the remainder of this bonus period to reflect the Directors’
specific responsibilities. Any share-based entitlements granted
to an Executive Director under the Company’s share plans will be
determined based on the relevant plan rules. In certain prescribed
circumstances, such as death, ill health, disability or other
circumstances at the discretion of the Remuneration Committee,
‘good leaver’ status may be applied. For good leavers, awards will
normally vest at the normal vesting date. PSPs vesting will also be
subject to the satisfaction of the relevant performance conditions
at that time (including an overall performance underpin attached to
the award) and pro-rata reduction to reflect the proportion of the
vesting period actually served. However, under the plan rules, the
Remuneration Committee has discretion to determine that awards
vest at cessation of employment and/or to disapply the time pro-
rating requirement if it considers it appropriate to do so.
In relation to a termination of employment, the Remuneration
Committee may make payments in relation to any statutory
entitlements or payments to settle or compromise claims as
necessary. The Remuneration Committee also retains the
discretion to reimburse reasonable legal expenses incurred
in relation to a termination of employment and to meet any
transitional or outplacement costs if deemed necessary.
Payment may also be made in respect of accrued benefits,
including untaken holiday entitlement.
There is no provision for additional compensation on a change of
control. In the event of a change of control, the PSP awards will
normally vest on (or shortly before) the change of control subject
to the satisfaction of the relevant performance conditions at
that time and, unless the Remuneration Committee determines
otherwise, reduced pro-rata to reflect the proportion of the vesting
period served. Outstanding awards under any all-employee share
plans will vest in accordance with the relevant scheme plan.
Bonuses may become payable, subject to performance and, unless
the Remuneration Committee determines otherwise, subject to a
pro-rata reduction to reflect the curtailed performance period..
External appointments
The Board allows Executive Directors to accept appropriate
outside commercial non-executive director appointments
provided the aggregate commitment is compatible with their
duties as Executive Directors. The Executive Directors concerned
may retain fees paid for these services, which will be subject to
approval by the Board. No Non-Executive Directorships in a listed
company were held by the Executive Directors during the year.
Non-Executive Directors
The Chairman and Non-Executive Directors do not have contracts
of service, but their terms are set out in letters of appointment.
Appointments are subject to annual re-election by shareholders
at the AGM and may be terminated by three months’ notice on
either side. The letters of appointment of the Non-Executive
Directors, copies of which are available for inspection at the
Company’s registered office during normal business hours,
specify an anticipated time commitment of 50 days per annum
in relation to David Shearer, and 15 days in relation to David
Garman, Rob Barclay, Rhian Bartlett and Shatish Dasani.
90 Governance Speedy Hire Plc Annual Report and Accounts 2021
Remuneration Report continued
Relevant appointment letter and term dates of Non-Executive Directors are set out as follows:
Non-Executive Director
David Shearer2
David Garman
Rob Barclay
Rhian Bartlett
Shatish Dasani3
Appointment
letter date
18 July 2018
25 May 2017
Month of last
election
September 2020
September 2020
30 March 2016
September 2020
1 June 2019
September 2020
22 January 2021
n/a
Expected month of expiry
of current term 1
July 2021
July 2023
April 2022
July 2022
July 2024
1 Subject to annual re-election by shareholders at the AGM.
2 Details relate to appointment as Non-Executive Chairman, original appointment as Non-Executive Director was September 2016.
3 Appointed with effect from 1 February 2021.
Annual Remuneration Report
Remuneration Committee role and membership
The Remuneration Committee comprises three members: Rob Barclay (Chairman), David Garman and Rhian Bartlett. Bob Contreras
also served during the year as detailed below. All members are considered by the Board to be independent Non-Executive Directors.
Biographies of the members of the Remuneration Committee are set out on pages 66 and 67. Details of the attendance
at Remuneration Committee meetings are set out below.
Remuneration Committee members and scheduled meetings attended
Name
Rob Barclay (Chairman)
David Garman
Rhian Bartlett
Bob Contreras1
1 Bob Contreras stepped down as a member of the Remuneration Committee on 1 August 2020.
At the invitation of the Remuneration Committee Chairman,
other members of the Board and senior management may attend
meetings of the Remuneration Committee, except when their own
remuneration is under consideration. No Directors are involved in
determining their own remuneration. The Company Secretary acts
as the secretary to the Remuneration Committee. The members
of the Remuneration Committee can, where they judge it
necessary to discharge their responsibilities, obtain independent
professional advice at the Group’s expense.
The Remuneration Committee’s duties include:
• to make recommendations to the Board on the Group’s
framework and policy for the remuneration of the Executive
Directors, Company Secretary and senior executives;
• to review and determine, on behalf of the Board, executive
remuneration and incentive packages to ensure such packages
are fair and reasonable;
• to review Directors’ expenses;
Position
Meetings attended
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
5/5
5/5
5/5
1/1
• to review Executive and Non-Executive Directors against the
shareholding guidelines;
• to determine the basis on which the employment of executives
is terminated;
• to design the Group’s share incentive schemes and other
performance related pay schemes, and to operate and
administer such schemes;
• to determine whether awards made under performance related
and share incentive schemes should be made, the overall
amount of the awards, the individual awards to executives
and the performance targets to be used;
• to ensure that no Director is involved in any decisions as to
his/her own remuneration; and
• to review regularly the ongoing appropriateness and
effectiveness of all remuneration policies.
Governance Speedy Hire Plc Annual Report and Accounts 2021 91
Corporate InformationFinancial StatementsStrategic ReportGovernance
Remuneration Report continued
During FY2021, the Remuneration Committee reviewed the
following matters at its meetings:
• determination of FY2020 bonuses for the Executive Directors
and senior managers;
• tender and selection of new remuneration advisors to the Committee;
• determination of executive remuneration structure and
application of the policy for FY2021 and FY2022;
• Executive Director post-employment shareholding requirement;
• interim and final progress of employee share plan performance
measures against targets and consequent approval of any vesting
of awards;
• grant of awards to be made under the performance share plan;
• progress of bonus achievement for FY2021 executive bonuses;
• approval of 25-year long service awards for eligible employees
and consideration of other awards based on long-service;
• terms of reference for, and effectiveness of, the Remuneration
Committee;
• ongoing appropriateness and effectiveness of remuneration and
benefits policies for Executive Directors and employees generally;
• performance of external remuneration advisers;
• use of equity for employee share plans in relation to dilution
headroom limits;
• review of the Non-Executive Chairman’s fee; and
• determining remuneration arrangements for Executive
Director and senior management joiners and leavers (including
termination arrangements for Chris Morgan).
The Remuneration Committee’s terms of reference are published on
the Company’s website at speedyservices.com/investors and are also
available in hard copy on application to the Company Secretary.
Advisers
During the year, the Remuneration Committee retendered the
provision of remuneration advisory services to the Committee
and FIT Remuneration Consultants LLP (‘FIT’) were appointed with
effect from 1 October 2020. Accordingly, the Committee received
independent advice from Alvarez and Marsal LLP and FIT, in
connection with remuneration matters including the provision of
general guidance on market and best practice and the production
of this report. Neither of the remuneration advisors has any other
connection or relationship with the Group and provided no other
services to the Group during FY2021. FIT is a member of the
Remuneration Consultants Group and is a signatory to its Code of
Conduct. Fees paid to Alvarez and Marsal LLP and FIT for FY2021
totalled £11,018 and £15,000 respectively (excluding VAT) in
respect of advice provided to the Remuneration Committee and for
related matters. The Remuneration Committee also sought advice
from the Group’s legal advisers, Pinsent Masons LLP, in connection
with the production of this report, the 2014 Performance Share
Plan and the all employee share scheme (‘SAYE’).
Implementation of the Remuneration Policy for FY2022
The sections of the Annual Remuneration Report that have been
audited by KPMG LLP are page 93 from ‘Non-Executive Directors’
to page 98 up to and including ‘Directors’ interests in the share
capital of the Company’, but excluding paragraphs concerning
‘Details of long-term incentive plan awards outstanding’,
‘Dilution’, and ‘Shareholder voting at AGM’.
Base salary
Base salaries for each Executive Director are normally reviewed
annually by the Remuneration Committee, taking account of the
Directors’ performance, experience and responsibilities with
any changes normally effective from 1 April. When determining
Executive Directors’ base salaries, the Remuneration Committee
has regard to economic factors, remuneration trends and the
general level of salary increases awarded throughout the Group.
Following a detailed review of Russell Down’s base salary
of £387,700 in advance of the normal 1 April 2021 review
date (noting that the 1 April 2020 review date was ultimately
cancelled), the Remuneration Committee has concluded that it is
significantly below market levels. However, the Committee does
not consider that it would be appropriate to make an award at
above workforce inflationary increase from 1 April 2021 in light
of the ongoing pandemic. As such, a workforce aligned increase
of 2% was awarded from 1 April 2021.
However, the Remuneration Committee does intend to move
Russell’s salary to the market level on a phased basis over the
next two years, with increases taking effect from 1 April 2022
and 1 April 2023, subject to ongoing individual and Company
performance. Major shareholders will be consulted in advance
of any increase being agreed and full disclosure of the intended
salary increase from 1 April 2022 will be set out in next year’s
Directors’ Remuneration Report.
Following the recruitment of James Bunn during the year ended
31 March 2021, his salary of £325,000, which is considered to be
market aligned, was increased by 1% from 1 April 2021, being
below the average for the wider workforce (based on James’
appointment commencing approximately mid-way through
the financial year).
92 Governance Speedy Hire Plc Annual Report and Accounts 2021
Remuneration Report continued
Pension
Russell Down’s pension allowance of 15% will reduced to be
fully aligned to the level of the majority of the UK workforce by
the end of the current policy.
The annual Company pension allowance for James Bunn will
continue to be set at a workforce aligned 3% of base salary.
Performance related annual bonus
For FY2022, the maximum bonus opportunity will continue to
be limited to 100% of salary notwithstanding the 125% of
salary maximum limit under the Remuneration Policy. Reflecting
the Company’s key financial and strategic priorities for FY2022,
performance metrics will be based on group profit before tax
(70%), strategic (15%) and ESG (15%) targets.
The performance targets are deemed to be commercially
sensitive but full details will be disclosed on a retrospective
basis in next year’s Directors’ Remuneration Report.
Long-term incentive plans
The Performance Share Plan (‘PSP’) will continue to operate
as the Company’s primary long-term incentive arrangement,
whereby awards over shares will normally vest three years from
grant, subject to continued employment and performance.
PSP awards for FY2022 will be granted over shares equal to no
more than 100% of salary and the Committee will consider the
prevailing share price at the time of grant. Performance metrics
are expected to be based on EPS and Total Shareholder Return
and full details of the targets will be set out in the RNS which
will be issued immediately following grant.
Non-Executive Directors
Current annual fee levels for Non-Executive Directors, which have not been increased, are as follows:
David Shearer
David Garman
Rob Barclay
Rhian Bartlett
Shatish Dasani
Role
Committee
chair role
Non-Executive Chairman
Nomination
Non-Executive Director
–
Non-Executive Director
Remuneration
Non-Executive Director
–
Non-Executive Director
Audit & Risk
1 April 20211
£132,500
1 April 2020
£132,500
£47,500
£49,500
£42,500
£49,500
£42,500
£49,500
£42,500
–
1 The policy reflects a base Board fee of £42,500; additional fees for the Chairman of the Audit & Risk and Remuneration Committees of £7,000 and an additional fee for the
Senior Independent Director (David Garman) of £5,000.
Governance Speedy Hire Plc Annual Report and Accounts 2021 93
Corporate InformationFinancial StatementsStrategic ReportGovernance
Remuneration Report continued
Directors’ remuneration for FY2021
The emoluments of the Directors of the Company for the year under review were as follows:
Executive Directors
Russell Down
James Bunn6
Non-Executive Directors
David Shearer
David Garman7
Rob Barclay
Rhian Bartlett8
Shatish Dasani9
Former Directors
Chris Morgan10
Bob Contreras11
Totals
Financial
year
Fees/basic
salary
£’0001
Benefits
£’0002
Pension
£’0003
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
368
388
179
–
126
133
44
43
47
50
40
35
8
–
72
255
43
55
927
959
14
13
7
–
–
–
–
–
–
–
–
–
–
–
4
13
–
–
25
26
58
58
6
–
–
–
–
–
–
–
–
–
–
–
13
38
–
–
77
96
Total
fixed
remuneration
£’000
440
459
Annual
bonus
£’0004
137
–
192
115
–
126
133
44
43
47
50
40
35
8
–
89
306
43
55
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,029
1,081
252
–
Value of
long-term
incentives
£’0005
Total
variable
remuneration
£’000
Total
remuneration
£’000
213
224
–
–
–
–
–
–
–
–
–
–
–
–
–
154
–
–
213
378
350
224
115
–
–
–
–
–
–
–
–
–
–
–
790
683
307
–
126
133
44
43
47
50
40
35
8
–
–
154
–
–
465
378
89
460
43
55
1,494
1,459
1 All Directors, including the Non-Executive Directors, agreed to a three month 20% reduction in salaries and fees from 1 April 2020 due to the outbreak of COVID-19.
2 Taxable benefits comprise a car or cash alternative, health insurance, and life insurance, including 0.55144 pence per share for the SAYE 2020 awards granted in December 2020
(being the value of the discount under the scheme).
3 Russell Down, James Bunn and Chris Morgan received £58,032, £0 and £12,735 respectively in lieu of pension contributions which are included in the Pension column above together
with any actual pension contributions made.
4 For FY2021 the maximum bonus opportunity for the Executive Directors was 50% of salary, based on Group adjusted profit before tax on a pre-IFRS 16 basis. Details of actual performance
against targets is set out below.
5 For FY2021, this reflects the value of the 2018 PSP awards vesting in 2021 valued using the average share price over the period 1 January 2021 to 31 March 2021 (66.56p). The estimated
value of the shares at vesting is £212,529 of which approximately £20,946 is attributable to share price growth. This calculation does not take into account any dividend shares that may
be awarded following a future exercise of the award. Details of actual performance against targets is set out below.
6 James Bunn was appointed to the Board on 14 September 2020.
7 David Garman was appointed as Senior Independent Director from 1 August 2020.
8 Rhian Bartlett was appointed to the Board on 1 June 2019.
9 Shatish Dasani was appointed to the Board on 1 February 2021.
10 Chris Morgan stepped down from the Board with effect from 31 July 2020. Details of his termination arrangements are set out below.
11 Bob Contreras stepped down from the Board with effect from 17 February 2021.
94 Governance Speedy Hire Plc Annual Report and Accounts 2021
Remuneration Report continued
Annual bonuses awarded in respect of FY2021 performance
The annual bonus plan for FY2021 was delayed and then ultimately withdrawn for the first six months of the year to reflect the uncertainty
surrounding the impact of Covid-19 and reflecting that the Company had relied on Government support for some of this period.
Once Government support in respect of Job Retention Schemes had ceased and no staff were on furlough a bonus plan was introduced
for the second half of the year, albeit the maximum potential was reduced to 50% of salary to reflect the shortened performance
period and stretch PBT targets were set.
Details of the performance targets and resulting bonus outcome are set out in the table below:
Weighting
(% of salary
limited to six
month period
for second half
of FY2021)
100%
Measure
Group adjusted
profit before tax
(‘adjusted PBT’)
before impact of IFRS 16
Target
Stretch
Max
Actual
Result
£17.23m
(25% of salary)
£20.68m
(45% of salary)
£22.53m
(50% of salary)
£19.00m
70.54% of
maximum potential
(equating to 35.27%
of annual salary)
In addition to the above financial measures, when assessing the extent to which any bonus should become payable, the Committee also
considered the impact of major health, safety and environmental incidents during the year (there were none), the performance of the
individual Director and such other factors as the Committee considers relevant.
Having considered the above and on the basis that the Company had not utilised Job Retention Schemes (and no staff were on furlough)
post 30 September 2020, all tax deferrals were paid by this date and in the context of Company’s strong share price recovery in the year,
the Committee concluded that a bonus award for the six months to 31 March 2021 was appropriate in the circumstances.
Performance share awards granted in 2018 and vesting in 2021
The performance share awards granted in 2018 vested on 24 May 2021. Details of the performance targets set for the award and
actual achievement against them are set out in the table below.
The Committee was satisfied that the long-term variable pay outturns accurately reflect the wider performance of the Group and has
not exercised discretion to override the calculation of the pay out on the vesting outcomes. Although the EPS element of the 2018 PSP
was not met primarily as a result of the impact of Covid-19, the Committee was pleased with relative TSR performance and believes
it to be aligned with the underlying performance of the Company in the context of the significant challenges of the last year. The
Committee determined that the vesting of the TSR related element appropriately reflects the Company’s strong performance over the
first two years of the performance period, and the exceptional leadership demonstrated during the entire performance period, which
means that the Company is well positioned for future growth.
Performance measure
Adjusted earnings
per share before the
impact of IFRS 16
Total shareholder return
of FTSE 250
Performance
period end
Threshold
performance
hurdle
(25% vesting)
Stretch
performance
hurdle
(100% vesting)
31 March 2021
6.13p
7.67p
Weighting
50%
50%
31 March 2021 Median
Upper Quartile
Actual
Below
threshold
% vesting for this
part of the award
0%
97.02%
Between
Median and
Upper Quartile
Earnings per share performance for FY2021 was 1.26 pence on a pre-IFRS 16 basis and therefore this part of the award will not vest.
Relative Total Shareholder Return (‘TSR’) performance was just below upper quartile and therefore the majority of this part of the
award will vest as to 97.02%. The TSR condition is based on the Company’s performance against FTSE 250 companies (excluding
investment trusts) as at the date of grant.
The value of the shares included in the Directors’ remuneration for FY2021 table for Russell Down is based on the vesting level
set out above and has been valued using the average share price over the period 1 January 2021 to 31 March 2021 (66.56p).
The estimated value of the shares at vesting is £212,529 of which approximately £20,946 is attributable to share price growth.
Governance Speedy Hire Plc Annual Report and Accounts 2021 95
Corporate InformationFinancial StatementsStrategic ReportGovernance
Remuneration Report continued
Long-term incentive plan awards granted in the year
Russell Down and James Bunn were granted the following awards under the 2014 Performance Share Plan on 27 November 2020 as
set out below:
Executive Director
Date of grant
Basis of award
Maximum shares
under award
Russell Down
27/11/2020 100%
565,490
Face value
of awards 1
£387,700
of salary
James Bunn
27/11/2020 100%
474,037
£325,000
of salary
Performance
period
Vesting
period
Three years
from grant
Three years
from grant
Three years
ending
26 November
2023
Three years
ending
26 November
2023
% vesting
at threshold
25% of
an award
25% of
an award
1 Determined using the average mid-market closing share price of the Company for the five days preceding the date of grant.
Given the difficulty in setting robust three-year EPS targets at that time and the Committee’s desire to see the share price return to
pre-Covid levels, rather than the normal EPS and relative Total Shareholder Return targets, the awards were based on the following
absolute Total Shareholder Return targets:
The Company’s compound annual growth rate of TSR
over the three years from grant1
Percentage of an award that may vest2
Below 7.5% p.a.
7.5% p.a.
15% p.a. or above
0%
25%
100%
Greater than 7.5% p.a. but less than 15% p.a.
Between 25% and 100% on a straight line basis
1 Based on one month base and end share price averages.
2 The number of Shares which may vest may be reduced (including to zero) where the Committee determines that exceptional circumstances exist which mean that the Vesting of the Award would
be inappropriate taking into account such factors as it considers relevant (including, but not limited to, the overall performance of the Company, any Group Member or the relevant Participant).
Details of long-term incentive plan awards outstanding
Details of the Executive Directors’ interests in share-based awards are as follows:
Options/
awards
granted
during
the year
Options/
awards
exercised
during
the year
Options/
awards
lapsed
during
the year
Interest at
31 March
2021
Exercise
price
(pence)
Normal date
from which
exercisable/vested
to expiry date
(if appropriate)
Executive Director
Russell Down
PSP 2015 1,2
PSP 2016 1,2
PSP 20171,2
PSP 20181,2,5
PSP 20191,2
PSP 20201,3
SAYE 2016 4
SAYE 2017 4
SAYE 2018 4
SAYE 2019 4
SAYE 2020 4
Interest at
1 April 2020
226,130
943,115
314,241
638,608
617,947
–
9,653
5,040
6,406
6,000
–
–
–
–
–
–
565,490
–
–
–
–
3,786
–
–
–
–
–
–
9,653
5,040
–
–
–
Total
2,767,140
569,276
14,693
James Bunn
PSP 2020 1,3
Total
–
–
474,037
474,037
–
–
96 Governance Speedy Hire Plc Annual Report and Accounts 2021
–
–
–
–
–
–
–
–
–
–
–
–
–
–
226,130
943,115
314,241
638,608
617,947
565,490
–
–
6,406
6,000
3,786
nil
nil
nil
nil
nil
nil
33.936
44.280
46.080
48.000
55.144
Aug 2018 – Aug 2025
Jun 2019 – Jun 2026
Jun 2020 – Jun 2027
May 2021 – May 2028
May 2022 – May 2029
Nov 2023 – Nov 2030
Feb 2020 – Jul 2020
Feb 2021 – Jul 2021
Feb 2022 – Jul 2022
Feb 2023 – Jul 2023
Feb 2024 – Jul 2024
3,321,723
–
–
474,037
474,037
nil
–
Nov 2023 – Nov 2030
–
Remuneration Report continued
Chris Morgan6,7
PSP 20161,2,8
PSP 20171,2,8
PSP 20181,2
PSP 20191,2
SAYE 20164
SAYE 20174
SAYE 20184
SAYE 20194
Total
646,708
215,479
419,522
405,961
13,260
7,073
2,578
7,350
1,717,931
–
–
–
–
–
–
–
–
–
646,708
215,479
–
–
–
–
419,522
405,961
13,260
–
–
–
–
7,073
2,578
7,350
875,447
842,484
–
–
–
–
–
–
–
–
–
nil
nil
nil
nil
33.936
44.280
46.080
48.000
Jun 2019 – Jun 2026
Jun 2020 – Jun 2027
May 2021 – May 2028
May 2022 – May 2029
Feb 2020 – Jul 2020
Feb 2021 – Jul 2021
Feb 2022 – Jul 2022
Feb 2023 – Jul 2023
–
–
1 The Performance Share Plan awards above were granted as nil-cost options. No consideration was paid for the grant of these options.
2 50% of each 2015, 2016, 2017, 2018 and 2019 Performance Share Plan award is subject to an EPS condition. All EPS measures referenced in this footnote are quoted on a pre-IFRS 16 basis.
25% of this part of the award vests in respect of the 2015 award: for EPS (before amortisation and exceptional costs) of 4.00 pence, with full vesting of this part of the award for EPS of 4.70
pence or better; in respect of the 2016: award for EPS (before amortisation and exceptional costs) of 2.92 pence, with full vesting of this part of the award for EPS of 5.11 pence or better;
and in respect of the 2017: award for EPS (before amortisation and exceptional costs) of 5.41 pence, with full vesting of this part of the award for EPS of 6.95 pence or better; and in respect
of the 2018: award for EPS (before amortisation and exceptional costs) of 6.13 pence, with full vesting of this part of the award for EPS of 7.67 pence or better A sliding scale operates
between the points. 50% of each 2015, 2016, 2017, 2018 and 2019 Performance Share Plan award is subject to a TSR condition based on the Company’s performance against FTSE 250
companies (excluding investment trusts) as at the date of grant. 25% of this part of the award vests if the Company’s TSR is at a median of the ranking of the TSRs of the comparator group,
with full vesting of this part of the award for upper quartile performance or better. A sliding scale operates between these points. Regardless of the Company’s TSR performance, no portion
of the part of the award which is subject to TSR performance may vest unless the Committee is also satisfied that the Company’s TSR performance is reflective of its underlying performance
over the performance period.
3 The performance conditions for the 2020 Performance Share Plan awards are set out at ‘Long-term incentive plan awards granted in the year' on page 96.
4 All-employee scheme giving employees the opportunity to acquire shares at a discount of 20% of the market value of the shares at the time the invitation is issued. The maximum monthly
contribution is £250.
5 Following the year-end, the 2018 Performance Share Plan vested at 48.51% on 24 May 2021 resulting in an outturn of 309,788 options over shares in favour of Russell Down.
6 All outstanding Performance Share Plan awards and SAYE options in favour of Chris Morgan lapsed on his termination of appointment, effective 31 July 2020.
7 All options exercised in the year by Chris Morgan are referenced at the date of his termination of appointment, effective 31 July 2020.
8 On exercise of the 2016 and 2017 PSP awards by Chris Morgan dividend shares of 74,371 and 19,385 respectively were additionally awarded in accordance with the terms of the relevant PSP grants.
The mid-market closing price of Speedy Hire Plc ordinary shares at 31 March 2021 was 66.60 pence and the range during the year
was 46.70 pence to 73.00 pence per share.
Dilution
The Performance Share Plan and SAYE share option schemes provide that overall dilution through the issuance of new shares for
employee share schemes should not exceed an amount equivalent to 10% of the Company’s issued share capital over a rolling ten-year
period. Within this 10% limit, dilution through the Performance Share Plan is limited to an amount equivalent to 5% of the Company’s
issued share capital over a ten year period. Both limits are in line with The Investment Association Principles of Remuneration.
The Committee monitors the position prior to making awards under these schemes to ensure that the Company remains within these
limits. As at the date of this report, 1.6% of the 5% limit and 3.87% of the 10% limit have been used.
Termination payments
As per the announcement on 8 June 2020, Chris Morgan stepped down from the Board as Group Finance Director on 31 July 2020.
In respect of his termination arrangements:
• he received a severance payment of £146,452.50, calculated as the equivalent of six months basic salary and pension entitlement,
and paid in lieu of Mr Morgan's entitlement to notice (nine months), any other sums pursuant to his service agreement and in
settlement of any potential claims (including unfair dismissal). This payment was subject to deductions on account of income tax and
National Insurance contributions;
• there was no entitlement to an annual bonus for the years ended 31 March 2020 or 31 March 2021;
• PSP awards granted in 2018 and 2019 and outstanding options under the Company’s Save As You Earn scheme lapsed on the cessation;
• Shares in respect of PSP awards granted in 2016 and 2017, which vested in June 2019 and June 2020 (less shares sold to pay
associated tax liabilities), will continue to remain subject to a two year holding period from the respective vesting dates; and
• a payment of £6,000 (excluding VAT) was paid to Mr Morgan's legal adviser in respect of legal services provided to Mr Morgan in
connection with his termination.
Other than the amounts disclosed above, there were no other remuneration payments or payments for loss of office.
Governance Speedy Hire Plc Annual Report and Accounts 2021 97
Corporate InformationFinancial StatementsStrategic ReportGovernance
Remuneration Report continued
Shareholder voting at AGM
At the 2020 AGM, the Directors’ Remuneration Report and Remuneration Policy received the following votes from shareholders:
For
Against
Total votes cast (for and against)
Votes withheld1
Total votes cast (including withheld votes)
Remuneration Report
Remuneration Policy
Total number
of votes
% of
votes cast
Total number
of votes
% of
votes cast
413,084,883
16,058,430
429,143,313
1,791,859
430,935,172
96.26
3.74
100
n/a
413,837,471
16,425,923
430,263,394
671,778
430,935,172
96.18
3.82
100
n/a
1 A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes cast ‘For’ and ‘Against’ a resolution.
Directors’ interests in the share capital of the Company
The interests of the Directors (all of which were beneficial) who held office during FY2021, are set out in the table below:
Legally owned
PSP Awards
Sharesave
Total
31 March
2020
31 March
2021
Unvested
Vested
Unvested
31 March
2021
Russell Down1
304,493
319,186
1,822,045 1,483,486
16,192
1,802,672
James Bunn1
–
–
474,037
David Shearer
450,00
500,000
David Garman
75,000
75,000
Rob Barclay
Rhian Bartlett
Shatish Dasani
Former Directors
48,000
74,744
–
48,000
74,744
35,000
Chris Morgan2,4
250,713
770,623
Bob Contreras3,4
40,000
40,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
500,000
75,000
48,000
74,744
35,000
770,623
–
Shareholding
requirement1
% of
salary/fee of
requirement met
%
200
200
100
100
100
100
100
n/a
n/a
%
91
0
>100
>100
65
>100
47
n/a
n/a
Note that only legally owned shares and vested but unexercised PSP awards (on a net of tax basis) count towards the shareholding
requirement. Shareholdings are valued on the basis of the average daily closing share price (of the three months prior to the 31 March
(being 66.56p) and tested against the Directors’ base salary/fee at 31 March).
1 The shareholding requirement for Executive Directors increased to 200% of salary on 1 April 2020 to reflect the requirements in the Directors’ Remuneration Policy.
2 As at 31 July 2020, the date Chris Morgan stepped down as a Director.
3 As at 17 February 2021, the date Bob Contreras stepped down as a Director.
4 Legally owned shares are referenced at the date of termination of Chris Morgan and Bob Contreras, as 31 July 2020 and 17 February 2021 respectively.
Following the year-end, the 2018 Performance Share Plan vested at 48.51% on 24 May 2021 resulting in an outturn of 309,788
options over shares in favour of Russell Down. There have been no other changes in the interests of any current Director in the
share capital of Speedy Hire Plc between 1 April 2021 and the date of this report.
98 Governance Speedy Hire Plc Annual Report and Accounts 2021
Remuneration Report continued
Comparison of overall performance and pay
The chart below presents the total shareholder return for Speedy Hire Plc compared to that of the FTSE 250 and FTSE SmallCap
(both excluding investment trusts). The values indicated in the graph show the share price growth plus reinvested dividends over
a ten-year period from a £100 hypothetical holding of ordinary shares in Speedy Hire Plc and in the index.
Total shareholder return
300
250
200
150
100
50
0
)
d
e
s
a
b
e
r
(
)
£
(
e
u
l
a
V
31/03/2011
31/03/2012
31/03/2013
31/03/2014
31/03/2015
31/03/2016
31/03/2017
31/03/2018
31/03/2019
31/03/2020
31/03/2021
Speedy Hire
FTSE 250 (excl. Investment Trusts)
FTSE SmallCap (excl. Investment Trusts)
This graph shows the value, by 31 March 2021, of £100 invested in Speedy Hire on 31 March 2011, compared with the value of £100 invested in the FTSE 250 (excl.
Investment Trusts) and FTSE SmallCap (excl. Investment Trusts) Indices on the same day. The other points plotted are the values at intervening financial year-ends.
Source: Refinitiv Eikon
The total remuneration figures for the Chief Executive during each of the last ten financial years are shown in the table below.
The total remuneration figure includes the annual bonus based on that year’s performance (FY2012 to FY2021) and PSP awards
based on three year performance periods ending just after the relevant year end. The annual bonus pay-out and PSP vesting level,
as a percentage of the maximum opportunity, are also shown for each of these years.
Steve Corcoran
Mark Rogerson
FY
2013
553
FY
2014
FY
2014
707
115
FY
2015
593
FY
2016
107
FY
2016
409
FY
2017
757
Russell Down
FY
2018
FY
2019
6671
1,2781
FY
2020
683
FY
2021
790
FY
2012
Single Total Figure 421
of remuneration
(£’000s)
Annual bonus
(% of max)
PSP vesting
(% of max)
– 37.0%
–
– 60.0%
–
– 82.0%
–
–
–
–
– 97.4%
54.8% 54.9%
– 70.54%3
–
– 33.0%2 96.4%2 50.0% 48.51%
Steve Corcoran stepped down and Mark Rogerson was appointed as Chief Executive during FY2014. Mark Rogerson stepped down
and Russell Down was appointed as Chief Executive during FY2016.
1 Total remuneration for 2018 includes the EPS element of the 2015 PSP grant (of which 15% of the maximum vested). Total remuneration for 2019 includes the TSR element of 2015
PSP grant (of which 18.51% of the maximum vested) and both the EPS and TSR element of the 2016 PSP grant (of which 96.41% vested).
2 The vesting percentage for 2018 shows the vesting of the 2015 PSP grant (EPS and TSR elements). The vesting percentage for 2019 shows the vesting of the 2016 PSP grant only.
3 The annual bonus potential was limited to 50% of salary over the second half of FY21.
Governance Speedy Hire Plc Annual Report and Accounts 2021 99
S
t
r
a
t
e
g
i
c
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e
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o
r
t
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o
v
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r
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n
a
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i
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t
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Remuneration Report continued
Percentage change in Directors' remuneration
The table below shows the percentage change in each Director’s total remuneration (excluding the value of any long-term incentives and pension
benefits receivable in the year) between FY2020 and FY2021 compared to that of the average for all UK and Ireland based employees of the Group.
David Shearer
Russell Down
James Bunn2
David Garman3
Rob Barclay
Rhian Bartlett4
Shatish Dasani5
Average employees
% change from FY2020 to FY2021
Salary/Fee1
Benefits
(6%)
(5%)
n/a
4%
(5%)
(4%)
n/a
0%
n/a
2%
n/a
n/a
n/a
n/a
n/a
0%
Bonus
n/a
100%
n/a
n/a
n/a
n/a
n/a
n/a
1 All Directors, including the Non-Executive Directors, agreed to a three month 20% reduction in salaries and fees from 1 April 2020 due to the outbreak of COVID-19.
2 James Bunn was appointed to the Board on 14 September 2020. As such, there was no prior year remuneration.
3 David Garman was appointed as Senior Independent Director from 1 August 2020.
4 Rhian Bartlett was appointed to the Board on 1 June 2019. Her 2020 numbers have been pro-rated up to enable a full year on year comparison.
5 Shatish Dasani was appointed to the Board on 1 February 2021. As such, there was no prior year fee.
Pay ratio of the Chief Executive to average employee
The following table compares the ratio of Chief Executive’s pay at the 25th, median and 75th percentile as at 31 March 2021
(and for the prior year), and the pay details for the individuals at each percentile:
Year
Method of
calculation adopted
25th percentile pay ratio
(Chief Executive : UK employees)
Median pay ratio
(Chief Executive : UK employees)
75th percentile pay ratio
(Chief Executive : UK employees)
2021 Option A
2020 Option B
37:1
30:1
32:1
29:1
25:1
22:1
The median, 25th percentile and 75th percentile figures used to determine the above ratios were calculated by reference to option
‘A’ methodology prescribed under the UK Companies (Miscellaneous Reporting) Regulations 2018. The Committee selected this
calculation methodology as a preferred methodology under UK Government guidelines and also it was felt to produce the most
statistically accurate result and to be comparable from year-to-year.
A significant proportion of the Chief Executive’s pay is delivered in long term investment awards, which are linked to the Group’s
performance and share price movement. The Committee considers that the median pay ratio disclosed above is consistent with the
pay, reward and progression policies for the Company’s UK employees taken as a whole.
Pay details for the individuals whose 2020/21 remuneration is at the median, 25th percentile and 75th percentile amongst UK based
employees (and for the prior year) are as follows:
2021
Salary (Total pay and benefits)
£368,315 (£789,647)
£20,429 (£21,514)
£23,503 (£24,600)
£30,043 (£31,660)
2020
Salary (Total pay and benefits)
£387,700 (£683,155)
£22,000 (£23,141)
£22,000 (£23,167)
£28,050 (£30,514)
Chief Executive
UK Employees
25th percentile
Median
75th percentile
Relative importance of spend on pay
The following table shows the Company’s actual spend on pay (for all employees) relative to dividends.
Staff costs (£’m)
Dividends (£’m)
2020
117.0
10.9
2021
% change
109.7
–
(6.3)
(100)
£1.2m of the staff costs figures relate to pay for the Executive Directors. This is different from the aggregate of the single figures for
the year under review due to the way in which the share-based awards are accounted for. The dividend figures relate to amounts paid
in respect of the relevant financial year.
This report was approved by the Board on 24 May 2021.
Rob Barclay
Chairman of the Remuneration Committee
100
Independent
t
auditor’s report
to the members of Speedy Hire Plc
1. Our opinion is unmodified
We have audited the financial statements of
Speedy Hire Plc (“the Company”) for the year
ended 31 March 2021 which comprise the
consolidated income statement, consolidated
statement of comprehensive income, consolidated
balance sheet, consolidated statement of changes
in equity, consolidated cash flow statement,
company balance sheet, company statement of
changes in equity, company cash flow statement
and the related notes, including the accounting
policies in note 1.
In our opinion:
— the financial statements give a true and fair
view of the state of the Group’s and of the
parent Company’s affairs as at 31 March 2021
and of the Group’s profit for the year then
ended;
— the Group financial statements have been
properly prepared in accordance with
international accounting standards in conformity
with the requirements of the Companies Act
2006;
— the parent Company financial statements have
been properly prepared in accordance with
international accounting standards in conformity
with the requirements of, and as applied in
accordance with the provisions of, the
Companies Act 2006; and
— the financial statements have been prepared in
accordance with the requirements of the
Companies Act 2006 and, as regards the Group
financial statements, Article 4 of the IAS
Regulation to the extent applicable.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit
evidence we have obtained is a sufficient and
appropriate basis for our opinion. Our audit opinion
is consistent with our report to the audit
committee.
We were first appointed as auditor by the Directors in
October 2000. The period of total uninterrupted
engagement is for the 21 financial years ended 31
March 2021. We have fulfilled our ethical
responsibilities under, and we remain independent of
the Group in accordance with, UK ethical requirements
including the FRC Ethical Standard as applied to listed
public interest entities. No non-audit services
prohibited by that standard were provided.
Overview
Materiality:
group financial
statements as a
whole
£1.1m (2020:£1.6m)
4.1% (2020: 4.8%) of profit
before tax, normalised to exclude
this year’s exceptional items and
discontinued operations and by
averaging over the last three years
Coverage
90% (2020: 86%) of group profit
before tax
Key audit matters vs 2020
Recurring risks Group – Carrying
◄►
amount and existence
of hire equipment
Group – Provision for
trade receivables
Parent Company –
Recoverability of
parent’s debt due from
group entities
◄►
◄►
101
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by
us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. We summarise below the key audit matters, in decreasing order of audit
significance, in arriving at our audit opinion above, together with our key audit procedures to address those matters and, as
required for public interest entities, our results from those procedures. These matters were addressed, and our results are
based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a
whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate
opinion on these matters.
Carrying amount of and
existence of hire equipment
(£207.2million; 2020: £227.1
million)
Refer to page 75 (Audit & Risk
Committee Report), page 110
(accounting policy) and page 127
(financial disclosures).
The risk
Our response
Physical quantities:
Our procedures included:
The Group has a large number of items
of hire equipment and a high frequency
of movement in assets, through asset
purchases, physical hires and disposals.
As such there is inherent difficulty in
maintaining an accurate register of the
Group’s hire equipment.
Subjective estimate
Judgement is applied by the Group in
the estimation of useful economic lives
and residual values. These judgements
are based on historical experience,
industry regulation, an assessment of
the nature of the assets involved and
the future expected usage and market
for the sale of assets. The judgements
made are profit impacting and therefore
there is an incentive for management to
manipulate the judgements made.
The effect of these matters is that, as
part of our risk assessment, we
determined that the estimation of useful
economic lives and residual values have
a high degree of estimation uncertainty,
with potential range of reasonable
outcomes greater than our materiality
for the financial statements as a whole
and potentially many times that amount.
This is more so in the current year
where residual values and useful
economic lives of assets may be
impacted by the current economic
condition caused by the Coronavirus
pandemic.
— Control design and re-performance:
Testing the design and operating
effectiveness of key controls including
authorisation of asset purchases.
— Control operation: Testing the design of
controls operating over hire equipment
asset counts. Testing the operating
effectiveness of these controls by
performing counts to test the accuracy of
the counting for a sample of hire equipment
assets.
— Test of details: Agreeing a statistical
sample of assets acquired and disposed of
during the year to third party evidence and
bank proceeds where applicable. Comparing
the hire equipment register for the current
year to prior year to determine any changes
made to useful economic lives and residual
values and challenging any changes to
assess whether they are consistent with
accounting policies and reflective of the
planned usage for those assets. Reviewing
profit or loss on disposal of hire equipment
to support the reasonableness of the useful
economic lives and residual values applied.
— Test of details: Comparing the hire
equipment register to hire revenue
information to identify the quantity and net
book value of assets not recently hired to
customers. Identifying from this analysis
those assets we consider to be at highest
risk of obsolescence, challenging the
company to provide evidence over the
existence and carrying amount of these
assets and inspecting this evidence.
— Assessing transparency: Assessing the
adequacy of the Group’s disclosures in
respect of the judgements and estimates
involved in arriving at the carrying amount of
hire equipment.
Our results
— As a result of our work we found that the
carrying amount and existence of hire
equipment were acceptable (2020:
acceptable).
102
2. Key audit matters: our assessment of risks of material misstatement (continued)
Provision for trade receivables
Subjective estimate:
Our procedures included:
The risk
Our response
(Net trade receivables:
£88.5million; 2020: £95.5 million)
(ECL Provision: £3.5million; 2020:
£3.9 million)
Refer to page 76 (Audit & Risk
Committee Report), page 114
(accounting policy) and page 129
(financial disclosures).
The Group’s customers operate mainly
in the construction market, which entails
a higher risk of non-recoverability of
trade receivables as evidenced by a
number of customers entering
administration or going into liquidation in
previous years.
— Test of details: Assessing the methodology
used to calculate the provision recorded
against trade receivables, challenging the
appropriateness of these provisions based
on historical bad debt write offs, collection
rates and the forecasted impact of
Coronavirus.
The risk of recoverability of all trade
receivables has been heightened at least
in the short term by the impact of
Coronavirus.
The effect of these matters is that, as
part of our risk assessment, we
determined that the provision for
doubtful debts has a high degree of
estimation uncertainty, with a potential
range of reasonable outcomes greater
than our materiality for the financial
statements as a whole. The financial
statements (note 1) disclose the
sensitivity estimated by the Group.
— Tests of details: Identifying a risk based
sample of receivables and analysing the
level of cash receipts post year end. For this
sample, assessing the adequacy of the
provision held by evaluating the payment
status of the receivable balance and the
customer’s likelihood of payment, including
independently agreeing the customer’s
latest credit score and assessing the legal
status of balances.
— Benchmarking assumptions: Assessing
the directors’ assumptions behind the
provision for trade receivables against
externally available data on trade credit
exposures;
— Assessing transparency: Assessing the
adequacy of the Group’s disclosures in
relation to the degree of estimation involved
in arriving at the carrying amount of the
trade receivables balance.
We performed the tests above rather than
seeking to rely on any of the group's controls
because the nature of the balance is such that
we would expect to obtain audit evidence
primarily through the detailed procedures
described.
Our results
— We found the provision for trade receivables
to be acceptable (2020: acceptable).
103
2. Key audit matters: our assessment of risks of material misstatement (continued)
Recoverability of parent’s debt
due from Group entities
(£306.6 million; 2020: £319.8
million)
Refer to page 114 (accounting
policy) and page 144 (financial
disclosures).
The risk
Our response
Low risk, high value:
Our procedures included:
The carrying amount of the intra-group
debtor balance represents 73% (2020:
71%) of the parent Company’s total
assets. The recoverability is not at a high
risk of significant misstatement or
subject to significant judgement.
However, due to its materiality in the
context of the parent Company financial
statements, this is considered to be the
area that had the greatest effect on our
overall parent Company audit.
— Tests of detail: Assessing 100% of Group
debtors to identify, with reference to the
relevant debtors’ draft balance sheet,
whether they have a positive net asset value
and therefore coverage of the debt owed, as
well as assessing whether those debtor
companies have historically been profit
making.
— Assessing subsidiary audits: Assessing
the work performed by the subsidiary audit
teams, and considering the results of that
work, on those net assets, including
assessing the liquidity of the assets and
therefore the ability of the subsidiary to fund
the repayment of the receivable.
We performed the tests above rather than
seeking to rely on any of the company's
controls because the small number of
transactions meant that detailed testing is
inherently the most effective means of
obtaining audit evidence.
Our results
— We found the conclusion that there is no
impairment of the intra-group debtor balance
to be acceptable (2020: acceptable).
We continue to perform procedures over going concern and Geason: contingent consideration, impairment, and the claim
provision, all of which were described as key audit matters in our prior year audit report. However, following evidence of the
Group’s track record throughout the Coronavirus pandemic and the settlement of the funding agency claim, we have not assessed
these as part of the most significant risks in our current year audit and, therefore, they are not separately identified in our report
this year. In the prior year we also reported a key audit matter in respect of the impact of uncertainties due to the UK exiting the
European Union. Following the trade agreement between the UK and the EU, and the end of the EU-exit implementation period,
the nature of these uncertainties has changed. We continue to perform procedures over material assumptions in forward looking
assessments such as going concern and impairment tests however we no longer consider the effect of the UK’s departure from
the EU to be a separate key audit matter.
104
3. Our application of materiality and an
overview of the scope of our audit
Normalised group profit before
tax
£27.1m (2020: £33.6m)
Materiality for the group financial statements as a
whole was set at £1.1m (2020: £1.6m), determined
with reference to a benchmark of group profit before
tax, normalised to exclude this year’s exceptional
items of £8.4m and discontinued operations as
disclosed in note 3 and by averaging over the last
three years due to fluctuations in the business cycle
caused by Coronavirus (2020: normalised to exclude
exceptional items of £12.9m), of which it represents
4.1% (2020: 4.8%).
Materiality for the parent company financial
statements as a whole was set at £1.0m (2020:
£1.1m), determined with reference to a benchmark
of company total assets, of which it represents 0.3%
(2020: 0.2%).
In line with our audit methodology, our procedures
on individual account balances and disclosures were
performed to a lower threshold, performance
materiality, so as to reduce to an acceptable level the
risk that individually immaterial misstatements in
individual account balances add up to a material
amount across the financial statements as a whole.
Performance materiality was set at 75% (2020: 75%)
of materiality for the financial statements as a whole,
which equates to £0.825m (2020: £1.2m) for the
group and £0.75m (2020: £0.825m) for the parent
company. We applied this percentage in our
determination of performance materiality because
we did not identify any factors indicating an elevated
level of risk.
We agreed to report to the Audit Committee any
corrected or uncorrected identified misstatements
exceeding £0.055m (2020: £0.08m), in addition to
other identified misstatements that warranted
reporting on qualitative grounds.
Of the group’s sixteen (2020: sixteen) reporting
components, we subjected nine (2020: twelve) to full
scope audits for group purposes and one (2020:
none) to specified risk-focused audit procedures. The
latter was not individually financially significant
enough to require a full scope audit for group
purposes, but did present specific individual risks
that needed to be addressed. We conducted reviews
of financial information (including enquiry) at a further
one (2020: one) non-significant component.
The components within the scope of our work
accounted for the percentages illustrated opposite.
The remaining 0% (2020: 0%) of total group
revenue, 10% (2020: 14%) of group profit before tax
and 0% (2020: 0%) of total group assets is
represented by five (2020: four) of reporting
components, none of which individually represented
more than 0.2% (2020: 1.0%) of any of total group
revenue, group profit before tax or total group
assets. For these components, we performed
analysis at an aggregated group level to re-examine
our assessment that there were no significant risks
of material misstatement within these.
Key:
Group materiality
£1.1m (2020: £1.6m)
£1.1m
Whole financial
statements materiality
(2020: £1.6m)
£0.825m
Whole financial
statements performance
materiality (2020: £1.1m)
£1.0m
Range of materiality at 10
components (£0.055m - £1m)
(2020: £0.1m - £1.1m)
£0.055m
Misstatements reported to the
audit committee (2020: £0.08m)
Normalised PBT
Group materiality
Group revenue
Group profit before tax
100%
(2020 100%)
100
100
90%
(2020 86%)
86
90
Group total assets
Group profit before exceptional
items and tax
100%
(2020 100%)
100
100
94%
(2020 91%)
91
94
Full scope for group audit purposes 2021
Specified risk-focused audit procedures 2021
Full scope for group audit purposes 2020
Specified risk-focused audit procedures 2020
Residual components
105
3. Our application of materiality and an overview
Our procedures also included:
of the scope of our audit (continued)
The Group team instructed component auditors as to
the significant areas to be covered, including the
relevant risks detailed above and the information to be
reported back. The Group team approved the
component materialities, which ranged from £0.055m to
£1.0m (2020: £0.1m to £1.1m), having regard to the mix
of size and risk profile of the Group across the
components. The work on three of the sixteen
components (2020: five of the sixteen) was performed
by component auditors and the rest, including the audit
of the parent company, was performed by the Group
team. The group team performed procedures on the
exceptional items excluded from normalised group
profit before tax.
The Group audit team held conference meetings with
the component auditors. At these meetings, the
findings reported to the Group audit team were
discussed in more detail and any further work required
by the Group audit team was then performed by the
component auditors.
4. Going concern
The Directors have prepared the financial statements on
the going concern basis as they do not intend to
liquidate the Group or the Company or to cease their
operations, and as they have concluded that the Group’s
and the Company’s financial position means that this is
realistic. They have also concluded that there are no
material uncertainties that could have cast significant
doubt over their ability to continue as a going concern
for at least a year from the date of approval of the
financial statements (“the going concern period”).
We used our knowledge of the Group, its industry, and
the general economic environment to identify the
inherent risks to its business model and analysed how
those risks might affect the Group’s and Company’s
financial resources or ability to continue operations over
the going concern period. The risk that we considered
most likely to adversely affect the Group’s and
Company’s available financial resources over this period
was:
— The general economic environment as a result of the
Coronavirus pandemic.
We considered whether this risk could plausibly affect
the liquidity or covenant compliance in the going
concern period by comparing severe, but plausible
downside scenarios that could arise from the risk
individually and collectively against the level of available
financial resources and covenants indicated by the
Group’s financial forecasts.
106
— Critically assessing assumptions in base case and
downside scenarios relevant to liquidity and covenant
metrics, in particular in relation to the current economic
environment by comparing to historical trends in severe
economic situations, including the Group’s experience
during the first national lockdown, and considering
knowledge of the Group’s plans based on approved
budgets and our knowledge of the Group and the sector
in which it operates.
— Assessing whether downside scenarios applied mutually
consistent and severe assumptions in aggregate, using
our assessment of the possible range of each key
assumption and our knowledge of inter-dependencies.
— Assessing the working capital assumptions inherent in
the forecasts to actual recent experience and existing
supplier/ customer arrangements.
— We also compared past budgets to actual results to
assess the Directors' track record of budgeting
accurately.
— We inspected the confirmation from the lenders of the
level of committed financing, and the associated
covenant requirements. As part of this we inspected the
latest correspondence surrounding the refinancing of the
loan facility.
— We inspected the finance agreement to assess the
restrictions on the use of funds and compared these
restrictions to management's model.
— We considered whether the going concern disclosure in
note 1 to the financial statements gives a full and
accurate description of the Directors' assessment of
going concern, including the identified risks,
dependencies and related sensitivities. We assessed the
completeness of the going concern disclosure.
Our conclusions based on this work:
— we consider that the Directors’ use of the going concern
basis of accounting in the preparation of the financial
statements is appropriate;
— we have not identified, and concur with the Directors’
assessment that there is not, a material uncertainty
related to events or conditions that, individually or
collectively, may cast significant doubt on the Group’s or
Company's ability to continue as a going concern for the
going concern period;
— we have nothing material to add or draw attention to in
relation to the Directors’ statement in note 1 to the
financial statements on the use of the going concern
basis of accounting with no material uncertainties that
may cast significant doubt over the Group and
Company’s use of that basis for the going concern
period, and we found the going concern disclosure in
note 1to be acceptable; and
— the related statement under the Listing Rules set out on
page 108 is materially consistent with the financial
statements and our audit knowledge.
However, as we cannot predict all future events or
conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that were
reasonable at the time they were made, the above
conclusions are not a guarantee that the Group or the
Company will continue in operation.
5. Fraud and breaches of laws and regulations – ability
We also performed procedures including:
to detect
Identifying and responding to risks of material
misstatement due to fraud
To identify risks of material misstatement due to fraud
(“fraud risks”) we assessed events or conditions that could
indicate an incentive or pressure to commit fraud or provide
an opportunity to commit fraud. Our risk assessment
procedures included:
— Enquiring of Directors, the Audit and Risk Committee,
Internal Audit and the Group’s legal counsel and
inspection of policy documentation as to the Group’s
high-level policies and procedures to prevent and detect
fraud, including the internal audit function and the
Group’s channel for “whistleblowing”, as well as
whether they have knowledge of any actual, suspected
or alleged fraud.
— Reading board and Audit and Risk Committee meeting
minutes.
— Considering remuneration incentive schemes and
performance targets for management and Directors
including the EPS target for management remuneration.
— Using analytical procedures to identify any unusual or
unexpected relationships.
We communicated identified fraud risks throughout the
audit team and remained alert to any indications of fraud
throughout the audit. This included communication from the
Group to full scope component audit teams of relevant
fraud risks identified at the Group level and request to full
scope component audit teams to report to the Group audit
team any instances of fraud that could give rise to a
material misstatement at group.
As required by auditing standards, and taking into account
possible pressures to meet profit targets and our overall
knowledge of the control environment, we perform
procedures to address the risk of management override of
controls and the risk of fraudulent revenue recognition, in
particular the risk that revenue is recorded in the wrong
period, the risk that Group and component management
may be in a position to make inappropriate accounting
entries and the risk of bias in accounting estimates and
judgements such as the estimation of useful economic lives
and residual values and the estimated credit loss provision.
We did not identify any additional fraud risks.
Further detail in respect of the fraud risk from the ability for
management to manipulate useful economic lives and
residual values is set out in the key audit matter disclosures
in section 2 of this report.
In determining the audit procedures we took into account
the results of our evaluation and testing of the operating
effectiveness of some of the Group-wide fraud risk
management controls as discussed in page 12 of our report
dated 19 May 2021 to the Audit and Risk Committee.
— Identifying journal entries and other adjustments to test
for all full scope components based on risk criteria and
comparing the identified entries to supporting
documentation. These included those posted to
unexpected or unusual accounts and those posted
between hire equipment and administration costs.
— Evaluated the business purpose of significant unusual
transactions.
— Assessing significant accounting estimates for bias.
We discussed with the audit committee other matters
related to actual or suspected fraud, for which disclosure is
not necessary, and considered any implications for our
audit.
Identifying and responding to risks of material
misstatement due to non-compliance with laws and
regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the
financial statements from our general commercial and
sector experience and through discussion with the
Directors and other management (as required by auditing
standards), and from inspection of the Group’s regulatory
and legal correspondence and discussed with the Directors
and other management the policies and procedures
regarding compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved
gaining an understanding of the control environment
including the entity’s procedures for complying with
regulatory requirements.
We communicated identified laws and regulations
throughout our team and remained alert to any indications
of non-compliance throughout the audit. This included
communication from the group to full-scope component
audit teams of relevant laws and regulations identified at
the Group level, and a request for full scope component
auditors to report to the group team any instances of non-
compliance with laws and regulations that could give rise to
a material misstatement at group.
The potential effect of these laws and regulations on the
financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that
directly affect the financial statements including financial
reporting legislation (including related companies
legislation), distributable profits legislation and taxation and
we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial
statement items.
Secondly , the Group is subject to many other laws and
regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in
the financial statements, for instance through the
imposition of fines or litigation. We identified the following
areas as those most likely to have such an effect: health
and safety, anti-bribery, employment law, regulatory capital
and liquidity and certain aspects of company legislation
recognising the financial and regulated nature of the
Group’s activities and its legal form. Auditing standards
limit the required audit procedures to identify non-
compliance with these laws and regulations to enquiry of
the Directors and other management and inspection of
regulatory and legal correspondence, if any. Therefore if a
breach of operational regulations is not disclosed to us or
evident from relevant correspondence, an audit will not
detect that breach.
107
5. Fraud and breaches of laws and regulations – ability
to detect (continued)
Disclosures of emerging and principal risks and longer-
term viability
Context of the ability of the audit to detect fraud or
breaches of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the financial statements, even
though we have properly planned and performed our audit
in accordance with auditing standards. For example, the
further removed non-compliance with laws and regulations
is from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures
required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk
of non-detection of fraud, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal controls. Our audit procedures are
designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and
cannot be expected to detect non-compliance with all laws
and regulations.
6. We have nothing to report on the other information
in the Annual Report
The Directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does
not cover the other information and, accordingly, we do not
express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial
statements audit work, the information therein is materially
misstated or inconsistent with the financial statements or
our audit knowledge. Based solely on that work we have
not identified material misstatements in the other
information.
Strategic report and Directors’ report
Based solely on our work on the other information:
— we have not identified material misstatements in the
strategic report and the Directors’ report;
— in our opinion the information given in those reports for
the financial year is consistent with the financial
statements; and
— in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
108
We are required to perform procedures to identify whether
there is a material inconsistency between the Directors’
disclosures in respect of emerging and principal risks and
the viability statement, and the financial statements and
our audit knowledge.
Based on those procedures, we have nothing material to
add or draw attention to in relation to:
— the Directors’ confirmation within Directors’ Viability
Statement on page 55 that they have carried out a
robust assessment of the emerging and principal risks
facing the Group, including those that would threaten its
business model, future performance, solvency and
liquidity;
— the Principal Risks disclosures describing these risks
and how emerging risks are identified, and explaining
how they are being managed and mitigated; and
— the Directors’ explanation in the Directors’ Viability
Statement of how they have assessed the prospects of
the Group, over what period they have done so and why
they considered that period to be appropriate, and their
statement as to whether they have a reasonable
expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the
period of their assessment, including any related
disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the Directors’ Viability
Statement set out on page 55 under the Listing Rules.
Based on the above procedures, we have concluded that
the above disclosures are materially consistent with the
financial statements and our audit knowledge.
Our work is limited to assessing these matters in the
context of only the knowledge acquired during our financial
statements audit. As we cannot predict all future events or
conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that were
reasonable at the time they were made, the absence of
anything to report on these statements is not a guarantee
as to the Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether
there is a material inconsistency between the Directors’
corporate governance disclosures and the financial
statements and our audit knowledge.
Based on those procedures, we have concluded that each
of the following is materially consistent with the financial
statements and our audit knowledge:
— the Directors’ statement that they consider that the
annual report and financial statements taken as a whole
is fair, balanced and understandable, and provides the
information necessary for shareholders to assess the
Group’s position and performance, business model and
strategy;
— the section of the annual report describing the work of
the Audit Committee, including the significant issues
that the audit committee considered in relation to the
financial statements, and how these issues were
addressed; and
— the section of the annual report that describes the
review of the effectiveness of the Group’s risk
management and internal control systems.
6. We have nothing to report on the other information
in the Annual Report (continued)
9. The purpose of our audit work and to whom we owe
our responsibilities
This report is made solely to the Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the
Company’s members, as a body, for our audit work, for this
report, or for the opinions we have formed.
Nick Plumb (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
1 St Peter’s Square
Manchester
M2 3AE
24 May 2021
Corporate governance disclosures (continued)
We are required to review the part of the Corporate
Governance Statement relating to the Group’s compliance
with the provisions of the UK Corporate Governance Code
specified by the Listing Rules for our review. We have
nothing to report in this respect.
7. We have nothing to report on the other matters on
which we are required to report by exception
Under the Companies Act 2006, we are required to report
to you if, in our opinion:
— adequate accounting records have not been kept by the
parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or
— the parent Company financial statements and the part
of the Directors’ Remuneration Report to be audited
are not in agreement with the accounting records and
returns; or
— certain disclosures of Directors’ remuneration specified
by law are not made; or
— we have not received all the information and
explanations we require for our audit.
We have nothing to report in these respects.
8. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page
65, the Directors are responsible for: the preparation of the
financial statements including being satisfied that they give
a true and fair view; such internal control as they determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error; assessing the Group and
parent Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern;
and using the going concern basis of accounting unless
they either intend to liquidate the Group or the parent
Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the
FRC’s website at www.frc.org.uk/auditorsresponsibilities.
109
Financial Statements
CONTENTS
Financial Statements
Consolidated
Income Statement
111
Consolidated Statement of
Comprehensive Income 112
Consolidated
Balance Sheet
113
Consolidated Statement
of Changes in Equity
114
Consolidated Cash
Flow Statement
Notes to the
Financial Statements 116
Company Balance Sheet 147
Company Statement
of Changes in Equity
Company Cash
Flow Statement
148
149
Notes to the Company
Financial Statements 150
115
Five-year summary
154
Consolidated Income Statement
For the year ended 31 March 2021
Revenue
Cost of sales
Gross profit
Distribution and administrative costs
Analysis of operating profit
Operating profit before amortisation
and exceptional items
Amortisation
Exceptional items
Operating profit
Share of results of joint venture
Profit from operations
Net financial expense
Exceptional financial income
Profit before taxation
Taxation
Profit for the financial year
Earnings per share
Basic (pence)
Diluted (pence)
Non-GAAP performance measures
EBITDA before exceptional items
Adjusted profit before tax
Adjusted earnings per share (pence)
Year ended March 2021
Year ended March 2020
Note
2
Continuing Discontinued
operations
operations
£m
£m
332.3
(147.4)
184.9
(172.4)
31.3
(23.6)
7.7
(3.2)
Total
£m
363.6
(171.0)
192.6
(175.6)
Continuing Discontinued
operations
operations
£m
£m
371.5
(157.2)
214.3
(205.7)
35.2
(25.3)
9.9
(4.5)
Total
£m
406.7
(182.5)
224.2
(210.2)
13
4
5
8
4
9
10
10
12
12
10
21.7
(0.8)
(8.4)
12.5
1.2
13.7
(5.4)
–
8.3
(2.2)
6.1
1.17
1.15
85.3
17.5
2.68
3.7
–
0.8
4.5
–
4.5
(0.5)
–
4.0
(0.6)
3.4
0.65
0.64
5.2
3.2
0.54
25.4
(0.8)
(7.6)
17.0
1.2
18.2
(5.9)
–
12.3
(2.8)
9.5
1.82
1.79
90.5
20.7
3.22
33.4
(1.3)
(23.5)
8.6
2.8
11.4
(6.2)
10.9
16.1
(3.9)
12.2
2.35
2.32
99.2
30.0
4.60
5.7
–
(0.3)
5.4
–
5.4
(0.8)
–
4.6
–
4.6
0.88
0.87
8.2
4.9
0.94
39.1
(1.3)
(23.8)
14.0
2.8
16.8
(7.0)
10.9
20.7
(3.9)
16.8
3.23
3.19
107.4
34.9
5.54
The accompanying notes form part of the Financial Statements.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 111
Strategic ReportCorporate InformationGovernanceFinancial Statements
Consolidated Statement
of Comprehensive Income
For the year ended 31 March 2021
Profit for the financial year
Other comprehensive income that may be reclassified subsequently to the Income Statement:
Effective portion of change in fair value of cash flow hedges
Exchange difference on translation of foreign operations
Tax on items
Other comprehensive income, net of tax
Total comprehensive income for the financial year
The accompanying notes form part of the Financial Statements.
Year ended Year ended
31 March
2020
£m
31 March
2021
£m
9.5
16.8
0.2
(1.4)
–
(1.2)
8.3
(0.2)
0.9
0.1
0.8
17.6
112 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Consolidated Balance Sheet
At 31 March 2021
Assets
Non-current assets
Intangible assets
Investment in joint venture
Property, plant and equipment
Hire equipment
Non-hire equipment
Right of use assets
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Cash
Current tax asset
Total assets
Liabilities
Current liabilities
Borrowings
Lease liabilities
Other financial liabilities
Trade and other payables
Provisions
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Deferred tax liability
Total liabilities
Net assets
Equity
Share capital
Share premium
Merger reserve
Hedging reserve
Translation reserve
Retained earnings
Total equity
Note
31 March
2021
£m
31 March
2020
£m
13
14
15
15
16
24
17
18
21
21
22
19
23
21
22
23
24
25
24.7
6.2
207.2
25.9
59.1
2.5
325.6
8.2
93.3
11.7
1.1
114.3
439.9
23.1
7.3
227.1
30.5
64.7
2.8
355.5
8.7
102.3
22.8
1.5
135.3
490.8
(0.5)
(19.3)
(0.4)
(94.8)
(3.1)
–
(20.2)
(0.5)
(90.9)
(5.9)
(118.1)
(117.5)
(44.4)
(46.5)
(2.9)
(8.8)
(102.6)
(220.7)
219.2
26.4
1.3
1.0
(0.7)
(1.0)
192.2
219.2
(102.1)
(52.7)
(1.2)
(7.4)
(163.4)
(280.9)
209.9
26.4
0.8
1.0
(0.9)
0.4
182.2
209.9
The accompanying notes form part of the Financial Statements.
The Consolidated Financial Statements on pages 111 to 146 were approved by the Board of Directors on 24 May 2021 and were
signed on its behalf by:
James Bunn
Director
Company registered number: 00927680
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 113
Strategic ReportCorporate InformationGovernanceFinancial Statements
Consolidated Statement
of Changes in Equity
For the year ended 31 March 2021
Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Hedging
reserve
£m
Translation
reserve
£m
Retained
earnings
£m
At 1 April 2019
Total comprehensive income
Dividends
Tax on items taken directly to equity
Equity-settled share-based payments
Issue of shares under the Sharesave Scheme
At 31 March 2020
Total comprehensive income
Equity-settled share-based payments
Issue of shares under the Sharesave Scheme
At 31 March 2021
26.3
–
–
–
–
0.1
26.4
–
–
–
26.4
0.4
–
–
–
–
0.4
0.8
–
–
0.5
1.3
1.0
–
–
–
–
–
1.0
–
–
–
1.0
(0.7)
(0.2)
–
–
–
–
(0.9)
0.2
–
–
(0.7)
(0.5)
0.9
–
–
–
–
0.4
(1.4)
–
–
(1.0)
175.5
16.9
(10.9)
0.2
0.5
–
182.2
9.5
0.5
–
192.2
The accompanying notes form part of the Financial Statements.
Total
equity
£m
202.0
17.6
(10.9)
0.2
0.5
0.5
209.9
8.3
0.5
0.5
219.2
114 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Consolidated Cash Flow Statement
For the year ended 31 March 2021
Note
Year ended
31 March
2021
£m
Year ended
31 March
2020
£m
Cash generated from operating activities
Profit before tax
Financial expense
Exceptional intangible asset impairment
Exceptional financial income
Amortisation
Depreciation
Share of profit from joint venture
Termination of lease contracts
Loss/(Profit) on disposal of hire equipment
Loss/(Profit) on disposal of non-hire equipment
Decrease in inventories
Decrease/(increase) in trade and other receivables
Increase in trade and other payables
Movement in provisions
Translation reserve recycled on disposal of Middle East assets
Equity-settled share-based payments
Cash generated from operations before changes in hire fleet
Purchase of hire equipment
Proceeds from sale of hire equipment
Cash generated from operations
Interest paid
Tax paid
Net cash flow from operating activities
Cash flow from investing activities
Purchase of non-hire property, plant and equipment and IT development
Proceeds from sale of non-hire property, plant and equipment
Proceeds from disposal of Middle East assets
Investment in joint venture
Net cash flow from investing activities
Net cash flow before financing activities
Cash flow from financing activities
Payments for the principle element of leases
Net loan (repayment)/drawdown
Proceeds from the issue of Sharesave Scheme shares
Dividends paid
Net cash flow from financing activities
(Decrease)/increase in cash and cash equivalents
Net cash at the start of the financial year
Net cash at the end of the financial year
Analysis of cash and cash equivalents
Cash
Bank overdraft
The accompanying notes form part of the Financial Statements.
21
21
12.3
5.9
–
–
0.8
68.1
(1.2)
(4.1)
1.0
0.5
0.5
9.3
3.6
(1.1)
1.0
0.5
97.1
(36.4)
12.2
72.9
(6.0)
(0.8)
66.1
(11.2)
0.8
13.0
1.0
3.6
69.7
(23.6)
(58.2)
0.5
–
(81.3)
(11.6)
22.8
11.2
11.7
(0.5)
11.2
20.7
7.0
18.5
(10.9)
1.3
69.4
(2.8)
(2.4)
(0.8)
(3.9)
0.4
(0.6)
5.4
4.6
–
0.5
106.4
(53.6)
11.7
64.5
(6.5)
(9.3)
48.7
(9.0)
4.2
–
1.3
(3.5)
45.2
(24.5)
2.1
0.5
(10.9)
(32.8)
12.4
10.4
22.8
22.8
–
22.8
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 115
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements
1 Accounting policies
Speedy Hire Plc is a company incorporated and domiciled in the United Kingdom. The consolidated Financial Statements of the
Company for the year ended 31 March 2021 comprise the Company and its subsidiaries (together referred to as the ‘Group’).
The Group and Parent Company Financial Statements were approved by the Board of Directors on 24 May 2021.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these
consolidated Financial Statements. In accordance with IFRS 5 ‘Non-current Assets Held for Sale and Discontinued Operations’, the
comparative income statement has been re-presented for the disclosures of discontinued operations relating to all operations that
have been discontinued by the balance sheet date (see Note 3).
Statement of compliance
Both the Group and Parent Company Financial Statements have been prepared and approved by the Board of Directors in accordance
with International Financial Reporting Standards as adopted by the European Union (‘IFRS’) and in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006 (“Adopted IFRS”).
Furthermore, the Financial Statements have been prepared in accordance with international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
Basis of preparation
The Directors consider the going concern basis of preparation for the Group and Company to be appropriate for the following reasons.
The Group has a £180m asset based finance facility (‘the facility‘) which expires in October 2022 and has no prior scheduled
repayment requirements. The total cash and undrawn availability on the facility as at 31 March 2021 was £142.3m (2020: £99.0m)
based on the Group’s eligible hire equipment and trade receivables.
The Group meets its day-to-day working capital requirements through operating cash flows, supplemented as necessary by borrowings.
The Directors have prepared a going concern assessment up to 31 May 2022, which confirms that the Group is capable of continuing
to operate within its existing loan facility and can meet the covenant requirements set out within the facility. The key assumptions
on which the projections are based include an assessment of the impact of future market conditions on projected revenues and an
assessment of the net capital investment required to support the expected level of revenues, including a continuation of the impact
of the increased economic uncertainty resulting from COVID-19.
The Board has considered various possible downside scenarios to the base case, which result in reduced levels of revenue across the
Group, whilst maintaining the same cost base. Mitigations applied in these downturn scenarios include a reduction in planned capital
expenditure. Despite the significant impact of the assumptions applied in these scenarios, the Group maintains sufficient headroom
against its available facility and covenant requirements.
Whilst the Directors consider that there is a degree of subjectivity involved in their assumptions, on the basis of the above the
Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational
existence for a period of at least 12 months from the date of approval of these Financial Statements. Accordingly, they continue
to adopt the going concern basis of accounting in preparing the Financial Statements.
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Company. The Group controls an entity when it is exposed to variable returns and has the
ability to use its power to alter its returns from its involvement with the entity. The Financial Statements of subsidiaries are included in
the consolidated Financial Statements from the date that control commences until the date that control ceases.
Intra-group balances, and any unrealised gains and losses or income and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated Financial Statements.
Joint ventures
A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the
arrangement, rather than rights to its assets and obligations for its liabilities.
Interest in joint ventures are accounted for using the equity method. They are initially recognised at cost. Subsequent to initial
recognition, the consolidated Financial Statements include the Group’s share of the profit or loss and other comprehensive income
of equity-accounted investees, until the date on which significant influence or joint control ceases.
116 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
1 Accounting policies continued
New accounting standards and accounting standards not yet effective
The following new standards, amendments to standards and interpretations issued by the International Accounting Standards Board
(‘IASB’) became effective during the year:
Amendment to IFRS 16
IFRIC 23
Amendments to IFRS 4
Amendments to IFRS 9, IAS 39 and IFRS17
Related Rent Concessions
Uncertainty over Income Tax Treatments
Deferral of IFRS 9
Interest Rate Benchmark Reform
The IASB and International Financial Reporting Interpretations Committee (‘IFRIC’) have also issued the following standards and
interpretations at 31 March 2021 with an effective date of implementation after the date of these Financial Statements. Their adoption
is not expected to have a material effect on the Financial Statements:
International Accounting Standards (IAS)/IFRS
Effective date
(periods beginning on or after)
Amendments to IFRS 3*
IFRS 17
Amendments to IAS 1*
Various standards
Amendments to IAS 1*
Amendments to IAS 8*
Amendments to IFRS 16*
* Not yet endorsed by the UKEB.
Definition of a Business
Insurance Contracts
Classification of Liabilities as Current or Non-current
Amendments to References to the Conceptual Framework in IFRS Standards
Disclosure of accounting policies
Changes in accounting estimates
Leases COVID Related Rent Concessions beyond 30 June 2021
1 January 2022
1 January 2023
1 January 2023
1 January 2022
1 January 2023
1 January 2023
1 January 2021
Accounting for leasing activities under IFRS 16
The Group holds leases for a number of properties and vehicles. Rental contracts are typically entered into for fixed periods of
one to ten years but may have break options or extension options as set out below. Such leases can contain a wide range of different
terms and conditions. On transition to IFRS 16 the Group reassessed its other contracts to identify whether they contained a lease.
Until 31 March 2018, leases of property, plant and equipment were classified as either operating leases or finance leases.
Payments made under operating leases (net of any incentives received from the lessor) were charged to the Income Statement
on a straight-line basis over the lease term.
From 1 April 2018, leases are recognised as a right of use asset and a corresponding liability at the date at which the leased asset
is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged
to the Income Statement over the lease period. The right of use asset is depreciated over the lease term on a straight-line basis.
Lease liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value
of fixed payments (including in-substance fixed payments) and variable lease payments that are based on a specified index or rate.
The lease payments are discounted using the Group's incremental borrowing rate (if the interest rate implicit in the lease is not
readily determinable). This rate is the interest rate the Group would have to pay to borrow the funds necessary to obtain an asset
of similar value over a similar term and with similar security to the right of use asset in a similar economic environment.
Right of use assets are measured at cost comprising the amount of the initial measurement of the lease liability, any initial direct
costs, any restoration costs, and any lease payments made at or before the commencement date. Payments associated with
short term leases and leases of low value assets are recognised on a straight-line basis as an expense in the Income Statement.
Short term leases are certain leases with a lease term of 12 months or less. Low value assets comprise certain small items of
IT equipment and office furniture where the cash value when new is considered immaterial.
Extension and termination options are included in a number of leases across the Group. These terms are used to maximise operational
flexibility in terms of managing contracts. In determining the lease term applicable for accounting purposes, consideration is given
to all facts and circumstances that create economic incentive to exercise an extension option, or not to exercise a termination
option. Extension options are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
The assessment is reviewed if a significant event or significant change in circumstances occurs which affects this assessment
and that is within the control of the Group.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 117
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
1 Accounting policies continued
Accounting for leasing activities under IFRS 16 continued
COVID-19 related rent concessions
The Group has applied COVID-19-Related Rent Concessions – Amendment to IFRS 16. The Group applies the practical expedient
allowing it not to assess whether eligible rent concessions that are a direct consequence of the COVID-19 pandemic are lease
modifications. For rent concessions which do not qualify for the practical expedient, the Group assesses whether there is a
lease modification.
As the Group has chosen to apply the practical expedient, rent waivers granted have been treated as variable lease payments,
and therefore a credit has been recognised in the profit and loss account.
Revenue
Revenue is measured based on the consideration specified in a contract with a customer net of returns, trade discounts and
volume rebates. Customer invoicing is typically performed multiple times a month on standard payment terms. The Group reports
three revenue categories:
i) Hire and related activities
The Group recognises revenue for hire services on a straight-line basis over the period of hire, adjusted for rebates. Revenue
is recognised for transport services provided at the point at which delivery or collection is completed. Revenue for repairs is
recognised when damage is identified.
ii) Services revenue
The Group recognises revenue for rehire services on a straight-line basis over the period of hire, adjusted for rebates. The Group
recognises revenue for training services over time as the service is provided to the customer. Revenue for testing is recognised at a
point-in-time once certification is provided. The Group recognises revenue on the sale of consumables (including fuel) on a point-
in-time basis when control is transferred to the customer.
iii) Disposals revenue
The Group recognises revenue on planned asset disposals on a point-in-time basis when control is transferred to the customer.
Discontinued operations
A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical
area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for
sale, if earlier. When an operation is classified as a discontinued operation, the comparative income statement is restated as if the
operation has been discontinued from the start of the comparative period.
Property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes
expenditure that is directly attributable to the acquisition or the refurbishment of the asset where the refurbishment extends the
asset’s useful economic life.
Depreciation of property, plant and equipment is charged to the income statement so as to write off the cost of the assets over their
estimated useful economic lives after taking account of estimated residual values. Residual values and estimated useful economic
lives are reassessed at least annually. Land is not depreciated. Hire equipment assets are depreciated so as to write down to their
residual value over their normal useful lives, which range from three to fifteen years depending on the category of the asset.
118 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
1 Accounting policies continued
Property, plant and equipment continued
The principal rates and methods of depreciation used are as follows:
Hire equipment
Tools and general equipment
Between three and seven years straight-line
Access equipment
Surveying equipment
Power equipment
Non-hire assets
Between five and fifteen years straight-line
Five years straight-line
Between five and ten years straight-line
Freehold buildings and long leasehold improvements
Over the shorter of the lease period and 50 years straight-line
Short leasehold property improvements
Over the period of the lease
Fixtures and fittings and office equipment (excluding IT)
25%-45% per annum straight-line
IT equipment and software
Between three and five years straight-line, or over the
period of the software licence (if shorter)
Motor vehicles
25% per annum straight-line
Planned disposals of hire equipment are transferred, at net book value, to inventory prior to sale, with the sale included in revenue.
Profit or loss on other disposals is taken to operating profit as shown in Note 5.
Financing income and costs
Financing costs comprise interest payable on borrowings and lease liabilities, and gains and losses on financial instruments that
are recognised in the income statement.
Interest income is recognised in the income statement as it accrues, using the effective interest rate.
Interest payable on borrowings includes a charge in respect of attributable transaction costs and non-utilisation fees, which are
recognised in the income statement over the period of the borrowings on an effective interest basis.
IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
Government grants have been recognised in line with the accrual method. During the period, certain employees were placed on furlough
under Job Retention Schemes. Furlough income of £8.9m in relation to a maximum of 1,740 employees has been recognised in the
year ended 31 March 2021 and as such the Group has adopted IAS 20 in accounting for this Government assistance. The grant has been
recognised as income and matched with associated payroll costs over the same period. There are no unfulfilled conditions at year end.
Income tax
Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it
is recognised in equity. Income tax comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for
the year, using tax rates substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet liability method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary
differences are not provided for: goodwill not deductible for tax purposes, the initial recognition of assets or liabilities affecting
neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably
not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
IAS 12 ‘Income Taxes’, does not require all temporary differences to be provided for. In particular, the Group does not provide for
deferred tax on undistributed earnings of subsidiaries where the Group is able to control the timing of the distribution and the
temporary difference created is not expected to reverse in the foreseeable future.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which
the asset can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 119
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
1 Accounting policies continued
Segment reporting
The Group determines and presents operating segments based on the information that is provided internally to the Board, which
is the Group’s ‘chief operating decision-maker’.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any other member of the Group and for which discrete
financial information is available. An operating segment’s operating results are reviewed regularly by the Board to make decisions
about resources to be allocated to the segment and to assess its performance.
Segment results that are reported to the Board include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly corporate assets and head office expenses.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible
assets other than goodwill.
Intangible assets
Goodwill
All business combinations are accounted for by applying the purchase method. The Group measures goodwill at the acquisition date as:
• The fair value of the consideration transferred; plus
• The recognised amount of any non-controlling interests in the acquiree; plus
• The fair value of the existing equity interest in the acquiree; less
• The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in the income statement.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified
as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the
contingent consideration are recognised in the income statement.
Goodwill is stated after any accumulated impairment losses and is included as an intangible asset. It is allocated to cash-generating
units and is tested annually for impairment and at each reporting date to the extent that there are any indicators of impairment.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Other intangible assets
Intangible assets other than goodwill that are acquired by the Group are stated at cost less accumulated amortisation and impairment
losses (Note 13).
Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred.
Amortisation
Amortisation is charged to the income statement on a straight-line basis over the estimated useful economic lives of identified
intangible assets. Intangible assets excluding goodwill are amortised from the date that they are available for use. For a number
of its acquisitions, the Group has identified intangible assets in respect of customer lists and brands. The values of these intangibles
are recognised as part of the identifiable assets, liabilities and contingent liabilities acquired. The useful lives are estimated as follows:
Customer lists
Brands
Over the period of the expected benefit, up to ten years
Over the period of use in the business, up to ten years
120 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
1 Accounting policies continued
Dividend distribution
Dividend distributions to the Company’s shareholders are recognised as a liability in the Group’s Financial Statements in the period
in which the dividends are declared.
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
Impairments
The carrying amounts of the Group’s non-financial assets, other than deferred tax, are reviewed at each reporting date to determine
whether there is any impairment. If any such indication exists, then the asset’s recoverable amount is estimated, being the higher
of net realisable value and value in use, and if there is an impairment loss then this loss is recognised such that the carrying amount
is reduced accordingly.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill
allocated to the units and then to reduce the carrying amount of the other assets in the unit (or group of units) on a pro-rata basis.
Own shares held by Employee Benefits Trust
Transactions of the Company-sponsored Employee Benefits Trust are treated as being those of the Company and are therefore
reflected in the Company and Group Financial Statements. In particular, the Trust’s purchases of shares in the Company are
charged directly to equity.
Inventories
Inventories are measured at the lower of cost and net realisable value. Assets transferred from the hire fleet are measured at the
lower of cost less accumulated depreciation and impairment at the date of transfer, or net realisable value. The cost of inventories is
based on the first-in, first-out principle. In the case of manufactured inventories and work in progress, cost includes an appropriate
share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and selling expenses.
Derivative financial instruments
The Group uses derivative financial instruments to hedge its exposure to interest rate risks arising from financing activities.
In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes;
however derivatives that do not qualify for hedge accounting are accounted for as trading instruments and the movement in
fair value is recognised in the income statement.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the income statement when
incurred. Subsequent to initial recognition, changes in the fair value of the derivative hedging instrument designated as a cash
flow hedge are recognised directly in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective,
changes in fair value are recognised in the income statement.
If the hedging instrument expires, no longer meets the criteria for hedge accounting, is sold, is terminated or is exercised, then hedge
accounting is discontinued prospectively. The cumulative gain or loss previously recognised in equity remains there until the forecast
transaction occurs. When the hedged item is a non-financial asset, the amount recognised in equity is transferred to the carrying
amount of the asset when it is recognised. In other cases the amount recognised in equity is transferred to the income statement
in the same period that the hedged item affects the income statement.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 121
Strategic ReportCorporate InformationGovernanceFinancial Statements Notes to the Financial Statements continued
1 Accounting policies continued
Intra-group financial instruments
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within the Group,
the Company considers these to be insurance arrangements and accounts for them as such. In this respect the Company treats the
guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to make a
payment under the guarantee.
Trade and other receivables
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition, they are measured at amortised cost
using the effective interest method, less any impairment losses.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and overnight deposits.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less directly attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being
recognised in the income statement over the period of the borrowings on an effective interest basis.
Start-up expenses
Legal and start-up expenses incurred in respect of new depots are written off as incurred.
Provisions and contingent liabilities
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past
event, the obligation can be measured reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Contingent
liabilities are disclosed for possible obligations whose existence will be confirmed by uncertain future events, or where settlement
values cannot be measured reliably.
Employee benefits
Pension schemes
The Group has automatically enrolled UK employees in a defined contribution pension plan and makes contributions to personal
pension schemes for these UK employees and certain other non-UK employees. Obligations for contributions to these defined
contribution pension plans are recognised as an expense in the income statement as incurred. In addition, a requirement exists in
United Arab Emirates, where the Group operated, to pay terminal gratuities to employees based on their length of service when
they leave the Group’s employment.
Share-based payment transactions
The Group operates a number of schemes that allow certain employees to acquire shares in the Company, including the Performance
Share Plan and the all-employee Sharesave Schemes. The fair value of options granted is recognised as an employee expense with
a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees
become unconditionally entitled to the options. The fair value of the options granted is measured, using an appropriate option-pricing
model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of share options that vest, except where it is related to market based performance conditions.
For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to
reflect such conditions and there is no adjustment for differences between expected and actual outcomes.
122 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
1 Accounting policies continued
Translation of foreign currencies
Transactions in foreign currencies are initially recorded at the rate of exchange prevailing at the transaction date. Monetary assets
and liabilities denominated in foreign currencies are retranslated at the rates of exchange ruling at the balance sheet date. Exchange
gains and losses arising on settlement or retranslation of monetary assets and liabilities are included in the income statement.
Assets and liabilities of overseas subsidiaries are translated at the rate of exchange ruling at the balance sheet date. The results of
overseas subsidiary undertakings are translated into sterling at the average rates of exchange during the period. Exchange differences
resulting from the translation of the results and balances of overseas subsidiaries are charged or credited directly to the foreign
currency translation reserve.
Gains and losses on intercompany foreign currency loans that are long-term in nature, and which the Company does not intend to
settle in the foreseeable future, are also recorded in the foreign currency translation reserve.
Significant judgements and estimates
The preparation of Financial Statements requires management to make judgements, estimates and assumptions in applying the
accounting policies that affect the reported amounts of assets and liabilities, income and expense. The estimates and associated
assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances,
the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
The judgements, estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods. The following accounting policies are limited to those items that would be
most likely to produce materially different results were the underlying judgements, estimates and assumptions changed.
The following are significant sources of estimation uncertainty that management has made in the process of applying the
accounting policies and that have the most significant risk of resulting in a material adjustment within the next financial year.
Hire equipment
In relation to the Group’s hire equipment (Note 15), useful economic lives and residual values of assets have been established
using historical experience and an assessment of the nature of the assets involved. At 31 March 2021, the carrying value of hire
equipment was £207.2m (2020: £227.1m), representing 88.9% (2020: 88.2%) of the total property, plant and equipment. The hire
equipment depreciation charge for the year ended 31 March 2021 was £33.7m (2020: £34.9m), which represents 8.5% (2020:
8.8%) of the average original cost of hire equipment. Both useful economic lives and residual values are reviewed on a regular
basis. Given the varied portfolio and range of assumptions relating to both the useful economic lives and residual values of the
Group’s hire equipment, it is not practical to disclose sensitivity analysis.
Valuation of trade receivables
The Group monitors the risk profile of trade receivables regularly and makes a provision for amounts that may not be recoverable
on the basis of expected portfolio losses, including the impact of recent economic conditions. When a trade receivable is not
collectable it is written off against the bad debt provision. At 31 March 2021, the provision for bad debt was £3.5m (2020: £3.9m)
against a total debtor book of £93.4m (2020: £100.7m). Further detail is provided in Note 18, including an ageing analysis of
unprovided debt. The Group's estimated expected credit losses are 3.8% of gross trade receivables. An increase of 1% in this
assumption would result in an increase to the provision of £1.0m.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 123
Strategic ReportCorporate InformationGovernanceFinancial Statements Notes to the Financial Statements continued
2 Segmental analysis
The segmental disclosure presented in the Financial Statements reflects the format of reports reviewed by the ‘chief operating
decision-maker’. UK and Ireland delivers asset management, with tailored services and a continued commitment to relationship
management. International principally delivers projects and facilities management contracts by providing a managed site support
service. During the year, the Middle East assets which were previously classified as part of the international segment have been
disposed of (see Note 3) and are now shown as discontinued operations. As a consequence of this change, the results from the joint
venture in Kazakhstan have been reallocated to ‘Corporate items’. The comparative period has been restated to reflect this change.
For the year ended 31 March 2021
Revenue
Segment result:
EBITDA before exceptional items
Depreciation
Operating profit/(costs) before amortisation and exceptional items
Amortisation
Exceptional items
Operating profit/(costs)
Share of results of joint venture
Trading profit/(costs)
Financial expense
Profit before tax
Taxation
Profit for the financial year
Intangible assets
Investment in joint venture
Hire equipment
Non-hire equipment
Right of use assets
Taxation assets
Current assets
Cash
Total assets
Lease liabilities
Other liabilities
Borrowings
Taxation liabilities
Total liabilities
UK and
Ireland
£m
332.3
89.5
(63.2)
26.3
(0.8)
(8.4)
17.1
–
17.1
20.1
–
206.4
25.9
59.1
–
96.5
–
408.0
(65.8)
(83.9)
–
–
(149.7)
Total-
Corporate
items
£m
continuing Discontinued
operations
operations
£m
£m
Total
£m
–
332.3
31.3
363.6
(4.2)
(0.4)
(4.6)
–
–
(4.6)
1.2
(3.4)
4.6
6.2
0.8
–
–
3.6
2.2
11.7
29.1
85.3
(63.6)
5.2
(1.5)
90.5
(65.1)
21.7
(0.8)
(8.4)
12.5
1.2
13.7
(5.4)
8.3
(2.2)
6.1
24.7
6.2
207.2
25.9
59.1
3.6
98.7
11.7
437.1
3.7
–
0.8
4.5
–
4.5
(0.5)
4.0
(0.6)
3.4
–
–
–
–
–
–
2.8
–
2.8
25.4
(0.8)
(7.6)
17.0
1.2
18.2
(5.9)
12.3
(2.8)
9.5
24.7
6.2
207.2
25.9
59.1
3.6
101.5
11.7
439.9
–
(8.8)
(44.9)
(8.8)
(62.5)
(65.8)
(92.7)
(44.9)
(8.8)
(212.2)
–
(8.5)
–
–
(8.5)
(65.8)
(101.2)
(44.9)
(8.8)
(220.7)
124 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
2 Segmental analysis continued
Corporate items comprise certain central activities and costs that are not directly related to the activities of the operating
segments. The financing of the Group’s activities is undertaken at head office level and consequently net financing costs
cannot be analysed by segment. The unallocated net assets comprise principally working capital balances held by the support
services function that are not directly attributable to the activities of the operating segments, together with net corporate
borrowings and taxation.
For the year ended 31 March 2020
Revenue
Segment result:
EBITDA before exceptional items
Depreciation
Operating profit/(costs) before amortisation and exceptional items
Amortisation
Exceptional items
Operating profit/(costs)
Share of results of joint venture
Trading profit/(costs)
Financial expense
Exceptional financial income
Profit before tax
Taxation
Profit for the financial year
Intangible assets
Investment in joint venture
Hire equipment
Non-hire equipment
Right of use assets
Taxation assets
Current assets
Cash
Total assets
Lease liabilities
Other liabilities
Borrowings
Taxation liabilities
Total liabilities
UK and
Ireland
£m
371.5
102.7
(65.4)
37.3
(1.3)
(23.5)
12.5
–
12.5
21.9
–
215.7
28.4
62.2
–
94.5
–
422.7
(68.8)
(82.4)
–
–
(151.2)
Total-
Corporate
items
£m
continuing Discontinued
operations
operations
£m
£m
Total
£m
–
371.5
35.2
406.7
(3.5)
(0.4)
(3.9)
–
–
(3.9)
2.8
(1.1)
1.2
7.3
–
–
–
4.3
1.6
22.8
37.2
–
(4.0)
(102.1)
(7.4)
(113.5)
99.2
(65.8)
33.4
(1.3)
(23.5)
8.6
2.8
11.4
(6.2)
10.9
16.1
(3.9)
12.2
23.1
7.3
215.7
28.4
62.2
4.3
96.1
22.8
459.9
(68.8)
(86.4)
(102.1)
(7.4)
(264.7)
8.2
(2.5)
5.7
–
(0.3)
5.4
–
5.4
(0.8)
–
4.6
–
4.6
–
–
11.4
2.1
2.5
–
14.9
–
30.9
(4.1)
(12.1)
–
–
(16.2)
107.4
(68.3)
39.1
(1.3)
(23.8)
14.0
2.8
16.8
(7.0)
10.9
20.7
(3.9)
16.8
23.1
7.3
227.1
30.5
64.7
4.3
111.0
22.8
490.8
(72.9)
(98.5)
(102.1)
(7.4)
(280.9)
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 125
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
2 Segmental analysis continued
Geographical information
In presenting geographical information, revenue is based on the geographical location of customers. Assets are based on the
geographical location of the assets.
UK
Ireland
Discontinued operations – Middle East
Revenue by type
Revenue is attributed to the following activities:
Hire and related activities
Services
Disposals
Major customers
Year ended
31 March 2021
Year ended
31 March 2020
Revenue
£m
323.6
8.7
31.3
363.6
Total
assets
£m
423.7
13.4
2.8
439.9
Revenue
£m
361.3
10.2
35.2
406.7
Total
assets
£m
438.4
14.2
38.2
490.8
Year ended
31 March 2021
£m
213.3
146.1
4.2
363.6
Year ended
31 March 2020
£m
240.5
162.0
4.2
406.7
No one customer represents more than 10% of revenue, reported profit or combined assets of the Group.
3 Discontinued operations
On 1 March 2021, the Group sold the assets relating to its Middle East operations. The transaction comprised of the disposal of
its equipment fleet, stock and other fixed assets relating to its Middle East business to its principal customer ADNOC Logistics and
Services LLC (‘ADNOC’), for a consideration of $18m. At the date of sale, this translated to proceeds of £13.0m, on which a pre-tax
gain of £0.8m was recognised. The attributable tax was £0.2m, resulting in a gain after tax of £0.6m.
Cash flows from/(used in) discontinued operations
Net cash from/(used in) operating activities
Net cash from investing activities
Net cash used in financing activities
Net cash from/(used in) discontinued operations
2021
£m
13.8
13.0
(0.8)
26.0
2020
£m
(0.2)
–
(0.7)
(0.9)
126 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
4 Exceptional items
For the year ended 31 March 2021
Property related costs
Restructuring costs
Disposal of Middle East assets (see Note 3)
Training provision
Continuing Discontinued
operations
operations
£m
£m
5.6
1.9
–
0.9
8.4
–
–
(0.8)
–
(0.8)
Total
£m
5.6
1.9
(0.8)
0.9
7.6
During the year, exceptional administrative items of £7.6m were incurred.
Action has been taken to manage the Group's cost base following the COVID-19 pandemic, and consequently the network has
been restructured. A number of depots have been closed and further consolidation of depots is underway to create larger,
customer focused service centres. As a result, £5.6m of property related costs and £1.9m of redundancy costs have been
incurred during the year.
On 1 March 2021 the Group sold its equipment fleet, stock and other fixed assets relating to its Middle East business to its principal
customer in the territory ADNOC, for a consideration of $18m. The transaction results in a gain on disposal of £0.8m.
The training business, Geason, which was acquired in December 2018, was subject to an assurance visit from a funding agency in
early 2020, and a subsequent claim was received for amounts overpaid. The claim was settled in October 2020, within the provision
held at 31 March 2020. An additional provision has been made for £0.9m to cover legal and other costs associated with the
ongoing initiatives to improve the Group’s financial position.
For the year ended 31 March 2020
Changes to fair value of contingent consideration
Impairment of Training CGU
Training provision
Exceptional items relating to Training
Sale of surplus land
Acquisition integration costs
Property related costs
COVID-19 related costs
International contract costs
Recognised in
distribution and
administrative
expenses
£m
Recognised
in net
financial
expenses
£m
–
20.1
3.0
23.1
(3.9)
1.7
2.0
0.6
0.3
(10.9)
–
–
(10.9)
–
–
–
–
–
Total
£m
(10.9)
20.1
3.0
12.2
(3.9)
1.7
2.0
0.6
0.3
23.8
(10.9)
12.9
Exceptional items of £12.6m relate to continuing operations with £0.3m relating to discontinued operations.
In the year ended 31 March 2020, an exceptional financial credit of £10.9m had been recognised in relation to changes in the fair
value of contingent consideration no longer expected to be paid in respect of Geason Training. An exceptional impairment charge
of £20.1m for the Speedy Training cash generating unit had also been recognised.
In April 2020 Speedy were notified that a funding agency was suspending payments, and seeking repayment of funding from
Geason Training; £3.0 million was provided as an exceptional charge including legal and verification costs. As referred to above,
the claim was settled within the amount provided. Further detail is provided in Note 23.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 127
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
4 Exceptional items continued
On 29 October 2019, the Group sold a plot of surplus land. Consideration of £4.0m was paid in cash in full at completion. The land
had a book value £0.1m and the resultant profit of £3.9m was recognised as an exceptional item.
Following the acquisitions of Geason Training and Lifterz in the year ended 31 March 2019, integration expenses of £1.7m were
incurred in the year ended 31 March 2020, relating to property provisions, redundancy and project management costs.
An exceptional provision of £2.0m was made for specific non-recurring identified repairs required to properties within the depot
network as a result of potential landlord claims.
Exceptional costs of £0.6m related to COVID-19, including bad debt and staff related costs were provided for at 31 March 2020.
Exceptional costs of £0.3m incurred relating to the extension of the major contract in the International division were also
recognised in the prior year.
5 Operating profit
Operating profit is stated after charging/(crediting):
Amortisation of intangible assets
Depreciation of owned property, plant and equipment
Depreciation of right of use assets
Loss/(Profit) on disposal of hire equipment
Loss/(Profit) on disposal of non-hire equipment
Impairment of intangible assets
Auditor’s remuneration
Audit of these Financial Statements
Audit of Financial Statements of subsidiaries
Total audit fees
Non-audit fees: audit-related services – interim review fee of £35,000 (2020: £31,200)
Total fees
6 Employees
The average number of people employed by the Group (including Directors) during the year was as follows:
UK and Ireland
International
Central
2021
£m
0.8
43.4
24.7
1.0
0.5
1.1
0.3
0.2
0.5
–
0.5
2020
£m
1.3
44.5
24.9
(0.8)
(3.9)
18.5
0.2
0.1
0.3
–
0.3
Number of employees
2021
3,040
581
254
3,875
2020
3,212
610
249
4,071
128 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
6 Employees continued
The aggregate payroll costs of these employees (including bonuses) were as follows:
Wages and salaries
Social security costs
Pension costs
Share-based payments
£8.9m was received from furlough schemes in the year and is included within the employee payroll costs above.
7 Directors’ remuneration
Directors’ emoluments
Basic remuneration, including benefits
Value of long-term incentives
Performance related bonuses
Gain on exercise of share options
Company pension contributions
Emolument of the highest paid Director
Basic remuneration, including benefits
Value of long-term incentives
Termination payments
Gain on exercise of share options
Company pension contributions
2021
£m
96.3
10.0
2.7
0.5
109.5
2020
£m
103.5
9.9
3.1
0.5
117.0
2021
£’000s
2020
£’000s
1,108
213
252
587
76
2,236
76
–
156
584
13
829
985
378
–
–
96
1,459
401
224
–
–
58
683
Further analysis of Directors’ remuneration can be found in the Remuneration Report. All the Directors’ remuneration is paid
by Speedy Support Services Limited, a wholly-owned subsidiary of Speedy Hire Plc.
8 Financial expense
Interest on bank loans and overdrafts
Amortisation of issue costs
Total interest on borrowings
Interest on lease liabilities
Hedge interest payable
Other finance (income)/costs
Net financial expense before exceptional items
Exceptional financial income (see Note 4)
Net financial expense
2021
£m
2.9
0.4
3.3
2.6
–
–
5.9
–
5.9
2020
£m
3.4
0.4
3.8
3.2
0.1
(0.1)
7.0
(10.9)
(3.9)
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 129
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
9 Taxation
Tax charged in the Income Statement
Current tax
UK corporation tax on profit at 19% (2020: 19%)
Adjustment in respect of prior years
Deferred tax (Note 24)
UK deferred tax at 19% (2020: 19%)
Adjustment in respect of prior years
Effect of change in rates
Total deferred tax
Total tax charge
Tax (credited)/charged in equity
Current tax
Current tax
Deferred tax (Note 24)
Deferred tax
Total tax credited to equity
2021
£m
2020
£m
1.8
(0.7)
1.0
0.7
–
1.7
2.8
–
–
–
4.1
(0.6)
(0.3)
0.2
0.5
0.4
3.9
(0.2)
0.1
(0.1)
The adjusted tax rate of 18.9% (2020: 17.2%) is lower (2020: lower) than the standard rate of UK corporation tax of 19% (2020: 19%).
The tax charge in the Income Statement for the year of 22.8% is higher (2020: lower) than the standard rate of corporation tax in the
UK of 19% (2020: 19%) and is explained as follows:
Profit before tax
Accounting profit multiplied by the standard rate of corporation tax at 19% (2020: 19%)
Expenses not deductible for tax purposes
Share-based payments
Overseas profits not subject to tax
Share of joint venture income already taxed
Change in deferred tax rates
Adjustment to tax in respect of prior years
Tax charge for the year reported in the Income Statement
Tax (credited)/charged in equity
Current tax
Deferred tax
Tax credited to equity
2021
£m
12.3
2.3
0.7
–
–
(0.2)
–
–
2.8
–
–
–
2020
£m
20.7
3.9
0.9
0.1
(0.6)
(0.5)
0.5
(0.4)
3.9
(0.2)
0.1
(0.1)
In the March 2021 Budget it was announced that the UK tax rate will increase to 25% from 1 April 2023. This will have a consequential
effect on the Group’s future tax charge. If this rate change had been substantively enacted at the current balance sheet date the
deferred tax liability would have increased by £2.0m.
130 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
10 Earnings per share
The calculation of basic earnings per share is based on the profit for the financial year of £9.5m (2020: £16.8m) and the weighted
average number of 5 pence ordinary shares in issue, and is calculated as follows:
Weighted average number of shares in issue (m)
Number of shares at the beginning of the year
Exercise of share options
Movement in shares owned by the Employee Benefit Trust
Weighted average for the year – basic number of shares
Share options
Employee share scheme
Weighted average for the year – diluted number of shares
2021
2020
521.3
0.3
0.8
522.4
6.5
0.6
529.5
519.5
0.3
0.2
520.0
5.2
1.1
526.3
Profit for the year after tax
Amortisation charge (after tax)
Exceptional items (after tax)
Adjusted earnings (after tax)
Basic earnings per share
Dilutive options and shares
Diluted earnings per share
Adjusted earnings per share
Dilutive options and shares
Diluted adjusted earnings per share
2021
2020
Continuing Discontinued
operations
operations
£m
£m
6.1
0.6
7.3
14.0
Pence
1.17
(0.02)
1.15
2.68
(0.03)
2.65
3.4
–
(0.6)
2.8
Pence
0.65
(0.01)
0.64
0.54
(0.01)
0.53
Total
£m
9.5
0.6
6.7
16.8
Pence
1.82
(0.03)
1.79
3.22
(0.04)
3.18
Continuing Discontinued
operations
operations
£m
£m
12.2
1.1
10.6
23.9
Pence
2.35
(0.03)
2.32
4.60
(0.06)
4.54
4.6
–
0.3
4.9
Pence
0.88
(0.01)
0.87
0.94
(0.01)
0.93
Total
£m
16.8
1.1
10.9
28.8
Pence
3.23
(0.04)
3.19
5.54
(0.07)
5.47
Total number of shares outstanding at 31 March 2021 amounted to 528,180,280 (2020: 526,773,177), including 4,413,516
(2020: 5,472,206) shares held in the Employee Benefit Trust, which are excluded in calculating earnings per share.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 131
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
11 Dividends
The aggregate amount of dividend comprises:
2019 final dividend (1.40 pence on 525.3m shares)
2020 interim dividend (0.70 pence on 525.4m shares)
2021
£m
–
–
–
2020
£m
7.3
3.6
10.9
Subsequent to the end of the year and not included in the results for the year, the Directors recommended a final dividend of 1.40
pence (2020: nil pence) per share, bringing the total amount payable in respect of the 2021 year to 1.40 pence (2020: 0.70 pence),
to be paid on 24 September 2021 to shareholders on the register on 13 August 2021.
The Employee Benefit Trust, established to hold shares for the Performance Share Plan and other employee benefits, waived its
right to the interim dividend. At 31 March 2021, the Trust held 4,413,516 ordinary shares (2020: 5,472,206).
12 Non-GAAP performance measures
The Group believes that the measures below provide valuable additional information for users of the Financial Statements in
assessing the Group’s performance by adjusting for the effect of exceptional items and significant non-cash depreciation and
amortisation. The Group uses these measures for planning, budgeting and reporting purposes and for its internal assessment
of the operating performance of the individual divisions within the Group.
Operating profit
Add back: amortisation
Add back/(deduct): exceptional items
Adjusted operating profit (‘EBITA’)
Add back: depreciation
EBITDA before exceptional items
Profit before tax
Add back: amortisation
Add back/(deduct): exceptional items
Adjusted profit before tax
Continuing Discontinued
operations
operations
2021
2021
£m
£m
12.5
0.8
8.4
21.7
63.6
85.3
8.3
0.8
8.4
17.5
4.5
–
(0.8)
3.7
1.5
5.2
4.0
–
(0.8)
3.2
Total
2021
£m
17.0
0.8
7.6
25.4
65.1
90.5
12.3
0.8
7.6
20.7
Continuing Discontinued
operations
operations
2020
2020
£m
£m
8.6
1.3
23.5
33.4
65.8
99.2
16.1
1.3
12.6
30.0
5.4
–
0.3
5.7
2.5
8.2
4.6
–
0.3
4.9
Total
2020
£m
14.0
1.3
23.8
39.1
68.3
107.4
20.7
1.3
12.9
34.9
132 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
13 Intangible fixed assets
Cost
At 1 April 2019
Additions
At 31 March 2020
Additions
At 31 March 2021
Amortisation
At 1 April 2019
Charged in year
Impairment
At 31 March 2020
Charged in year
Impairment
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020
At 31 March 2019
Goodwill
£m
Customer
lists
£m
IT
Brands development
£m
£m
126.3
–
126.3
–
126.3
95.1
–
13.7
108.8
–
–
108.8
17.5
17.5
31.2
45.1
–
45.1
–
45.1
37.2
0.9
3.7
41.8
0.4
1.1
43.3
1.8
3.3
7.9
7.0
–
7.0
–
7.0
4.4
0.4
1.1
5.9
0.4
–
6.3
0.7
1.1
2.6
–
1.2
1.2
3.5
4.7
–
–
–
–
–
–
–
4.7
1.2
–
Total
£m
178.4
1.2
179.6
3.5
183.1
136.7
1.3
18.5
156.5
0.8
1.1
158.4
24.7
23.1
41.7
The amount of goodwill that is tax-deductible is £nil (2020: £nil).
All goodwill has arisen from business combinations. On transition to IFRS, the balance of goodwill as measured under UK GAAP
was allocated to cash-generating units (CGUs). These are independent sources of income streams, and represent the lowest level
within the Group at which the associated goodwill is monitored for management purposes. The Group’s reportable CGUs comprise
UK and Ireland (excluding Training) and Training. All intangible assets are held in the UK. Goodwill arising on business combinations
after 1 April 2004 has been allocated to the CGU that is expected to benefit from those business combinations. The Group tests
goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. No impairment test
has been performed in respect of the International CGU as there are no intangible assets allocated to the CGU.
The recoverable amounts of the assets allocated to the UK and Ireland (excluding Training) and Training CGUs are determined by a
value-in-use calculation. The value-in-use calculation uses cash flow projections based on five-year financial forecasts approved by
management. The key assumptions for these forecasts are those regarding revenue growth and discount rate, which management
estimates based on past experience adjusted for current market trends and expectations of future changes in the market. To prepare
the value-in-use calculation, the Group uses cash flow projections from the FY2022 budget, and a subsequent four-year period
using the Group’s business plan, together with a terminal value using long-term growth rates. The resulting forecast cash flows
are discounted back to present value, using an estimate of the Group’s weighted average cost of capital, adjusted for risk factors
associated with each individual CGU and market-specific risks.
The Training CGU performed below expectations during the year ended 31 March 2020 due to lower than expected learner
enrolments, the setup of a number of regional training centres which had yet to reach critical mass and compliance related issues.
During the year the business has been further affected by market conditions due to COVID-19 and the impact social distancing
has had on the delivery of courses. The recoverable amount of the CGU is considered £nil and the goodwill and intangible assets
associated with the training business have been fully impaired, which resulted in an impairment of £1.1m in the year.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 133
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
13 Intangible fixed assets continued
The pre-tax discount rates and terminal growth rates applied are as follows:
UK and Ireland (excluding Training)
31 March 2021
31 March 2020
Pre-tax
discount
rate
12.3%
Terminal
value
growth
rate
Pre-tax
discount
rate
Terminal
value
growth
rate
2.5%
9.2%
2.5%
Impairment calculations are sensitive to changes in key assumptions of revenue growth and discount rate. At 31 March 2021, the
headroom between value in use and carrying value of related assets for the UK and Ireland was £27.6m (2020: £45.1m). The reduction
in headroom is due to the rise in discount rate at 31 March 2021 compared with previous years. There are no reasonable variations in
these assumptions that would result in an impairment.
14 Investment in joint venture
Cost
At 1 April 2019
Effect of movement in foreign exchange rates
At 31 March 2020
Effect of movement in foreign exchange rates
At 31 March 2021
Share of post-acquisition results
At 1 April 2019
Share of results for the year after tax
Dividend received
Loan repayment
At 31 March 2020
Share of results for the year after tax
Share of other comprehensive income
Dividend received
Loan repayment
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020
At 31 March 2019
Equity
investment
£m
Loan
advances
£m
3.6
0.2
3.8
(0.6)
3.2
0.9
2.8
(1.2)
–
2.5
1.2
(0.5)
(0.7)
–
2.5
5.7
6.3
4.5
1.9
0.1
2.0
(0.1)
1.9
(0.6)
–
–
(0.4)
(1.0)
–
–
–
(0.4)
(1.4)
0.5
1.0
1.3
Total
£m
5.5
0.3
5.8
(0.7)
5.1
0.3
2.8
(1.2)
(0.4)
1.5
1.2
(0.5)
(0.7)
(0.4)
1.1
6.2
7.3
5.8
On 11 November 2013, Speedy acquired 50% of the share capital of Turner and Hickman Limited, a joint venture company that
controls the operations of Speedy Zholdas LLP. Speedy Zholdas LLP provides asset management and equipment rental services to
the oil and gas sector in Kazakhstan. Total cash consideration for the purchase of shares in Turner and Hickman Limited was US$4.3m.
In addition to the investment in share capital, Speedy provided a loan of US$2.5m to the joint venture with an equivalent amount
provided by the joint venture partner. A repayment of £0.4m ($0.5m) (2020: repayment of £0.4m ($0.5m)) was received during the
year. This joint venture is not considered to be individually material.
134 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
15 Property, plant and equipment
Cost
At 1 April 2019
Foreign exchange
Additions
Disposals
Transfers to inventory
At 31 March 2020
Foreign exchange
Additions
Disposals
Transfers to inventory
At 31 March 2021
Depreciation
At 1 April 2019
Charged in year
Disposals
Transfers to inventory
At 31 March 2020
Foreign exchange
Charged in year
Disposals
Transfers to inventory
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020
At 31 March 2019
Land and
buildings
£m
Hire
equipment
£m
Other
£m
Total
£m
52.2
0.3
2.4
(0.1)
–
54.8
(0.5)
1.7
(5.4)
–
50.6
33.1
3.4
–
–
36.5
(0.3)
3.6
(3.2)
–
36.6
14.0
18.3
19.1
385.8
0.7
55.3
(21.6)
(12.1)
408.1
(1.1)
36.0
(46.0)
(10.4)
386.6
168.9
34.9
(14.3)
(8.5)
181.0
(0.6)
33.7
(27.4)
(7.3)
179.4
207.2
227.1
216.9
77.8
–
5.5
(0.2)
–
83.1
0.6
6.0
(1.2)
–
88.5
64.7
6.2
–
–
70.9
–
6.1
(0.4)
–
76.6
11.9
12.2
13.1
515.8
1.0
63.2
(21.9)
(12.1)
546.0
(1.0)
43.7
(52.6)
(10.4)
525.7
266.7
44.5
(14.3)
(8.5)
288.4
(0.9)
43.4
(31.0)
(7.3)
292.6
233.1
257.6
249.1
The net book value of land and buildings comprises freehold properties of £nil (2020: £nil) and improvements to short leasehold
properties of £14.0m (2020: £18.3m).
Included within depreciation charged in the year is £1.0m relating to exceptional impairments (see Note 4).
An impairment review has been completed during the year on the basis set out in Note 13.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 135
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
16 Right of use assets
Cost
At 1 April 2019
Foreign exchange
Additions
Disposals
At 31 March 2020
Foreign exchange
Additions
Disposals
At 31 March 2021
Depreciation
At 1 April 2019
Foreign exchange
Charged in year
Disposals
At 31 March 2020
Foreign exchange
Charged in year
Disposals
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020
At 31 March 2019
Included within depreciation charged is £2.0m relating to exceptional impairments (see Note 4).
17 Inventories
Work in progress
Finished goods and goods for resale
Land and
buildings
£m
Other
£m
Total
£m
128.0
0.4
9.5
(10.1)
127.8
(0.6)
13.7
(9.6)
131.3
77.2
0.2
13.2
(10.0)
80.6
(0.4)
13.3
(6.9)
86.6
44.7
47.2
50.8
49.9
–
8.5
(6.5)
51.9
–
8.9
(12.6)
48.2
28.5
–
11.7
(5.8)
34.4
–
11.4
(12.0)
33.8
14.4
17.5
21.4
177.9
0.4
18.0
(16.6)
179.7
(0.6)
22.6
(22.2)
179.5
105.7
0.2
24.9
(15.8)
115.0
(0.4)
24.7
(18.9)
120.4
59.1
64.7
72.2
2021
£m
1.0
7.2
8.2
2020
£m
1.1
7.6
8.7
The amount of inventory expensed in the year amounted to £31.1m (2020: £34.7m) and is included within cost of sales. A provision
of £0.3m (2020: £0.2m) is recorded in respect of inventory held at the year-end.
136 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
18 Trade and other receivables
Trade receivables
Other receivables
Prepayments and accrued income
2021
£m
88.5
4.7
0.1
93.3
2020
£m
95.5
6.5
0.3
102.3
The Group’s credit risk is primarily attributable to trade receivables. The amounts presented in the consolidated statement of
financial position are net of any loss provision. There are £26.2m (2020: £37.7m) of trade receivables that are past due at the
balance sheet date that have not been provided against. There is no indication as at 31 March 2021 that customers will not meet
their payment obligations in respect of trade receivables recognised in the balance sheet that are past due and unprovided.
The ageing of trade receivables (net of impairment provision) at the year end was as follows:
═════ ═════
Not past due
Past due 0-30 days
Past due 31-120 days
More than 120 days past due
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
═════
═════
At 1 April
Impairment provision charged as exceptional to the Income Statement
Impairment provision charged to the Income Statement
Utilised in the year
At 31 March
19 Trade and other payables
Trade payables
Other payables
Accruals
Non-current
Current
2021
£m
62.3
17.4
6.3
2.5
88.5
2021
£m
3.9
–
2.0
(2.4)
3.5
2021
£m
49.8
9.1
35.9
94.8
–
94.8
94.8
2020
£m
57.8
22.7
11.3
3.7
95.5
2020
£m
3.7
0.7
3.6
(4.1)
3.9
2020
£m
52.3
10.0
28.6
90.9
–
90.9
90.9
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 137
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
20 Financial instruments
The Group holds and uses financial instruments to finance its operations and to manage its interest rate and liquidity risks. The Group
primarily finances its operations using share capital, retained profits and borrowings. The main risks arising from the Group’s financial
instruments are credit, interest rate, foreign currency and liquidity risk. The Board reviews and agrees the policies for managing each
of these risks on an annual basis. A full description of the Group’s approach to managing these risks is set out below.
The Group does not engage in trading or speculative activities using derivative financial instruments. A Group offset arrangement
exists in order to minimise the interest costs on outstanding debt.
Fair value of financial assets and liabilities
The fair values of financial assets and liabilities are considered to be equal to the carrying values shown in the balance sheet.
Basis for determining fair values
The following summarises the principal methods and assumptions used in estimating the fair value of financial instruments:
(a) Derivatives – Broker quotes are used for all interest rate swaps.
(b) Interest-bearing loans and borrowings – Fair value is calculated based on discounted expected future principal and interest cash
flows at a market rate of interest.
(c) Trade and other receivables and payables – For receivables and payables with a remaining life of less than one year, the notional
amount is deemed to reflect the fair value. All other receivables and payables are discounted to determine the fair value.
(d) Lease liabilities – Fair value is calculated based on expected future principal and interest cash flows, discounted at the incremental
borrowing rate for the lease.
Fair value hierarchy
The Group’s financial assets and liabilities are principally short-term in nature and therefore their fair value is not materially different
from their carrying value. The valuation method for the Group’s financial assets and liabilities can be defined as follows in accordance
with IFRS 13:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from customers. The exposure to credit risk is monitored on an ongoing
basis. Credit evaluations are performed on all customers requiring credit over a certain amount.
At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented
by the carrying amount of each financial asset, including derivative financial instruments, in the balance sheet. No individual customer
accounts for more than 10% of the Group’s sales transactions and the Group’s exposure to outstanding indebtedness follows this
profile. No collateral is held as security in respect of amounts outstanding; however, in a number of instances, deposits are held against
the value of hire equipment provided. The extent of deposit taken is assessed on a case-by-case basis and is not considered significant
in comparison to the overall amounts receivable from customers.
Transactions involving derivative financial instruments are undertaken with counterparties within the syndicate of banks that provide
the Group’s asset based finance facility. Given their high credit ratings, management does not expect any counterparty to fail to meet
its obligations.
The Group establishes an allowance for impairment that is based on historical experience of dealing with customers with the same risk
profile along with a consideration of the future expected credit losses.
138 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
20 Financial instruments continued
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group uses both short and long-term cash forecasts to assist in monitoring cash flow requirements. Typically, the Group uses
short-term forecasting to ensure that it has sufficient cash on demand to meet operational expenses and to service financing
obligations for a period of 12 weeks. Longer-term forecasts are performed on a regular basis to assess compliance with bank
covenants on existing facilities, ensuring that activities can be managed within reason to ensure covenant breaches are avoided.
At 31 March 2021, the Group had a banking facility amounting to £180.0m (2020: £180.0m), as detailed in Note 21. The cash and
undrawn availability on this facility as at 31 March 2021 was £142.3m (2020: £99.0m) based on the Group’s eligible hire equipment
and trade receivables.
The Group monitors available facilities against forward requirements on a regular basis and, where necessary, obtains additional
sources of financing to provide the Group with the appropriate level of headroom against the required borrowing. The Group
maintains close contact with its syndicate of banks.
The following analysis is based on the undiscounted contractual maturities on the Group’s financial liabilities including estimated
interest that will accrue.
Asset based finance facility
Overdraft
Lease liability (principle and interest)
Bank interest payments
Trade and other payables
Asset based finance facility
Lease liability (principle and interest)
Bank interest payments
Trade and other payables
Undiscounted cash flows – 31 March 2021
2023
£m
44.4
–
15.8
1.7
–
61.9
2024
£m
–
–
10.8
–
–
10.8
2025
and later
£m
–
–
23.5
–
–
23.5
Total
£m
44.4
0.5
71.4
4.4
57.7
1,798.4
Undiscounted cash flows – 31 March 2020
2022
£m
102.1
16.1
1.4
–
119.6
2023
£m
–
13.4
–
–
13.4
2024
and later
£m
–
28.4
–
–
28.4
Total
£m
102.1
80.6
4.1
62.3
249.1
2022
£m
–
0.5
21.3
2.7
57.7
82.2
2021
£m
–
22.7
2.7
62.3
87.7
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 139
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
20 Financial instruments continued
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group’s income
or the value of its holdings of financial instruments. Generally, the Group seeks to apply hedge accounting in order to manage
volatility in profit.
Foreign exchange risk
With over 5% of the Group’s revenue generated in currencies other than sterling, the Group’s Balance Sheet and Income Statement
are affected by movements in exchange rates. The revenue and costs of overseas operations normally arise in the same currency and
consequently the exposure to exchange differences is not normally significant and consequently not hedged. Overseas operations
maintain local currency bank facilities, which provide partial mitigation against balance sheet risk.
At 31 March 2021, if sterling had weakened or strengthened by 10% against the Euro and United Arab Emirates Dirham with all
other variables held constant, post-tax profit for the year would have been £0.6m (2020: £0.7m) higher or lower respectively.
Interest rate risk
The Group is exposed to a risk of a change in cash flows due to changes in interest rates as a result of its use of variable rate
borrowings. The Group’s policy is to review regularly the terms of its borrowing facilities, to assess and manage the long-term
borrowing commitment accordingly, and to put in place interest rate hedges to reduce the Group’s exposure to significant fluctuations
in interest rates. The Group adopts a policy of ensuring that between 40% and 80% of its net borrowings are covered by
hedging instruments.
The principal derivative financial instruments used by the Group are interest rate swaps. The notional contract amount and the related
fair value of the Group’s derivative financial instruments can be analysed as follows:
Designated as cash flow hedges
Fixed interest rate swaps
31 March 2021
31 March 2020
Fair
value
£m
Notional
amount
£m
Fair
value
£m
Notional
amount
£m
(0.4)
60.0
(0.5)
60.0
═════ ═════
═════
═════
Future cash flows associated with the above instruments are dependent upon movements in the London Inter Bank Offered Rate
(LIBOR) over the contractual period. Interest is paid or received under the instruments on a quarterly basis, depending on the
individual instrument, referenced to the relevant prevailing UK LIBOR rates.
The weighted average interest rate on the fixed interest rate swaps is 1.00% (2020: 1.02%) and the instruments are for a weighted
average period of 10 months (2020: 20 months). The maximum contractual period is 36 months (2020: 36 months).
Contingent consideration
Contingent consideration is payable by the Group in relation to the acquisition of Geason Holdings Limited dependent on the
combined performance of the acquired business and the Group’s training business in the three years post acquisition. The fair
value of contingent consideration as at year end is £nil (2020: £nil).
Sensitivity analysis
In managing interest rate and currency risk, the Group aims to reduce the impact of short-term fluctuation on the Group’s
earnings. Over the longer term, however, permanent changes in foreign exchange and interest rates would have an impact on
consolidated earnings.
At 31 March 2021 it is estimated that an increase of 1% in interest rates would decrease the Group’s profit before tax by
approximately £0.4m (2020: £0.7m). Interest rate swaps have been included in this calculation.
140 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
20 Financial instruments continued
Capital management
The Group requires capital for purchasing hire equipment to replace the existing asset base when it has reached the end of its
useful life, and for growth, by establishing new depot locations, completing acquisitions and refinancing existing debts in the longer
term. The Group defines gross capital as net debt (cash less borrowings) plus shareholders’ funds, and seeks to ensure an acceptable
return on gross capital. The Board seeks to maintain a balance between debt and equity funding such that it maintains an efficient
capital position relevant for the prevailing economic environment.
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. The Board of Directors monitors the demographic spread of shareholders in order to ensure
that the most attractive mix of capital growth and income return is made available to investors.
The Group encourages ownership of Speedy Hire Plc shares by employees at all levels within the Group, and has developed this
objective through the introduction of long-term incentive plans and SAYE schemes.
There were no changes in the Group’s approach to capital management during the year. Neither the Company nor any of its
subsidiaries are subject to externally imposed capital requirements.
21 Borrowings
Current borrowings
Bank overdraft
Lease liabilities
Non-current borrowings (excluding lease liabilities)
Maturing between two and five years
Asset based finance facility
Lease liabilities
Total non-current borrowings
Total borrowings
Less: cash
Exclude lease liabilities
Net debt
2021
£m
0.5
19.3
19.8
44.4
46.5
90.9
110.7
(11.7)
(65.8)
33.2
2020
£m
–
20.2
20.2
102.1
52.7
154.8
175.0
(22.8)
(72.9)
79.3
The Group has a £180m asset based finance facility which is sub divided into:
(a) A secured overdraft facility, provided by Barclays Bank Plc, which secures by cross guarantees and debentures the bank deposits
and overdrafts of the Company and certain subsidiary companies up to a maximum of £5m.
(b) An asset based finance facility of up to £175m, based on the Group’s hire equipment and trade receivables balance. The cash
and undrawn availability of this facility as at 31 March 2021 was £142.3m (2020: £99.0m), based on the Group’s eligible hire
equipment and trade receivables.
The facility amounts to £180m and, is based on the Group’s hire equipment and trade receivables balance, reduced to the extent
that any ancillary facilities are provided, and is repayable in October 2022, with no prior scheduled repayment requirements.
An additional uncommitted accordion of £220m remains in place through to October 2022.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 141
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
21 Borrowings continued
Interest on the facility is calculated by reference to the LIBOR applicable to the period drawn, plus a margin of 150 to 250 basis points,
depending on leverage and on the components of the borrowing base. During the year, the effective margin was 1.80% (2020: 1.84%).
The facility is secured by fixed and floating charges over the UK and Ireland assets.
Analysis of consolidated net debt
Cash at bank and in hand
Bank overdraft
Bank borrowings
22 Lease liabilities
At 1 April 2019
Foreign exchange
Additions
Repayments
Unwinding of discount rate
Terminations
At 31 March 2020
Foreign exchange
Additions
Repayments
Unwinding of discount rate
Terminations
At 31 March 2021
31 March
2020
£m
Non-cash
movement
£m
Cash flow
£m
31 March
2021
£m
22.8
–
(102.1)
(79.3)
–
–
(0.5)
(0.5)
(11.1)
(0.5)
58.2
46.6
11.7
(0.5)
(44.4)
(33.2)
Land and
buildings
£m
60.8
0.2
9.5
(15.1)
2.4
(2.5)
55.3
(0.1)
13.7
(14.2)
2.0
(5.3)
51.4
Other
£m
21.6
–
8.4
(12.6)
0.8
(0.6)
17.6
–
8.9
(12.0)
0.6
(0.7)
14.4
Total
£m
82.4
0.2
17.9
(27.7)
3.2
(3.1)
72.9
(0.1)
22.6
(26.2)
2.6
(6.0)
65.8
Included within terminations in the year was £3.7m (2020: £0.7m) relating to exceptional terminations of property leases (see Note 4).
Amounts payable for lease liabilities (discounted at the incremental borrowing rate of each lease) fall due as follows:
Payable within one year
Payable in more than one year
At 31 March
2021
£m
19.3
46.5
65.8
2020
£m
20.2
52.7
72.9
142 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
23 Provisions
At 1 April 2019
Created in the year
Provision utilised in the year
Net changes in fair value
At 31 March 2020
Created in the year
Provision utilised in the year
At 31 March 2021
Contingent
Dilapidations consideration
£m
£m
Training
provision
£m
2.5
3.1
(1.5)
–
4.1
3.2
(2.5)
4.8
10.9
–
–
(10.9)
–
–
–
–
–
3.0
–
–
3.0
0.9
(2.7)
1.2
Total
£m
13.4
6.1
(1.5)
(10.9)
7.1
4.1
(5.2)
6.0
Of the £6.0m provision at 31 March 2021, £3.1m (2020: £5.9m) is due within one year and £2.9m (2020: £1.2m) is due after
one year. The dilapidations provision is calculated based on estimated dilapidations at current market rates. The total liability is
discounted to current values.
In April 2020 Speedy were notified that a funding agency was suspending payments, and seeking repayment of £2.6m from
Geason Training, based on an extrapolation of errors found in a small sample of learner documentation over a three year period from
August 2017. In the year ended 31 March 2020, £3.0 million was provided as an exceptional charge. The claim was settled in October
2020 within the provision held. An additional provision has been recognised for £0.9m in relation to legal and other costs associated
with ongoing initiatives to improve the Group’s financial position.
Contingent consideration of between £nil and £26.0m may be payable by the Group in relation to the acquisition of Geason Training.
The consideration depends on the combined performance of the acquired business and the Group’s training business in the three
years post acquisition. The fair value of contingent consideration as at year end is £nil.
24 Deferred tax
At 1 April 2019
Recognised in income
Recognised in equity
At 31 March 2020
Recognised in income
At 31 March 2021
Property,
plant and
equipment
£m
6.2
1.2
–
7.4
1.4
8.8
Intangible Share-based
assets
£m
payments Other items
£m
£m
Total
£m
0.9
(0.9)
–
–
(0.3)
(0.3)
(0.5)
–
0.1
(0.4)
–
(0.4)
(2.5)
0.1
–
(2.4)
0.6
(1.8)
4.1
0.4
0.1
4.6
1.7
6.3
The Group has gross trading losses carried forward at 31 March 2021 amounting to approximately £7.7m (2020: £9.4m). No deferred
tax asset has been recognised in respect of these losses. The Group also has gross capital losses carried forward at 31 March 2021
amounting to approximately £1.4m (2020: £1.7m). No deferred tax asset has been recognised in respect of these losses.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 143
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
25 Share capital
Allotted, called-up and fully paid
528.2m (2020: 526.8m) ordinary shares of 5 pence each
2021
£m
2020
£m
26.4
26.4
During the year, 1.4m ordinary shares of 5 pence were issued on exercise of options under the Speedy Hire Sharesave Schemes
(2020: 1.5m).
An Employee Benefits Trust was established in 2004 (the ‘Trust’). The Trust holds shares issued by the Company in connection with the
Performance Share Plan. No shares were acquired by the Trust during the year and 1,058,690 shares were transferred to employees
during the year. At 31 March 2021, the Trust held 4,413,516 (2020: 5,472,206) shares.
The movement in issued share capital was as follows:
At 1 April 2019
Exercise of Sharesave Scheme options
At 31 March 2020
Exercise of Sharesave Scheme options
At 31 March 2021
26 Share incentives
Number (m)
525.3
1.5
526.8
1.4
528.2
£m
26.3
0.1
26.4
–
26.4
At 31 March 2021, options and awards over 15,533,504 shares (2020: 14,465,265) were outstanding under employee share schemes.
The Group operates two share incentive schemes. During the year a weighted average 327,607 ordinary shares of 5 pence were issued
on exercise of options under the Speedy Hire Sharesave Schemes (2020: 269,953).
As at 31 March 2021, options to acquire 6,771,223 (2020: 6,522,196) Speedy Hire Plc shares were outstanding under the Speedy Hire
Sharesave Schemes. These options are exercisable by employees of the Group at prices between 44 and 55 pence (2020: 34 and 48
pence) at dates between April 2021 and July 2024 (2020: April 2020 and July 2023). At 31 March 2021, options to acquire 8,762,281
shares (2020: 7,943,070) under the Performance Share Plans were outstanding. These options are exercisable at nil cost between
April 2021 and November 2030 (2020: June 2020 and May 2029). The weighted average fair value of the awards granted in the year
was 27 pence (2020: 35 pence).
The number and weighted average exercise price (‘WAEP’) of share options and awards under all the share incentive schemes
are as follows:
Outstanding at 1 April
Granted
Exercised
Lapsed
Outstanding at 31 March
Exercisable at 31 March
2021
2020
WAEP pence
Number
WAEP pence
Number
21
26
15
40
22
5
14,465,265
5,463,705
(1,519,073)
(2,876,394)
15,533,503
3,179,683
20
26
27
28
21
3
13,138,115
4,776,231
(1,772,531)
(1,676,550)
14,465,265
2,938,928
144 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Financial Statements continued
26 Share incentives continued
Options and awards outstanding at 31 March 2021 have weighted average remaining contractual lives as follows:
Exercisable at nil pence
Exercisable at 44 pence
Exercisable at 46 pence
Exercisable at 48 pence
2021
Years
0.8
0.8
1.8
2.8
2020
Years
1.3
0.8
1.8
2.8
The fair value of services received in return for share options granted and shares awarded is measured by reference to the fair
value of those instruments. The pricing models and inputs used for the outstanding options (on a weighted average basis where
appropriate) are as follows:
Speedy Hire Sharesave Schemes
Pricing model used
Exercise price
Share price volatility
Option life
Expected dividend yield
Risk-free interest rate
Performance Share Plan
Pricing model used
Exercise price
Share price volatility
Option life
Expected dividend yield
Risk-free interest rate
December
2020
Stochastic
55p
31.23%
3.25 years
1.1%
(0.1%)
November
2020
Stochastic
Nil
31.83%
3 years
Nil
(0.0%)
December
2019
Stochastic
48p
28.8%
3.25 years
2.9%
0.5%
May
2019
Stochastic
Nil
27.1%
3 years
Nil
0.7%
December
2018
Stochastic
46p
36.4%
3.25 years
3.2%
0.7%
June
2018
Stochastic
Nil
30.8%
3 years
Nil
0.8%
December
2017
Stochastic
44p
41.0%
3.25 years
2.0%
0.6%
June
2017
Stochastic
Nil
49.5%
3 years
Nil
0.3%
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 145
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Financial Statements continued
27 Contingent liabilities
There are no contingent liabilities as at the 31 March 2021.
28 Commitments
The Group had contracted capital commitments amounting to £19.2m (2020: £0.9m) at the end of the financial year for which no
provision has been made.
29 Post-balance sheet events
There are no post balance sheet events not already disclosed.
30 Related party disclosures
Key management remuneration
The Group’s key management personnel are the Executive and Non-Executive Directors as identified in the Directors’
Remuneration Report.
In addition to salaries, the Group also provides non-cash benefits to Executive Directors, and contributes to approved pension
schemes on their behalf. Executive Directors also participate in the Group’s share option schemes.
Non-Executive Directors receive a fee for their services to Speedy Hire Plc.
Full details of key management personnel compensation and interests in the share capital of the Company as at 31 March 2021
are given in the Directors’ Remuneration Report.
146 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Company Balance Sheet
At 31 March 2021
Assets
Non-current assets
Investments
Deferred tax asset
Current assets
Trade and other receivables
Current tax receivable
Cash
Total assets
Liabilities
Current liabilities
Bank overdraft
Trade and other payables
Other financial liabilities
Non-current liabilities
Borrowings
Total liabilities
Net assets
Equity
Share capital
Share premium
Merger reserve
Hedging reserve
Retained earnings
Total equity
31 March
2021
£m
31 March
2020
£m
Note
32
37
33
36
36
34
35
36
38
93.5
0.1
93.6
308.6
16.1
1.0
325.7
419.3
–
(126.5)
(0.4)
(126.9)
(56.4)
(183.3)
236.0
26.4
1.3
2.3
(0.7)
206.7
236.0
93.5
0.1
93.6
320.8
16.0
21.4
358.2
451.8
–
(102.6)
(0.5)
(103.1)
(113.6)
(216.7)
235.1
26.4
0.8
2.3
(0.9)
206.5
235.1
The accompanying notes form part of the Financial Statements.
The Company Financial Statements on pages 147 to 153 were approved by the Board of Directors on 24 May 2021 and were signed
on its behalf by:
James Bunn
Director
Company registered number: 00927680
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 147
Strategic ReportCorporate InformationGovernanceFinancial Statements
Company Statement
of Changes in Equity
For the year ended 31 March 2021
Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Hedging
reserve
£m
Retained
earnings
£m
At 1 April 2019
Profit for the financial year
Effective portion of change in fair value of cash flow hedges
Dividends
Tax on items taken directly to equity
Equity-settled share-based payments
Issue of shares under the Sharesave Scheme
At 31 March 2020
Profit for the financial year
Effective portion of change in fair value of cash flow hedges
Equity-settled share-based payments
Issue of shares under the Sharesave Scheme
At 31 March 2021
26.3
–
–
–
–
–
0.1
26.4
–
–
–
–
26.4
0.4
–
–
–
–
–
0.4
0.8
–
–
–
0.5
1.3
2.3
–
–
–
–
–
–
2.3
–
–
–
–
2.3
(0.7)
–
(0.2)
–
–
–
–
(0.9)
–
0.2
–
–
(0.7)
213.4
3.4
–
(10.9)
0.1
0.5
–
206.5
(0.3)
–
0.5
–
206.7
Total
equity
£m
241.7
3.4
(0.2)
(10.9)
0.1
0.5
0.5
235.1
(0.3)
0.2
0.5
0.5
236.0
The accompanying notes form part of the Financial Statements.
148 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Company Cash Flow Statement
For the year ended 31 March 2021
Cash generated from operating activities
Profit before tax
Financial income
Exceptional impairment charge
Decrease in trade and other receivables
Increase in trade and other payables
Equity-settled share-based payments
Cash generated from operations
Interest received
Tax paid
Net cash flow from operating activities
Cash flow from financing activities
Net loan (repayment)/drawdown
Proceeds from the issue of Sharesave Scheme shares
Dividends paid
Net cash flow from financing activities
(Decrease)/increase in cash and cash equivalents
Cash at the start of the financial year
Cash at the end of the financial year
The accompanying notes form part of the Financial Statements.
Year ended
31 March
2021
£m
Year ended
31 March
2020
£m
0.3
(5.6)
5.3
6.9
23.8
0.6
31.3
6.1
(0.8)
36.6
(57.5)
0.5
–
(57.0)
(20.4)
21.4
1.0
4.0
(6.2)
–
14.2
5.6
0.5
18.1
6.6
(8.7)
16.0
8.4
0.5
(10.9)
1.0
17.0
4.4
21.4
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 149
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Company
Financial Statements
31 Accounting policies
The Company Financial Statements have been prepared in accordance with the accounting policies set out in Note 1, supplemented
as below. The Company is taking advantage of the exemption in Section 408 of the Companies Act 2006 not to present its individual
income statement or statement of comprehensive income and related notes that form part of the approved Financial Statements.
The amount of the profit for the financial year dealt with in the Financial Statements of the Company is disclosed in the Company
Statement of Changes in Equity.
Investments in subsidiary undertakings are stated at cost less any provisions for permanent diminution in value. Dividends received
and receivable are credited to the Company’s Income Statement to the extent that they represent a realised profit for the Company.
The Company monitors the risk profile of intercompany receivables regularly and provides for amounts that may not be recoverable
on the basis of expected portfolio losses.
The Company does not have any employees. Directors are paid by other Group companies.
32 Investments
Cost
At 1 April 2019, 31 March 2020 and 31 March 2021
Provisions
At 1 April 2019, 31 March 2020 and 31 March 2021
Net book value
At 1 April 2019, 31 March 2020 and 31 March 2021
Investments
in related
undertakings
£m
113.3
(19.8)
93.5
Following the impairment testing performed in accordance with IAS 36 (see Note 12), the Company’s carrying value of investment in
related undertakings has been reviewed and no impairment has been made (2020: £nil).
The Company’s related undertakings are as follows:
Allen Contracts Limited1
Allen Investments Limited1
Bucks Access Rentals Limited1,2
Chestview (North East) Limited1
Crewe Plant Hire Limited1,2
Drain Technology (1985) Limited2
Drain Technology Limited3
Geason Holdings Limited2,3
Geason Apprenticeships Limited2,3
Hire-A-Tool Limited1
Ian Kilpatrick Limited2,3
Lifterz Holdings Limited1,2
Lifterz Limited1,2
Lifterz (Scot) Limited1,2
OHP Limited1,2
Platform Sales & Hire Limited1,2
Prolift Access Limited1,2
Prospects Training International Limited2,3
Rail Hire (UK) Limited1,2
SHH 501 Limited1,2
Speedy Asset Leasing Limited1
150 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Incorporation
and operation
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
Principal
activity
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Holding company
Training services
Dormant
Dormant
Holding company
Hire services
Hire services
Holding company
Dormant
Dormant
Training services
Dormant
Dormant
Dormant
Ordinary
share
capital
held
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Notes to the Company Financial Statements continued
32 Investments continued
Speedy Asset Services Limited1
Speedy Engineering Services Limited1
Speedy Hire (Ireland) Limited4
Speedy Hire (Ireland) Limited2,5
Speedy Hire (UK) Limited1
Speedy Hire Centres (Midlands) Limited1
Speedy Hire Centres Limited1
Speedy Hire Direct Limited1,2
Speedy Industrial Services Limited1
Speedy International Asset Services (Holdings) Limited1
Speedy International Asset Services Equipment Rental LLC2,6,7
Speedy International Asset Services LLC (Egypt)2,8
Speedy International Asset Services LLC (Qatar)2,6,9
Speedy International Leasing Limited1,2
Speedy LCH Generators Limited3
Speedy LGH Limited1
Speedy Lifting Limited1
Speedy Plant Hire Limited1
Speedy Power Limited1
Speedy Pumps Limited1
Speedy Rail Services Limited1
Speedy Safemaker Limited1,2
Speedy Services Limited1
Speedy Space Limited1
Speedy Support Services Limited1
Speedy Survey Limited1
Speedy Transport Limited1
Speedy Zholdas LLP10
Speedyloo Limited1
Stockton Investments (North East) Limited1
Tidy Group Limited1
Turner & Hickman Limited10,11
Waterford Hire Services Limited1,12
Incorporation
and operation
UK
UK
UK
Ireland
UK
UK
UK
UK
UK
UK
UAE
Egypt
Qatar
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
Kazakhstan
UK
UK
UK
UK
Ireland
Ordinary
share
capital
held
Principal
activity
Hire services
Dormant
Hire services
Hire services
Dormant
Dormant
Dormant
Dormant
Dormant
Holding company
Hire services
Dormant
Dormant
Leasing services
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Provision of group services
Dormant
Provision of group services
Hire services
Dormant
Dormant
Dormant
Holding company
Dormant
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
49%
100%
49%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
100%
1 Registered office: Chase House, 16 The Parks, Newton-le-Willows, Merseyside, WA12 0JQ.
2 Indirect holding via a 100% subsidiary undertaking.
3 Registered office: 13 Queen's Road, Aberdeen, United Kingdom, AB15 4YL.
4 Registered office: Unit 2 Duncrue Pass, Duncrue Road, Belfast, Antrim, Northern Ireland, BT3 9DL.
5 Registered office: Unit 2, Glen Industrial Estate, Broombridge Road, Glasnevin, Dublin 11, Republic of Ireland.
6 Although the Group holds less than half of the voting rights, it is able to govern the financial and operating policies of the company. The Group therefore consolidates the company.
7 Registered office: Sector # MW5, Inside ESNAAD Base, ICAD-1, Musafah Industrial Area, Near National Petroleum Construction Company, PO Box 127149, Abu Dhabi, UAE.
8 Registered office: City Light Tower A3, Third Floor, Office No. 303, 1 Makram Ebeid Street, Nasr City, Cairo, Egypt.
9 Registered office: PO Box 4619, Doha, Qatar.
10 The Group has a 50% investment in Turner & Hickman Limited, which has a 90% investment in Speedy Zholdas LLP. The registered office of Speedy Zholdas LLP is Building 276,
Traffic Atyrau – Dossor, Atyrau City, Kazakhstan.
11 Registered office: 19 Woodside Crescent, Glasgow, G3 7UL.
12 Registered office: Kingsmeadow Retail Park, Ring Road, Waterford, Republic of Ireland.
The Company holds voting rights in each related undertaking in the same proportion to its holdings in the ordinary share capital
of the respective undertakings.
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 151
Strategic ReportCorporate InformationGovernanceFinancial Statements
Notes to the Company Financial Statements continued
33 Trade and other receivables
Amounts owed by Group undertakings
Other receivables
34 Trade and other payables
Amounts owed to Group undertakings
Accruals
2021
£m
306.6
2.0
308.6
2020
£m
319.8
1.0
320.8
2021
£m
125.7
0.8
126.5
2020
£m
101.8
0.8
102.6
35 Financial instruments
The Company financial instruments are stated in accordance with Note 20.
The fair values of financial assets and liabilities are considered to be equal to the carrying values shown in the balance sheet.
36 Borrowings
Non-current borrowings
Maturing between two and five years
Asset based finance facility
Total borrowings
Less: cash
Net debt
2021
£m
2020
£m
56.4
56.4
(1.0)
55.4
113.6
113.6
(21.4)
92.2
The Company borrowings are stated in accordance with Note 21.
Both the overdraft and asset based finance facility are secured by a fixed and floating charge over all the assets of the Group and are
rated pari passu.
Analysis of net debt
Cash
Borrowings
31 March
2020
£m
Non-cash
movement
£m
21.4
(113.6)
(92.2)
–
(0.4)
(0.4)
Cash flow
£m
(20.4)
57.6
36.2
31 March
2021
£m
1.0
(56.4)
(55.4)
152 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
Notes to the Company Financial Statements continued
37 Deferred tax
Company asset
Opening at 1 April 2019 and 1 April 2020
Closing balance at 31 March 2020 and 31 March 2021
38 Share capital and share incentives
The Company share capital is stated in accordance with Note 25.
39 Contingent liabilities and commitments
The Company contingent liabilities and commitments are stated in accordance with Notes 27 and 28.
40 Post-balance sheet events
The Company post-balance sheet events are stated in accordance with Note 29.
41 Related party disclosures
The Company related party disclosures are stated in accordance with Note 30.
Total
£m
0.1
0.1
S
t
r
a
t
e
g
i
c
R
e
p
o
r
t
G
o
v
e
r
n
a
n
c
e
F
i
n
a
n
c
i
a
l
S
t
a
t
e
m
e
n
t
s
C
o
r
p
o
r
a
t
e
I
n
f
o
r
m
a
t
i
o
n
Financial Statements Speedy Hire Plc Annual Report and Accounts 2021 153
Five-year Summary
Income Statement
Revenue
Gross profit
Analysis of operating profit
Operating profit before amortisation and exceptional items
Amortisation
Exceptional items
Operating profit
Share of results of joint ventures
Net financial expense
Financial income/(expense) – exceptional
Total net financial (expense)/income
Profit before taxation
2021
£m
2020
£m
2019
£m
20182
£m
20172
£m
363.6
192.6
406.7
224.2
394.7
214.4
373.0
204.7
369.4
191.7
25.4
(0.8)
(7.6)
17.0
1.2
(5.9)
–
(5.9)
12.3
39.1
(1.3)
(23.8)
14.0
2.8
(7.0)
10.9
3.9
20.7
36.7
(0.7)
(1.2)
34.8
1.9
(7.2)
(0.8)
(8.0)
28.7
29.2
(0.2)
(7.2)
21.8
0.8
(4.1)
(0.5)
(4.6)
18.0
19.3
(1.8)
–
17.5
1.7
(4.8)
–
(4.8)
14.4
Non-GAAP performance measures
EBITDA before exceptional items
Adjusted profit before tax, exceptional items and amortisation
90.5
20.7
107.4
34.9
104.8
31.4
73.0
25.9
63.1
16.2
Balance sheet
Hire equipment – original cost
Hire equipment – net book value
Total equity
Cash flow
Cash generated from operations
Net cash flow before financing activities
Purchase of hire equipment
(Loss)/profit on disposal of hire equipment
In pence
Dividend per share (interim and final dividend)
Adjusted earnings per share1
Net assets per share
In percentages
Gearing
Return on capital employed1
EBITDA margin1
In ratios
Net debt/EBITDA1 (excluding impact of IFRS 16)
Net debt/net tangible fixed assets
In numbers
Average employee numbers
Depot numbers
1 Before amortisation and exceptional items.
2 2018 and 2017 amounts are presented excluding the impact of IFRS 16
154 Financial Statements Speedy Hire Plc Annual Report and Accounts 2021
386.6
207.2
219.2
408.1
227.1
209.9
385.8
216.9
202.0
364.0
203.7
197.8
350.7
194.8
189.6
72.9
69.7
(36.4)
(1.0)
64.5
45.2
(53.6)
0.8
61.2
13.6
(54.3)
1.2
1.40
3.22
41.4
13.1
7.6
24.9
0.5
0.14
0.70
5.54
39.8
37.8
12.0
26.4
1.0
0.31
2.00
4.96
38.5
44.1
11.7
26.6
1.1
0.35
37.2
17.4
44.8
0.7
1.65
4.04
37.7
35.1
11.5
19.3
1.0
0.29
48.9
35.0
40.5
(1.5)
1.00
2.45
36.2
37.7
7.7
17.1
1.1
0.30
3,875
180
4,071
216
3,873
222
3,738
217
3,641
210
Shareholder Information
Annual General Meeting
Subject to the UK Government’s guidance and restrictions on
travel and public gatherings in relation to COVID-19 in place
at the time, the Annual General Meeting (‘AGM’) will be held at
the offices of Addleshaw Goddard LLP, One St Peter’s Square,
Manchester, M2 3DE on 9 September 2021 at 11.00am.
Details of the business of the AGM and the resolutions to be
proposed will be sent to those shareholders who have opted
to continue receiving paper communications, which is also
available to other shareholders and the public on our
website at speedyservices.com/investors.
Shareholders will be asked to approve the Directors’
Remuneration Report and the re-election of all Directors.
Other resolutions will include proposals to renew, for a further
year, the Directors’ general authority to allot shares in the
Company, to allot a limited number of shares for cash on a non-
pre-emptive basis and to buy back the Company’s own shares.
Share price information/performance
The latest share price is available at speedyservices.com/investors.
By selecting share price information under the investor
information section, shareholders can check the value of their
shareholding online or review share charts illustrating annual
share price performance trends.
Shareholders can download copies of our Annual Report and
Accounts and interim accounts from speedyservices.com/investors.
Dividend reinvestment plan (DRIP)
You can choose to reinvest dividends received to purchase
further shares in the Company through a DRIP. A DRIP application
form is available from our registrar, whose contact details
are 0371 384 2769, or from overseas +44 (0)121 415 7047.
Lines are open 8.30am to 5.30pm (UK time), Monday to Friday
(excluding public holidays in England and Wales). Alternatively
you can write to our registrar at Equiniti Limited, Aspect House,
Spencer Road, Lancing, West Sussex, BN99 6DA.
If your question is not answered by the information provided,
you can send your enquiry via secure email from this webpage.
You will be asked to complete a structured form and to provide
your shareholder reference, name and address. You will also need
to provide your email address, if this is how you would like to
receive your response.
Boiler room fraud
Share scams are often run from ‘boiler rooms’ where fraudsters
cold-call investors offering them worthless, overpriced or even
non-existent shares. While such scams promise high returns,
those who invest usually end up losing their money.
If you are offered unsolicited investment advice, discounted
shares, a premium price for shares you own, or free company or
research reports, you should take these steps before handing
over any money:
• get the name of the person and organisation contacting you;
• search the list of unauthorised firms to avoid at fca.org.uk/
consumers/scams to ensure they are authorised;
• only use the details on the FCA Register to contact the firm; and
• call the Consumer Helpline on 0800 111 6768 if you suspect
the caller is fraudulent.
REMEMBER: if it sounds too good to be true, it probably is!
Forward-looking statements
This Annual Report and Accounts includes statements that are
forward-looking in nature. Forward-looking statements involve
known and unknown risks, assumptions, uncertainties and
other factors which may cause the actual results, performance
or achievements of the Group to be materially different from
any future results, performance or achievements expressed or
implied by such forward-looking statements. Except as required
by the Listing Rules, the Disclosure Guidance and Transparency
Rules and applicable law, the Company undertakes no obligation
to update, revise or change any forward-looking statements to
reflect events or developments occurring on or after the date of
this Annual Report and Accounts.
Electronic communications
Contact details
You can elect to receive shareholder communications
electronically by signing up to Equiniti’s portfolio service at
shareview.co.uk. This will save on printing and distribution costs,
creating environmental benefits. When you register, you will be
sent a notification to say when shareholder communications are
available on our website and you will be provided with a link to
that information.
Enquiries on shareholdings
Any administrative enquiries relating to shareholdings in the
Company, such as dividend payment instructions or a change of
address, should be notified direct to the registrar, Equiniti Limited,
at Aspect House, Spencer Road, Lancing, West Sussex, BN99
6DA. Your correspondence should state Speedy Hire Plc and the
registered name and address of the shareholder. Information
on how to manage your shareholdings can be found at help.
shareview.co.uk.
We are happy to answer queries from current and potential
shareholders. Similarly, please let us know if you wish to receive
past, present or future copies of the Annual Report and Accounts.
Please contact us by telephone, email or via the website.
Speedy Hire Plc
Chase House, 16 The Parks
Newton-le-Willows
Merseyside WA12 0JQ
Telephone
01942 720 000
Email: investor.relations@speedyservices.com
Website: speedyservices.com/investors
Corporate Information Speedy Hire Plc Annual Report and Accounts 2021 155
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Registered office and advisers
Registered office
Financial advisers
Bankers continued
HSBC Invoice Finance (UK) Ltd
21 Farncombe Road
Worthing
West Sussex
BN11 2BW
HSBC Bank Plc
8 Canada Square
Canary Wharf
London
E14 5HQ
RBS Invoice Finance Limited
250 Bishopsgate
London
EC2M 4AA
Wells Fargo Capital Finance (UK) Limited
Bow Bells House
1 Bread Street
London
EC4M 9BE
Public relations
MHP Communications
60 Great Portland Street
London
W1W 7RT
Registrars and transfer office
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Insurance brokers
Marsh Ltd
Belvedere
12 Booth Street
Manchester
M2 4AW
Speedy Hire Plc
Chase House
16 The Parks
Newton-le-Willows
Merseyside
WA12 0JQ
Telephone
01942 720 000
Email
investor.relations@speedyservices.com
Website
speedyservices.com/investors
Registered number: 00927680
Company Secretary
Neil Hunt
Visit our website to find out more
speedyservices.com/investors
NM Rothschild & Sons Limited
1 King William Street
London
EC4N 7AR
Stockbrokers
Liberum Capital Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London
EC2Y 9LY
Panmure Gordon (UK) Limited
1 New Change
London
EC4M 9AF
Legal Advisers
Pinsent Masons LLP
1 Park Row
Leeds
LS1 5AB
Addleshaw Goddard LLP
One St Peter's Square
Manchester
M2 3DE
Auditors
KPMG LLP
One St Peter’s Square
Manchester
M2 3AE
Sign up for our RNS alerts
speedyservices.com/investors/alert-subscribe
Bankers
Barclays Bank PLC
1st Floor
3 Hardman Street
Spinningfields
Manchester
M3 3AP
Bank of America Merrill Lynch
2 King Edward Street
London
EC1A 1HQ
156 Corporate Information Speedy Hire Plc Annual Report and Accounts 2021
Speedy is the UK’s leading provider of tools and
equipment hire, and services to the construction,
infrastructure and industrial markets.
Our hire and services business operates
from 200 locations in the UK and Ireland.
We also operate internationally through
a joint venture in Kazakhstan.
CONTENTS
Strategic Report
Who we are
What we do
Our network
Governance
Chairman’s letter
to shareholders
Directors’ Report
IFC
02
03
61
62
65
66
68
Statement of Directors’
Responsibilities
Board of Directors
Corporate Governance
Audit & Risk Committee Report 74
Nomination Committee Report 78
80
Remuneration Report
Independent auditor’s report 101
Financial Statements
Consolidated Income
Statement
Consolidated Statement of
Comprehensive Income
111
112
Consolidated Balance Sheet 113
Consolidated Statement
of Changes in Equity
Consolidated Cash
Flow Statement
114
115
04
Where we operate
Our customer value proposition 06
07
Why invest in Speedy
Our ESG strategy
Chairman’s statement
COVID-19: Supporting
colleagues and customers
through the pandemic
Chief Executive’s Review
Financial KPIs
Our strategy
Simplify
Standardise
08
10
12
14
17
18
19
20
21
Grow
Speedy and B&Q trial new outlets 22
24
ESG Report
40
Financial Review
Principal risks and uncertainties 45
55
Viability Statement
Board engagement
with our stakeholders
56
Notes to the
Financial Statements
Company Balance Sheet
Company Statement
of Changes in Equity
Company Cash Flow
Statement
Notes to the Company
Financial Statements
Five-year summary
Corporate Information
Shareholder Information
Registered office
and advisers
116
147
148
149
150
154
155
156
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www.speedyservices.com/investors
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Sustainable
growth
Speedy Hire Plc
Annual Report and Accounts 2021
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Speedy Hire Plc
Chase House
16 The Parks
Newton-le-Willows
Merseyside WA12 0JQ
speedyservices.com/investors
trust us to deliver