Annual Report and Accounts 2012 - Speedy Hire plc

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64 Financial statements Notes to the financial statements continued 1 Accounting policies continued 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 most likely produce materially different results were we to change the underlying judgements, estimates and assumptions. The following are judgements, apart from those involving estimations that management has made in the process of applying the accounting policies and that have the most significant effect on the amounts recognised in the financial statements. Whether an investment is a subsidiary or associate Judgement is applied with regards to the consolidation of Speedy International Asset Services Equipment Rental LLC as although the Group holds less than half of the voting rights at 49%, it is able to govern the financial and operating policies of the Company and the Group therefore consolidates the company. Assets held for sale Judgement is applied in relation to the classification of assets held for sale. The following are key assumptions concerning the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Property, plant and equipment In relation to the Group’s property, plant and equipment (note 13), 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 2012, the carrying value of hire equipment was £210.3m (2011: £185.7m) representing 87.3% (2011: 84.4%) of the total property, plant and equipment. The hire equipment depreciation charge for the year ended 31 March 2012 was £34.2m (2011: £46.0m) which represents 9.2% (2011: 11.0%) of the average original cost of hire equipment. Both useful economic lives and residual values are reviewed on a regular basis. Onerous lease provision The Group has a number of properties which are leased but no longer occupied. The future cost of these ongoing lease obligations is provided for by way of an onerous property contract provision (see note 20), and at 31 March 2012 the amount provided was £4.5m (2011: £4.7m). In determining the level of provision required, the Group assesses the likelihood of mitigating future lease costs as a result of break clauses in leases, or the likelihood of sub-letting the property to third parties. In doing so, the Group obtains external professional advice where the amounts involved are material. Impairment Goodwill is reviewed annually to assess the requirement for impairment; at 31 March 2012 goodwill was £44.3m (2011: £44.3m). Other intangible assets was £13.7m at 31 March 2012 (31 March 2011: £15.9m) and are assessed on an ongoing basis to determine whether circumstances exist that could lead to the conclusion that the carrying value of such assets is not supportable. Impairment testing on goodwill is carried out in accordance with the analyses described in note 12. Such calculations require assumptions relating to the appropriate discount factors and long term growth prevalent in particular markets as well as short-term business performance. The Directors draw upon experience as well as external resources in making these assumptions. In the year to 31 March 2012, an impairment review was undertaken in respect of intangible assets and property, plant and equipment, using the basis and key assumptions set out in note 12. Bad debt provision The Group monitors the risk profile of debtors regularly and makes a provision for amounts that may not be recoverable. When a trade receivable is not collectable it is written off against the bad debt provision. At 31 March 2012, the provision for bad debt was £2.4m (2011: £4.1m) against a total debtor book of £86.0m (2011: £97.8m). Speedy Hire Plc Annual Report and Accounts 2012
Financial statements 65 2 Segmental analysis The segmental disclosure presented in the financial statements reflects the format of reports reviewed by the ‘chief operating decisionmaker’ (CODM). UK & Ireland Asset Services deliver asset management, with tailored services and a continued commitment to relationship management. International Asset Services deliver major overseas projects and facilities management contracts by providing a managed site support service. UK & Ireland Asset Services are managed separately at below CODM level but have been aggregated into one operating segment as they have similar economic characteristics including the nature of the products and services, the type or class of customer for their products and services and the methods used to distribute their products or provide their services. The Group previously reported on the International and Training & Advisory Services segment. However, as part of a reorganisation of the business in the second half of the year and the closure of Advisory Services, Training Services is now fully integrated into UK Asset Services. Consequently, the two reportable segments identified by the Group are UK & Ireland Asset Services and International Asset Services. For the year ended 31 March 2012 UK & Ireland Asset Services £m International Asset Services £m Corporate items £m Segmental revenue 320.0 18.0 – 338.0 Intra-Group revenue (1.8) (6.9) – (8.7) Revenue 318.2 11.1 – 329.3 Segment result: EBITDA before exceptional costs 66.3 2.5 (5.6) 63.2 Amortisation (4.1) – – (4.1) Depreciation (38.5) (3.2) (1.9) (43.6) Exceptional restructuring costs (2.9) – – (2.9) Operating profit/(loss) 20.8 (0.7) (7.5) 12.6 Financial expense (7.2) Exceptional financial expense (2.2) Profit before tax 3.2 Taxation (1.5) Profit for the financial year 1.7 Intangible assets 58.0 – – 58.0 Hire equipment 185.8 24.5 – 210.3 Non-hire equipment 30.5 0.2 – 30.7 Current assets 90.4 5.5 4.6 100.5 Cash – – 0.2 0.2 Total assets 364.7 30.2 4.8 399.7 Liabilities (66.1) (8.7) (8.1) (82.9) Bank overdraft – – (0.2) (0.2) Borrowings – – (76.3) (76.3) Taxation liabilities – – (10.8) (10.8) Total liabilities (66.1) (8.7) (95.4) (170.2) Capital expenditure 60.8 10.0 – 70.8 Total £m Speedy Hire Plc Annual Report and Accounts 2012 Financial statements
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Measured progress Annual Report and
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Measured progress Actions count. Re
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Measured progress Financial highlig
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Financial KPIs Revenue £m 600 500
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New build 2010 18.1% 25.7% New buil
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1 3 2 4 Thames Water Speedy is a st
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Majors By 2013 the top 100 construc
Page 15 and 16: Products and services ePod Speedy p
Page 17 and 18: Costs Speedy has remained focused o
Page 19 and 20: 2 Actions Over 70% of our carbon fo
Page 21 and 22: We remain committed to our strategy
Page 23 and 24: The Group will maintain its focus o
Page 25 and 26: Risk description Potential impact S
Page 27 and 28: Our performance UK & Ireland Asset
Page 29 and 30: Our performance International Asset
Page 31 and 32: Exceptional items Exceptional items
Page 33 and 34: Ishbel Macpherson Non-Executive Cha
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Page 37 and 38: Articles of association The Company
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Page 41 and 42: Performance evaluation During the y
Page 43 and 44: Remuneration report This report has
Page 45 and 46: Components of remuneration The main
Page 47 and 48: Benefits under the Performance Plan
Page 49 and 50: Emoluments of the Directors The emo
Page 51 and 52: 1 The interests at 1 April 2011 are
Page 53 and 54: Review of the work of the external
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Page 57 and 58: Financial statements 55 Consolidate
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Page 61 and 62: Notes to the financial statements F
Page 63 and 64: Financial statements 61 1 Accountin
Page 65: Financial statements 63 1 Accountin
Page 69 and 70: Financial statements 67 3 Exception
Page 71 and 72: 7 Financial expense Financial state
Page 73 and 74: 10 Dividends The aggregate amount o
Page 75 and 76: Financial statements 73 12 Intangib
Page 77 and 78: Financial statements 75 18 Financia
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Page 81 and 82: 20 Provisions Financial statements
Page 83 and 84: Financial statements 81 23 Share in
Page 85 and 86: Financial statements 83 27 Commitme
Page 87 and 88: Company statement of changes in equ
Page 89 and 90: Notes to the Company financial stat
Page 91 and 92: 36 Deferred tax Financial statement
Page 93 and 94: Shareholder information Annual Gene
Page 95 and 96: Awards 2012 NOEA - Event Innovation
Page 97 and 98: Memberships Professional body and t
Page 99 and 100: Printing and paper: this report has
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Annual Report and Accounts 2012 - Speedy Hire plc

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