12.10.2020

A long year for Ainscough

UK crane rental company Ainscough has filed its results for the 16 months to the end of September 2019 which show a decline in pro-rata revenues and profit.

Total revenues for the period - during which the company moved its year end from the end of May to the end of September - were £123.1 million which on a simplistic 12 month basis would have been £92.2 million, 13.5 percent down on the 12 months to end of May 2018. Pre-tax profits however were roughly the same at £1.66 million – however this is for 16 months and not 12 months, so in a pro-rata basis they declined 25 percent.

Administration expenses were slightly lower on a pro-rata basis, while the company posted an exceptional administrative expense of £8.3 million which included refinancing and restructuring costs, plus £4.6 million for a new system, including an impairment cost for installation. Last year the single exceptional cost was £3.5 million for restructuring.

After a £1.07 million tax credit the net profit was £2.73 million – compare to £3.84 million in 2018. The directors decided not to recommend dividend payment for the second year running. However according to a note in the accounts a £23.55 million dividend was declared and paid in August.

With the current economic slowdown Ainscough is not currently in compliance with its lending covenants in terms of some of its facilities. Some have already been amended, albeit with a lower borrowing limit, with further adjustments anticipated by the end of this year.

The company statement in the accounts says: “The directors believe that market uncertainty will continue but opportunities will increase with major infrastructure and projects in the coming financial period, as a result of the UK government’s ‘Build Build Build’ strategy. As a result of careful strategic management and diversification across a number of sectors, the company is well placed to respond to opportunities as and when they present themselves.”

Vertikal Comment

It is hard to make a proper comment on the basic accounts submitted to Companies House, but they are certainly not a surprise and even mildly encouraging and we would probably agree with its statement that it is well placed to respond to opportunities. Since the end of September GSO Capital Partners and its affiliates have held a 95 percent stake in the business and seems to be taking a far more positive approach to Ainscough than some of its previous private equity owners. It is therefore surprising and disappointing to see it extract such a large dividend from the business in the current environment.