Ainscough Crane Hire’s parent posts £70m loss
THE parent company of Ainscough Crane Hire suffered a £70m loss on falling sales of £97.5m in 2011, according to newly-filed accounts.
Sales fell by 11% in the year to May 31 (2010: £109.7m), which the Wigan-based company blamed on “challenging” trading conditions.
The loss was largely due to an exceptional writedown of £50m relating to the goodwill value of the company. A further £27.7m charge related to interest on its debt pile, which stood at £306.3m by its year end.
Ainscough Crane Hire was bought by a management team led by current managing director Neil Partridge in a £255m deal in October 2007.
The purchase, from members of the Ainscough family, was one of the last major deals to be completed under a hybrid debt-equity structure offered by the now-disbanded Bank of Scotland Integrated Finance division.
Mr Partridge told TheBusinessDesk.com that although the loss figure looked heavy, much of this related to non-cash items such as the goodwill write-down.
He added that only around half of the £27.7m of interest was payable on loans, with the remainder being rolled-up interest that is only repayable once the equity is sold.
He said that its main trading company, Ainscough Crane Hire Ltd, made a post-tax profit of over £15m for the period (although £4.6m of this was a tax credit on past losses). He also said that the company was cash-generative, and finished the year with a cash balance of £12m even after investing some £28.7m on its fleet of cranes during 2011.
Mr Partridge said the company is “well down the road” in renegotiating its bank debt. Its current loans with successor bank Lloyds Banking Group are due to expire in around eight months, but he argued that negotiations will be completed “well before that”.
He also argued that the 2011 figures represented a “low point” in the company’s trading. Its sales are likely to rebound to around £110m in the year to May 2012, and he expects a brand new wind energy arm to generate £10m of sales in the year to May 2013.
The business, Ainscough Wind Energy Services, provides both labour and installation expertise for wind farm developers and operators and has an order book worth more than £5m after little more than a month’s trading, said Mr Partridge (right).
“This is a usefully profitable business with improving prospects on both the crane hire and the wind energy sides of the business,” he said.
Earlier this week, Ainscough Crane Hire announced the appointment of Gareth Jones as its new commercial director and Chris Chambers as new finance director.
