13 September 2022

Facilities by ADF plc

("Facilities by ADF", "ADF", the "Company" or the "Group")

Half year results for the six months ended 30 June 2022

Facilities by ADF, the leading provider of premium serviced production facilities to the UK film and high-end television industry ("HETV"), is pleased to announce its unaudited half year results for the six months ended 30 June 2022.

Financial highlights

Operational highlights

·           Positive trading in H1-22, with revenues marginally ahead of H1-21 levels.

·           Interim dividend proposed of 0.46 pence per share.

·       Supported 46 productions in the half, including The Crown season 5, Slow Horses, Everything I         knowabout Love, Sandman and Secret Invasion.

·        Continued deployment of funds raised at IPO, supporting the expansion of the current fleet adding 51 units in H1-22, bringing the total fleet to 550 units.

·     Experienced increased demand for ADF's services from global streaming brands in H1-22, firmly establishing the UK's position in the content production landscape.

·         Working with carbon audit consultancy Creative Zero to better understand our impact on the                  environment.

·      New operational base at Longcross, Surrey, on track to be completed by Q4 2022, highlighting the Company's commitment to its growth strategy and increased demand for ADF's services.

·      Increased number of productions serviced, with almost double the number of productions serviced in H1- 21, leading to increased mobilisation costs.

Outlook

·         Underlying market drivers providing confidence that the demand for ADF's services will continue to             expand for the foreseeable future.

·        Excellent order visibility in the second half with the order book for 2022 now filled and the Group services continue to be oversubscribed.

·        The Group remains committed to growth and will continue to review acquisition opportunities in line with its strategy.

·        Notwithstanding the high number of smaller scale productions undertaken in H1-22 compared to H1-21, leading to expected, higher fleet mobilisation costs, the H2-22 order book consists of predominantly larger scale productions, and thus the Group continues to trade in line with market expectations for the FY-22 year.

·        Management is monitoring the macro-economic backdrop, with increased energy and fuel costs, along with higher inflation, and are preparing strategies accordingly.

Commenting, Marsden Proctor, CEO, said:

"Following a strong end to FY-21, we have continued to trade positively in the new financial year demonstrated by high levels of fleet utilisation. Funds provided at IPO have allowed the Company to increase the size of our fleet to ensure that we meet the robust demand for film and HETV in the UK.

"The overall landscape has not changed, our order book is now filled for 2022, market dynamics have remained strong, and we are confident that we shall see continued success going forward into the second half and beyond."

Note

*Adjusted EBITDA is the adjusted profit before tax, prior to the addition of finance income and deduction of depreciation, amortisation, and finance expenses. The adjusted EBITDA measurement removes non-recurring, irregular and one-time items that may distort EBITDA. Adjusted EBITDA provides a more normalised metric to make comparisons more meaningful across the Group and other companies in the same industry

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company take responsibility for this announcement.

For further enquiries:

OVERVIEW OF FACILITIES BY ADF

ADF's production fleet is made up of premium mobile make-up, costume and artiste trailers, production offices, mobile bathrooms (known as honey wagons), diners, school rooms and technical vehicles. The Group provides these production facilities and additional services after a planning process with the customer held well in advance of filming. In servicing productions, ADF staff are available on site and each production is allocated an account manager who acts as a single lead point of contact during filming.

The Group serves customers in an industry that has experienced significant growth in recent years, with additional demand driven by a material rise in the consumption of film and HETV content via streaming platforms such as Netflix, Disney and Amazon Prime. The UK film and TV industry has directly benefited during this growth due to the quality of its production facilities and studios, highly skilled domestic workforce, geography, accessibility to Europe, English language environment and strong governmental support. Major US streaming companies have now set up permanent bases in the UK, with the UK now Netflix's third largest operation after the USA and Canada.

CEO review

Overview

We are pleased with the operational and financial progress made in the first half of the new financial year as we continue to strengthen our position as the leading provider of premium serviced production facilities to the UK film and HETV industry. To date this progress has been driven by organic growth benefitting from additional scale following our successful IPO in January 2022. Whilst last year several larger productions had to catch up from Covid-19 restrictions, resulting in an exceptional first half of FY-21, we are delighted to report that revenues for the half are ahead of H1-21 levels.

Demand for our products remains strong, underpinned by the ever-growing film and TV market in the UK and we continue to find ourselves at the forefront of increasing competition for subscribers amongst the leading global streaming companies. The funds raised at IPO enable us to continue to increase the size of our fleet, allowing us to better support higher demand for our services. Our current fleet size is 550, up from 500 at the end of 2021, reflecting this demand lead growth strategy.

Alongside supportive market drivers and a strong business model, we have unrivalled long-standing customer relationships, a full order book for the year and an expert dedicated team across the Group, providing the Board with confidence in the long-term success of the business.

Financial performance

The strong financial end to FY-21 has continued into the first half, with revenues up 9% to £12.6m (HY21 £11.5m), highlighting our strong position in a market full of opportunities. We have seen demand for our fleet steadily increase, demonstrated by our high number of productions, doubling on the number from last year. The increased number of productions has translated into shorter production times with a greater need for mobilisation. Whilst this has caused a rise in our cost base for H1-22, we continue to have optimism moving forward as we see further growth opportunities through larger productions planned in H2-22. The Group has strong order visibility for the remainder of FY-22, with the 2022 order book now filled, and management is confident in achieving full year market expectations.

Market opportunity

We operate in an industry that has experienced significant growth and investment in recent years, underpinned by the success of HETV. The significant rise of global streaming platforms such as Apple TV+, HBO Max, Netflix, Disney +, Sky TV and Amazon Prime, has culminated in a material increase in the consumption of films and HETV, with Disney + recently announcing 221.1 million subscribers, a rise of over 14 million in its fiscal Q3 of 2022. Despite concerns over some streaming platform subscriber numbers, the Group has seen no effect on production demand to date and we continue to expand our offering. There continues to be an influx of inward investment and co-production spend in the UK, as we see the demand for content reaching record levels. The UK has become a major hub for international clients, with the UK being Netflix's third largest operation after the USA and Canada, which bodes well for our growth ambitions.

Ulster University has recently partnered with the Belfast Harbour Commission, with the support of the Northern Ireland Screen to commission a £72m complex. The complex is set to include commercial Virtual Production stages, at a time when Virtual Production is being viewed as a revolutionary innovation for production pipelines across the film sector. 

The Shepperton studios, of the Pinewood Group, is set to undergo a huge expansion project. The expansion will see the production hub double in size, with the promise of 14 sound stages and 31 workshops to be used by Netflix. This is an exciting time for the UK as major developers continue to increase their investment and we envisage this trend continuing.  

Great Point Seren Studios, in Cardiff, plans to expand one of Wales' biggest film studios. Great Point Seren Studios recent productions include Netflix's Havoc, popular BBC show Industry, A Discovery of Witches, and the fourth series of Sherlock. The studios already have four stages, the smallest of which measures 15,873 sq ft, while the largest is 21,039 sq ft. Now plans have been submitted to Cardiff Council to further expand the east Cardiff studios. The plans include building three studio buildings, as well as parking for cars and bikes and access for pedestrians and cyclists. The brief, according to the design and access statement, is to "design cutting edge studio facilities in response to the booming demand for high quality content, combined with a shortage of large purpose-built studios".

UK's Shinfield Studios has secured £261 million of funding from investment firm Cain International to construct the main phase of its 18-stage facility in Berkshire, England. The new complex situated at the Thames Valley Science Park, near Reading, already has four temporary stages in place, which are let to HETV, streaming and film companies, including Disney, and work on a further 14 purpose-built sound stages is underway. The studios hope to generate between £500-600 million of annual inward investment and create 3,000 new jobs.

A list of the new Film and TV studios under construction in the UK can be found at The Studio Map: thestudiomap.com.

Industry Performance

In terms of the overall performance of film and TV production in the UK, the British Film Institute ("BFI") recently reported for the half-year ended 28 July 2022 the following facts:

·     The combined total spend on film and HETV production in the UK for H1 2022 was £3.19 billion from 191 productions. This is the highest combined film and HETV spend reported for the H1 official statistics period.

·    The combined total UK spend on film and HETV productions for the 12 months from July 2021 to June 2022 was £5.72 billion. This is a 3% increase in spend on the previous 12-month period and is also now the highest figure seen since records began. Inward investment productions accounted for £4.75 billion or 83% of the total.

·     The latest 12-month period contains the second and third highest quarters for combined UK spend since the introduction of the HETV tax relief in 2013.

·      The total number of films starting principal photography during H1 (January - June) 2022 was 90, which is 13 more than reported for H1-21. The total UK spend of these films was £1.11 billion, 44% higher than the £771 million reported for 2021.

This information only furthers our confidence in the market dynamics and the outlook of the HETV industry in the UK.

Competitive strength

We are already the provider of choice in the UK for large scale and quality productions, which has allowed us to select the highest value production contracts available. This market position has taken several years to build, and we have the right infrastructure in place to support continued expansion. To deliver such productions and compete at this level, the quality of a supplier's fleet needs to be incredibly high. ADF prides itself upon the strength of its fleet and customer service, which has led to ADF having positive direct relationships with some of the world's largest traditional and on-demand production companies, and positions us well to capture a growing proportion of the expanding market. ADF has won several contracts for future productions through existing customers and being able to retain these customers is critical for the success of a business like ADF. Production companies are unlikely to change provider once they know the facilities and service levels meet their requirements, given the bespoke set of requirements for each production. The Group has experienced a larger number of shorter productions in the H1-22 than in H1-21 which, in addition to receiving some enquires over twelve months ago, has meant the Company's order book for 2022 is filled. This level of revenue visibility allows the Group to accurately plan.

The Group continues at pace with its capital expenditure programme, and we have orders with our key suppliers through to the end of 2023.

The Group is in the process of taking a lease on an adjacent property to our factory in Brynmenin, with the intention of doubling the capacity of our new vehicle manufacturing and fit-outs. We expect this to be fully staffed and operational by the end of the year.

The completion of our new UK operational hub at Longcross is expected by the end of October, from when an orderly transition will commence from the current site in Bordon Hampshire. All necessary operational planning components are complete for this.

Our NPS score continues at an exceptional level - currently 87, up from 83 at the date of the IPO.

The Group has continued to work on several premier productions throughout H1-22, including the upcoming season of The Crown, Sandman, Everything I know about Love and Slow Horses. We mentioned our work with Disney on the latest Dr Strange movie, and we are pleased to announce our work on another Marvel movie, Secret Invasion. As previously stated, having visibility on such highly acclaimed projects is imperative as we look to continue our growth in the future.

Delivering against growth strategy

In the first six months of the year, we have continued to successfully execute on our organic growth strategy through further investment into revenue-generating fleet equipment.

Our total current fleet size is 550, with this capacity level fully booked for the 2022 year. By the end of 2022 we expect the fleet size to reach 600, and 700 by the end of 2023, further strengthening our leading market position. The Group has committed to new fleet capital expenditure orders of c.£7.8 million and £8.2 million for 2022 and 2023, respectively. Final capex for these years will be ahead of this with ad-hoc purchases and the fitout costs of some vehicles and trailers.

Due to the well documented worldwide supply chain issues, we continued to see increased lead times on delivery of our new fleet from ADF's key suppliers; General Coach Canada, who supply the Artists Trailers and Production Offices; and from DAF, who supply our Technical Vehicles, Tractor Units & Generators. To date in 2022, any delays in deliveries of new equipment has not had a major effect on the business.

The construction of our new operational base at Longcross in Surrey is well under way. It is a five acre facility compared to our current 1.4 acres at Borden and is on track to be operational by the start of Q4 2022.

At IPO, we also emphasised our intention to grow through acquisitions. We approach acquisitions with a robust set of criteria in that we look to work within demanding multiples, will have an element of the consideration both deferred and contingent, will in most circumstances retain the management and will typically keep the brand name unchanged as it serves its customer base. Whilst opportunities were limited pre-IPO, the IPO has raised the Group's profile and balance sheet strength, and we are now seeing more opportunities. We are in discussions with several parties and will continue to review opportunities for complementary additions as they arise.  

ESG

As a Group, minimising any impact on the environment from our operations remains core to the business. ADF is recognised as the first Albert approved facilities provider to the film and television industry in Europe and our progress against this accreditation continued to move forward throughout the year. We are always looking to leverage our strong network of clients and partners, to help identify initiatives that can improve our environmental performance. We have recently started working with Creative Zero, a sustainability consultant working with creative companies to transition to Net Zero, to undergo a Carbon Audit to better understand our impact on the environment, as we embark upon a journey to ultimately become a carbon-neutral operator in the future. Our business is also committed to enforcing the highest ethical standards and we are always focused on enhancing the offering for our employees and customers. We are constantly working to ensure we carry out regular health and safety inspections and audit reporting to ensure compliance. The Board also recognises the value and importance of high standards of corporate governance and has since IPO observed the requirements of the QCA Corporate Governance Code.

People

We will always maintain that our employees are the most important asset of ADF and are key to the Group's long-term success. We have had a successful start to life as a listed business and our employees are at the centre of that success. Following several key appointments in January 2022 including Andrea Browning as the Head of HR, Rhys Thomas as Head of Fleet, Ross McDiarmid as Deputy Chief Financial Officer and Janis Arents as IT Manager, in May 2022 we announced the appointment of Alexandra Innes as an independent Non-Executive Director. Alexandra's executive career spanned investment banking, global capital markets, and investment management across several sectors, which will be invaluable to us, as we continue to grow.

Outlook

It has been an encouraging start to the year, working on several premier productions in the UK, bolstered by a resurging market following the pandemic. We have successfully grown our fleet and have seen a rise in our overall number of productions. Going forward, we remain optimistic over the outlook for the business, and with the 2022 order book now filled, our business model provides a strong platform for sustainable growth. We enter the second half in a robust position and look to the future with confidence as the UK continues to establish itself as a hub for our industry, presenting a significant opportunity for ADF to capitalise on this expanding market.

Marsden Proctor

Chief Executive Officer

Financial performance

Summary

The financial results for the six months ended 30 June 2022 reflect a very busy period for ADF. Sales in the first half of the year were 9% ahead of the same period in 2021, which were exceptional at the time, and came in slightly ahead of management's expectations.

Production and revenue visibility at the back end of 2021 meant we knew that the first half of the 2022 was going to comprise a much higher number of smaller, and thus shorter duration, productions. This work schedule meant an additional requirement for equipment and labour and that these would require a higher degree of mobilisation, which was subsequently built into the 2022 budget.

H1-21 was undoubtedly a 'bounce-back' period after the Covid restrictions from 2020 were finally lifted. There has always been a degree of seasonality with production activity, with a winter hiatus in Q1 and then a build towards the summer months with the more reliable weather. However, in 2021, with a high level of backed-up work from 2020, the first 6 months of 2021 were very busy for the film & TV industry from the outset of the year. Additionally, the mix of jobs in Q1 and Q2 in 2021 was very static and studio-based with very little movement and hence much lower mobilisation & associated costs (agency drivers, fuel etc). Given this comparative activity it is very pleasing that H1-22 revenue exceeded that of the prior year.

The overall metrics are further summarised in the table below.

The cost of the additional mobilisation in H1-22 was c.£1 million, with twice the number of agency HGV driver hires than in H1-21, combined with a 30% increase in fuel costs in the same period resulted in operating profit reducing from 25% in 2021 to 12% in 2022. Fuel costs are passed onto customers during productions but not the costs of mobilisation between engagements.

Further details regarding the impact of the mix of productions and associated costs are provided in the following sections.

Revenue

ADF's revenue increased by 9% in the first half of 2022 compared to 2021.

The table below shows the revenue for the period analysed between the 2 main categories, being Main Packages and Additional Sales, plus other miscellaneous sales.

Main Package sales

Main packages are agreed with ADF's clients, in most cases several months in advance, for the hire of specific items of equipment over a set timeframe. Each type of equipment has a set daily hire rate. The cost of ADF staff required to be onsite to manage and service the equipment is also calculated by reference to a set daily hire rate. The rate card is set and adjusted annually.

Additional sales

As ADF's trailers are typically booked six or more months in advance, and client requirements invariably change in the run up to filming. Any additional equipment and staff required during the filming period, and the labour cost of all equipment moves are then charged out weekly during the filming period. In H1-22, the value of additional sales was 74% of the initial package revenue compared to 76% during the 12 months of 2021 Specifically, additional sales include:

·        Labour recharges - this is the largest component of additional revenue (typically more than half) and is principally payments for drivers to move trailers and equipment around the various locations on each production.

·          Additional trailer hire - incremental vehicles required during the project.

·        Fuel recharges - ADF recharges fuel used on productions (with a c10% admin fee). ADF also sells fuel cards that the clients' staff can use as they move about between sets. 

·          Sundry recharges - consumable products, hand sanitisers, toiletries etc.

As noted above, generally there is an element of seasonality, with a build up to the key summer months when outdoor filming on location is more reliable with better weather, and a tail off in December when the TV & film industry generally has a 3-4-week hiatus. In 2021 there was no such effect with an overspill of demand from 2020.

Revenue Mix

ADF worked on 39 productions across the 12 months of 2021 with an average revenue value of £682K. This was a significant increase on the pre-Pandemic average value, which was £338K in 2019.

In H1-22 we have worked on 46 productions with an average revenue value of £274K and clearly the mix for the first half of 2022 has been very different to 2021. In the second half of 2022 there are a number of much larger productions planned.

The split of productions across the revenue bands is shown below:

Direct Costs & Gross Profit

Agency HGV Driver costs

As mentioned above, the first half of 2022 was characterised by smaller value jobs and consequently higher mobilisation costs. During the first 6 months of 2022, we made 7,097 individual agency driver bookings vs 3,680 in the same period in 2021 - an increase of 93%.

There was a compound effect with rate increases from agencies due to changes in IR35 rules and the well-publicised shortage in HGV drivers in the second half of 2021 pushing up pay rates. Consequently, agency driver costs, although slightly below budget, have increased from 7.7% in H1-21 to 16.1% in H1-22. Hourly rates paid to agencies in H1-21 were £21.45 compared to £27.85 in the comparative period in 2022. Across the whole of 2021, the equivalent rate was £24.75 - hence the rate increase on FY-21 is c.12%.

Fuel Costs

Fuel costs have also significantly increased, up c.30% on the same period in 2021, but the majority of this is passed on to customers.

Other direct costs

Some labour efficiencies have been achieved in the first half of 2022, with direct payroll costs down from 30.3% of turnover in 2021 to 29.1% in 2022 (and ahead of budget of 31.5%). Likewise cross-hiring of equipment reduced from 4.6% in 2021 to 4.3% in 2022.

Administrative expenses

Since the listing of the business in January 2022, overheads have increased by £190K in the first 6 months of 2022 compared to the same period in 2021 in relation to the 'administrative' costs of being a PLC (audit & accountancy fees, brokers costs, company secretarial costs' legal fees, etc), plus a further £100K increase in overall remuneration for senior executives and new NEDs - these were all budgeted for in 2022.

Other administrative costs comprise payroll for senior management and office-based staff, rent and facility related costs for the 3 mains sites that the company operates from, depreciation & amortisation, and various other overheads. Excluding depreciation and amortisation, administrative expenses were 11.9% of sales vs 8.6% in H1-21 (and 11.3% in FY-21).

Share Based Payments

These relate to certain options granted to 3 employees. The cost was calculated under the Black Scholes method.

Cash Flow & Net Debt

Operating cash inflows before movements in working capital was £1.2 million in H1 2022 compared to £2.8 million in H1-21.

Trade and other receivables increased by £1.1 million and trade and other payables decreased by £1.5 million due to the settlement of accrued advisers and brokers fees for the IPO accrued at 31 December 2021.

During the period, net proceeds of £13.2 million were raised from the IPO on 5 January 2022 and cash balances at the end of the period were £16.0 million (£5.0 million at 31 December 2021).

Net cash at 30 June 2022 was £2.4 million - net debt at 31 December 2021 was (£7.6 million).

During the 6 months to 30 June 2022, ADF spent £4.3 million on new equipment, of which £2.4 million was financed by hire purchase and £1.9 million was paid for with cash.

Neil Evans

Chief Financial Officer

FACILITIES BY ADF PLC

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2022

The accompanying notes on page 14 to 21 form an integral part of these consolidated interim financial statements.

All amounts relate to continuing operations.

FACILITIES BY ADF PLC

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2022

The notes on pages 14 to 21 are an integral part of these consolidated interim financial statements.

The financial statements were approved and authorised for issue by the Board on 12 September 2022 and signed on its behalf by:

Neil Evans, Director

Company registered number: 13761460

FACILITIES BY ADF PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2022

The notes on pages 14 to 21 are an integral part of these consolidated interim financial statements.

FACILITIES BY ADF PLC

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2022

The notes on pages 14 to 21 are an integral part of these consolidated interim financial statements.

FACILITIES BY ADF PLC

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2022

1      General Information 

The principal activity of Facilities by ADF Plc (the "Company") and its subsidiaries (together, the "Group") is the supply of mobile facilities for television and film productions.

The Company is a public company limited by shares, incorporated, domiciled and registered in England and Wales in the UK. The registered number is 13761460 and the registered address is Ground Floor, 31 Oldfield Road, Bocam Park, Pencoed, Bridgend, United Kingdom, CF35 5LJ.

2      Summary of significant accounting policies

2.1     Basis of preparation

The unaudited interim financial information presents the financial results of the Group for the six-month period to 30 June 2022. This financial information has been prepared in accordance with UK-adopted International Accounting Standards and includes a fair review of the information required. They are presented on a condensed basis. All values are rounded to the nearest thousand (£'000) except where otherwise indicated.

The financial information presented in this interim financial report for the period ended 30 June 2022 does not constitute statutory accounts, within the meaning of section 434 of Companies Act 2006. These interim financial statements do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS Standards. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements.

The Annual Report and Financial Statements for the year ending 31 December 2021 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statement ended 31 December 2021 was Unqualified.

2.2     Accounting policies

The accounting policies are consistent with those followed in the preparation of the Annual Report and Financial Statements for the year ending 31 December 2021, which are filed with the Registrar of Companies.

2.3     Going concern

The interim financial statements have been prepared on the going concern basis, which the directors believe to be appropriate for the following reasons. The directors have prepared cash flow forecasts for a 12-month period from the date of approval of these interim financial statements and such forecasts have indicated that sufficient funds should be available to enable the Group to continue in operational existence for the foreseeable future by meeting its liabilities as they fall due for payment.

Furthermore, the Directors have considered the ongoing impact of the conflict in Ukraine and current macro-economic factors on the Group's forecast cashflows and liabilities, concluding that these have no material impact on the Group due to the nature of its operations.

2.4     Critical accounting judgements and estimates

The preparation of the interim financial information requires the use of certain critical accounting estimates. It also requires management to exercise judgement and use assumptions in applying the Group's accounting policies. The resulting accounting estimates calculated using these judgements and assumptions will, by definition, seldom equal the related actual results but are based on historical experience and expectations of future events. Management believe that the estimates utilised in preparing the interim financial information are reasonable and prudent.

Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

The judgements and key sources of estimation uncertainty that have a significant effect on the amounts recognised in the interim financial information are consistent with those followed in the preparation of the Annual Report and Financial Statements for the year ending 31 December 2021 which are filed with the Registrar of Companies.

3      Revenue from contracts with customers 

All of the Group's revenue was generated from the provision of services in the UK. 4 customers make up 10% or more of revenue in the period ending 30 June 2022 (2021: 4). Management considers revenue is derived from two business streams being that of hire of facilities and fuel by ADF.

Revenue from customers

4       Other operating income

The Group received government grants as part of initiatives to provide financial support as a result of the COVID-19 pandemic. There are no future costs in respect of these grants which were received solely as compensation for the impact of the pandemic during the period.

5      Segmental reporting

The Group has two reporting segments, being the hire of facilities and fuel cards by ADF. No non-GAAP reporting measures are monitored. Total assets and liabilities are not provided to the CODM in the Group's internal management reporting by segment and therefore are not presented below and information on segments is reported at a gross profit level only. Information about geographical revenue is disclosed in note 3. All non-current assets are held in the UK.

6      Earnings per share

The calculation of the basic earnings per share (EPS) is based on the results attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. Diluted EPS includes the impact of outstanding share options.

7      Property, plant, and equipment

Depreciation is charged to administrative expenses within the statement of comprehensive income.

8       Leases

Right-of-use assets

9      Capital commitments and contingencies

Capital and financial commitments

The Group commits to lease agreements in respect of hire facilities over 6 months in advance, due to the nature of the facilities leased. As at 30 June 2022 CAD Services Limited, a subsidiary of the company, committed to the lease of Kitsmead, Kitsmead Lane, Longcross KT16 0EF. The expected commencement of this lease is to start in Q4 2022, with expected rentals of £754,000 per annum for fifteen years, with a break clause after the first ten years.

Additionally, the Group has committed to new fleet capital expenditure orders of approximately £7.8 million and £8.2 million for 2022 and 2023, respectively.

The Group held no other additional capital, financial and or other commitments at 30 June 2022.

10    Share capital

All classes of shares have full voting, dividends and capital distribution rights.

On the 5 January 2022 the shares of the Company were admitted to the London Stock Exchange trading on the UK AIM market. Admission and dealings of the ordinary shares of Facilities by ADF Plc became effective on this date. As part of the listing, and on this date, 30,000,000 new ordinary shares were placed at a price of 50p.

On 5 January 2022 Cenkos Securities Plc were granted the conditional right to subscribe for 1,200,000 new ordinary shares at the Placing Price of 50p at any time during the three-year period from Admission. The weighted average fair value of options granted in the year was determined using the Black-Scholes option pricing model. The Black-Scholes model is considered to apply the most appropriate valuation method due to the options vesting immediately. The expected life used in the model has been adjusted, based on management's best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations. Non-vesting conditions and market conditions are taken into account when estimating the fair value of the option at grant date. Inputs to the model included a risk-free rate of 0.8%; expected life of 1.48 years; expected volatility of 50%; and a weighted average share price of 50p.

In respect of the options granted to Cenkos Securities Plc the Group recognised a charge of £133,352 to Share Premium. The charge was recognised in Share Premium as the options were granted as part of the fees structure between the Company and Cenkos Securities Plc detailed in the Placing Agreement dated 21 December 2021.

10     Share capital (continued)

On 4 April 2022 500,000 new ordinary share were issued in respect of options exercised. The options exercised were outstanding prior to the Company's January 2022 IPO, as detailed in the Company's Admission Document, with the majority having been issued in 2016 as part of the Company's Enterprise Management Incentive ("EMI") scheme.

No other options were issued, exercised, or forfeited during the period ending 30 June 2022.

11    Post balance sheet events

There have been no material post balance sheet events that would require disclosure or adjustment to these Interim Financial Statements.