At Group level, we measure the performance of the business using a number of key performance indicators (‘KPIs’). These help to ensure that we are delivering against our strategic priorities.

Several of these KPIs (adjusted EPS, return on investment and leverage) influence the remuneration of our executive team. During the year, we have reviewed our KPIs to ensure that they remain appropriate for the Group. As a result, we have added carbon intensity due to our increased focus on environmental matters so that we can clearly track our performance for the Group as a whole. We have removed physical utilisation as this has become less relevant to understanding the performance of the business as we continue to broaden our fleet, particularly with the growth in Specialty.

Furthermore, physical utilisation is a component of dollar utilisation which remains a Group KPI.Certain KPIs are more appropriately measured for each of our operating businesses, whereas other KPIs are best measured for the Group as a whole.

Link to strategic priorities

Grow General Tool and advance our clusters  Grow General Tool and advance our clusters
Amplify Specialty  Amplify Specialty
Advance technology  Advance technology
Lead with ESG  Lead with ESG
Dynamic capital allocation  Dynamic capital allocation
Remuneration  Linked to remuneration

ADJUSTED EPS (P)

    Calculation

    Adjusted Group profit after taxation divided by the weighted average number of shares in issue (excluding shares held by the Company and the ESOT).

    Target

    As a cyclical business, adjusted EPS varies through the cycle.

    2021 performance

    Adjusted EPS was 166p per share in 2020/21.

    Strategic priorities

    Dynamic capital allocation Remuneration

    RETURN ON INVESTMENT (‘RoI’) (%)

      Calculation

      Adjusted operating profit divided by the sum of net tangible and intangible fixed assets, plus net working capital but excluding net debt and tax.

      Target

      Averaged across the economic cycle we look to deliver RoI well ahead of our cost of capital, as discussed in our Strategic review.

      2021 performance

      Our RoI was 15% for the year ended 30 April 2021, reflecting the impact of the COVID-19 pandemic.

      Strategic priorities

      Grow General Tool and advance our clusters Amplify Specialty Dynamic capital allocation Remuneration

        NET DEBT AND LEVERAGE AT CONSTANT EXCHANGE RATES

          Calculation

          Net debt is total debt less cash balances, as reported, and leverage is net debt divided by adjusted EBITDA, calculated at constant exchange rates (balance sheet rate).

          Target

          We seek to maintain a conservative balance sheet structure with a target for net debt to adjusted EBITDA of 1.5 to 2.0 times (excluding IFRS 16).

          2021 performance

          Excluding lease liabilities arising under IFRS 16, net debt at 30 April 2021 was £3,019m and leverage was 1.4 times.

          Strategic priorities

          Dynamic capital allocation Remuneration

            FLEET ON RENT ($m/£m/C$m)

              Calculation

              Fleet on rent is measured as the daily average of the original cost of our itemised equipment on rent.

              Target

              To achieve growth rates in excess of the growth in our markets and that of our competitors.

              2021 performance

              In the US, fleet on rent remained broadly constant, in Canada, fleet on rent decreased by 2%, while in the UK it increased by 5%. The US market reduced by 9%, the Canadian market by 11% and the UK market by 16%.

              Strategic priorities

              Grow General Tool and advance our clusters Amplify Specialty Advance technology

                DOLLAR UTILISATION (%)

                  Calculation

                  Dollar utilisation is rental revenue divided by average fleet at original (or ‘first’) cost measured over a 12-month period.

                  Target

                  Improve dollar utilisation to drive improving returns in the business.

                  2021 performance

                  Dollar utilisation was 50% in the US, 47% in Canada and 54% in the UK. These reductions in the US and Canada reflect the impact of the COVID-19 pandemic while the UK reflects the work done for the Department of Health.

                  Strategic priorities

                  Grow General Tool and advance our clusters Amplify Specialty Advance technology

                    ADJUSTED EBITDA MARGINS (%)

                      Calculation

                      Adjusted EBITDA as a percentage of total revenue.

                      Target

                      To improve or maintain margins with EBITDA margins of 45–50% in the US, 40–45% in Canada and 35–40% in the UK.

                      2021 performance

                      EBITDA margins in 2020/21 were 49% in the US, 30% in the UK and 44% in Canada.

                      Strategic priorities

                      Grow General Tool and advance our clusters Amplify Specialty Advance technology Dynamic capital allocation

                      CARBON INTENSITY (TCO2E/£M)

                        Calculation

                        Carbon intensity is calculated as emissions per £m of revenue (tCO2e/£m), calculated at constant exchange rates.

                        Target

                        To reduce our carbon intensity by 35% by 2030 with reference to 2018 as a base year.

                        2021 performance

                        Our carbon emission intensity ratio was 64.3 (2020: 68.5).

                        Strategic priority

                        Lead with ESG

                          STAFF TURNOVER (%)

                            Calculation

                            Staff turnover is calculated as the number of leavers in a year (excluding redundancies) divided by the average headcount during the year.

                            Target

                            Our aim is to keep employee turnover below historical levels to enable us to build on the skill base we have established.

                            2021 performance

                            Turnover levels have reduced across the business. Our well-trained, knowledgeable staff remain targets for our competitors.

                            Strategic priority

                            Lead with ESG

                            SAFETY

                            Calculation

                            The RIDDOR (‘Reporting of Injuries, Diseases and Dangerous Occurrences Regulations’) reportable rate is the number of major injuries or over seven-day injuries per 100,000 hours worked.

                            Target

                            Continued reduction in accident rates.

                            2021 performance

                            The RIDDOR reportable rates were 0.31 in the US, 0.27 in the UK and 0.29 in Canada.

                            Strategic priority

                            Lead with ESG