Facilities by ADF PLC on Tuesday said it expects to meet the market’s expectations in 2022, despite profit taking a short-term hit from higher mobilisation costs.
The provider of production and support vehicles for the TV and film industry said revenue for the first half rose to £12.6 million from £11.5 million a year before.
The figure was slightly ahead of management expectations, and outperformed the record half of 2021 which saw a ‘bounce back’ in the TV & film industry as Covid restrictions eased.
ADF proposed a 0.46 pence per share interim dividend.
Pretax profit, however, more than halved to £1.3 million from £2.8 million.
Shares in ADF were down 7.7% to 54.90 pence each in London on Tuesday afternoon. The stock is up 9.8% from its January initial public offering price of 50p.
‘The mix of jobs in [the first two quarters of] 2021 was very static and studio-based with very little movement and hence much lower mobilisation and associated costs (agency drivers, fuel etc). Given this comparative activity, it is very pleasing that [first half 2022] revenue exceeded that of the prior year,’ the firm explained.
The first half of 2022, in comparison, was made up of more jobs that were smaller and shorter in duration, thus requiring more equipment and labour, which drove up mobilisation costs.
Operating profit margin was reduced to 12% from 25%, as a result of the need to hire more heavy goods vehicle drivers and a 30% increase in fuel costs. Administrative expenses were £2.6 million compared to £1.9 million the prior year.
Looking ahead, ADF said market conditions remain supportive of an expansion in demand, and it has ‘excellent’ order visibility for the second half.
The order book, now full, is mostly made up of larger-scale productions, which should bring down mobilisation costs. It expects to meet market expectations for 2022 as a whole.
‘Following a strong end to 2021, 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 [high-end] TV in the UK,’ commented Chief Executive Officer Marsden Proctor.
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