Facilities By Adf (LSE:ADF) — Final results for the year ended 31 December 2025

0:00 Good morning, and welcome to the Facilities BY ADF PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Nicola Pearce, CEO. Good morning to you.

0:31 Good morning, and thank you for joining us as we share our FY twenty five results and outlook for Facilities BY ADF. I'll start with sharing the annual highlights. Will will then run through our financials, and I'll then conclude with the strategic direction and outlook. By way of introduction, my name is Nicola Peercy. I'm the new CEO of FACILITIES BY ADF. I'm delighted to have joined the business in January, so very much new to the company. And likewise, Will, our new CFO, has been with us just three weeks. So, we're very excited looking forward. Having spent majority of my career across film and TV, I'm incredibly passionate about content creation in the same way that our producing clients of ADF are.

1:21 What really attracted me to the business was its brilliant reputation, strong foundations, and the really significant opportunity ahead. Throughout my career, I've operated across the full spectrum of business environments from founder led family run businesses, which is very much my my upbringing in my early years, through to independent producing and then right through to the major studios. And because of this, the origins of the ADF family of companies and where the group is today and that scope of growth, it really felt like a natural fit for me.

1:56 Thanks for me. Morning, everybody. So Nicholas, the new CEO. I'm the very new CFO at FACILITIES BY ADF. Before joining the company, I spent four years on the board at Everyman Cinemas. And prior to that, I built my career across the hospitality and predominantly facility sectors. I was really drawn to ADF for a few reasons. Firstly, it's got the foundations of a strong business and a great reputation in the sector. But more candidly, I think there's still a lot to go after, which is exciting. I think there's a real opportunity to build on these strong foundations and drive stronger returns for shareholders.

2:34 And also having spent the last few years very close to the film and TV industry, it's a space I really enjoy working in, and I'm excited to continue to be a part of. Okay. So looking forward then and taking a look at our overview. I'm really proud as as I know all of our staff are of the fact that FACILITIES BY ADF really demonstrates the best in class in physical production facilities and services. That's across the entirety of the film and TV industry, including expert on location hired services from our location one business and likewise in our excellent portable roadway solutions company, Autotrap. We're trusted by global content players and independent producers alike, having delivered services for major globally viewed productions in the past year alone, including Black Doves, Ted Lasso, The Witcher, Gentleman, Rivals, Young Sherlock, Marvel's Vision Quest, and many, many more. I'm sure many of you will have watched at least one of those or will be looking forward to seeing them in the near future.

3:43 Across the group, we operate a modern premium fleet of around 800 vehicles. So makeup, costume, artist trailers, production offices, technical vehicles, and many more. What was really impressive to me when I was first introduced to the business was our NPS score. We have an exceptional score of 89. And if you think about the the measurement of that from minus 100 to a 100 to be sat at 89 really reflects our customer facing operational excellence. We have a number of touch points within our with our clients across each production, and each one of those really counts as much as the other, whether it's early in the stage of the quoting process, our account management team, or onset with our HODs. Our real ambition is to be a one stop shop across our family of companies, helping to simplify the production process where it really matters for our client and, as such, creating a great competitive advantage for ourselves.

4:43 Okay. So let's take a quick look at the f y twenty five highlights. We helped 311 productions realize their full potential in 2025. That was up year on year 5% for us. When digging into the detail, I established that very interestingly, we were only on 20 of those together as three companies. So that really demonstrates great growth potential. Our utilization at 56 and percent improved year on year also, very much thanks to, our experienced chair, Russell Down, who made great steps to improve the fleet efficiencies. I think what's really important to note at this point that this is an ADF scoring. It's very much our goal to ensure that we include this metric across the whole of the business and incorporate it as a key metric for us moving forward, which will be measured, and monitor monitored by our recently promoted and excellent, group COO, James Long.

5:42 Our revenue hit 41,300,000. That was up 17%, reflecting the positive performance also of AutoTrac in its first full year. Another really interesting stat for me is that our revenue outside of film and TV rose to 3,900,000 in the year. That was about 96% year on year. That was based at large to the full year of business for AutoTrac, but really demonstrates a very interesting potential for us moving forward. Adjusted EBITDA was 9,200,000, up 28%, and I'll defer to Will to talk more to that in a moment. We've mentioned the NPS score up up again, 89. It's an exceptional score, one we're really, really proud of. And I think that's really reflective of my introduction into the company and meeting the staff and just how passionate they really all are in terms of delivering the best service possible.

6:38 That truly demonstrates that customer loyalty and satisfaction also. Okay. So, Will, if you will, to give us more of a financial review. Thank you, Nicolas. So just starting with some key financial KPIs. I think of this slide as a financial health check of the business and includes some of the key KPIs that we should now focus on as a business. And I think, hopefully, it demonstrates that we're starting from a good place. So I'll run through these, and then by and large, we'll come to the detail as we review the primary statements over the next few slides. So revenue of $41,300,000 as Nikola mentioned, up 17% on the prior year from 35.2 Adjusted EBITDA, 9,200,000, up 28% from $7,200,000 Profit after tax reached breakeven versus a GBP 3,000,000 loss in the prior year.

7:26 And net debt fell to GBP 12,300,000, 11% reduction from 13,800,000 in the previous year. Leverage was at 1.3 x, falling from 1.9 in the prior year and between our targets of one and one point five times. And we were free cash flow generative at $600,000 down from $3,000,000 in the prior year, which we'll come on to talk about when we go through the cash flow statement. Utilization, as Nicolas mentioned, at 56%, up 50% from the prior year. And return on capital employed at 5.9%, up from 3.4% in 2024.

8:06 So now moving on to the P and L, just running through the key points. Group revenue increased to $41,300,000,000 an increase of 17% on '24, which was driven mainly by stronger H2 trading, mainly due to the phasing of productions as well as stronger utilization with H2 revenue 39% ahead of H1, stronger non film and HETV revenue, as Nicolas alluded to earlier, and the full year impact of the Auto Track business, which was acquired by the Greek in September 2024. You can see from the breakdown that the core facilities by ADF business was broadly flat year on year in terms of revenue with Location one down by $05,000,000 mainly due to the transfer of that business' portable roadways offering to Autotrack.

8:53 So moving down to gross profit. Despite pressures on people costs driven by the well publicized increases to national living wage and NICs, the group achieved a gross profit margin of 38%, which was a 1% improvement on the prior year. That was driven by the full year impact of the higher margin Auto Track business and the impact of cost saving initiatives, including around £300,000 from more active fleet management, generating a reduction in vehicle inspection and maintenance costs. Adjusted EBITDA rose to £9,200,000 an increase of 28% on the prior year and an increase in margin of 2% from 20% to 22%. This was driven by the increases to gross profit margin mentioned previously and further cost saving initiatives delivered in this part of the P and L, including business rates reductions and management team restructuring.

9:44 Operating profit increased to £1,100,000 from a £1,300,000 loss in the prior year, mainly driven by stronger EBITDA and a reduction in exceptional costs. And profit after tax reached breakeven, driven by stronger operating profit and a £800,000 tax credit, primarily driven by the add back for tax purposes of the revaluation of contingent consideration, which we'll come to shortly when we talk about the balance sheet.

10:14 So moving on to the balance sheet now. We've finished the year in a net asset position of $33,200,000 And just to run through some of the key points, net debt, which is represented by motor vehicles and fleets on higher purchase agreements and is included in lease liabilities, less cash at bank, fell by 11% to 12,300,000 Leverage being the ratio of net debt to adjusted EBITDA was 1.3x falling from 1.9x in the prior year. And return on capital employed was 5.9, up from 3.4% in the prior year, reflecting stronger utilization of the group's asset base and improved profitability driven by the acquisition of Autotrack and cost savings delivered. And just to touch on that movement in contingent consideration, which has fallen from 6,500,000 last year to $3,500,000 this year, predominantly due to a downward revaluation of the Autotrack earnouts.

11:05 That business continues to perform in line with expectations, but that initial earnout was based on stretch targets. And just a final point on funding. Post year end, the group presented into a new £5,000,000 revolving credit facility with HSBC as announced in early April, and this will support our working capital requirements as the group continues to grow.

11:29 And now moving on to the cash flow statement. So the group generated operating cash of $9,500,000 down from $11,500,000 in 2024. The pre working capital movements operating cash flow increased from $6,600,000 last year to $8,300,000 this year, with the large $4,200,000 working capital movements in 2024 relating to the AudioTrack acquisition. The business generated positive free cash flow of $600,000 compared to $3,000,000 last year. But again, last year's figure was inflated by the $4,200,000 working capital movement relating to the Autotrack acquisition. We saw a net decrease in cash and cash equivalents of $100,000 resulting in cash at bank at the end of the year of $2,200,000 And just a recap on net debt, which was down on the prior year at 12,300,000 comprised of those $14,500,000 higher purchase agreements less that $2,200,000 cash at bank balance.

12:26 And finally, just to touch on the board on not recommending the payment of a final dividend to support in the group's strategic priorities through organic growth and potential acquisition opportunities. And to talk more about our strategy going forward, I'll pass you back to Nicola. Thank you, Rob. Okay. So taking a look at our strategic priorities. Before we dig into those, I thought it was really important to to take a quick look at the market overview, which obviously helps to shape our strategic priorities. So UK production spend for the year was up 6,800,000,000. That was up 1,000,000,000 year on year, a truly impressive number and the third highest on record.

13:10 Inward spend actually represented 85 percent of this number. I think what's important to to note is that these numbers are the first reported numbers from February 2026 by BFI, and they will be further updated later as the year progresses because it takes time to catch up all productions. So if anything, the numbers would improve.

13:33 High end TV represented 4,000,000,000 in value. That's up 17%. And film was 2,800,000,000, up 31%. That is, in fact, the highest spend on record. This really reiterates The UK as leading global hub for production spend, strong tax incentives, world class infrastructure, and incredible crew without a doubt. Further enhanced tax credits formalized in 2025, including the VFX, uncapped, and then likewise, the IFTC, the independent film tax credit, provide an increased incentive to spend in The UK, coupled with new regional funding incentives also.

14:16 Okay. So let's take a look at our strategic priorities. So first and foremost, our integrated proposition. Our goal, as highlighted earlier on, is to be a one stop shop. We are building an integrated group strategy to unify pipeline, sales, our customer proposition, and efficiencies. Just one example of that is that as of the start of April, we've already realigned staff members to move into group roles, including a group head of sales operations who is already helping to combine our pipeline efforts across the group, and it's already having a great impact. This integration will enable us to be more impactful in the industry without a doubt, underpinned by a national to local approach, as you'll see from the map on the right, enabling us to utilize our regional expertise where it really matters most for our production partners.

15:07 Having been on the other side of the of the production cycle, I know full well how valuable it is to have that local production support. Sustainability is another important factor for many of our key customers, and so we work really hard to ensure we're representing their needs in our approach to be more conscious in our behaviors. For example, let's take a look at Location 1. Their fleet is a 100% powered by HVO fuel, which is virtually emission free. We offer sustainability support and offset have reduced and we've reduced the sorry. We've offset our carbon footprint by 33% over three years. Likewise, it's really key for us to ensure that our fleet is accessible to meet the needs of all cast and crew.

15:56 I wanted to share the next slide with you quickly just to demonstrate how we present our integrated offering to our clients by offering our roadway solutions, power, water, what else can you see there, lighting kits, recycling, in addition to all of our trailers and the management of them. We're really helping to simplify the production process for our core clients where it really matters most for them. Diversification is a key opportunity for us to target new revenue opportunities, and it's something we're really excited by as a business. Outdoor live events represent represents a really significant value of The UK. We plan to tap into our existing client base at Autotrack to monetize our existing assets and capabilities across the rest of the business.

16:45 This revenue stream will help us to provide increased certainty around seasonal opportunities. So if you remember, I highlighted that in nearly £4,000,000 delivery last year for nonfilm and TV. That demonstrates the opportunity for us across the rest of the business. We're building up strategic partnerships along the production vertical to create more winning ways in addition to evaluating complementary business for acquisition and key growth. These strategic priorities give you an idea of our core focus areas for growth over the year and beyond, and I'm truly excited about our outlook. Our q one FY twenty six trading is in line with expectations.

17:31 The year is expected to have a similar weighting to FY twenty five with a flow of productions coming into flow, and that's demonstrated with our combined order book and pipeline combined. So to the April 1, we're at 21,000,000, and that's 4% up year on year. It's really clear to see that The UK continues to attract strong global investment, world class studios, facilities, and, as I've mentioned, phenomenal crews. Our revolving credit facility will also support capital requirements as the business grows. So the strategic priorities focus on customer centric growth, business diversification, and broadening our client base.

18:17 In conclusion, we feel we are really well positioned with our revitalized team, to capitalize on the underlying industry drivers and the diversified marketing, market opportunities.

18:31 Thank you so much for your time. That concludes the formal part of the presentation. And at this time, we'll now pause to run a q and a session. That's great. Thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the right hand corner of your screen. As you can see, we have received a number of questions throughout today's presentation. And if I may just start off with the first question here, which reads as follows. Whilst there'll be no final dividend in respect of last year's revenues to aid further investment, how long are you planning for this policy to continue?

19:04 That's one for me to pick up, I think. So in respect of 2025, the Board has proposed no final dividend, and that's to support ongoing investments in our strategic priorities, including organic growth as well as potential acquisition opportunities. Looking ahead to 2026, and beyond, as a board, we've yet to confirm our dividend policy, but we will communicate this to shareholders, as soon as something has been agreed. That's great. Thank you. The next question we have here reads, how likely are the Trump tariffs to be implemented? Good question. I I think the first thing of note is that the statement relates to film only. We operate very much across film and TV.

19:51 But the view with the industry, the industry feeling at large, I would say, is that it's very hard to legally and practically implement 100% tariffs on that global scale. We operate in a global business. You know, if we're talking about film at large and the success of film, we're talking about the global business. We're talking about the global box office. When we're producing, we need one another as territories, you know, depending on your story directed. You the interest and the joy of filmmaking comes from the benefit of of shooting in different locations. I think we really need one another really for that for that broad spread of great content creation, not to mention it mention, of course, the financing backup providers to get these the films and series into into production in the first place.

20:39 Perhaps what's more likely would be tax credits. So the introduction of tax new tax credits in any one territory is something to be very mindful of. And that's why for The UK, we just, you know, need to very much stay on our toes in terms of the attraction of our tax incentives and all of the other components I've mentioned, such as, you know, infrastructure, cruise, etcetera, etcetera, to make sure that we're as ahead of the curve as possible. That's great. How are you dealing with the rise in fuel prices and the impact of the war in The Middle East? I think that's probably another one for me. I think, firstly, probably important to say we've not seen any disruption in terms of diesel supply. But that said, our fleet, as Nicola mentioned, can can run on HVO, I. E, vegetable oil or diesel.

21:29 And we have secured a large amount of HVO at a fixed rate, which we can use across great businesses.

21:36 On pricing, clearly, there has been price pressure. It's quite hard to say on diesel, but the majority of increases are pass through to customers across the business, which they are understanding and supportive of. Final point, suppose, do also have a number of hybrid generators and batteries across our fleet, which have helped to limit fuel usage and and reduce costs to some degree. Yeah. That sustainability factor really comes into play. Yeah. That's it. Yeah. That's great. Are you aiming to improve utilization? And if so, how?

22:12 Yeah. Absolutely. You know, our utilization was was at 56% for the year for our, you know, active vehicles in the fleet. I should note that this refers to to the ADF core business. So it really is a, you know, a focus of us to ensure that we're measuring utilization across the whole of the grow group, and this will be a key metric for us moving forward. We've actively disposed of 5% of of the fleet and continue to seek further opportunities to do so as well, especially where it means we can dispose of the least utilized vehicles and and ultimately release that cash to be able to help continue to to, you know, improve the the fleet and the core fleet where where it really, really matters as well to ensure that we're satisfying customer demands.

23:06 Thank you. With a positive outlook and increasing market demand, but a deflated share price and so few players in The UK market, what plans, and if any, does the company have to take greater market share, find new markets, or accelerate growth? Okay. I'll I'll take that one. So, hopefully, the presentation has has demonstrated this to to a large extent. We do have plans. We do want to improve market share. You know, there there are areas which we are quickly identifying as I'm getting to to know the business well better and and as we'll certainly will do so over the forthcoming weeks and months where we feel we can tap more into the business both across that film and TV spread. I mentioned that we were on 311 productions.

23:52 Of that, 20 were where we were across all for all three companies and 90 for for two of our companies. There's absolutely scope to build our business, therefore, with our existing client base. And so that's something that we're working on, just being more intelligent with right right from the outset. And that's that's an area where we absolutely see that that potential for growth. Coupled with that is that component I mentioned where we have this really interesting growing client base within the auto track business, which has identified areas outside of film and television as well, which will we will be exploring. So that we see as as another opportunity in in addition to other areas which we are just evaluating at this time.

24:42 Thank you. Just moving to the next question. You've highlighted a strong pipeline and improving utilization. What specific indicators give you confidence this recovery is sustainable into FY '27 and beyond? Good question. Another one for me. Yes. Strong pipeline, and and that obviously is indicative of the ability and and the amount of quotes that we are you know, we're retaining and how much visibility we have of what's happening in the marketplace as well. We're working harder than ever, which is why we identify that that new role to make sure that we are on top of it as ahead of the curve as possible in terms of understanding pipeline. With my background as well, obviously, having having worked in the industry for many years and worked with many producers over the the the past ten, fifteen years, working, you know, and building further building those relationships in in addition to wider at level with the with the streamers and studios.

25:42 That understanding of what we can see coming through gives has is keeping us busy in terms of that pipeline and ability to to quote. I think the other thing is that content is king. No matter what, you know, the the streamers and the studios want their success Even if we look at the potential consolidate consolidation with the Paramount deal, for example, there is a commitment within that that there will be 30 theatrical films a year. That's a really great number, and that's something that gives you that continued confidence despite, you know, the the constant changes in the industry. Thank you. Just moving on here. Is there potential for geographic expansion beyond The UK? It's an interesting question.

26:29 Being so new into the business, it's not something that we are is top of the radar right now, but it is a it is a consideration to the extent that productions are often coproductions or productions are often shot in multiple territories, as I mentioned. So it's not something that we should be blinkered on in terms of it being UK only. We're very aware that that productions are international, as I referred to earlier. So mindful of and understanding that, you know, the world in which we operate is an international business. Thank you. Just turning to the next question. The company had previously put excess fleet assets in storage and was undergoing a sales process for some of these where possible. Can you comment on the progress here and how close you are to the rightsizing the fleet asset base?

27:19 I think that's probably one for me. We are continuing to look at disposals where appropriate, and a small part of the fleet is being actively marketed at the moment. But I think we also want to ensure that we've considered the opportunities for the fleet in equal measure. So that's something that we'll working on actively in our first few months in the business. Thank you. How much further optimization opportunity remains in the fleet and cost space? Me, again, I think. I think it's very difficult to put numbers on it at this early stage. But what I would say is that there are certainly more opportunities in both of those areas, and I think, hopefully, we'll be able to say a bit more about that when we speak to you at the interims.

28:09 Thank you. What kind of opportunity are there vertically, music festivals, etcetera? So this this refers to one of our strategic priorities, in fact. So already breaks in this space. So as you can imagine, with some of the amazing locations you will find for music festivals, let's look also at sporting events. I mean, any outdoor based event, essentially, agricultural shows also. You know, those just those three combined demonstrate a whole wealth of production spend in in The UK. And as such, that's why AutoTrac is is active within it. If you look at those types of events also, there is absolutely a value for the location one business in terms of that, you know, shoot hire expertise, that on location expertise, coupled with that potential for for ADF that is is certainly something that we are, you know, driving forward as one of our strategic priorities. We don't have that, you know, extensive analysis having, you know, only just entered into the business. So it's just something that we know is a an opportunity for us that we want to tap into as soon as possible.

29:22 Perfect. Thank you. Is AutoTrac likely to continue to attract growth investment in priority to the rest of the business? It's a it's a great question and probably one that I would ask as well off the back of the margins that that the business delivers. So it is a you know, it's it's a very strong business. The the team that run it are, you know, a great business who, you know, originated it and have built it to what it is today and credit to them. I think that off the back of the success that they they've achieved today and how well it integrates within the overall business, it it is absolutely something that that is something for us to further explore. Perhaps probably just to to to highlight right now for for Will and I being so new into the business, the the core priority is obviously to get everything in a great place of what we have existing today. You know, that organic growth is absolutely a key priority.

30:17 But, you know, it's a great question if I and if I was looking at it and exploring, then it makes total sense. Thank you. What are the key opportunities to accelerate auto track growth? Oh, I I think I've hopefully pretty much just answered that. I suppose, you know, in terms of that extension of growth, it's working more closely with our our sales team. It's looking at the utilization levels as part of that as well. You know, are we capping out because we're you know, all of all of our panels are out and along jobs. Are we effective with with the jobs that that we have? Certain certain jobs may may bring more value than others. So it's being effective with the client base that which we already have, but then also looking at what else. So Yeah. You know, if our utilization is incredibly high, what can we do about that to it to to build that business further out?

31:08 And just really expanding on our national reach as part of that. And we've talked about the sort of growth in in nonfelt and HCT with fee revenue as well. Mhmm. And also, FACILITIES is absolutely a key player in that in that part of the business. So I think that's another another, you know, continuing opportunity for them. Yeah. Thank you. The last question we've got here reads, how was the premium star artistry suite mentioned at previous meetings received? Oh, great question and very timely. It's about to launch it. In fact, I I think it was suggested that it might be available slightly early, but, you know, I'm delighted that it's launching on on my watch and really excited to get it out there. So we've introduced it to a couple of clients already who have have been very joyous about it. So we cannot wait to get out there. I think it will be a a storming success.

31:59 And, you know, that that the talent on the other side will be very happy with what they receive. Thank you. We've just had one final question come through. You continue to mention potential potential acquisition. How would these be financed bearing in mind existing levels of financial gearings? It's a tricky question because it very much depends on the acquisition in question. I think maybe what we want to address here is that the new revolving credit facility that we took on in April, it's not designed for that purpose. We're not planning to fill that up with debt and go and buy other businesses. That is really to service the group's working capital requirements as we go forward and we grow. But on a case by case basis, it will vary, I think.

32:46 That's great. Thank you both for answering all those questions you have from investors. And of course, you can, the company can review your questions submitted today, and we'll publish those responses on the investment company platform. Just before redirecting investors to provide you with their feedback, which now is particularly important to the company, Nicola Nicola, could I please just ask you for a few closing comments? Yeah. Absolutely. Thank you so much for your for your time. It's great to be able to to answer the questions that we've been put forward, and I've I've really hopefully, really demonstrates the excitement that, you know, Will and I have and the and the teams across the the family of companies have in terms of wanting to grow the business. We've covered a lot of ground today. I'm really confident and hopeful that you agree that we have a really truly exciting future ahead of us. Thank you so much for your time.

33:35 That's great. Thank you for updating investors today. Now please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This may take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good morning to you all.