Thank you to who can stay to hear from Speedy Hire, who are half years earlier this week. If you have not seen it already, we have published a note which is now up on our website. The purpose of today is to go through these results presentation and then take Q&A. As always, feel free to submit questions as we head through the presentation. Now I will hand over to CEO Dan Evans.
Thank you, Hannah, and good morning, ladies and gentlemen. Thank you for joining this webinar to discuss Speedy's interim results for this financial year so far. As Hannah just said, I'm Dan Evans, Chief Executive of Speedy Hire, and I'm joined by Paul, our Chief Financial Officer. If we just go through into the highlights page, look, we are delighted with the significant strategic and operational progress that we've made this year. The delivery of our velocity growth strategy is firmly on track, and it has enabled our agreement that we recently announced to the city with ProService that we will come on to into some more detail. The conclusion this year of the enable phase, excuse me, of our Velocity Strategy will happen when we announced our strategy at our CMD in July 2023.
We said five-year strategy, and for the first three years, there were some enabling investments that we needed to make in order to ensure that we were set fair to deliver that. Those will conclude this year as planned. We have communicated our transformational commercial agreement with ProService, which I'm pleased to say is now live, and we have continued to strengthen the business. We have secured in excess of GBP 90 million of annualized revenue opportunity through recently won long-term contracts. That gives us much greater visibility of those revenue streams for the business for the months and, importantly, the years to come. The group is well positioned to capitalize on market recovery and spending commitments. Obviously, our results came out the same day as the budget. Those things that have been communicated in the budget, we are well positioned to make the most of those.
We do position ourselves for a greater focus on the sectors with the highest growth opportunities, and we'll come on to what we see those as in the short to medium term as we develop through the pack. Another resilient H1 performance in what we know, certainly in the markets that we serve, are those subdued market conditions with a recommended interim dividend payment of GBP 0.003 per share, with the board's expectations for financial year 2026 remaining unchanged. First things first, we wanted to talk you through our agreement with ProService, one because of its size, but also because at the point at which the deal was communicated, I understand it was a reasonably complicated deal to digest and to explain because of the various elements of that deal that needed to be satisfied.
Today, what I'm here to talk you through with Paul is what it means for Speedy Hire. I appreciate there's been changes for HSS, etc. We don't work for HSS. We're here to tell you why this is a transformational agreement for Speedy Hire and why we've decided to work with ProService. In two slides, what does the deal mean? The agreement, the GBP 35 million investment that we have put in place, what does it enable? Firstly, a 9.99% equity investment in the soon-to-be-renamed ProService Building Services Marketplace. That's not a 10% investment. It is a 9.99% investment in that business, very importantly. We have acquired three strategic locations through assignment of lease. Why three?
Because they are the three that we wanted, two in London and one in the Midlands, that complement our existing network that we've worked really hard to rationalize and ensure is best placed to serve our customers over the last three years. We have taken possession of those already, and they are immediately working to serve our customers. Why did we not take any more? Because we didn't want any more. We took the three that we wanted as part of the deal, and we're very pleased with those. We have acquired the assets that were on hire at the point in which the deal went live. So the assets on hire to customers are essentially at 100% utilization. And then we have chipped in approximately 300 colleagues.
Those colleagues are even in the three locations above that that we've brought into the business to staff and manage those accordingly. As well as using our AI partner, peak, we've kind of put the revenue and the volumes of ProService over the last period through that engine. That said to us, "Look, you are likely to need this volume of people in these Speedy locations." Positions were made available for colleagues new to TUPE into that, brought them across as part of the Speedy team based on that data. We also then saw circa 100 TUPE out as part of our rehire training and product sales businesses working with ProService. A net movement of circa 200 colleagues into the Speedy business. What does that mean in terms of the deal?
It's a five-plus three-year commercial deal, but I'd like you to think of it as an eight-year deal. That plus three years is serviceable by Speedy. If everything is going well, I can't think of a reason why we wouldn't want and see that as an eight-year deal for the business going forwards. We've taken over the live hires. They have transferred to Speedy as part of that orderly transition for customers and us immediately servicing ProService as a customer. In our net orders, we'll come directly via Speedy from ProService from the point at which we communicated to the stock exchange that the deal had gone live within those chosen product categories that we are serving. We have also agreed a new tick channel that we are going to create with Pro within the ProService Marketplace for our Lloyd's British business.
I'll come on to what that means in the next slide, but we're very, very positive about what that means for us. ProService has become our fulfillment partner for rehire, for training, and for product sales. All told, it is the largest commercial agreement in Speedy's near 50-year history that we're very proud and very pleased to have secured. In terms of outlook, we said in July 2023 at our capital markets day that we had three growth engines: Pro Hire, specialist products and services, and trade and retail, all enabled by technology. Every single one of those is satisfied by this deal. Clearly, doing a deal with a marketplace business, as it will become now that that separation has occurred, the enablement of that through technology was very, very important in Speedy securing this deal.
The key deliverables of the deal, as we've said, GBP 50 million-GBP 55 million of revenue in its first full year once we've been through periods of integrating the businesses, as we've said, in the R&S in the ways that are required and appropriate. There are some elements of that already done, but there is obviously continually work for us to do. We will expand Lloyd's British into that tick marketplace. We haven't done that yet. What that will mean in future is Pro Service's customers and new customers being able to book tick services and engineering services through the Pro Service system in the same way that they may choose to transact for hire-related services and the other services offered by Pro Service.
We're really pleased around the scalable marketplace channel that that gives Lloyd's British to be able to grow that, frankly, we would not have been able to give Lloyd's were we to not have done this deal with ProService. A fantastic opportunity for growth. It is a proven marketplace platform as a channel for customers. There are lots of businesses out there in this space, but what ProService has proven is that it has taken volume for a number of years. That is another channel within this commercial agreement, which we will now be able to serve and will be very pleased to service ProService through that channel of the marketplace. Again, without the developments that we've made in our own technology, that would not have been possible.
We very much limited the disruption to ProService customers by acquiring the assets and the contracts that were on hire at the point of transition and completion. Otherwise, we would have needed a pretty expensive transition services agreement in place, and we would have had to mess customers at both sides of the business around in one way or another that would just not have been appropriate. It was definitely the right thing to do for that to occur. Obviously, we have therefore taken over the assets at 100% utilization and the management of the live file from that point. Speedy Hire, very importantly, continues to offer all of the products and services that we always have done in our rehire business customer solutions, our training business, and our product sales business with ProService now supporting our fulfillment. Our targets are very clear.
A strong improvement, three to five percentage points in utilization, a strong improvement in operating profit, 160 to 180 basis points, an excellent conversion of in excess of 90% of operating cash converted, which will allow us, having gone out of our range in order to do this deal, to de-level the business over the next period of time, which Paul will touch on, with an estimated payback in total of our investment of two to three years. It is very, very important that I go to the fact that without Velocity Strategy and without the investments made in our enable phase to date, it would have been impossible for Speedy Hire to do this deal with ProService. Yes, we're very pleased to have done the deal.
I hope we have provided you with a much simpler view of the deal and clarity as to what it means for Speedy Hire. I do need to be very clear as well of how pleased we are with the enable phase of velocity and the position that has put us in in order to execute this deal in the way that we have done. Just moving forward into that velocity transformation program, as I've said, up in the top right, our enable phase of the strategy will conclude this financial year. Paul will touch on some of the numbers as we roll forward into the presentation. We will conclude on time and having delivered fundamental change for the Speedy business.
You can see in H1 our transforming transport plan and what that means about rolling out transport optimization, optimizing the routes that we take, taking miles off the road, and communicating with all customers effectively around when they can expect deliveries and collections to land. Very important. Our temporary site solutions business that we communicated at year-end has gone live and is developing through the business as we speak. We've gone into a new telephony system with Microsoft that allows us much more clarity about how we handle our calls, how we manage those calls, and the data that allows us to serve customers better as we go forwards, linked into our customer service technology that we've put in place in previous years.
Just going around from the bottom right, the new engineering tablets and apps that we've put in place across all of our engineers enable us to record damages, losses, uptime, and downtime that we're focusing on through our engineering teams much more intuitively, should make us much more efficient, able to manage our cost base better, and importantly, able to communicate with our customers much better going forwards in that space. We have never had an effective CRM nationally. I think we've said this to you probably for the last two years, Paul. That has now gone live, I think, to win and to secure business in the way that we have done. In the absence, an effective CRM has been admirable, but it's not been efficient. That is now in place. That should make us more effective from both a sales, a marketing, and a financial planning perspective.
With peak, our partner, we are now looking at multiple opportunities to deploy agents and agentic AI across the business. We continue to use peak for things like asset planning, pricing optimization, but we are always looking at greater opportunities to do more of that as we go forwards. Running into H2 and that culmination of the enable phase that we mentioned, the order management system was always something that would be developed and delivered later in our plan. It will roll through the enable phase, and we will still be doing elements of that into next year. Aside from what I've said about the enable phase investment, a very important part of the continual development of the business around how we manage logistics, assets being allocated to customers, etc., etc., and all of that being roped into communication.
Our iterative improvements to our websites continue to go live from a transactional perspective, simplifying that and from an investor relationship perspective. We will expect that to conclude in H2. Our Speedy trading platform that simplifies the way that our own colleagues trade into our system, allowing them to upsell to customers and simply understand what asset pairings go together in order to do that and provide the best levels of customer service will roll forward and be delivered into the second half of the year. Importantly, as I mentioned on the previous updates around ProService, we do have a lot of integration work to do within the realms of that deal.
Some has been achieved that's allowed us to go live, but there is more that is going to be needed to be done throughout the second half in order to optimize that relationship and ensure that we've set it fair for the best success that we can going forwards. Just in terms of the general business, and obviously, as I said a moment ago, we communicated our interim results on the same day as the budget was going out. We know that construction output has been tough. We've seen quarter-on-quarter downgrades in the sector.
Whilst we welcome the government's commitments in the spending review, and we've now seen the things that are coming through as part of the budget, what we need is that certainty turning into that work and those projects happening that gives our customers right the way through to clients and larger customers through to the smaller customers that we serve, the confidence to get on and do that work. The PMI, the Purchasing Managers' Index that we follow, you would have seen, has had 10 months of being below 50. It is a contracting market, meaning that it has continued to be difficult, and the best way to secure growth is to take market share. We will have seen the downgrades both from the ONS and the CPA in terms of construction output.
Whilst reasonably small in % terms, they are considered significant downgrades and continue to demonstrate that our markets, albeit with opportunities in pockets, are continually tough to serve. What's Speedy Hire done through that? We could look at that and be daunted by it. We could look at that and say, the only way through this is to drive costs down or to target pricing reductions and try and drive volumes. We've focused our time and efforts on taking market share, demonstrating the value that we offer to customers, and we're pleased that that's coming through in terms of key wins of mobilizations for this business that we've announced as part of this, obviously culminating with the deal with ProService and some others that we'll talk about. There continues to be very strong opportunities for Lloyd's British.
It is a growing and expanding regulation and legislation-led sector. We have a new manager and director in place in that business who is an expert from the sector, and we look forward to the development opportunities that we have, albeit as a smaller business within the Speedy arsenal, a very, very important business that we look forward to growing in the months and years to come. The group remains very well positioned to capitalize on market recovery and any spending commitments that are out there as we roll forwards from the budget, and we understand what that means. You will have remembered potentially at our year-end, we talked about the key growth sectors that we saw being most opportune for Speedy as we go forwards.
What we've taken the opportunity to do is just talk about three specifics where we're seeing key highlights, tough or more positive, that we wanted to talk you through. In the rail sector, control period seven, CP7, continues to be challenging. Spending commitments and activity are below our expectations, and Network Rail's own spend is down 5% on the prior year period of year one of the framework. We're seeing that continuing to be difficult. Whilst there are opportunities with our tier one customers, regional customers, they are challenging, and the output is down in that CP7 framework. CP7 is not the entire railway. The Transpennine Route U pgrade, which continues to be supported by the government as part of the budget announcement this week, is positively performing for us. It's growing, and despite the change in sector, remains an opportunity for us as we go forwards.
Into the water sector, we know AMP has commenced and is a good opportunity. We can see and expect increased levels of activity as the period progresses, underpinned by the fact that we have recently secured a major hire framework contract with Thames Water, which will mobilize in the second half of this financial year and beyond. We are absolutely delighted to have secured that in line with how we have previously guided the market, that we have refocused our efforts onto those growth sectors that we see being the most opportune for Speedy, water obviously being one. Very pleased with that. As we go into nuclear and energy, both Sizewell and Hinkley are encouraging. They are continuing again to be supported by the government as part of the budget. There are opportunities that we are already on with, obviously, and working on going forwards.
It is encouraging that we will continue to see that and critical that we will have the confidence that those projects are going ahead as major infrastructure programs for the U.K. energy network. Additionally, various energy and transmission projects throughout the U.K. and Ireland that will see that sector continue to grow going forwards, whether that's the Great Grid Upgrade, Scotch power line, smaller modular reactors, all of these different things. Very important, highly opportune projects for us that we will continue to focus on both now and going forwards. I am not going to go through all of these slides, but in terms of our people, firstly, both Paul and I would like to thank all of our people once again for their tremendous hard work throughout this first half year.
It is very challenging out there, both in working and running Speedy Hire, but also we know that things are tough out there more generally in the world. Thank you to our people for your continued hard work and support. We are pleased from a communications perspective with the continued development we've made in Speedy Hire being a positive place to work for our people that, as you can see, is being recognized by Inspiring Workplaces. Hopefully, that is underpinned by a second year of record low voluntary attrition for Speedy, trending down from the mid-20s when Paul and I took over down to just over 15%. We are very pleased with what that's demonstrated for us.
We've continued to invest in being a business that takes earned and learned roles, apprentices, graduates very seriously, and we will continue to do so going forwards to the best of our ability. From a health and safety perspective, I never apologize for talking about this. It is of critical importance to us. On the third bullet point down, you can see we still measure very strongly through our EcoO nline technology, the number of leading indicators that we report. So incidents that we're able to report maybe before they've happened as a hazard or a near miss, right the way through to a positive communication. Very, very important for us that we understand how we can continually improve. It is never good enough.
We are always looking for how we can collaborate with our customers and our supply chain partners to improve that, excuse me, in whatever way that we can. At the top there, the technology that we've invested in with Samsara that monitors our drivers and our drivers' behaviors with internally and externally facing cameras. It can monitor destructive driving behaviors. It can monitor the overall behavior of our drivers and how they're using our vehicles. A really important investment for us that, as it pushes forwards, should see a trending down of any accidents and incidents we may have had, but also that should lead to improvements in things like insurance and bringing the cost base down. Finally, the last thing that I just want to touch on there was the importance of our partnership with Prostate Cancer UK.
We are a dominant male business, and we are very pleased to support that charity with the overall support of our entire business, adding to the additional charity partners that we already support. Finally, supporting Rosper from a health and safety perspective around the obvious and inevitable skills gap in construction. There are not enough people out there. We are working very hard with Rosper as a partner around how we can look at supporting more people into the sector and closing that skills gap so that we do not have those challenges going forwards if we want to meet the productivity that should come in an improving market. I should now hand you over to Paul.
Good morning, everybody. Thank you, Dan. I will just take you through the financial highlights. I will then talk through the balance sheets and cash flow.
In our first half, as Dan has said, our markets were very subdued, and our volume in our hire business was down about 1.7%. Those of you who've spoken to us before know that our hire revenue effectively is our highest gross margin product. If it falls, then it drops through to the bottom line. The regional customers have a tough time. One of the reasons we increased our bad debt provision in the first half by about GBP 900,000 over last year's first half is just to be cautionary of the economy as we sit here today. We have seen an increase in our services business. If we exclude fuel, customer solutions has done very well for us, and Lloyd's British increased in the half by 3.8%. On Lloyd's British, you'll see in the appendices, we disposed of a manufacturing business that was within Lloyd's British.
It was loss-making, but we lost a couple of hundred K in the first half. We disposed of that to the management, got out of a big property in Birmingham, and we have now focused ourselves on the tick business. As Dan says, we have a new managing director who is focused on growing Lloyd's British. He's also looked at the bottom line as well as the top line within that business. On fuel, we have always had a fleet of tankers where we deliver to our customers, and we make a small margin on the buying and the selling of the fuel. We no longer do that. We are now an agent, so we take a small margin introducing our customers to the principal, and therefore the revenue has dropped, not because of volume, it's because of the fact we are now an agent rather than principal.
We'll have a minimal impact on gross profit because we'll still make the same number. Next year, it will revert back to being within services. The margins overall are down a bit on last year's first half, but that is a mix. We've maintained our overheads. Two things that have really impacted us in H1 compared to last year's H1 would be about a 2% pay rise we put in April, which will cost us GBP 1.5 million in the first half, and therefore GBP three million in the full year. Last year's budget, national increase, living wage, national insurance would have cost us about GBP 1.9 million, half on half. Overall, the bottom line is down on last year.
However, we feel as we go into the second half with the new ProService contract that we've won, which is starting to generate revenue already, the Thames Water contract that we won the other day will start to mobilize and generate revenue probably in February, March of our Q4. Other contract wins, we can see a bridge to the full year. On there, we talk about operating cash flow. I'm particularly happy that our operating cash converted from EBITDA is now in excess of 100%, and that allows us to ultimately generate free cash flow because we spent less on CapEx in the first half than we did last year. We deliberately set out last year to spend more money on the back of winning the new AMI contract and buying specialist kit.
Having done the Pro deal, we down the self-field that in 2027, we will probably reduce our CapEx spend just because we have the core kit we need. We have not yet finalized that, and we will talk more about that in the spring when we next announce. Our net debt is just over two and a bit times levered, slightly outside of our target range. Now we have the Pro deal, and we can see ourselves deleveraging the debt because of the cash flow that it can produce. If we could kindly move on, Hannah, thank you. This is a bridge to the profitability. The gross margin is lower, and that is purely the drop-through of higher revenue, slightly lower drop-through to gross profit.
We did, in the first half, take a conscious decision to sell a range of specialist compressors because one of the things we felt in 2027 and 2028, we would have to invest probably GBP 10 million-GBP 15 million in the specialist compressor range. We divested it and made a small profit on disposal. The 3.4 budget pay review there is budget GBP 1.9 million from last year and a 2% pay rise. Slightly more other overheads. As I said, I've increased the bad debt charge. I think that's prudent. At the moment, our bad debt provision as a percentage of overall debt is higher than it has been for the last couple of years. Our Kazakhstan JV was disappointing in the first half and made a small loss. We now expect that Kazakhstan for the full year will break even.
We are still looking and waiting for new contracts to be awarded in country. When it does, it will start to bring back this to profitability. In the end of the year to March 2023, the JV made over GBP six million of after-tax profits. Once it works and has the big contracts coming through, it is an extremely cash and profitable business. Slightly higher interest, and that is a function of debt and what we have done. If I could turn to the balance sheet, Hannah, a couple of things we have done on there. Our hire fleet at the end of March was GBP 200 million for itemized and GBP 28 million for non. Now that we have done the Pro deal in October and November, when you get to March 2026, we will have allocated part of the GBP 35 million towards new assets, which will feature between itemized and non-itemized.
One thing I just want to bring your attention to, the end of the first week we bought Pro, compared to the previous week before Pro, we've noticed we saw that our underlying utilization for itemized assets was up from just over 58% and a little bit to just over 61% and a bit. Already, by buying the live file of the various assets we bought, that 100% utilization, it's starting to show in the utilization of our overall kit blend. We'll talk more about that when we get to the spring in next year. Our equity additions were lower than last year, as was the cash spend. We've also said, we always said that if we spend less on CapEx, we will generate free cash flow because of the nature of our debtor-creditor and the product we supply.
It is pleasing at last to have debtor days less than creditor days. I think I can't see it getting much lower than 60. We're in an infrastructure construction business that typically pays that sort of level. Last year, I set out with the supply chain to rationalize our payment terms with suppliers, and it's consistent mid-60s as we are today. Finally, I did the refi back in April, which gave us our facilities of GBP 225 million, GBP 150 million RCF, and GBP 75 million term loan. That has enabled us to do the GBP 35 million investment last week within that facility and still give us headroom in excess of GBP 50 million on the RCF, which is very positive. If I look at the free cash flow, just turning that into a pictogram, you can see our EBITDA of GBP 38 million being converted to GBP 45 million of operating cash. Our target's 90.
I suspect I'm going to have to increase the target because we are at a very good level. We've got net CapEx, which includes some of the disposal we talked about, specialist compressors. One thing on non-underlying items, having said we will finish the enable phase this March, next year's first half, that GBP 3.6 million, for example, will not recur. It will go straight to the bottom line in terms of cash flow as well as reducing the exceptionals. We would not want to be spending below the line items next fiscal year, having done the enable phase. In the appendix, there's a split of the underlying that the exceptionals we've taken, which is transformation, the business disposal.
Finally, we've incurred costs in relation to the Pro deal at September, which we've accrued on our balance sheet at September, and we'll pay that in Q1-ish of this year now that deal is completed. Interest and tax, ultimately, you get to free cash flow of GBP 3.7 million. Interestingly enough, last year, that was a minus, and the full year, we did GBP 800,000 in total. The market and our expectations is we'd expect at least GBP 7-8 million of free cash flow for the full year as well because we're deleveraging our balance sheet. Now we've done the Pro deal, and we're now moving past the enable phase of the Velocity Strategy. On that, I'll now pass back to Dan.
Thank you. Just briefly, in terms of summary first, very pleased with the significant strategic and operational processes we've provided an overview to.
The Velocity Strategy fundamentally makes Speedy a different business. We have enabled the transformational commercial agreement with ProService, as we have hopefully given you more clarity and simpler levels of detail on. Our commitment to the enable phase investments has been important, but that will conclude in this financial year. We have continued to strengthen the business, not in excess of GBP 90 million of annual revenue opportunities secured through those recently won long-term contracts that we have discussed, as well as being well-positioned to capitalize on spending commitments and market recovery as we go forward, with a focus on those high-growth, short-term, medium-term most likely to give us those opportunities sectors. The new commercial agreement with ProService is the largest in our history and is now live. We do have a period of integration to follow that we have started and will continue.
A resilient H1 performance in what we know. Subdued markets with an interim dividend recommended of GBP 0.003 per share. If we just move forward into Outlook, again, just to repeat, whilst the ProService deal is live, that period of integration will follow the summary of where we are at now in H1, but moving forward into H2, we will be integrating for a period of weeks and months those ProService processes that we need to get right, and we will update you, obviously, at year-end as to how that's gone. The group will have a second half weighting to revenues and profits consistent with prior year periods, but both October and November trading today is in line with our expectations.
The recent contract wins with Thames Water and the commercial agreement with ProService will support and help us offset those subdued market conditions for the remainder of this financial year that we're expecting. The board's expectations for this financial year remain unchanged. Thank you for listening. On that note, Hannah, I shall hand back to yourself.
Thank you. Obviously, a lot of excitement and interest around ProService. Two years ago, you said that you would want to double in size, but with the successful completion of ProService, can you now be more ambitious?
I don't remember coming out saying that we would double in size. We've put some targets out there saying GBP 650 million at 28% margins, and we have held those and said that we believe those were achievable when we put out our recent results.
I would guide you to think more about 650 and 28% and what that means in terms of bottom line profitability. Doubling the business is not a financial statistic that we've got out there in the market.
Thank you. Can you talk through what you expect to happen with ProService once the eight-year period has elapsed?
If I'm still the person sitting in this chair then, I would like to think that we've run a very successful eight-year contract, eight-year agreement, and that if you're doing something that's going well for both businesses, there would be no reason for anybody to want to change that. It is a five-plus three-year deal that I'd like people to think about as an eight-year deal.
If it's going well, I would like to think that in seven or eight years' time, whether it's me and Paul or the terminal people, it is thought of as a continually positive opportunity for both businesses that is likely to be wanted to be extended.
Thank you. Can you talk through what is the current strategy, where you're up to with retail? There's no mention of B&Q in this presentation.
There is no mention of trade and retail in this presentation. We seem to, one way or another, we always admit something. It's probably behind our expectations at this stage. I'm not talking about B&Q here. I'm talking trade and retail overall as a strategy. We are digitally integrated from a dropship vendor DSV perspective with B&Q. Our products and services are on their website for all B&Q and TradePoint customers. Our relationship with them is great.
It's very, very positive. With that and other partners that we're working with in that space, we would have liked to have seen the revenue grow faster. Where I think we're set fair is we have now got that digital integration. We know that we can be a dropship vendor, which is not something that is typical for a hire company. That's not a typical language or thing that we would talk about here. I think we're in a good place where we want to continue to focus on the growth opportunities in that sector. Again, as market conditions ease and there's more cash or opportunity available more generally, that trade and retail market is still something that we would see as important to our strategy. Within ProService, there are obviously tradespeople and retailers trading through Pro.
That's why when I said earlier that deal impacts all three of the growth engines that were articulated at our CND, I think it is really important to think about it as a trade and retail strategy, not a B&Q strategy despite our positive relationship with B&Q.
Thank you. Can you talk a little more on the future plans for Speedy Hydrogen Solutions? Is it still in operation in the current financial year?
Yes. Speedy Hydrogen Solutions, our joint venture with AFC Energy, is in operation, yes. We have now deployed some of those units into the market. We are working really hard with the management team, obviously, and for us, and it's not a disrespectful comment, it is a small number of machines.
That Javen, it was about us offering the opportunities around hydrogen to our customers without Speedy having to take all of the capital risk of owning the assets. We have had a number of those deployments to a small range of customers, which was always the intention. We're not aiming at hundreds of customers at the moment. We're aiming at 10s. We recognize it still needs to develop commercially to be at that exact commercial comparison to the generator diesel equivalent. To this point, those deployments have gone well. I think it would be right for us to update in the future that they went well. This is why they went well. This is our intention for it going forwards.
I just have to remind of the relativity that it is a very small number of machines in the grand scheme of how many power generation assets Speedy Hire owns. We continue to get on well with AFC as a joint venture partner.
Okay. Thank you. Back to Pro Service. How many new customers are you acquiring through Pro Service?
We do not acquire any customers through Pro Service. We serve Pro Service. From a competition perspective, we do not see the customers that we serve. We serve Pro, and we build Pro, and we are paid by Pro. Whatever customers Pro Service is winning, if it is within the terms of the deal that we have done, we would be supporting them. We do not see the volumes, and we do not see the names very strictly and very specifically from a competition perspective.
To clarify, ProService will get one invoice one month with thousands of lines on it. Our customer, ProService, will pay us on 60-day terms, which effectively is the same terms we have with them the other way around.
Can you say a little more about the competitive process that brought you to the ProService deal?
We have not said it was a competitive process, but all I can say is that we were never a supplier to the ProService platform. Historically, I think for those that are interested, that is reasonably well known that we did not. We entered into a supply chain conversation with the ProService leadership team that materialized into the deal that it did. I am aware that there are others interested in the deal.
Having not been a provider to ProService, the reason that we were not is culturally, Speedy and HSS were traditional competitors. I did not feel like I could explain why we would work with the traditional HSS business to Speedy's customers, our people, or our investors. That is not a slight on HSS at all. If I cannot explain it, I cannot do it. As that supply chain conversation developed, a really positive opportunity to deal with the business that will become called ProService on the listed market came around, and we are delighted to have done it.
Brilliant. Thank you. Obviously, your results came out not long before the budget was early announced, but a little bit. Now that we know the impact of minimum wage, are there any comments you would like to add, Paul?
Me, when I stood up on Wednesday morning, I said I think I was a luckier FD given the fact the FD at number 11 had a harder job than me.
I heard about, seeing the national living wage, it's not like last year's national insurance employers. The impact on us is within our tolerance limit of materiality. What was more interesting was your comment down about. Look, I think from a minimum wage perspective, clearly, we believe it's important to pay people as well as you can. We can't be negative about the fact that what the government has done is seeing people. We don't pay the minimum wage. We have a buffer to the national living wage. We support the fact that people in those roles need to earn more money. Understood.
I think it is of critical importance, though, however, that the spending commitments for businesses that allow those things to continue to be affordable are seen to come through. The fact that in the budget, critical projects were continued to be supported, unlike in previous years, we did not lose a major scheme or anything like that. The continuation of those schemes and things like CP7 getting back on track and new projects starting with confidence, whilst we absolutely support the fact that minimum wage, national living wage, etc., is very, very important, it needs to be affordable for businesses, and that business confidence needs to return in order for that to be the case as we go forward.
Thank you.
There were no scrappery of major projects. Lower Thames Crossing will continue, etc., etc.
Conversely, there were no new ones, but there were no scrappery after the budget. It was neutral from an infrastructure perspective on Speedy anyway.
Good. That is it for the questions today. Thank you to our audience for joining, and thank you to you both for your time. We'll look forward to an update in another six months.
Thanks, Hannah.
Thank you for joining.
Thank you.