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(Alliance News) - Speedy Hire PLC on Wednesday said it expects annual results to be in line of consensus expectations, despite a considerable fall in profit and revenue for the first half of its financial year.
For the six months to the end of September, the tool, equipment and plant hire firm said pretax profit plunged by 92% to GBP1.4 million from GBP16.4 million the same period the year before, on revenue that dropped by 20% year-on-year to GBP163.8 million from GBP205.7 million.
The revenue drop was mostly due to the Covid-19 induced lockdown implemented in the UK in late March, which led to two thirds of the Speedy Hire's depots being closed and up to 50% of staff placed on furlough during the lockdown.
Following a restructuring programme, Speedy Hire had closed 13 depots for good and reduced its staff numbers to 3,756 at the end of September from 4,070 the same day the prior year.
Although Speedy Hire said that it will not further use Covid-19 support schemes, and has had no staff on furlough post period, it will not declare an interim dividend due to disruption from the virus.
However, assuming that its current trading performance continues, the company intends to pay a dividend for the full year, it said.
Looking ahead, in the second half to date, Speedy Hire reported an improved trading performance, with asset utilisation in the UK and Ireland rising as at October 31 to 60% from 58% a year before.
In addition, the second UK lockdown is not affecting operations so far, with construction and infrastructure markets continuing to operate.
"I am pleased with the resilient performance of our business during this unprecedented period. Cash flow performance has been excellent, due to actions taken quickly to control costs and preserve cash, and our balance sheet remains strong," said Chief Executive Russell Down.
"I am pleased to report ongoing positive trading momentum in recent months. Moving into the second half, while conditions remain uncertain due to Covid-19, utilisation has returned to 2019 levels and the business is well positioned and invested to take advantage as trading recovers to more normal levels. As a consequence full year results are expected to be towards the top end of analysts' expectations," Down added.
For the year ending March 31, 2021 consensus expectations has adjusted pretax profit between GBP10 million to GBP17 million. This reflects a 51% to 71% fall from GBP34.9 million the year before.
Also Wednesday, Speedy Hire announced the departure of Non-Executive Director Bob Contreras with effect on February 17 next year, in order to pursue his executive role fully.
Contreras has been part of Speedy Hire for five years since 2015, and is currently executive chair of environmental services firm Adler & Allan Ltd.
Shares in Speedy Hire were up 3.3% at 67.97 pence on Wednesday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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