Speedy Hire Regulatory News (SDY)

Speedy Hire Plc

("Speedy", "the Company" or "the Group")

9 April 2020

COVID-19 update

Speedy, the UK's leading provider of tools and equipment hire and services to the construction, infrastructure and industrial markets, provides an update on actions made in response to the COVID-19 pandemic.

Health and safety

Our priority at this time remains the welfare of our colleagues, customers and the communities we serve. We continue to monitor government guidance and take action to ensure the safety of our colleagues as we continue to operate to satisfy customer demand for essential services.

Trading update

Further to the announcement made on 23 March 2020, COVID-19 had an impact on trading towards the end of March 2020, with some business areas operating at reduced activity levels. Whilst demand for certain products and services has reduced, many projects are continuing, new opportunities are emerging and others accelerating as economic conditions permit. As a result, the Group has to date retained a substantial proportion of its revenues entering its new financial year.

COVID-19 actions

We have taken decisive action to contain costs and preserve cash, whilst maintaining the capability to support our customers and protect the health and safety of our colleagues and stakeholders.

Where possible, employees are working from home through our secure and robust infrastructure and technology platforms. We have temporarily closed a number of our smaller depots, and furloughed c.50% of our colleagues (1,725) in the UK under the government's Coronavirus Job Protection Scheme and in Ireland under the Irish government's Wage Subsidy Scheme. We continue to maintain a national coverage through our larger superstores from which we are able to service customers who are providing essential services at this time. All depots are physically closed to customers, with trading now being undertaken solely through the Group's digital platforms or by telephone.

We are monitoring our operations closely and are actively managing our cost base. A recruitment freeze is in place and the annual salary review due on 1 April 2020 has been deferred. All Board directors and the leadership team have agreed to reduce salaries and fees by 20% for a period of three months from 1 April 2020. All non-essential spend has been suspended and variable operating costs, including IT and vehicle costs, have been reduced.

The Group has taken advantage of government actions, including payroll support for furloughed colleagues, business rates relief, and a reduction, or deferral, in taxes payable. The young age profile of the Group's hire fleet will allow us to significantly reduce capital expenditure in FY 2021 compared to FY 2020 (c.£55m). In the short term, whilst the uncertainty continues, all non-essential capital expenditure has been suspended.

The final dividend is ordinarily paid in August. The Board will consider whether it is prudent to recommend a final dividend on the announcement of its final results, when the potential scale of the impact of COVID-19 on the Group will have become clearer.

Financing and liquidity

The measures outlined above provide significant cost savings, will preserve cash and liquidity, and generate additional headroom. 

In spite of the impact that COVID-19 is having on trading conditions, cash collections in March 2020 remained strong. Net debt (on a non IFRS16 basis) at 31 March 2020 was c.£80m, significantly below the maximum committed facilities of £180m, which expire in October 2022. Leverage and fixed charge covenant tests are only applied under the facility if headroom falls below £18m. Based on various revenue downturn scenarios, and the measures outlined above, the Board remains confident that the Group can operate within its existing debt facilities and covenant tests during a prolonged period of reduced trading activity.

Guidance

The COVID-19 situation is likely to remain uncertain for some time and the Group therefore suspends all guidance until the position stabilises.

Russell Down, Chief Executive said:

"Speedy has an important role in supporting the delivery of customers' projects and particularly those providing essential services at this critical time. We are proud to be supporting several COVID-19 related projects, including the establishment of the Nightingale hospitals, and have offered our four-hour delivery service free to all NHS providers.

We have taken significant measures to protect our financial position whilst preserving our ability to continue trading and to respond quickly to changing market conditions. Over the medium term we remain well positioned to benefit as normal trading conditions resume.

I would like to thank all my Speedy colleagues, including those on furlough leave, and our customers for their continuing support at this time."

Enquiries:

Inside Information: This announcement contains inside information.

Forward looking statements: The information in this release is based on management information. This report includes statements that are forward looking in nature. Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Except as required by the Listing Rules and applicable law, the Company undertakes no obligation to update, revise or change any forward looking statements to reflect events or developments occurring after the date of this report.

Notes to Editors: Founded in 1977, Speedy is the UK's leading provider of tools, equipment and plant hire services to a wide range of customers in the construction, infrastructure and industrial markets, as well as to local trade and industry. The Group provides complementary support services through the provision of training, asset management and compliance services. Speedy is certified nationally to ISO27001, ISO50001, ISO9001, ISO14001 and OHSAS18001. The Group operates from over 200 fixed sites across the UK and Ireland together with a number of on-site facilities at client locations, from an international office based in Abu Dhabi and through a joint venture in Kazakhstan.