Speedy Hire Regulatory News (SDY)

Speedy Hire Plc

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

23 March 2020

COVID-19 and trading update

Speedy ("The Group"), the UK's leading provider of tools and equipment hire and services to the construction, infrastructure and industrial markets provides an update on its trading performance for the year to 31 March 2020, ahead of its full year results which the Board plans to announce on 19 May 2020. 

Group revenue, pre disposals, is expected to increase by c.3.5% from the prior year. Hire and services revenues are expected to grow by c.1.5% and c.6.0% respectively, with hire revenue from SME customers growing by more than 25% following our strategic focus on diversifying our customer base.

Whilst underlying business momentum has been positive, COVID-19 is now having an impact on our revenues with activity levels reducing. Consequently, adjusted profit before tax for the full year is expected to be slightly below market consensus of £37m. Looking further ahead, the full impact of COVID-19 will depend on the length and severity of the disruption to activity in our markets. We continue to monitor the situation closely.

We anticipate that the exceptional profit relating to the sale of surplus land of £3.9m, which we announced in October 2019, will be largely offset by exceptional integration and property costs. 

The Group has a committed asset-backed facility of £175m and an overdraft facility of £5m, available until October 2022. Net debt, excluding lease liabilities, as at 31 March 2020 is expected to be in the range of £80 - 85m, after continued hire fleet investment of c.£55m in the year to support availability and our four-hour nationwide service promise. This investment has maintained the young age profile of the hire fleet, which will allow capital expenditure to be reduced as required, while maintaining the operational capability of the business. The Group has significant headroom against its committed banking facilities and, in addition, has an uncommitted accordion facility of £220m. Net debt to EBITDA at 31 March 2020 is expected to be c.1.0 times, below the Board's target range.

The Board has been assessing the potential for disruption caused by COVID-19 and has put in place pre-emptive plans and measures to respond. However, the Board recognises that additional measures are likely to become necessary as this unpredictable situation evolves and is making further plans to both protect the Company's cash position and maintain a robust balance sheet, while seeking to safeguard our workforce.

Russell Down, Chief Executive, said:

"Whilst COVID-19 is starting to have some financial impact on the business, I'm pleased to report continued positive momentum across the Group over the last 12 months. We have a well invested fleet, diversified customer base and robust balance sheet.

We are operating in an uncertain macro environment, and our number one priority is the welfare of our colleagues, customers and communities. Management has robust contingency plans in place, which are being continually updated as the situation evolves."

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.