Last checked at 28 Sep 2015 07:00
Speedy Hire Plc
("Speedy", "the Company" or "the Group")
Trading Update
28 September 2015
Speedy, the UK's leading tools, equipment and plant hire services company, operating across the construction, infrastructure and industrial markets, is today issuing a trading update ahead of announcing results for the six months ended 30 September 2015 (H1 FY2016) on 10 November 2015.
Following the disappointing start to the current financial year, the Board and management team have implemented a number of remedial actions to address the legacy issues identified. These actions include:
· A programme to increase engineering resources, redistribute assets throughout the depot network to improve asset availability, and optimise stock levels
· A realignment of the sales function to better address the needs of the SME market
· A more effective operational structure and overhead base which more closely aligns costs with revenues
· Improvements to the IT system to enhance management information and the customer experience.
The benefits from these actions will be realised from the second half of the year onwards. Overhead costs across FY2016 are expected to be c.£13m lower than the prior year. Approximately £10m of this saving will be realised in the UK and Ireland business, of which c.£6m relates to people costs.
In the Middle East the business continues to break even at an operating profit level, with further opportunities for revenue and margin growth.
Net debt at 30 September 2015 is expected to be at a similar level to September 2014 (£104.4m). The Group is operating well within its banking facilities of £180m, which expire in September 2019.
Whilst we have now instituted the remedial actions referred to above, the resolution of the legacy issues previously identified is taking longer than originally anticipated. Current year core hire revenue in the UK and Ireland is now expected to be c.10% below the prior year. Accordingly the Board anticipates that profitability will be weighted towards the second half of the year and materially below current market expectations.
Jan Åstrand, Executive Chairman, commented:
"Following the extremely disappointing start to the year, we have taken action to grow revenue and cut costs. Whilst these actions will take time to come to fruition, we believe they will deliver material benefits over the medium term."
Enquiries:
Speedy Hire Tel: 01942 720 000
Russell Down, Chief Executive
Instinctif Partners Tel: 020 7457 2020
Mark Garraway
Helen Tarbet
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 clients across the construction, infrastructure, industrial, manufacturing and facilities management sectors - as well as to local trade and industry. The Group provides complementary support services through the provision of training, asset management and testing, repair, inspection and maintenance (TRIM). Speedy is accredited nationally to ISO9001, ISO14001, OHSAS18001 and ISO50001. The Group operates from over 220 fixed sites across the UK and Ireland together with a number of on-site facilities at client locations throughout the UK and Ireland, and from an international hub in the Middle East.