Last checked at 30 Jan 2024 07:00
Speedy Hire Plc
("Speedy", "the Company" or "the Group")
Trading Update
Speedy, the UK's leading tools and equipment hire services company, operating across the construction, infrastructure and industrial markets, provides the following trading update.
Trading update
The business has continued to perform resiliently in the face of cost inflation and macroeconomic uncertainty. The challenges faced across much of the Construction sector mean that revenues from our National customers are now up 3% year-on-year as at end of the third quarter, compared to +5% at the end of H1, whilst revenues from our Regional customers have continued to track 6% down year on year, unchanged from the position reported at H1. The warmer winter period has also impacted our revenue from seasonal products, despite us being ready for the usual cold weather and the important support we provide to our customers.
At the same time, we continue to see revenue growth from opportunities with both new and existing National customers and, in the third quarter, we secured over £40m of annualised revenue from new multi-year contracts. These contracts represent attractive growth opportunities but have taken longer to mobilise, due to contract specific delays. Therefore, new contract revenues will have only marginal benefit in FY24 with the full effect coming in FY25. We are pleased by these contract wins and have a strong pipeline of opportunities. This new business has been secured with good pricing discipline and demonstrates the attractiveness of Speedy's customer offering.
Velocity Strategy
We continue to focus on delivering growth opportunities as well as operational efficiencies through exceptional customer service, and excellent supplier and customer relationships. We remain on track with the early progress of our Velocity strategy launched at our Capital Markets Day in July 2023.
As anticipated, supply chain benefits arising from the implementation of Velocity are being seen in the second half of FY24 and will continue to deliver benefits into future years. Our acquisition of Green Power Hire Limited ("GPH") continues to perform in line with its business plan and since purchase we have bought further units to enlarge our battery storage unit fleet and satisfy customer demand.
We confirmed in November that our partnership with B&Q was evolving to a more digitally focused model. We are pleased to confirm that our products and services are now available for digital hire in-store within every B&Q and Tradepoint as well as on the respective websites, demonstrating strong strategic progress in our Trade and Retail offering.
We continue to refine our strategy and transformation programme, led by systems and data, to ensure that we will have an efficient operating structure to power our growth.
Net Debt
With the acquisition of GPH, net debt increased to £117.3m as at 31 December 2023 which marks the normal seasonal high point. Working capital continues to be well controlled and we expect net debt to reduce from this level in the last quarter of the financial year, to end the year comfortably within our target leverage range.
Outlook
We continue to make good progress with the implementation of our Velocity strategy, which will deliver benefits and opportunity for Speedy for the long term. Nevertheless, with weakness in some of our end markets and seasonal product lines, and some delays in mobilisation of significant contract wins, the Board expects the full year profits to be below its previous expectations.
Enquiries:
Speedy Hire Plc Tel: 01942 720 000
Dan Evans, Chief Executive
Paul Rayner, Chief Financial Officer
MHP Communications
Oliver Hughes Tel: 07885 224532
Katie Hunt Tel: 07884 494112
Notes:
Inside Information: This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.