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Speedy Hire reports drop in revenue but plans no more closures

Plant hire firm Speedy Hire has said it is planning no more widespread closures after reducing its depot locations from 500 to 325 over the past two years.

The company reported this week in its quarterly management statement that a drop in revenue in the three months to 30 June was in line with expectations.

Group revenues, excluding fleet equipment sales, were 0.7% below the same period last year, but Speedy reported an ongoing steady improvement in year-on-year comparisons. The previous financial year saw a total revenue drop of 27.3% from £482.7M to £351.1M.

“In view of the uncertainty, we continue to take a cautious view about recovery prospects.”

David Wallis, Speedy Hire

The company said net debt at the end of last week closed at £134.9M, which was “broadly in line with expectations”. Speedy aims to reduce net debt over the remainder of the year through tight control over cash, costs and capex.

While net debt has risen by 13% from 31 March − when it stood at £119.3M − it still stands below the figure for the previous year (2009: £248.4M).

Speedy has reduced its depot locations by 175 over two years as it consolidates its operations from autonomous regional branches into a tiered structure comprising small “express” hire locations, superstore depots for mid-size equipment and larger Multi Service Centres (MSC) to bring all products and services under one roof.

Any further depot closures will be on a case-by-case basis and will represent a “consolidation rather than a rationalisation”, said Speedy UK & Ireland asset services managing director Claudio Veritiero.

Cost base focus

Veritiero said Speedy is moving from being solely a hire company into technical and asset management support and outsourcing. It is “seeking to become an outsourcing partner than can deal with a range of requirements going beyond its own fleet”, he said.

Veritiero said infrastructure will be a key market for Speedy going forward, with transport in particular expected to be “a good growth area in the long term”. The firm will continue with a “sustained focus” around the cost base. “Clearly the public coffers are not going to be able to pay for as much [as before],” said Veritiero.

“Rates have bottomed out for the moment and we are seeing some improvement.”

Claudio Veritiero, Speedy Hire

Speedy chairman David Wallis said the firm’s future outlook will be heavily dependent on the timing of any recovery within private sector construction and on the outcome of the government’s Autumn Spending Review.

“In view of the uncertainty around these areas, we continue to take a cautious view about recovery prospects in the UK for the remainder of this year and next,” he said.

Veritiero said the firm “can touch and feel some of the recovery in the private market” but it was too soon to tell whether recovery would be fast or steep enough.

Both volume and average hire rates are improving, particularly in the smaller tools and equipment area, said Wallis. Veritiero said rates had been “coming off” since early 2009 but have shown some recent upturn. “Rates have bottomed out for the moment and we are seeing some improvement,” he said.

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