17.11.2010

Rental rates rise at Speedy

Speedy Hire, the UK’s largest rental company has reported its half year results which show an improving trend in both utilisation and rental rates which increased 2.8 percent in the quarter, in spite of weaker numbers compared to last year.

Six month revenues were £177.3 million - down just over four percent on the same period last year, while posting a pre-tax loss of £12.7 million, compared to a loss of £7.6 million last year.

UK/Ireland revenues were £172.8 million - down 6.1 percent on last year, while international revenues climbed from £800,000 in 2009 to £3.7 million this year. The company also had £800,000 of advisory revenue, largely training. (Irish revenues were £3 million)

In spite of the negative numbers Speedy says that it has now seen three quarters of quarter on quarter growth in the UK with revenues in the second quarter up 5.4 percent on the first, while rental rates increased 2.8 percent in the same period.

The company’s net debt increased from £119 million last year to £123 million this year. However this comes after net rental fleet additions of £13.2 million. Gross capital expenditure for the period was £19.7 million, of which over £18 million was for new rental equipment.


Chairman David Wallis who has also announced his retirement, said: “UK revenues, average hire rates and volume trends are now showing progressive improvement. Although market conditions remain challenging, with our strong balance sheet, market leading position and closer alignment with growth markets, the business continues to be well placed both to benefit from the actions taken to reduce operating costs and to capitalise on market recovery.”

In particular, the group’s on‐site facilities on the Olympics project, recent contract wins in construction and non‐construction markets, growing international presence and developing non‐hire activities provide grounds for confidence for the future, especially as these are now supported from a more efficient operating base.”


Wallis will retire after 10 years on the board of Speedy on 31st December. Ishbel Macpherson, Speedy's senior independent director, who joined the
board in 2007, will succeed him.

Steve Corcoran, chief executive, said: “I would like to take this opportunity to express the appreciation of all David’s colleagues throughout Speedy for the great contribution he has made over the past decade, not only in terms of his tremendous leadership, but also in his incredible capacity always to ensure that matters are undertaken with dignity and humanity. We wish him well and thank him for his immense service to the group and to shareholders. We are delighted that Ishbel will be succeeding David and are certain that, like him, she will make a significant contribution to the continued recovery and progress of Speedy.”

Vertikal Comment

While the year on year comparisons are still a little gloomy, the current trend is highly positive although the increasing losses a little surprising but are related to the revenue shortfalls with overall costs largely the same as last year.

The investment in the international business has also been a negative drain, but is of course an important move strategically which will potentially yield strong future growth and diversification away from the UK and Ireland, something it really needs to do.

The company looks as though it is preparing for a new period of growth as opportunities raise their heads in the months ahead.