14.02.2011

Strong fourth quarter for Speedy

Speedy Hire, the UK’s largest equipment rental company has issued a very positive interim trading statement.

The company says that in spite the harsh weather conditions at the end of last year, revenues (excluding fleet equipment sales) for the three months to the end of December climbed 8.8 percent compared the same quarter in 2009.
Making up for the declines of the previous two quarters.

Sales of used equipment from the fleet were £1.3 million 23.1 percent higher than the year before. The company says that business in January has also been strong and is at least two percent up on 2010.

In particular, the Tools, Lifting & Survey operations had a strong quarter, with revenues up nine percent, while the UK Power and Space operations has lagged behind.

Trading in the group’s International/Branded & Advisory Services businesses achieved revenues of £2.6 million in the quarter - up 225 percent on 2009.

Net debt at the end of January £126 million, compared to £141 million at the same time last year and reflects to a point the reduction in capital expenditure for the full year, to around £35 million, Speedy is forecasting that net debt at the year-end will be broadly in line with last year at around £119 million.

Based on the current age profile of the group's fleet it estimates that the replacement cost of equipment reaching the end of its UEL (useful economic life) over the next three years is approximately £120 million, equivalent to approximately 51 percent of the current net book value.

Outlook

The statement from the company says “The board confirms that the business is currently trading in line with its expectations for the full year in respect of adjusted profit before tax. This implies a return to operating profit in the second half of the year, following an operating loss of £4.6 million in the first half. These expectations continue, however, to be dependent on a continued strong finish to the year.”

“The board continues to take a cautious view about short term recovery prospects in the UK and therefore will maintain its concentration on cash, margins and capex, all of which have demonstrated further progress during the period. However, with its strong balance sheet, improving trading performance, market leading position and ever closer alignment to growth markets, the board considers that Speedy is well placed to benefit from the market recovery when it comes.”