26.04.2011

Speedy sells cabin division

UK based Speedy Hire is to sell off its Accommodation division, known as Speedy Space, that rents out cabins for £34.9 million in cash.

The business has been sold to Elliott Group, a subsidiary of Algeco Scotsman, on a debt and cash-free basis payable on completion later this week.

Speedy Space offers cabins for sale or rent from 14 leasehold trading depots throughout the UK all of which will transfer to Elliot as part of the deal. It had assets of £52.4 million, excluding working capital which will be retained by
Speedy, and in the year to 31 March 2010 the business generated revenues of £40.6 million with a loss before interest and tax of £5.3 million. The net cash proceeds will be used to reduce debt.

Speedy and Elliott will also enter into a three-year partnering agreement in which both companies will work together to provide customers with an integrated service. As part of this partnering agreement, Speedy and Elliott will make the full range of their products and services available to each other's customers on an exclusive basis.

The disposal will result in a £16.0 million exceptional loss for Speedy, of which around £12.5 million is non-cash, which will principally be reflected in the Group's FY11 financial results.

Speedy chief executive Steve Corcoran of said: "I am very pleased to announce the disposal of the loss making Accommodation Hire business and the partnering agreement with Elliott. From a customer service perspective, the partnering agreement we have entered into will provide our customers with a comprehensive accommodation hire offering from the UK's leading businesses in this market. We look forward to developing this partnership and we see significant opportunities from working together closely in the future.”

“Financially, the disposal delivers a pro-forma increase in both operating margin and return on capital. It also delivers a reduction in group borrowings and enables Speedy to focus on investing in our higher margin core operations and to develop further our non-hire services."