17.10.2012

Speedy up 5%

UK general rental company Speedy Hire has issued a mid-year trading statement that shows revenues increased 5.3 percent for the six months to the end of September.

It says that trading for the period was in line with its expectations with improved profitability, operating margins and return on capital employed. In the UK, which still represents the majority of its business, like for like revenues were up 3.2 percent with increases in both volume and yield. It also confirmed that underlying rental rates continue to improve.

Its relatively new International division saw revenues improve 77 percent, driven by the Middle East oil & gas sector. Mobilisation has commenced on the first phase of the ZADCO project to support drilling activity on four artificial islands in the Gulf that will allow land based drilling techniques to be used to exploit one of the largest offshore oil fields in the United Arab Emirates. The project is expected to generate around $50 million of revenues over the next five years.

Net debt at the end of September was £83 million, compared to £76.3 million at the end of March due to increased investment in its fleet.

Chief executive Steve Corcoran said: “Continued implementation of the group’s strategy and a range of self-help measures have seen Speedy make further progress during the first half. Although market conditions remain challenging the board is confident of meeting its expectations for the financial year and continues to look to the future with confidence.”

Vertikal Comment

This looks like a solid report from Speedy both in the UK and in its overseas operations which look to be progressing at a very significant pace. The fact that it managed to maintain rental rate improvements through a period which was challenging at times has to be encouraging for the market as a whole.

Market growth in the UK and many other northern and central European countries, will be slow over the next couple of years, so holding or if possible increasing rental rates will be critical to the health of rental companies. If the large public companies like Speedy and Lavendon etc.. lead by setting the example others will follow.