15.05.2013

Sharp rise in profitability for Speedy

UK rental company Speedy Hire has published its full year results for the period to the end of March. They show a modest increase in revenues along with a substantial rise in profits.

Total revenues were £340.4 million almost 3.5 percent up on 2012, while pre-tax profits quadrupled to £12.8 million. Although last year’s results included over £5 million in exceptional costs even if these are excluded the increase is still 55 percent. The upward trend continued in the second half.

Net debt at the end of the March was £72.4 million, down from £76.3 million last year. Total capital expenditure for the year was £69.8 million, of which £59 million related to new rental equipment compared to £64.2 million last year.

£19 million of revenues came from the growing international business most of which is in the Middle East. The rest is all down to the UK and Ireland.

Chairman Ishbel Macpherson said: “These results illustrate the impact that proactive management action over the last few years has had on Speedy’s business. Our focus on the right customers, in the right markets and on the right type of work has enabled the Group not only to grow revenue, but to do so at improved margins and levels of profitability, whilst improving cash flow and our ROCE.”

“Although there is still more to do, the continuing focus on quality and service throughout the Group through a range of self-help measures is differentiating our business in both the UK and international markets and underpins the transformation of Speedy from a hire to a service company.”

“We are confident that, in an environment of on-going economic headwinds, the actions that we have taken have increased our resilience and given us a solid platform upon which to build in the future, particularly when market conditions begin to improve.”

Vertikal Comment

Another decent result from Speedy which appears to be firmly ‘back on track’, even as it continues to make substantial changes within its business. One of these changes includes a substantial expansion to its powered access fleet – mostly with low level platforms as it looks to balance its range between non-power, push around and powered access.

A key factor to further significant growth will be the international business, started less than three years ago it has made a good start achieving revenues of £19 million and now in profit.

The company is banking end users preferring to single source their rental equipment, as are other general rental companies. The challenge with this strategy though is that many equipment sectors require dedicated specialist staff with in depth experience – incorporating this efficiently in a large generalist structure is not an easy task.

Having said this, the company is in reasonable shape and has the resources to ensure that it makes the most from the slowly improving economic cycle.