18.03.2014

Speedy issues warning

UK based rental company Speedy has warned that its full year results are likely to fall short of expectations, contrary to the update it issued just over four weeks ago.

The full statement issued today is as follows:

“Following a review of its most recent management information, Speedy today provides an update on trading and its outlook for the year ending 31 March 2014. In the Interim Management Statement of 12 February 2014, we stated that: "Whilst performance in International is running behind expectation, the UK performance to date gives the Board confidence that the group will meet its expectations for the full financial year."

However,

•Asset sales are running at a slower pace than anticipated and below historical trends;

•Trading losses in our Middle East business are likely to be greater than anticipated as the business is being stabilised. The performance of the International division will also be negatively impacted by adverse foreign exchange movements relating to the Kazakhstan Joint Venture; and

•Whilst total UK revenues are marginally higher than in the same period in the prior year, reflecting growth in services revenue, the higher margin hire revenues for February and March are below forecast.

As a consequence, the Speedy Board now expects adjusted pre-tax profits before exceptionals for the year ending 31 March 2014, to be in the region of £14.5 million.

Focus for the Group is on completing the stabilisation of the International division, and in the UK, focussing the sales effort to take advantage of the improving economic conditions, and delivering the previously announced network and asset optimisation projects.

Vertikal Comment

While this statement clarifies the situation and indicates that the company might have been a little over optimistic, especially considering that it is currently undergoing a number of management changes. However the most
important factor is that the issues that caused the resignation of Steve Corcoran are fully dealt with and accounted for in the current financial year which has just two or three weeks left to run.

In a separate issue we also understand that Andy Wright, who currently heads up the International division, is planning a move back to the temporary power market, with a UAE based supplier.