15.04.2015

Speedy to exit Middle East

UK rental company Speedy has indicated that it expects profits, for the full year to the end of March, to be slightly ahead of forecast. At the same time it has completed the sale or closure of most of its Middle East operations, and is looking to sell the residual business covering the oil & gas sector in the region.

The statement goes on to say:

“In the UK, a new national distribution centre in Tamworth is open and the programme to create a backbone to the national network comprising eight multi-service centres and 38 superstores has been completed ahead of the original schedule. A programme to re-profile asset holdings and redistribute assets across the network is now underway, this will enable the business to improve asset utilisation and operational efficiency during the coming year”.

“In the Middle East, where the group has incurred substantial losses, we have completed the withdrawal from the general hire business, offices in Egypt and Qatar have been closed and the Oman business sold. The newly restructured Oil and Gas Services business broke even in the final month of the fiscal year and the group is in discussions with a potential purchaser to sell this business. Regardless of the outcome of any negotiations, the Middle East business has been significantly de-risked”.

Speedy began its move into the Middle East in mid-2009, with a Memorandum of Understanding with Al Futtaim Carillion, to provide equipment, asset management and site support services to Al Futtaim Carillion’s operations across the region - see: Speedy lines up the Middle East.

This was expanded the following year with the acquisition of Al Futtaims rental fleet for £4.1 million and the signing of a five year exclusive deal, which ended in January - see: Speedy expands in the Middle East.

Vertikal Comment

The final closure of Speedy’s Middle East adventure, was inevitable as part of the new managements plans to restructure the entire business and put it on a firm footing, ready for future growth. That job now looks as though it is almost done, and the company should go into its new fiscal year in good shape to benefit from what should be several years of strong growth.