17.05.2016

Profit dive at Speedy

UK rental company Speedy Hire has issued a preliminary statement on its full year results for the 12 months to the end of March. The numbers show a sharp drop in revenues and collapse in profits.

Total revenues fell more 12 percent to £329.1 million with the UK falling by a similar percentage to £308.2 million, while international revenues declined almost 14 percent to £20.4 million. Last year’s pre-tax profit of £2.1 million was converted into a loss this year of £57.6 million. much of it due to “one off costs” such as restructuring etc… However even the ‘adjusted’ pre-tax profits were almost 80 percent lower than last year at £5 million, compared to £21.9 million last year.

Chief executive Russell Down said: “We have restructured the business, cut overheads to more closely align them with revenues, enhanced the management information generated from our systems and improved our cash performance. We are now starting to see an improvement in our culture and greater efficiencies throughout our operations.The business is starting to respond positively to the actions we are undertaking. With a renewed focus on sales, tighter overhead control and better management information with which to manage return on capital we are creating a solid platform for the future”.

Executive chairman Jan Åstrand added:“We are beginning to see the business responding to the actions being undertaken by the new management team with an improvement in our culture of accountability, customer service, and in driving greater efficiencies throughout our operations.”

Vertikal Comment

Speedy has a long way to go to retain the positive momentum it had in its glory days, as if this was not tough enough it now faces stronger competition from A-Plant which appears to ‘be on a roll’, a Hewden which appears to be rapidly regaining its mojo and a strong new competitor in the face of Ardent, led until recently by its ex chief executive Steve Corcoran.

Speedy has a lot of work to do to stop the decline, let alone regain a strong forward motion, however it remains one of Europe’s leading equipment rental companies with a strong brand and hundreds of first class employees – so the ingredients are all there, it is now down to the new management to make the most of them.