Uncertainty clouds Speedy Hire’s outlook
TOOL and equipment rental specialist Speedy Hire says that while it is seeing continued signs of gradual recovery, its long term prospects will be determined by the Government’s Autumn Spending Review and a revival in private sector construction.
Speedy, which is based in Newton-le-Willows, Merseyside, says its focus in the meantime is on “cash, costs and capex”.
Chairman David Wallis will tell investors at the company’s annual meeting this morning that while trading is in line with expectations, the uncertain outlook warrants a cautious approach to recovery prospects.
In the three months to the end of June, in what Mr Wallis said were “challenging” market conditions group revenues were down 0.7% on the same period last year, but much improved on the previous quarter this year, where revenues were 13.7% down year-on-year.
Revenue in June 2010 was only slightly behind the same month in the prior year and exceeded £30m for only the second time since July 2009 with both volume and average hire rates improving, particularly in the smaller tools and equipment area.
Net debt at the end of last week was £134.9m, and will be cut in the coming months.
Mr Wallis will say: “Cash generation continues to be the key area of focus and, with a continued tight control over cash, costs and capex, we aim to reduce net debt from this seasonal high over the remainder of the year.”
He said the group had enhanced its banking facilities, at a cost of £3.5m, to provide greater flexibility for future capital investment in the Middle East – a growing area for the group.
Despite the challenges and uncertainty Mr Wallis concluded: “We remain confident that the business is well placed to benefit from the upturn in activity when market recovery takes hold.”
