Speedy Hire posts a £70m loss
RESTRUCTURING measures at Merseyside tool rental company Speedy Hire helped push the company to a £70.6m annual pre-tax loss.
The business, based in Newton-le-Willows, has been hit by a collapse in orders from the the construction industry which it does not believe will show signs of growth for up to 18 months.
Last year it embarked on a series of cost-cutting measures to mitigate the effects of the downturn. It cut 957 employees – 17% of the workforce, shut 82 depots and returned or sold 470 vehicles.
The cost of these actions, together with integration costs relating to Speedy Hire’s acquisition of Hewden Tools in 2007 and other impairment charges, set the group back by £95.3m.
Revenue rose 2.3% to £476.1m in the year to March 31 but last year’s £30.5m pre-tax profit plunged to a £70.6m loss.
This morning group chairman David Wallis said the immediate priorities were to, “maximise revenues, optimise costs, generate cash and reduce bank debt”.
He conceded that the market was “subdued” and that the board was “cautious” about the group’s short-term outlook.
Mr Wallis said the construction industry continued to polarise between contractors dependent on government spending and those that are withdrawing from the market. He said fewer large contracts were being awarded to fewer large contractors but Speedy is growing its revenues with such clients.
A refinancing in April gave the group a £300m bank facility until 2012. But it said today that it was still considering an issue of new equity to provide extra cash and reduce net debt, which stands at £248.4m.
The board has recommended a final dividend of 6.4p.
