Speedy looks at foreign growth after fresh UK cuts
TOOL hire giant Speedy Hire said today it is looking at foreign shores to help it weather the storm as the outlook for the UK construction market remains uncertain.
The Newton-le-Willows firm said that its revenue forecasts remain on the “downside in the short term” as there are no signs of improvement in private sector spending and increased sensitivity around the sustainability of Government spending.
Speedy Hire said turnover for the first half is expected to be around 29% lower than the previous period’s figure of £256.2m.
It said that while stability is becoming more evident, confidence is fragile and with the cancellation of projects such as the Kingsnorth Power Station, there is little evidence that the seasonal pick-up in turnover typically associated with the late September/October period will follow traditional patterns.
It has been a tough 12 months for Speedy which has axed around 270 jobs – 6% of its workforce – in the last financial year as part of an aggressive cost reduction programme.
A number of depots have been merged and savings have been driven through in central functions such as IT, marketing, transport and supply chain. As a result of these actions management has removed more than £70m of costs since August 2008.
The group said it has continued to deepen its penetration of the major contractor market following recent contract wins with Bovis Lend Lease at its Stratford City project and the on-site award at the Shard of Glass, with MACE in the City.
It has also signed a deal with Carillion’s joint venture in the Middle East, Al Futtaim Carillion. Speedy has already transferred personnel and equipment from the UK to the region.
It said: “We are confident that this targeted, client driven approach will provide an excellent platform for growth as we extend this fuller outsourcing initiative to other selected customers across the Middle East and elsewhere.”
Speedy added: “With its strong balance sheet, improved cost structure and market leading position in the UK, the business is well placed to benefit from market recovery that will occur. This market and financial strength, together with the new growth opportunities available from the recently launched Middle East operation provides confidence in a strong future for the group.
“These initiatives, together with the step-up of activity from the group’s on-site facility at the Olympic Park and the benefits that should be realised from recently awarded new contracts at Stratford City, in the water sector and in support of other UK infrastructure projects, demonstrate a confident and positive response to what remains an extremely challenging trading environment.”
