Plant hire group reports steady improvement as UK returns to work
Plant and tool hire specialist Speedy Hire said business is steadily improving, as customers begin returing to work following the easing of lockdown restrictions.
In a trading update ahead of its annual general meeting today, the Newton-le-Willows-based business revealed that revenue has continued to improve over recent months as activity levels increased.
So much so, that, in response to customer demand, it relaunched its four-hour delivery promise in UK and Ireland on September 1, covering an expanded range of 350 products.
UK and Ireland core hire revenues for September to date are around eight per cent lower than the prior year.
Group revenues, pre-disposals, for the year to date are approximately 23% lower than the prior year.
However, utilisation rates have improved steadily throughout the first half as activity levels have increased and capital expenditure has been reduced. At September 4, 2020, utilisation rates in the UK and Ireland were 52.9%, compared with 54.6% a year ago.
Overhead costs have been tightly controlled during the first half following the decisive actions taken in response to the COVID-19 pandemic.
At August 31, UK and Ireland staff numbers were 3,222, against 3,464 at March 31, a reduction of around seven per cent from the year end, and a further 50 colleagues were placed at risk of redundancy during September.
Approximately 200 colleagues, equivalent to six per cent of the workforce, remained on furlough at August 31.
The group has permanently closed 13 depots in the UK and further depots will be consolidated into larger operating locations.
The costs of staff redundancies and depot closures will be recognised as exceptional items in the results for the current year.
As previously announced, the group’s training business, Geason, received a claim from a funding agency in late April 2020, alleging poor financial controls and overpayments of up to £2.6m for the three year period commencing August 2017.
The group said it is in discussions with the funding agency to resolve the matter.
Speedy Hire has a strong balance sheet and substantial unutilised banking facilities, it declared.
Cash collections have remained strong in the first half. As a consequence of this, net debt – on a non IFRS 16 basis – reduced from £79.3m at the year end to £59.4m at August 31, 2020.
The group anticipates that no staff will remain on furlough beyond September 30, and that other tax payments deferred as part of COVID-19 support measures will have been paid by that date.
Maximum committed facilities amount to £180m, which expire in October 2022.
As previously announced, James Bunn will join the board on September 14, 2020 as chief financial officer.
Further to the previous announcement on June 23, 2020, the COVID-19 situation is likely to remain uncertain for some time and all guidance, consequently, remains suspended.
Chief executive, Russell Down, said today: “We are pleased to report that in recent months we have seen an ongoing recovery in trading as customers have returned to work.
“The decisive actions we have taken during the pandemic to enhance the resilience of our business and the strength of our balance sheet leave us well placed to respond to improving trends and pursue our strategic objectives.”