Plant hire group confident on full year, despite interim turbulence
Speedy, the Newton-le-Willows tools and plant hire group, saw revenues and profits tumble in the six month period to September 30.
Turnover for the half year reduced from £205.7m in 2019 to £163.8m this year, while last year’s pre-tax profit of £16.4m was reduced to £1.4m this time, a 91.5% decrease.
The group said it took decisive action to manage costs and preserve cash in response to disruption caused by the COVID-19 pandemic. These included the closure of 13 depots and a 314 reduction in staff numbers to 3,756 at September 30.
Net debt was reduced to £57.8m from £79.3m at March 31, 2020, and the group said it had cash and facility headroom of £110.7m, compared with £99m at March 31, 2020.
As a result of the restructuring measures, £2.5m of property provisions and £1.6m redundancy costs have been incurred during the period.
Regarding current trading and outlook for the future, Speedy said customer demand continues to improve, with UK and Ireland core hire revenue around 3.5% below prior year in October.
It has achieved improved UK and Ireland asset utilisation, increasing to 60.2% by October 31, compared with 57.9% a year ago.
The second lockdown is not materially impacting the group, to date, with construction and infrastructure markets continuing to operate.
Ongoing improvements to simplify and standardise the operating model include further depot consolidations and a continued focus on cost control which is delivering enhanced efficiencies.
Post the reporting period, no staff are on furlough and there is no intention of further utilising COVID-19 support schemes.
The dividend policy remains unchanged. Assuming current trading continues, the board intends to pay a dividend for the full year, taking into account the results for the year as a whole.
Chief executive Russell Down said: “I am pleased with the resilient performance of our business during this unprecedented period.
“Cash flow performance has been excellent, due to actions taken quickly to control costs and preserve cash, and our balance sheet remains strong.
“This performance is testament to the strength of our model, hard work of all my colleagues and strong operational delivery.
“Our customer service focus and capital commitment promise have, once again, delivered customer renewals and market share gains.”
He added: “I am pleased to report ongoing positive trading momentum in recent months.
“Moving into the second half, while conditions remain uncertain due to COVID-19, utilisation has returned to 2019 levels and the business is well positioned and invested to take advantage as trading recovers to more normal levels.
“As a consequence, full year results are expected to be towards the top end of analysts’ expectations.”
Current analysts’ expectations range between £10m-£17m for adjusted profit before tax.
This morning Bob Contreras advised the company that he will step down from the board on February 17, 2021, to allow him to exclusively pursue his full-time executive role.
The board has started a search process for his replacement as a non-executive director and chair of the audit & risk committee.
Chairman David Shearer said: “I would like to thank Bob for his significant contribution and wise counsel over the past five years and wish him well for the future.”
