City round-up: Speedy Hire; Yourgene Health

Speedy Hire

Speedy, the Newton-le-Willows-based provider of tools and equipment hire and services to the construction, infrastructure and industrial markets reported a period of “momentum” and “resilience” in a trading update today, and said profits are expected to be ahead of expectations.

It has, today, sold its equipment fleet, stock and other fixed assts relating to its Middle East operations to ADNOC Logistics and Services for $18m.

The transaction, which comprised gross assets with a net book value of approximately $16m concludes the group’s obligations under its contracts with ADNOC. In the year ended March 31, 2020, the Middle East operations generated operating profit of £5.4m; for the six months ended September 30, 2020, operating profit was £1.8m.

The consideration was paid in cash in full on completion, in addition outstanding trade receivables from ADNOC of around $12m are payable within 30 days.

The net proceeds, after settlement of creditors, will be applied in reduction of group borrowings.

It is anticipated that the group’s 600 UAE-based employees’ contracts will be terminated and all colleagues offered re-employment by ADNOC. On conclusion of the deal the group intends to wind up its operations in the Middle East.

The group’s International business continues to operate the Kazakhstan JV, which is performing in line with expectations.

Speedy said trading since September 30, 2020 has been ahead of the board’s expectations. Revenue has improved as activity levels have continued to increase. In February 2021, core hire revenue in the UK and Ireland was around two per cent higher than the prior year – utilisation for the period October 1, 2020 to date is 58.7% (2020: 56.2%).

Underlying overhead costs across the group remain tightly controlled. It has not utilised government furlough or loan schemes in the second half of the financial year. As a consequence of stronger than expected revenue recovery, profit before tax for the year ending March 31, 2021 is anticipated to be well ahead of current market expectations.

Chief executive, Russell Down, said: “I am pleased to report another period of momentum and resilience for the group as our colleagues have adapted and supported our customers in these challenging times. Our ongoing positive trading has benefitted from increasing activity levels and shows the strength of our strategy, people and operational delivery.

“The successful exit from the Middle East operations is an important strategic step for Speedy and we wish the whole of the ADNOC team every success in the future. Looking ahead, we are well positioned to take advantage of the market opportunities in the UK and Ireland as activity levels continue to improve.”

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Lyn Rees

Yourgene Health, the Manchesdter biotech firm, said Yourgene Health Inc, its wholly-owned US subsidiary, has signed a supply agreement with a large US clinical laboratory group worth an estimated $1.5m over five years to Yourgene and grants the partner non-exclusive access to the company’s Ranger technology which Yourgene gained as part of acquisition of Coastal Genomics Inc in August 2020.

The agreement grants the partner non-exclusive rights to integrate the Ranger enrichment technology into its proprietary reproductive health diagnostic screening pathway, to support its US-wide clinical laboratory network. The agreement enables use of the technology for the field of reproductive health, with the potential to expand into other applications such as oncology in the future.

Coastal was acquired in August 2020 to allow AIM-listed Yourgene to bring its size selection and DNA enrichment technology to the US, Canadian and other international markets as a complement to the company’s reproductive health products, services and technologies.

The technology, and Coastal’s broader commercial pipeline in North America, also accelerate the ompany’s diversification into the oncology market and wider DNA sample preparation markets.

Yourgene chief executive, Lyn Rees, said: “We are very pleased to announce this first important validation by a strategic partner for our recently acquired new technology.

“We continue to believe that this is a key technology platform for our entry into the US diagnostics market, the largest in the world. We respect the partner’s preference to remain unidentified as it affirms their perception of Coastal’s Ranger technology as a competitive advantage.”

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