Speedy warns annual results will be at ‘lower end’ of expectations

Plant hire group, Speedy, has warned that it expects its annual results for the year to March 31, 2024, will be at the “lower end of the board’s expectations”.

In a trading update today, ahead of the mid-June release of its final results, the Newton-le-Willows-based group said it had performed resiliently against a challenging market backdrop and wider macroeconomic uncertainty.

Total Group Revenue of around £420m for the year was down approximately five per cent versus FY2023, impacted by underperformance from its regional base, the reduction in wholesale fuel prices and the performance of its seasonal products, which were affected by the warmer winter period.

The cost inflation and softer demand faced across much of the construction sector mean that revenues from regional customers closed six per cent down year-on-year, although these stabilised in the last quarter of the year and in FY2025 trading to date.

Revenues from national customers, while declining in the last quarter, had continued to trade positively year-on-year.

Despite the challenging trading environment through FY2024, the group secured additional annual turnover in excess of £40m across multi-year contracts with new and existing customers which, while slow to mobilise and only providing marginal benefit in FY2024, give confidence for growth in FY2025 and beyond.

The group’s Kazakhstan joint venture, following a record year last year, returned to a more normalised performance in FY2024 due to the timing of various projects.

The momentum from securing major opportunities and progressing operational efficiencies, positions the group well to benefit from the anticipated recovery of the wider macroeconomic environment during the second half of FY2025, it said.

As a result, while the group expects to report results for the year towards the lower end of the board’s expectations, it said it is encouraged by the commercial progress in the business and the outlook for FY2025 given the recent contract wins.

Speedy said it has remained highly focused on working capital management and expects to deliver free cash flow in excess of £20m, with net debt reducing by year-end to around £102m, within its target leverage range.

The group said it continues to progress its five-year Velocity strategy and transformation programme, led by systems and data, to ensure it will have an efficient operating structure to power growth and deliver long term benefits.

It said the investment in implementing the strategy and executing its transformation programme represents a significant cost to the business and will be reported separately at the year end.

The in-store partnership with B&Q has evolved to a more digitally-focused model during the final quarter of FY2024 and Speedy has now fully exited the remaining 22 concessions.

It incurred trading losses and closure costs in the region of £2m in FY2024 which will not recur under the new, low cost-to-serve model.

Its products and services are now available for digital hire in-store within every B&Q and Tradepoint, as well as on the respective websites.

Green Power Hire is performing in line with its acquisition business plan and Speedy continues to invest in the business to satisfy growing customer demand.

Last month the group also showcased the first H-Power Generator for Speedy Hydrogen Solutions, the joint venture partnership with AFC Energy. Speedy aims to grow the fleet during FY2025.