Speedy Hire downgrades profit expectations

SPEEDY Hire has revised down its full-year profit expectations on the back of weaker trading in the domestic market and higher losses in its Middle East division, which has been hit by an accounting scandal .

The company says it expects underlying profits for the year to the end of March, to be reported on May 13, will come in at around £14.5m, more than £3m below consensus forecasts of £17.7m, and lower than the 2013 profit of £16.8m.

Speedy, which has nearly 260 of its own depots in the UK, as well as operations in the Middle East and Ireland, had said lasy month that while its international business was running behind expectation, the UK performance was such that the board was confident full year expectations would be met.

However it said three factors were behind its downgrade: asset sales are running at a slower pace than anticipated; trading losses in the Middle East business are likely to be greater than anticipated as the business is being stabilised and also by adverse foreign exchange movements relating to a Kazakhstan joint venture; and while total UK revenues are marginally higher than in the same period in the prior year, reflecting growth in services revenue, the higher margin hire revenues for February and March are below forecast.

The Newton-le-Willows-based company said: “Focus for the group is on completing the stabilisation of the International division, and in the UK, focussing the sales effort to take advantage of the improving economic conditions, and delivering the previously announced network and asset optimisation projects.”