Speedy Hire looks forward after disappointing year

A DIFFICULT year for tool hire giant Speedy Hire, underlined by the departure of long-serving chief executive Steve Corcoran, has ended in a fall in profits.

Despite growing revenues in the year to the end of March to £349.7m (£340m in 2013), profits fell from £11.3m to £7m as the impact of accounting irregularities in the company’s Middle East-based international division were felt.

As a result of the problems in the Middle East – which prompted the Mr Corcoran’s resignation – the unit posted an ebida loss of £4.3m and also caused significant distraction throughout the rest of the business.

Chairman Ishbel Macpherson, who announced she will retire from the role in November, said that despite a tough year she has confidence that the new executive team led by new CEO Mark Rogerson can get Speedy back on track.

She said: “Without doubt, this has been a disappointing year of results for Speedy. The issues the group has faced in the Middle East have resulted in a financial impact, distraction in terms of management focus and general levels of disruption.

“These issues have now been addressed and we remain confident that the group has strong potential and the outlook is good.  I believe that Mark Rogerson and his restructured and renewed senior management team are well placed to deliver on this and position the group well for the coming years.”

It was not all bad news from the Newton-le-Willows company though as Speedy said it has started the new financial year in positive fashion and a 15% increase in the dividend to 0.61p per share.

Mark Rogerson, the former Costain and Serco executive who became chief executive in January said: “The events of the last six months have been understandably disappointing and no one at Speedy is proud of what has happened.  However, since the issues in the Middle East broke, we haveMark Rogerson Speedy Hire responded decisively and effectively, restructuring both the UK and Middle East management teams.

“In addition, we have gained pace in winning a wide range of new contracts, and have implemented a number of new key initiatives that will enable us to continue to improve our capital disciplines, business processes and further strengthen the culture of the company.

“Whilst there is much still to do, growth in our markets is now emerging and our sales revenues in the last quarter of FY2014 and in the first month of this new trading year have been promising. We now need to build on this opportunity to drive shareholder value through the delivery of our strategic priorities.”

Speedy, the country’s leading tool hire firm, said exceptional costs in the year amounted to  £4.7m before tax. The exceptional costs comprise: £2.4m from the reconfiguration of the UK & Ireland network structure including onerous leases on depots;  £1.7m was incurred as part of the accounting irregularities identified in the International division; £300,000 of fees were incurred in establishing a Kazakhstan Joint Venture; and finally a further £300,000 was incurred as a result of changes in executive directors during the year.