Speedy cuts 300 jobs as profits plunge

SPEEDY Hire, the country’s largest tool and equipment hire company, has reported a huge fall in half year profits amid a turbulent period which saw its chief executive axed.

New chief executive Russell Down, who replaced Mark Rogerson on July 1, said the Newton-le-Willows-based company had had a “challenging and disappointing” start to the year as he announced profits, after exceptional items, plunged from £10.3m to £2m as revenues in the six months to September 30 fell from £189.3m to £165m.

As part of a turnaround plan nearly 300 jobs have been cut, mostly among middle and senior management, the company said.

Down, Speedy’s former finance director, said that when it was clear that revenunes were declining a board review had found that: the business was not focusing sufficiently on SME customers; there was poor execution of a number of business improvement programmes, including the implementation of a new IT and management information system, resulting in the unavailability of key products in many of our depots and finally a “lack of ownership, empowerment and accountability within the business”

In response, the new leadership team of Down and executive chairman Jan Åstrand took action to revive the firm’s flagging fortunes.

Remedial actions taken included cutting costs by £13m , realigning the sales function, increasing engineering resources, redistributing assets and improving the IT system.

Russell Down said: “These are early days in the group’s recovery and the full benefits will only be realised over the medium term. However, remedial actions implemented to date have started to stabilise our revenue base and we are expecting to see an improvement in the second half.

“Whilst our markets remain competitive, Speedy remains a fundamentally good business which in a more lean, efficient and customer-focussed form, has the potential to once again deliver sustainable profitable growth.”

Despite the plunge in profits after exceptional costs of £14.2m, Speedy held its interim dividend at 0.3p per share.