Costs plunge tool hire specialist into £57.6m loss

TOOL hire company Speedy Hire, based at Newton le Willows on Merseyside, is continuing to struggle with exceptional costs wiping out profits and plunging it into a £57.6m loss.

Adjusted Profits for the year to March 31 took a 77.2% hit  – down to £5m from 21.9m in 2015, while turnover fell 12.2% to £329.1m from last year’s figure of £375m.

Adjusted earnings per share fell to 79p from £3.29, a fall of 75.5%.

As the business continues to cut overheads, the company bore exceptional costs of £59.9m before tax (2015: £17.1m) due to impairment of goodwill (£45.9m) and business restructuring costs.

Some £34.9m of the goodwill relates to three acquisitions undertaken in 2006 and 2007; £5.5m was bad debt provision in relation to an international debtor and £7.7m wasspent on the business restructure, consisting of £4.2m on management and restructuring and £3.5m on the network optimisation prorgamme.

£800,000 related to losses on non-oil and gas asset disposals in the Middle East.

Chief executive Russell Down said: “We have restructured the business, cut overheads to more closely align them with revenues, enhanced the management information generated from our systems and improved our cash performance.
 
“We are now starting to see an improvement in our culture and greater efficiencies throughout our operations.
 
“The business is starting to respond positively to the actions we are undertaking. With a renewed focus on sales, tighter overhead control and better management information with which to manage return on capital we are creating a solid platform for the future.”

Executive chairman Jan Åstrand added: “We are beginning to see the business responding to the actions being undertaken by the new management team with an improvement in our culture of accountability, customer service, and in driving greater efficiencies throughout our operations.”