Speedy reveals £1.7m Connaught hit
SPEEDY Hire, the North West supplier of tools and equipment to the construction sector, said it would make a half-year loss as it revealed that the failure of social housing firm Connaught would cost it at least £1.7m.
The Newton-le-Willows-based group, did say trading was more stable and that its was scaling back its management team. A consequence of this will see executive director Claudio Veritiero, managing director, UK & Ireland asset services, lose his job.
The former investment banker will leave the business at the end of this month.
Speedy, which will announce its results for the six months to September on November 17, said turnover in the period is set to be around 4% down on the same period last year, as a result of the timing of equipment sales.
In a trading statement it said: “In recent weeks Speedy has won a number of important new infrastructure contracts, including a five year sole supplier agreement with Thames Water to supply their tier one contractors on the £5.5bn AMP5 programme.”
It said ‘good progress’ had been made in its new international and branded and advisory divisions. . First half turnover from these two divisions is expected to top
£4.5m, up from £800,000 last year, with a substantial increase in both businesses’ revenues being anticipated to occur in the second half of the year.
Although both divisions are expected to be profitable over the full year, first half operating losses of around £2m will be reported, reflecting the investment in building-up the new units.
Regarding Connaught, which went into administration last month. and to which Speedy was an exclusive provider of tool and equipment hire, a £1.7m charge will be made in the first half..
This includes a sum for debtors which are likely to remain unpaid, together with an assessment of the value of equipment on hire which may not be returned.
Speedy said this sum does not include the potential impact of lost future revenues – the company had forecast revenue of £1.7m from Connaught over the remainder of the current financial year.
It said it was too early to say how much revenue will be retained from the firms which have taken on the bulk of Connaught’s work.
Looking ahead, Speedy said: “Although now trading profitably, the group expects to report a first half operating loss, The board confirms that the group is currently trading in line with its expectations for the full year in respect of adjusted profit before tax.”
