Slimmed-down Speedy weathering the storm

THE UK’s biggest tool hire company said today its cost cutting measures, which have seen almost 1,000 workers lose their jobs, is helping to offset falling demand.

The Newton-le-Willows firm also revealed that it has agreed new banking covenants for a £300m loan facility that expires in June 2012 and provides it with “prudent levels of headroom between debt outstanding and the facility amount”.

Speedy said that trading in the fourth quarter has remained difficult however pre-tax profits for the year to March 31 will be in line with current market expectations of around £33m.

Speedy has been hit by the downturn in the construction industry in the private sector, and since July last year has axed 957 people – 17% of its workforce – closed 82 depots and returned or sold 470 vehicles.

Capital expenditure has been reduced and a number of assets sold. Speedy said these actions will result in £42m of annual savings, however it will be hit by one-off charges of £25m because of the restructuring.

Despite the challenging environment Speedy said it continues to win significant new business.

Recent contracts include becoming, as part of a consortium with BSS, Hewden and Lavendon, the ODA’s first choice partner for the Olympic Park.
It has also signed a deal with one of the country’s leading M&E contractors, Southern Electric Contracting.

Chief executive Steve Corcoran said: “These new contracts and renewals, together with the new financing arrangements announced today, underline the group’s ability to trade successfully through the downturn.

“As a result, the group enters the new financial year well placed to build on its market leading position.”