Financial and trading update

RNS Number : 2334P

Speedy Hire PLC

08 February 2023

 

Speedy Hire Plc

("Speedy", "the Company" or "the Group")

  8 February 2023

Financial and trading update

Speedy, the UK's leading tools and equipment hire services company, operating across the construction, infrastructure and industrial markets, today provides a financial and trading update.

Net book value of hire equipment

Following recommendations made at the end of the audit for the year ended 31 March 2022 and as part of the subsequent work being undertaken by management to review controls around hire equipment, the Group has recently carried out a comprehensive count of all hire equipment in preparation for the upcoming 2023 audit.

As at 31 March 2022, the reported net book value of the Group's hire equipment assets was £226.9m.  The Company categorises hire equipment into two groups: those that are individually identifiable by a unique serial number to the asset register ("itemised assets", representing 78%, or £177.0m, of the total reported net book value), and other equipment such as scaffolding towers, fencing and non-mechanical plant which does not have a unique serial identifier and is not tracked on an individual asset basis ("non-itemised assets", representing 22%, or £49.9m, of the total reported net book value). The recently completed comprehensive count has covered both itemised and non-itemised assets. Whilst this count validated the previously disclosed net book value of itemised assets, it identified a deficiency in the value of non-itemised assets of c.£20.4m.

Actions taken

The Board has instigated an external investigation into the issue identified with non-itemised assets, including a review of controls and accounting procedures. In addition, management has strengthened the control environment for managing its non-itemised asset fleet, including weekly perpetual asset counts with additional internal audit focus, enhanced control over purchases and disposals, and monthly reconciliations against the fixed asset register. These actions will be further considered in conjunction with the findings of the external investigation, including any further changes to controls and processes as appropriate.

Group performing well - No change to the Board's underlying expectations for 2023

The Board is reviewing the appropriate accounting treatment of the deficiency. Whilst this is expected to result in a one-off non-cash write down of the balance sheet value of non-itemised assets in the year ending 31 March 2023, it is not expected to impact the Group's cash position or underlying profit* performance.

In the second half the new management team's operational review has included further progress in the evolution of the depot network towards larger, more energy efficient low-carbon facilities, located and designed to create a better experience for all customers and an enhanced working environment for our colleagues. This has resulted in a net 20 depot reduction at the end of January 2023.  The cost of these closures will be c.£2.9m and will be taken as an exceptional cost in the financial year.  The associated benefits are expected to be in the region of £2.9m per annum.

The Group continues to perform well in the second half, with its revenue (excluding disposals) for the four months to 31 January 2023 up c.16% against the corresponding period in the prior year and apart from any effects of the asset loss described above, the Board continues to be confident in delivering underlying profit* in line with its expectations for the full year.

Enquiries:

Speedy Hire Plc  Tel: [phone]

Dan Evans, Chief Executive

Paul Rayner, Interim Chief Financial Officer

MHP Communications  Tel: [phone]

Oliver Hughes

Charlie Barker

Notes:

* Profit before tax, amortisation and exceptional items

Inside Information: This announcement contains inside information.

Forward looking statements: The information in this release is based on management information. This report includes statements that are forward looking in nature. Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Except as required by the Listing Rules and applicable law, the Company undertakes no obligation to update, revise or change any forward looking statements to reflect events or developments occurring after the date of this report.

Notes to Editors: Founded in 1977, Speedy is the UK's leading provider of tools and equipment hire services to a wide range of customers in the construction, infrastructure and industrial markets, as well as to local trade and industry.  The Group provides complementary support services through the provision of training, asset management and compliance services. Speedy is certified nationally to ISO50001, ISO9001, ISO14001, ISO17020, ISO27001 and ISO45001. The Group operates from c.200 fixed sites and selected B&Q stores across the UK and Ireland together with a number of on-site facilities at client locations and through a joint venture in Kazakhstan.

 

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