Trading Update

RNS Number : 0227Q

Speedy Hire PLC

12 October 2011

 



12 October, 2011

Speedy Hire Plc ('Speedy' or 'the Group')

TRADING UPDATE

Speedy, the UK's largest provider of tools and equipment for hire, is issuing this trading update ahead of the announcement on 16 November 2011 of its interim results for the six month period from 1 April to 30 September 2011.

In spite of challenging macro-economic conditions, Speedy continues to make positive progress.  Underlying revenue* in the second quarter is expected to be ahead by approximately 4.1% against the same period in the prior year accompanied by a substantial increase in profitability.  The Board remains confident that the Group will meet its expectations for the full year.

In the UK & Ireland Asset Services division, underlying revenue* for the second quarter was up 2.1% year-on-year as the Group continues to win market share in its chosen markets.  Against a backdrop of on-going uncertainty in the UK economy, Speedy continues to target sustainable, profitable revenue with a commitment to maximise the return from the existing hire fleet investment, accompanied with selective capital investment.  As a result, in the UK, the second quarter increase in year-on-year revenue arose principally from a continued improvement in yield which was up 5.5% on the same quarter in the prior year, driven by a 7.8% growth in hire rates, offset by volumes which were 2.9% lower, which is, in part, a consequence of actively turning away unprofitable business.

The Group remains committed to its strategy of strengthening its key relationships with major contractors and is delighted to announce that in October 2011, Morgan Sindall Plc formalised their trading relationship with Speedy by entering into a five year Strategic Partnering agreement.

Prudent cash management has ensured that net debt has further reduced to approximately £77.0m at the 30 September 2011 (31 March 2011: £79.5m pro-forma, adjusted for the proceeds of the accommodation hire disposal).

Progress continues to be made in the International Division, with a significant increase in revenue and a substantial reduction in operating losses.  As a consequence of the 'Arab Spring', Speedy slowed capital investment in the region.  However, forward momentum remains supported by recent contract wins.

In the Training & Advisory Services Division whilst the Training business has performed satisfactorily the performance of the Advisory Services business has been disappointing, with continued generation of losses. Whilst not material to the Group, the results challenge the viability of the advisory business and we are undertaking a strategic review of our advisory activities which will be complete by the announcement of the interim results.

Outlook

Speedy's UK trading continues to improve steadily in line with expectations, although uncertainty remains in the overall outlook for the UK economy.  The Group draws confidence from the order books of its key major contractor customers, the breadth of its customer base and the diversity of its end markets.  Ongoing benefits from the investment in IT continue to provide Speedy with the visibility needed to pursue margin gains and also enable more effective investment of capital into the fleet.  These factors, together with the successes that continue to be extracted from repositioning the property base and driving ongoing efficiencies from operating costs, leave the Board confident of the Group meeting its expectations for this financial year.

* Underlying revenue is total revenue excluding revenue from fleet sales and adjusted for the disposal of the accommodation hire operations in April 2011 and the expiry of the Network Rail maintenance contract in December 2010.

For further information:

Speedy Hire Plc	Hudson Sandler
Steve Corcoran, Chief Executive Lynn Krige, Group Finance Director Tel:  [phone]	Nick Lyon / Andrew Leach Tel: [phone]

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 leading UK provider of equipment rental and support services to a wide range of clients across the construction, infrastructure, industrial, manufacturing and facilities management sectors - as well as to local trades and industry.

Operating from over 300 fixed sites - together with a number of on-site facilities at client locations throughout the UK, Ireland and the Middle East - the Group supplies a range of services, including the provision for hire of:

·       small tools and equipment

·       surveying and measurement instrumentation

·       lifting and materials handling equipment

·       powered and non-powered low-level access equipment

·       compressed air

·       temporary power generation

·       mechanical pumps

·       temporary site communications

The Group also provides associated services through the provision of training, asset management and testing, repair, inspection and maintenance (TRIM), as well as offering advisory services in areas such as health and safety, environmental and regulatory compliance.

Website:  www.speedyhire.plc.uk

 

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