10.11.2015

Slow start for Speedy

UK rental company Speedy has published its first half results, which show a further decline in revenues combined with a pre-tax loss.

Total revenues for the six months were down 12.5 percent on last year at £165 million, due to disposals and a drop off in activity. Revenues in the UK and Ireland were 12 percent lower at £155 million, while international revenues dropped 23 percent to £10 million, as the company winds down its overseas activities.

Pre-tax profits before exceptional costs fell from £10.3 million last year to just £2 million this year, however the cost of restructuring, including lay-offs and other reorganisation measures, resulted in a pre-tax loss of £12.2 million, compared to a profit at this time last year of £6.6 million. Net debt at the end of September was cut from £1-4.4 million last year to £102.6 million this year. The company still expects to bring the full year in as per its updated forecast in September. See Speedy cuts expectations

The new chief executive Russell Down said: "Following a disappointing and challenging start to the year, reflected in the results we are announcing today, we are beginning to see the benefits of the remedial actions put in place to address the various legacy issues. These are early days in the group's recovery and the full benefits will only be realised over the medium term. However, remedial actions implemented to date have started to stabilise our revenue base and we are expecting to see an improvement in the second half”.

“Whilst our markets remain competitive, Speedy remains a fundamentally good business which in a more lean, efficient and customer-focussed form, has the potential to once again deliver sustainable profitable growth."

Vertikal Comment

There are really no surprises here, the results are pretty much what we might have expected, given that the last quarter was surprisingly patchy in the UK and allowing for the disruption from restructuring and disposal activities, that were planned and carried out, not to mention the profit warning issued in September.

The changes that the company is working on are sensible and ought to put it into good shape for the future. Its main competitors such as HSS have also struggled somewhat during this period, so given all the changes at Speedy this result is not quite as bad as it might have been.

Expect the company to begin any bounce-back in April, when its new fiscal year begins and by when it will hope to have cleared all of its baggage.