Strong SME (small- and medium-sized enterprise) revenue growth boosted Speedy Hire’s performance in the first half of 2019, up to 30 September.
According to the latest results released by the UK-based rental firm, its revenues in the SME segment have increased by a compound annual growth rate of more than 25% since Speedy set up a customer relationship centre for SMEs in the UK and Ireland in 2018.
As a result, Speedy has recently expanded the centre to manage the relationship with some of its larger customers more efficiently.
Russell Down, Chief Executive, said, “Our strong balance sheet and financial performance are underpinned by excellent customer service, with continuing progress against our strategic objectives.”
He added, “I am particularly encouraged by the growth in higher margin SME customer revenues and progress with our digital roll out where we have continued to make significant investment.”
Speedy has continued to develop technological solutions, including artificial intelligence, to drive fleet optimisation and identify new revenue opportunities.
On 1 June, Rhian Bartlett joined the board as a non-executive director. With her experience in digital applications, Bartlett is supporting the company as it invests in new technology and looks to increase customer adoption rates for its digital solutions.
Services are also an increasingly important part of the business, with more than 40% of Speedy’s revenues now coming from services, compared with around 30% three years ago; “This, combined with our more diverse customer base, provides us with a strong platform for further growth,” said Down.
Services revenues grew by 14.2% following the acquisition of Geason Training, and growth in the company’s Lloyds British testing business.
The company’s total revenues were up 5.7% to £205.7 million, and within that rental revenues rose by 0.8% following the acquisition of LIfterz in March 2019, and the strong SME revenue growth. This was offset by rate deflation due to the more competitive landscape.
The rental fleet increased by 1.9% to £221 million due to further investment in core equipment. Speedy spent £24.8 million in terms of capital expenditure and invested £4.8 million on IT and depot refurbishments. This brought the firm’s debt up to £85.3 million.
Operating profit rose by 11.2% to £17.9 million, and return on capital employed was up 3.3% to 12.7%.
Down said, “In spite of the current uncertain UK political backdrop we remain confident of delivering full year results in line with our expectations.”