Revenues up at Speedy, profits down

By Patrick Hill27 May 2009

One of the six new Modec electric-powered delivery vehicles acquired by Speedy Hire.

One of the six new Modec electric-powered delivery vehicles acquired by Speedy Hire.

Speedy Hire's revenues for its fiscal year ending 31 March 2009 were £476.1 million (€547.5 million), up 2.3% from £465.5 million (€535.5 million) in 2008. However, EBITDA for the rental company fell 4.6%, from £131.6 million (€151.3 million) to £125.6 million (€144.4 million), reflecting a decline in operating margin, from 13.7% to 10.4%.

Adjusted profit before tax was £33.9 million (€39.0 million), but impairment charges and restructuring and integration costs charges totalling £95.3 million (€109.5 million) swung that performance to a loss, before tax, of £70.6 million (€81.2 million). The company had a profit in 2008 of £30.5 million (€35.1 million).

Chief executive Steve Corcoran said the company's principal market, construction, "continued to polarise, with contractors increasingly reliant upon government and regulated spending while the private sector continues to withdraw from the market." Speedy believes this market will not "show any meaningful signs of growth for another twelve to eighteen months." (See related article, right.)

Speedy's business with its top 20 clients now generates 24% of revenue, up from 21% in 2008. The company said it will continue to expand from traditional rental services to offer broader support services, such as testing, inspection, maintenance, asset management and training.

It also wants stronger market positions in "more resilient" sectors of the UK construction industry, which it said generates more than 70% of its major clients' revenues. Those sectors include infrastructure development, regulated utilities and petrochemicals.

The company said it is considering issuing new equity to reduce debt and to "maintain current investment levels". Speedy recently renegotiated its £300 million (€345 million) bank credit facility through 2012 (See related article, right.).

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