Speedy closes 13 depots, but revenues recovering
11 September 2020
While Speedy Hire has seen revenues improve in recent months due to increasing customer activity, the UK-based rental company has permanently closed 13 of its depots - the total network is more than 200 locations - and will consolidate others into larger locations. Staff numbers have been reduced by 7% since the end of March this year.
In a recent trading update, the company reported that group revenues for the year to date are approximately 23% lower than last year.
For the start of September, rental revenues were approximately 8% lower than the same short period in 2019.
Utilisation rates have improved steadily throughout the first half as activity levels have increased and capital expenditure has been reduced, according to Speedy. At 4 September, utilisation rates in the UK and Ireland were 52.9%, compared to 54.6% in 2019
In response to these improvements, Speedy has relaunched its four-hour delivery promise across the UK and Ireland.
As the Covid-19 pandemic emerged, Speedy took action to control overhead costs. This included the furloughing of half of its employees.
At 31 August, approximately 200 employees remained on furlough, accounting for about 6% of the Speedy’s workforce. The company does not expect any staff to remain on furlough beyond 30 September.
Staff numbers at 31 August were 3,222, down 7% from the 3,464 employed at 31 March 2020. A further 50 employees have been placed at risk of redundancy during September.
Russell Down, Speedy’s Chief Executive, said, “We are pleased to report that in recent months we have seen an ongoing recovery in trading as customers have returned to work.
“The decisive actions we have taken during the pandemic to enhance the resilience of our business and the strength of our balance sheet leave us well placed to respond to improving trends and pursue our strategic objectives.”
Cash collections have remained strong and, as a result, net debt has reduced from £79.3 million at the end of 2019 to £59.4 million at 31 August, 2020.
All guidance remains suspended due to the uncertainty caused by the pandemic.