Speedy cuts jobs in response to slowdown

By Murray Pollok08 October 2008

Steve Corcoran, chief executive of Speedy Hire in the UK.

Steve Corcoran, chief executive of Speedy Hire in the UK.

Speedy has made around 200 redundancies in its 5000-strong workforce in response to the uncertain economic outlook. The company said spending on infrastructure related projects remained strong but that residential, commercial, retail and mixed-use activities had seen a more pronounced fall.

"The diverging outlook for different end-markets highlighted at the time of the AGM statement in July has continued", said the company in a trading statement issued on 8 October following the completion of its half year to 30 September, "Whilst Government and regulated industry projects continue to provide good levels of business, uncertainty in the credit markets is impacting on overall activity and reducing confidence within the general construction market."

In addition to the job losses - equivalent to 4% of the workforce - Speedy said it would reduce its capital investment for the current financial year to £75m, down from the £100-110 million guidance given in May.

Speedy said it drew confidence from the strength of the order books of its key national contractor customers, but that it was difficult to predict the future outlook. It said that "despite a more challenging trading environment" it hoped the full year result to be in line with its expectations, "subject to no further deterioration in the outlook for [our] end markets."

Revenues from Speedy's 50 largest customers had risen 43% in the five months to August - these clients account for almost 30% of total revenues - but the company said it had seen a "significant decline" in business with its smaller and mid-sized customers.

"Financial constraints and economic uncertainty have also led to some new projects being delayed or deferred", said Speedy, "with the result that the traditional seasonal uplift in demand patterns in late August and into September has been more subdued than in previous years."

Speedy said revenues for the six months to 30 September were expected to be up 22% compared to the same period in 2007, helped by the Hewden Tools acquisition which completed on August 1, 2007, with profits broadly in line with the prior year period.

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