Speedy growth returns but still cautious on outlook
By Murray Pollok14 February 2011
Speedy said it expected to return to operating profit in the second half of its current financial year (to 31 March). Revenues in the three months to the end of December were up 8.8% year-on-year and rental rates rose for the third consecutive quarter.
However, in its interim management statement for the period 1 October to 13 February, Speedy said it continued to take a cautious view of short term recovery prospects in the UK and said it would maintain its close monitoring of cash, margins and capital expenditure.
The increase in revenues in the final quarter of 2010 followed two quarters of year-on-year declines, and the increase continued into January with a 2.1% increase in sales.
Speedy said it was benefitting from earlier restructuring and an increasing focus on markets such as water, waste, energy and transport. Its Tools, Lifting & Survey operations performed best - with revenues up 9.0% for the three months to 31 December - while its power rentals and portable accommodation rentals business (UK Power and Space) continued to lag behind other product areas.
Revenues for its new International and Branded & Advisory Services businesses more than doubled to £2.6 million for the three months to 31 December. Speedy said this "demonstrates the potential of these new business areas".
Speedy said fleet replacement costs of around £120 million would be required over the next three years; that being the replacement cost of equipment reaching its useful economic life. The company is making made gross capital investments of £130 million over the 2009-11 financial years.