Speedy Hire sees future in added services
29 May 2008
Speedy Hire is focused on expanding its business beyond pure rental of equipment by adding additional services such as training, technical advice, fuel management, and by reaching more outsourcing agreements with major customers where Speedy owns, maintains and delivers equipment.
As the company announced record results for its 2008 financial year and a positive outlook for the next 12 months, the company’s chairman, David Wallis, said it saw particular opportunities to “advance Speedy Hire’s business model…We will continue to supply all the basics of straight forward hire, but build on this foundation with added value services. We are already starting to see longer term arrangements for hire, technical advice, training”.
The company also said it has an opportunity to expand its long-term outsourcing agreements with major customers. One such agreement - announced on the same day as the annual results - is a five year partnership with Carillion plc that includes the £12.5 million acquisition of the portable accommodation fleet of Carillion Asset Management Ltd. Speedy now has long-term contracts valued at £250 million over the next five years.
Steve Corcoran, Speedy Hire’s chief executive, told IRN that the company would also consider operating outside of the UK as part of its partnerships with major customers such as Carillion. He said Speedy still had growth potential in the UK, but “where UK customers are operating outside the UK, that’s the opportunity.”
Mr Corcoran said Speedy would also consider adding other products to its range through partnerships with specialist rental companies, such as it currently does with aerial platforms.
However, Mr Corcoran signaled that Speedy might look again at whether owning its own access fleet might make sense. He told IRN that the decision not to invest in its own powered access fleet was made at a time when there was oversupply in the market and rates were low; “At that stage we made the right call.“ Mr Corcoran said the market had now changed, with a greater focus on safe working at height and changing construction techniques, which had “clearly made aerial platforms a more viable product.”
The company reported a 38.7% increase in revenues to £465.5 million, with pre-tax profits rising 18.8% to £48.1 million. Mr Corcoran said the integration of Hewden’s tool hire operation was now complete – “with synergies flowing” – and that “the business is in great shape”.
Housing represents less that 5% of Speedy’s revenues and the company said that the decline in housing and in speculative commercial development ”is expected to be more than counter-balanced by growth in infrastructure spending on energy, utilities, road and rail, hospitals, schools, social housing and the Olympics.” Speedy chairman David Wallis said; “Our key customers, the UK’s largest construction and industrial groups…continue to report full order books.”