Speedy losses continue but reaches break-even point

Despite making a pre-tax loss of £27.0 million for the year to 31 March Speedy Hire said its performance had improved in the second half and that it reached "broadly break-even" point at the end of the year.

The company's loss includes £20.8 million in exceptional costs, comprising a £13.5 million write-off on the sale of its accommodation division; £5.5 million in restructuring costs (depot closures and redundancy payments); and £1.5 million financing costs.

Pre-tax losses (before amortisation and exceptional costs) were £0.7 million for the year, although the profit performance was quite different in the first and second halves: losses were £9.9 million in the first half and profits (before tax and exceptionals) was £9.2 million in the second half.

Ishbel Macpherson, Speedy's chairman, said the company had seen another challenging year for the construction sector but that the business had been stablilised, with improvements in pricing, continued cost management measures and investment in the fleet and IT systems. She said these factors provided Speedy with a "solid platform from which to build and, whilst we remain alert to the continuing uncertainty in the economy, we expect to make further progress in 2011/12."

The company said the new financial year had started satisfactorily, but that uncertainty over the UK construction sector would continue "for some time".

Total group revenues were up 0.9% to £354.2 million fior the year, with the new international business in the Middle East turning over £8.4 million and the training and advisory services operation seeing revenues of £2.3 million.

Steve Corcoran said the completion of the 2010/11 financial year had signalled the end of "the most tumultuous period in the Group's history" and that the pre-tax profit in the second half of the year (before exceptions) supported the company's previous claim that the business had turned the corner.

Since the start of the downturn, Speedy has reduced its headcount by 29%, its vehicle fleet by a similar amount, and removed a third of its depots.

Mr Corcoran said hire rates were improving (10% higher at the end of the year compared to 12 months previously), demand was increasing demand and that Speedy had a more efficient cost base.

"Our Power business, which was loss making in the earlier part of 2010/11, traded profitably in the second half and, with the fledgling operations in International, Engineering (a part of UK Asset Services) and Training & Advisory also progressively moving towards profitability, we are confident that our recovery is well under way", said Mr Corcoran.