Speedy profits grow as reliance on construction falls

Speedy Hire saw pre-tax profits increase by 35% to £16.8 million for the year to 31 March on revenues up 4.3% to £340.4 million as it continued to reduce its reliance on construction, which represented less than half of its business last year for the first time.

Revenues in the UK and Ireland increased by 1.9% - after adjusting for the sale of its accommodation business last year – while those in its international division, operating in the Middle East, were up 17% to £19 million. The international business also made a profit for the first time, with EBITDA of £0.8 million.

Steve Corcoran, Speedy’s CEO, said the results represented good progress in a UK market where GDP was flat and construction activity shrank by 8.8%; “A key component of our success has been the continuing focus on the more sustainable infrastructure and industrial markets.

“At year end we had a revenue split of 49% from construction, 28% from infrastructure and 14% from industrial (the 9% balance being across a number of different activities).” In financial year 2010 construction represented 65% of revenues.

“Not only are we better positioned in our end markets in the UK but also, through the continuation of the strategy started in 2010 to extend our business internationally, we are less dependent on the UK market place with 7.1% of our business now derived from non-UK activity”, said Mr Corcoran.

The group’s strategy is to position itself as a service business rather than a pure hire company. In addition to training activities, Speedy is offering asset management services, helping companies maintain and service their own fleets and then providing rental equipment while an asset is out of commission.

“This cycle of service capability - hire, training, [servicing] and back to hire - is what differentiates our business from a standard hire offering and establishes Speedy as a recognised services company”, said Mr Corcoran.

Ishbel Macpherson, Speedy’s chairman, said: “These results illustrate the impact that proactive management action over the last few years has had on Speedy’s business.

“Our focus on the right customers, in the right markets and on the right type of work has enabled the Group not only to grow revenue, but to do so at improved margins and levels of profitability, whilst improving cash flow and our ROCE.”