Speedy reviews future of advisory services division

By Murray Pollok14 October 2011

Speedy is undertaking a strategic review of its new advisory services division following disappointing results at the division for the six months to 30 September, said Speedy in its interim statement for the period.

Advisory services offered include construction equipment training, health and safety training, waste advice and environmental advice. Speedy said its training operations were satisfactory, but the performance of the other activities were "disappointing, with continued generation of losses."

The company said the results were not significant for the group as a whole, but "the results challenge the viability of the advisory business and we are undertaking a strategic review of our advisory activities which will be complete by the announcement of the interim results."

Otherwise, Speedy said it had seen a "substantial" increase in profitability for the six months to 30 September, with a 7.8% increase in rental prices in the second quarter - year-on-year - more than offsetting a 2.9% fall in volume.

In its interim trading statement before its results announcement on 16 November, Speedy said it was making positive progress despite "challenging macro-economic conditions".

It said underlying revenues in the second quarter were expected to be approximately 4.1% up compared to the same period in 2010. By ‘underlying' it means revenues after accounting for fleet sales, the disposal of its accommodation business in April, and the expiry of the Network Rail maintenance contract in December 2010.

Speedy said it was confident that it would meet its expectations for the full year. "UK trading continues to improve steadily in line with expectations, although uncertainty remains in the overall outlook for the UK economy.

"The Group draws confidence from the order books of its key major contractor customers, the breadth of its customer base and the diversity of its end markets."

The company's new international division, which includes operations in the Middle East and Egypt, saw a significant increase in revenues and a fall in losses; "As a consequence of the 'Arab Spring', Speedy slowed capital investment in the region. However, forward momentum remains supported by recent contract wins."

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