Speedy Hire warns over ‘challenging' conditions amid depot closures
Speedy Hire has cautioned over 'challenging' conditions due to Government spending delays, after shutting eight depots in the face of heightened cost pressures.
Shares in the equipment hire firm dropped on Wednesday morning as it also reported weaker revenues and swung to a loss for the past year.
The Merseyside-based business said it was impacted by 'challenging market conditions' after the Government delayed spending on major infrastructure projects, such as Network Rail's development programme.
Speedy Hire said these challenges underpin its commitment to its accelerated transformation plan in order to return to growth.
As part of its turnaround efforts, the company said it shut eight of its depots, leading to a reduction in staff numbers.
It said its headcount dropped by 74 at the end of March compared with a year earlier.
On Wednesday, the company reported that revenues for the year slipped by 1.2% to £416.6 million for the year to March 31.
It said its hire business saw sales edge up 0.6% for the year.
Meanwhile, the group also swung to a £1.5 million pre-tax loss from a £5.1 million profit a year earlier. It also saw its net debts grow by £11.8 million to £113.1 million.
Dan Evans, chief executive of the business, said: 'Despite the macro-economic challenges, we have remained committed to, and in parts accelerated, the implementation of our velocity transformation strategy during its latest phase, which is setting the foundation for growth opportunities for the benefit of our customers and people, whilst maintaining shareholder returns.
'We are focused on what we can control, and we will continue to manage our cost base and balance our investment decisions through the economic cycle.
'Our transformation is key to our business, ensuring service excellence, innovation and ease of transacting for our customers, from an efficient and systems driven operating model.'
Mark Crouch, market analyst for EToro, said: 'It's been anything but a smooth ride for Speedy Hire.
'Grappling with spiralling costs and softening demand, the tool and equipment rental firm has found itself under mounting pressure as challenging economic conditions have pushed the business close to its limits.
'With both revenue and profit falling short of estimates, Speedy Hire's full-year results will have done little to shore up investor confidence.
'The broader trend of businesses tightening their belts is already troubling, but Network Rail's decision to delay spending on its £45.4 billion five-year infrastructure programme has delivered yet another hammer blow.'
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