Speedy Hire downbeat over outlook as revenues slump 29%

Published on Monday 12 October 2009 20:47

PLANT hire firm Speedy Hire delivered a bleak assessment on trading prospects yesterday after seeing no evidence of a seasonal pick-up in activity.

The UK's largest tool and equipment hire firm reported an estimated 29 per cent drop in revenues for the six months to 30 September and said there remained "significant uncertainty" in the current outlook.

It reported no sign of improvement in private sector spending and warned of increased sensitivity around the sustainability of government spending.

Speedy has cut 270 jobs – 6 per cent of its workforce – in the financial year, but said it would be inappropriate to make further cuts as this would begin to affect customer service.

Shares fell 11 per cent as the firm warned investors that any further slide in revenues forecasts was unlikely to be offset by additional cost reductions.

More than 950 staff left the Haydock-based business between July 2008 and the end of March, while 82 depots were closed and 470 vehicles returned to their lessors or sold.

Speedy said recession-related project cancellations, such as the new coal-fired power station at Kingsnorth in Kent, continued to affect demand.

Offsetting the gloom, Speedy said turnover generated from the top 50 UK contractors continued to prove more resilient than the wider market.

Stockbroker Panmure Gordon reduced its profit forecasts and target share price as a result of the update. Analyst Paul Jones said: "With a number of major projects delayed or cancelled, the market remains fragile for tool hire operators."