18.05.2015

Profits slip at Speedy

UK based rental company Speedy has reported more than a 10 percent jump in its full year revenues to £386 million. However pre-tax profits were slashed from £7 million last year to £2.1 million this year - although this was entirely due to exceptional costs. Pre-tax profits before exceptionals increased 64 percent to £19.2 million.

Chairman Jan Åstrand said: "I am delighted to report on a year of significant progress at Speedy. It is particularly pleasing that, despite all the challenges the company has had to face, we have today reported a strong set of results. Shortly after he was appointed CEO, Mark Rogerson set out a clear plan to return the group to health and build sustainable profit growth. Mark and his new leadership team have made significant progress, and whilst there is much to do, there is further opportunity to improve the business.”

"In the Middle East, having completed the exit from general and spot hire ahead of schedule, discussions are underway regarding the disposal of the oil and gas services operations, our last remaining asset in the region. We can now turn our focus to developing the business in the UK where there are major opportunities ahead through further professionalising our sales and marketing activity supported by improvements in cost management and asset utilisation.”

"We are, once again, in a position to deliver sustainable profit growth and our confidence for the future is underpinned by an increase in the recommended final dividend."

Chief executive Mark Rogerson added: “Speedy has achieved a great deal this year, especially given that a number of legacy issues have been much more challenging than originally expected. To have delivered a result ahead of market expectations is a good achievement. Following my appointment in January 2014, I set out a three-point turnaround plan: to fix the business, improve operational performance, and transform the company over the medium term with the aim of delivering sustainable profit growth.”

“Fixing the business meant principally addressing five key issues: stabilising the Middle East; returning the group to growth, expediting the delivery of our Network Optimisation Programme; delivering a new IT and MI system; and developing a new cultural environment where safety, governance and compliance, service, and employee conduct and ethics are our priority.”

“We are pleased to have fully exited the general hire market in the Middle East and to have not only achieved a break even position in the Oil and Gas Services Business, but to have also built enterprise value.”

“In the UK and Ireland we recorded increases in Revenue and EBITA before exceptional costs of 7.1 and 14.4 percent respectively. We secured a significant number of new contracts during the period and revenues from the group's strategic and major accounts (generating some 51 percent of total revenues) rose by 18 percent.”

“We have delivered the planned improvements to our UK network ahead of the scheduled timeline, successfully implemented a new IT system, and have made significant progress in establishing a new culture across the business. These achievements are a great credit not only to the wider management team but to all our people throughout the business who have frequently had to operate under stretching and challenging conditions.”

“We have now commenced the journey to improve our business further targeting three specific areas in the short term: growing our core hire revenue, optimising our assets; and creating cost efficiencies.”

“Looking to the future, we have identified three areas to focus on within our transformation agenda: broadening our service offering to our largest customers, reinventing the Express network and meeting customer demand through more demand led CapEx allocation and targeted growth.”

Vertikal Comment

Speedy is definitely getting its business back on track, completely ending its unfortunate overseas adventure will help step losses, while allowing the management to focus on its core UK operations.

In the UK the company has made substantial progress towards re-establishing its previous reputation, after an 18 month to two year decline, during which the company clearly lost its way and became overcomplicated.
The company is likely to reach £400 million of revenues in 2015/16, with a substantial improvement in profitability.