Strong half for Speedy
Speedy has reported a strong first half, in terms of revenues while more than doubling its profits.
Total revenues for the six months to the end of September were £194.6 million, up six percent on the same period last year, most of the increase came from access acquisitions along with a strong improvement from its small international operations.
UK and Irish revenues were 5.1 percent higher at £175.4 million. Mostly due to the acquisitions of Prolift and Platform Sales & Hire, while like for like revenue growth improved half a percent operating profit was 7.3 percent up at £14 million. International revenues jumped 23.4 percent to due to growth in short term rentals and sales of consumable items. On a constant currency basis the improvement was over 30 percent. Operating profit jumped 61 percent to £2.9 million, half of it due to high profits from its joint venture in Kazakhstan.
Group pre-tax profits more than doubled to £13.2 million, while net debt was marginally lower at £62.7 million. Capital expenditure over the six months increased 22.5 percent to £34.4 million of which £31.5 million was spent on rental equipment, a large percentage of it on powered access. The average age of the fleet was cut from 50 months last year to 42 months at the end of September. At the same time the company sold £6.3 million of used equipment compared to £9.1 million last year. Utilisation improved to 56.2 from 54.7 percent last year.
Chief executive Russell Down said: "These results demonstrate the progress we have made in implementing a customer focused strategy and growing our Small & Medium Enterprise customer base, a key strategic objective of the group's turnaround plan. I am pleased to report that we have seen strong growth in SME revenues during the period following introduction of our same day service promise. This was originally launched in London, but subsequently extended nationwide on 1 May 2018, and has now been strengthened to incorporate the option of a four hour delivery window in the London area. In addition we have invested in telemarketing activity and targeted sales activity through the use of artificial intelligence and machine learning. This activity has resulted in a notable increase in the number of customers trading with us during the period, the consequent increase in revenue has more than offset revenue lost following the liquidation of Carillion earlier this year.”
“We have continued to monitor our performance through the use of externally managed customer satisfaction surveys. The surveys measure our performance at account opening, order, delivery and collection and are undertaken by text and email. To date we have conducted over 300,000 surveys and in the period have instigated root cause analysis into the areas where we do not meet expectations. In August we achieved our highest ever satisfaction score with 92 percent of customers reporting that they were satisfied or highly satisfied with our performance. We will be expanding our surveys to monitor the performance of internal functions during the second half in order to further enhance the customer experience. We remain confident of delivering a result for the full year in line with our expectations."
This is a very positive report from Speedy which is certainly turning around the business around in terms of customer perception and being easy to deal with, following a sticky patch between 2014 and 2016. Since then a few solid acquisitions along with improved morale and a more commercial attitude is quietly transforming the business.
The company still has more to do but is making rapid progress and is giving staff the ability to manage the business. The positive atmosphere was notably positive at its recent Speedy Expo in Liverpool.
The company looks set to achieve exceed revenues of £400 million in 2019 for the first time since 2009. Barring any general economic issues, the next few years look bright.