Speedy stays confident
23 June 2020
Speedy Hire states that revenues are recovering as customers return to work following the Covid-19 lockdown.
Its results for the year ended 31 March 2020 show that Group revenue increased by 3.0% to £406.7m (2019: £394.7m), and that adjusted profit before tax went up 11.1% to £34.9m (2019: £31.4m)
At the end of March, in response to the pandemic, the company temporarily closed a number of depots, and furloughed approximately 1,800 of its personnel in the UK under the Government's Coronavirus Job Retention Scheme, and in Ireland under the Irish Government's Wage Subsidy Scheme.
In April, Group revenues were approximately 35% below the prior year as trading continued through larger superstores to service customers who were providing essential services.
“Recently, we have seen revenue increase as customers in England, Wales and Ireland return to work,” said Chief Executive, Russell Down. “In June, hire revenue in the UK and Ireland is c.17% below the prior year. Whilst c.30% of colleagues remain on furlough, we have started to re-open depots and un-furlough colleagues at a rate that reflects increases in customer demand.
“As our operations return to normal we will learn from the experiences of the past few months in order to simplify and standardise our operating model,” he added.
Speedy reports that is has grown its Services businesses faster than its hire business. Services revenues (encompassing re-hire; training; testing, inspection and certification; product and consumable sales; and fuel management services) are less capital intensive, have greater visibility and are more recurring in nature than hire revenues, the company states.
40% of revenue now comes from Services compared to around 30% three years ago, primarily due to growth in testing and training revenues from the acquisitions of Lloyds British and Geason Training respectively.
Speedy Chairman David Shearer says, “The Group is in a strong financial position with substantial unutilised bank facilities and robust plans in place to manage through the anticipated crisis period and adapt our business model as we return to a new normal. We have modelled a range of downturn scenarios and under all of these the Group continues to generate cash and would not breach any of the covenant tests under its banking facilities.”
Russell Down adds that, “Whilst Covid-19 will have some financial impact on the business, I am reassured by our performance in the last three months. We are well placed to emerge in a position of strength to pursue our strategic objectives as more normal trading levels return."