Speedy interims reflect macro challenges
15 November 2022
Speedy’s results announced this morning for the six months to 30 September 2022 reflect the influence of wider macro economic challenges that will affect all businesses in these unprecedented times.
The figures show hire revenue growth up by 5.5 per cent to £212.4 million compared against the same period in the previous year, with profit before tax down by 7.7 per cent to £13.2 million and profit after tax improved by 13.7 per cent to £10.8 million.
Interestingly, the company states that improved pricing has helped to mitigate inflationary cost pressures and reports a strong performance in its re-hire business Customer Solutions (formerly Partnered Services), together with increased revenue from fuel and energy sales. This reflects the higher average selling price of both diesel and hydrogenated vegetable oil (HVO).
During the period, Speedy says it has invested £30.5 million in its hire fleet, partly in response to its retail strategy rollout, including establishing a presence in more B&Q stores, and advanced purchasing to mitigate the impact of supply chain lead times and price inflation. Utilisation is currently at 58.1 per cent, up from 54.1 per cent.
The hirer also continues to develop its ESG (environmental, social and governance) strategy, another challenge that businesses will increasingly have to address. Some 41 per cent of the £30.5 million fleet investment was in carbon-efficient environmentally friendly products, increasing the amount of equipment utilising electric and renewable energy sources.
To combat future inflationary increases, utility prices have been fixed for the period to September 2024 and Speedy says that fuel hedges are in place on a nine to 12 month rolling basis.
Dan Evans, Speedy’s chief executive who took over the role from Russell Down last month, said: “We recognise that market conditions are uncertain, driven primarily by the conflict in Ukraine, inflationary pressures and the recent volatility in UK financial markets. There is some recent evidence of softening in demand as our end customers review their use of assets with a view to operational efficiency.
“In order to deliver profitable growth, and whilst the market remains competitive, we are focused on tendering for and winning national contracts that represent value and will deliver collective success for our customers and our business.
“Revenue growth is continuing with new contract wins, the effect of actions taken on price and a healthy pipeline of customer activity which gives confidence for further growth in the second half,” he added.
“Whilst the macroeconomic outlook is uncertain and inflationary pressures remain high, I take over as chief executive at a time when our business is performing well, is resilient and positioned to manage changes in market conditions. We remain confident of delivering results in line with the Board's expectation for the full year."
