Speedy aims to increase Velocity
22 June 2023
Speedy’s results announced this morning for the financial year ending 31 March 2023 show that while profits before tax were severely impacted by the £20.4 million asset write-off earlier in the year, revenue grew by 13.9 per cent.
The business has also announced a new five-year growth strategy called Velocity.
Full-year revenue grew to £440.6 million (2022: £386.8 million) with pre-tax profit of £1.8 million (£29.1 million). Adjusted profit before tax was £32.1 million (£30.1 million) an increase of 6.6 per cent.
As previously reported, Speedy announced in February it had identified a shortfall in the quantity of non-itemised assets of approximately £20.4 million, recognised as an exceptional cost in the year. An investigation concluded that the issue had resulted from problems with the company's controls and accounting procedures for non-itemised assets over a number of years, and in particular the reconciliation of such counts to the group's fixed asset register. The investigation concluded it was not the result of underlying systemic fraud and corrective actions and new controls have been implemented.
Speedy invested approximately £52.1 million in its hire fleet, with 51 per cent of this in sustainable products. Overall itemised asset utilisation was 54.4 per cent (2022: 57.0 per cent).
The group also reported a record year for its Customer Services activity, formerly branded Partnered Services. Sales revenue for the period was £176.3 million (£138.4 million), up 27.4 per cent.
The company reports a number of new national customer wins and renewals, as well as further penetration into the trade and SME market. Its partnership with B&Q has been extended to launch tool hire on both the diy.com and trade-point.co.uk platforms in 2023, providing home delivery tool hire digitally in-store from over 300 B&Q stores nationwide.
Speedy says it currently serves approximately 68,000 customers in the UK and Ireland, including a significant number of the UK's 100 largest contractors. During the year it has won and extended major contracts with national groups including Cadent Gas, Renew Group and Babcock.
An operational review included further progress in the evolution of the depot network towards larger, more energy efficient low-carbon facilities. This has resulted in a net 20 depot reduction, with cost savings estimated to be around.£6.7 million. The company’s headcount decreased to 3,375, compared to 3,554 at 31 March 2022.
Chief Executive Officer Dan Evans said: “Whilst the macro-economic environment is challenging, our end markets remain positive, with a strong pipeline of major infrastructure, construction and energy projects including HS2, nuclear new build and decommissioning and the rail network. Our largest customers continue to demand sustainable solutions to complex problems and, as a result, our newly branded Customer Solutions business, combining rehire and our services categories, has experienced record growth during the year, increasing revenues by 27.4 per cent.
“We also saw strong growth in our fuel and energy management business, where we proactively promote low-emission HVO fuel which now accounts for 29.9 per cent (FY2022: 12.3 per cent)of our fuel sales.
“During H2 FY2023, we launched a new strategy into the business that we call Velocity, which is designed to accelerate sustainable profitable growth,” he added. “Velocity provides a clear focus on measurable medium and long-term growth and performance objectives, building on the Simplify, Standardise, Grow programme launched in 2020. The Velocity growth strategy is underpinned by a five-year transformation programme with two defined stages: enable growth through creating foundational improvements across technology and operational efficiency; and deliver growth by becoming the most efficient and sustainable UK hire business.”
● Speedy has appointed Paul Rayner as Chief Financial Officer and executive director with effect from 1 July. He joined in the role of interim CFO with effect from 1 November 2022 and his previous experience includes interim and permanent roles respectively on the main board of FTSE listed companies Avon Protection and Chemring Group.
