Speedy adjusts to pandemic after strong year

UK-based Speedy Hire has reported a rise in both revenues and profits for the full year ending 31 March, though the Covid-19 pandemic had a negative effect towards the end of the year and has led the company to minimise variable costs and freeze all but essential capex. In April and May, capex was approximately £0.5 million.

Revenues for the full year increased by 3.4% to £402.5 million, while adjusted operating profit rose by 6.5% to £39 million.

This was said to reflect prior year acquisitions and the company’s strategy to grow higher-margin SME (small and medium-sized enterprise) customer revenues. SME customer revenues were up 32% compared to the year before.

UK and Ireland Services revenues were up 8.9% and now account for more than 40% of total group revenues. This growth was partly due to the prior year acquisition of Geason Training.

As previously reported, Geason Training performed below expectations. The company said management changes have been implemented to improve performance.

Capex for the full year was £63.2 million, compared to £61.8 million in 2019.

It has also been highlighted by Speedy that artificial intelligence (AI) has been supporting growth through fleet optimisation and the identification of revenue opportunities.

However, these positive developments were partially offset by the impact of reduced activity levels due to Covid-19 towards the end of the financial year.

As a result of the pandemic, the company closed a number of its smaller depots and furloughed 50% of its staff. It also froze capital expenditure, except for instances when it was necessary to meet customer requirements. As a result, in April and May, capex was approximately £0.5 million.

Speedy has begun to see revenues recovering as customers return to work in England, Wales and Ireland following the easing of Covid-19 restrictions. In response to this, the company is gradually reopening depots that had been closed and taking staff off of furlough, though one third of staff remain on furlough.

In April, group revenues were about 35% below the prior year. At this time, Speedy was trading through its larger depots, serving customers who were providing essential services.

In June, rental revenues in the UK and Ireland were approximately 17% below the prior year.

Russell Down, Chief Executive of Speedy Hire, said, “I am pleased to report continued positive momentum across the group. We have a well invested fleet, diversified customer base and robust balance sheet.

“Our priority remains the welfare of our colleagues, customers and the communities we serve. We continue to monitor government guidance and take action to ensure the safety of our colleagues as we continue to operate to satisfy customer demand.

“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.”

He added that the company would learn from the experiences of the past few months in order to simplify and standardise its operating model.