Speedy Hire pushes interim pre-tax profit 20% higher to £16m

Speedy Hire has unveiled an interim pre-tax profit of £16m, almost 20% higher than in the comparable period last year.

Financial figures released this morning (six months to 30 September) show turnover up by almost a third at £150m.

Steve Corcoran, chief executive, said: “We are pleased to report another successful six months.

“Underlying operating margins remain stable, despite the impact of challenging cost conditions and the dilutive effect of the launch of our new pumps business and our expansion into Ireland – these businesses, while performing to plan, are loss-making in the short-term.”

Speedy’s drive to offer a modern fleet has resulted in a capital spend of £48m, of which £26m went on replacements while a further £18m was invested in new equipment that broadens the range on offer.

In May, Speedy spent £59m on the acquisition of LCH Generators, a leading UK hirer of temporary power supplies.

Not surprisingly, the end of the financial period saw Speedy’s gearing (i.e. the ratio of debt to equity) jump to 110%, much higher than the 65% figure at the same time last year.

“We are comfortable with net debt of £172m (previous figure: £84m), which is underpinned by strong cash flow. The strength of our balance sheet and cash flow continue to provide us with headroom for further growth.”

Divisional analysis shows that in Tools Hire a turnover of £81m generated an operating margin of 14.4%.

The Equipment division, consisting of Speedy Hire’s Power, Lifting, Space, Survey and newly formed Pumps business, hit a turnover of £76m, an increase of 50%.

Operating margins ran out at 18.5% and the overall utilisation for the division was 68%.