Speedy reports 36% Q1 increase in revenue

Speedy Hire will report a 36% rise in first quarter (April - June 2008) revenue at its Annual General Meeting to be held this morning (Tuesday).

Following the purchase of Hewden Tools in August, tool hire revenue in the first quarter has risen by almost a half. Underlying equipment hire revenue climbed by over 10% and was boosted to 30% by contributions from the purchase of Amec LSS and Carillion Asset Management.

Spending by Speedy’s biggest 50 customers has risen by over a half in the first quarter with much of the business underpinned by infrastructure-related spending in the public and regulated industry sectors. 

Chairman David Wallis said: “Other factors contributing to this growth include a continued move towards outsourcing and greater focus by major customers on supply chain efficiency and quality.”

The company measures utilisation by Asset Turn (annualised hire revenue divided by average net book value of hire equipment) and said the figure has improved for both divisions. In the equipment hire division Asset Turn is estimated to have jumped to 1.17x from 0.97x in Q1 last year while tool hire edged a little higher to 1.35x from1.32x.

Wallis said only 5% of Speedy’s revenue is directly dependent on housebuilding but commercial office development and non-food retailing is likely to remain weak ‘for the foreseeable future.’ However, public sector spending and regulated industries remain strong while large private sector infrastructure projects (like the £250m Hutchinson Ports development at Felixstowe) and food retailing remain positive.

In addition, petrochemical, pharmaceutical, steel, nuclear and rail sectors, which represents approximately 30% of Speedy’s turnover, also continues to provide growth opportunities and the board is confidence in another year of further growth.