Speedy sets sights on large contractors

Speedy Hire is targeting larger contractors as it plans its route through the recession.

After posting a £70.6m loss in the year to the end of March, Speedy's chief executive Steve Corcoran said: "At the moment, the government is the only client in town. The top 10, 20, 30 contractors are taking more and more work at the expense of the smaller trades."

He said Speedy had increased its business with the top 500 contractors and with seven of the biggest 10 - including signing a new five-year deal with Laing O'Rourke, which had previously cut in its spend with the hirer by 61%.

Speedy will now target firms that 'appreciate service rather than just price' and has added Management Services, whereby it puts staff into customers' sites to handle all hires, including cross-hiring equipment outside its own range.

Deals already signed see co-operation with Ainscough and Lavendon for cranes and powered access, and Corcoran said he considered Hewden a natural partner for earthmoving equipment but no arrangements had yet been made.

Indeed, a £45m goodwill write-down from the purchase of Hewden's tool business was a major factor in turning Speedy's £34m adjusted pre-tax profit into a loss, despite increasing revenue by 2.3% to £476m and slashing capital expenditure from £53m in the first half of the year, to £22m in the second.

Over the past seven months, Speedy closed 82 depots, sold or returned 470 vehicles to lessors, and lost almost 1,000 employees to save £42m per year. However, Corcoran said a revised prediction is that the market will fall by 11.2% rather than 17%, "which would suggest we have removed sufficient capacity".