Speedy Hire predicts 29% fall in turnover, cuts 270 jobs

Speedy Hire has warned that its first half turnover will be down by approximately 29% on the same period a year ago, and has made 270 job cuts.

The plant and tool hirer generated revenue of £256.2m for the six months to 30 September 2008 (up 22% on the 2007 figure), meaning that this year’s figure is likely to be in the region of £182m.

In a statement to the stock exchange, Speedy Hire said it had made a further £30m of cost savings in the current financial year since the July 2009 AGM.

This has resulted in headcount falling by 270 (6%) during the course of the financial year and 19 (5%) depots have been merged with other local sites. Additionally, savings have been made  in central functions such as IT, marketing, transport and supply chain.

Exceptional costs associated with these actions are expected to total approximately £8m during the course of the current financial year.

Speedy Hire said it has continued its strategy of winning more business from major contractors, winning new awards with Bovis Lend Lease at Stratford City project and Mace at the Shard of Glass.

Turnover from the top 50 UK contractors now accounts for approximately 26% of Group turnover (21.5% a year ago).

Speedy Hire said it would be “inappropriate to reduce the Group's operational footprint any further as this would begin to impair customer service, the provision of which has been the bedrock of establishing Speedy as the UK market leader. As a consequence, any further deterioration in the Group's revenue forecasts is unlikely to be offset significantly by additional cost reductions.”

It continued: “While the trading environment within the construction sector remains challenging and confidence is fragile, the stability which we had suggested was becoming more evident in the early part of this financial year has carried through into September, albeit off a very low base.

“However, with the continued weakness of the private sector and cancellation of projects planned, e.g. Kingsnorth Power Station, there is little evidence that the seasonal pick-up in turnover typically associated with the late September/October period will follow traditional patterns.”

Speedy Hire will announce its interim results on 25 November 2009.