Speedy Hire profit tumbles as inflation bites
Tool and machinery specialist Speedy Hire has reported a significant dip in profit amid cost inflation and a “challenging” macro-economic environment.
The Newton-le-Willows-headquartered company said adjusted pre-tax profit had fallen by 52 per cent to £14.7m.
Revenue dipped 4.3 per cent to £421.5m, alongside a 6.8 per cent decrease in adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) to £96.8m.
Chief executive Dan Evans said Speedy Hire, a leading supplier of tools and equipment in the UK and Ireland, had delivered a “resilient financial performance, making strategic progress over the year despite the challenging macro-economic environment.”
“We continue to improve our customer proposition, investing in technology and AI capabilities, sustainable products and our people, to position the Group strongly for profitable growth.”
Evans said that performance had been “in line” with board expectations in the new financial year and marginally ahead of last year. “I am pleased that since the year end, we have also secured further contract wins and renewals with key customers,” he added.
It comes after a challenging 12 months for the group, which has struggled along with the wider UK construction sector with inflation, softer demand and warmer weather in the winter months.
Shares are down over 15 per cent in the year to date after Speedy Hire issued a profit warning in January that cut half-year forecasts from £13.2m to £5.6m.
Stakeholders have pounced on the share price slump, with Edinburgh-based Aberforth partners bumping up its holding in the company from 5.95 per cent to 10.31 per cent in February. Speedy Hire has proposed a full-year dividend fof 2.6p per share, level on last year.
The firm added that it expects a second-half weighting to its revenue and profit as it begins work on a series of contracts won over the last 12 months.
Construction firms, meanwhile, have had some reason to be positive in recent months. The S&P’s purchasing managers’ index (PMI) for the sector hit a 14 month high last month, driven by growth in civil engineering and commercial construction.