Speedy improves after taking its medicine

Plant and tool hire group Speedy saw its reported pre-tax profits collapse last year due to a series of exceptional restructuring costs but the strategy appears to be working.

Speedy chief executive Mark Rogerson

Speedy’s earnings before interest, taxation, amortisation and exceptional items were £26.4m in the year to 31st March 2015, up 19.5% from £22.1m the previous year. Total revenue was up 7.2% to £375.0m (2014: £349.7m).

Profit before tax was down from £7.0m to £2.1m as a result of a £5.6m loss in the international division.

Speedy was victim to an accounting fraud in its Middle East operations 18 months ago and new management brought in subsequently has spent the time putting the business right again.

Excluding the results from the international business, EBITA (before exceptional costs) increased by 21.2% to £32.0m (2014: £26.4m). Profit before taxation, exceptional items and amortisation increased by 50% to £21.9m (2014: £14.6m). Profit after taxation was £0.2m (2014: £4.0m).

Chairman Jan Åstrand said: “We are, once again, in a position to deliver sustainable profit growth and our confidence for the future is underpinned by an increase in the recommended final dividend.”

Chief executive Mark Rogerson said: “Following my appointment in January 2014, I set out a three-point turnaround plan: to fix the business, improve operational performance, and transform the company over the medium term with the aim of delivering sustainable profit growth.

“Fixing the business meant principally addressing five key issues: stabilising the Middle East; returning the Group to growth; expediting the delivery of our Network Optimisation Programme; delivering a new IT and MI system; and developing a new cultural environment where safety, governance and compliance, service, and employee conduct and ethics are our priority:

“We are pleased to have fully exited the general hire market in the Middle East and to have not only achieved a break even position in the Oil and Gas Services Business, but to have also built enterprise value.

“In the UK and Ireland we recorded increases in revenue and EBITA before exceptional costs of 7.1% and 14.4% respectively. We secured a significant number of new contracts during the period and revenues from the group’s strategic and major accounts (generating some 51% of total revenues) rose by 18%.

“We have delivered the planned improvements to our UK network ahead of the scheduled timeline, successfully implemented a new IT system, and have made significant progress in establishing a new culture across the business.

“These achievements are a great credit not only to the wider management team but to all our people throughout the business who have frequently had to operate under stretching and challenging conditions.

“We have now commenced the journey to improve our business further targeting three specific areas in the short term: growing our core hire revenue; optimising our assets; and creating cost efficiencies.”