Speedy Hire profits tumble more than 90% amid stock issues

Speedy Hire scraped a modest profit last year after recording a considerable impairment charge from missing inventory. 

In annual results delayed for the second year running, the rental equipment firm reported a £1.8million pre-tax profit for the 12 months ending March, a 93.8 per cent decline from the £29.1million it made the previous year.

Four months ago, the Merseyside-based group revealed a £20.4million shortfall in ‘non-itemised assets’ – items that cannot be detected by a unique serial number – after conducting a stock check.

It claimed the problem was ‘not the result of underlying systemic fraud’ but due to ‘controls and accounting procedures’ over multiple years.

Following the discovery, Speedy Hire said it had taken ‘corrective action’ and implemented new controls, such as more regular stock counts.

Inventory issues overshadowed a robust performance by the firm, which saw sales increase by 13.9 per cent to £440.6million thanks to a record result by its customer solutions division.

The company also gained multiple contract wins and renewals with the likes of gas distribution network operator Cadent Gas, engineering services provider Renew Group and aerospace giant Babcock.

Speedy Hire also achieved strong growth in its fuel and energy management business, and modestly boosted its hire revenue from price hikes done in response to rising cost inflation.

Dan Evans, chief executive of Speedy Hire, said: ‘I am pleased to report results that reflect the strong performance we have achieved this year.’

The firm expects the healthy pipeline of projects, including infrastructure, nuclear build and decommissioning, and high-speed rail link HS2 makes it confident of hitting annual expectations despite current macroeconomic challenges.

Consequently, Speedy Hire bosses have recommended a significant hike in the group’s final dividend from 1.45p to 1.80p per share, giving investors a full-year dividend boost of 2.60p per share.

Founded in 1977, Speedy Hire leases equipment and tools, ranging from generators to air conditioning units, cranes, excavators and leaf blowers, to a wide range of industries.

It has worked on prominent UK infrastructure projects, such as Crossrail, Hinkley Point C, and the Thames Tideway tunnel, and has a partnership to operate booths at numerous B&Q stores.

To capitalise on further growth, the group has launched a new strategy, Velocity, which Evans said ‘provides clear direction for the business, and we expect it to deliver long-term benefits to our customers, our people and our investors’.

Speedy Hire shares were just 0.2 per cent higher at 30.5p on Thursday morning, while their value has slumped by approximately 24 per cent since the start of January.