Plant and tool hire group Speedy has posted an £11.4m pre-tax loss for the half-year after spending £14.2m to turn the business around.
For the six months to 30th September 2015, Speedy revenue for the period was down 13% to £165.0m (2014 H1: £189.3m). UK and Ireland revenue dropped 12.0% to £155.2m (2014: £176.3m).
Profit before tax, amortisation and exceptional costs for the period was £2.0m (2014: £10.3m).
Exceptional costs totalled £14.2m before tax (2014: £3.7m). Of this, £2.2m was spent on reconfiguring the depot network and £3.3m on changing the management structure totalled £3.3m. The balance of £8.7m was incurred in providing for losses on disposal of fleet and writing off debts in the international division.
UK and Ireland headcount has been cut so far this year by 298 to 3,167.
These cost reductions are expected to deliver full year savings of approximately £13m a year, with half of this saving coming from the job cuts.
Speedy’s results come as little surprise, however. On 1st July, following a board review, chief executive Mark Rogerson was let go after just 18 months in post and replaced by finance director Russell Down. At the same time Jan Åstrand was appointed executive chairman.
The new chief executive says that he is starting to get things sorted now, however. Mr Down said: “Following a disappointing and challenging start to the year, reflected in the results we are announcing today, we are beginning to see the benefits of the remedial actions put in place to address the various legacy issues.
“These are early days in the group’s recovery and the full benefits will only be realised over the medium term. However, remedial actions implemented to date have started to stabilise our revenue base and we are expecting to see an improvement in the second half.
“Whilst our markets remain competitive, Speedy remains a fundamentally good business which in a more lean, efficient and customer-focussed form, has the potential to once again deliver sustainable profitable growth.”
As at 30 September 2015, net debt was £102.6m, which is well within its £180m facility.
Mr Down said his strategy was to better anticipate customer requirements so that the right products are in the right place.
He said: “We are investing time in talking to our customers, and asking them what they need and want from Speedy. Based on their feedback we are working on a number of initiatives that will introduce new value added products and services that will increasingly differentiate Speedy from its peer group.
He admitted: “We have not invested sufficiently in developing and building long term customer relationships across our customer base. We need to increase the levels of repeat business by anticipating our customers’ needs through getting to know them better.
“As part of this focus on all customers, from our national strategic clients to our 50,000 strong SME base, we will be upgrading our customer relationship management systems which will assist with availability of equipment based on real-time intelligence as we build relationships from the ground up.”
