Speedy Hire profits tumble more than 90% amid stock issues

Speedy Hire posted a modest profit last year after posting a significant write-down on missing inventory.

In full-year results delayed for the second consecutive year, the rental company reported a pre-tax profit of £1.8m for the 12 months ended March, down 93.8 per cent from £29.1m last year .

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

It claimed the problem was “not the result of underlying systemic fraud,” but was due to “controls and accounting procedures” over several years.

Following the discovery, Speedy Hire said it had taken “corrective actions” and implemented new controls, such as more regular inventory counts.

Stock issues overshadowed a robust performance from the company, which saw sales rise 13.9 per cent to £440.6 million thanks to a record result from its Customer Solutions division.

The company also secured multiple contracts and renewals with gas distribution network operator Cadent Gas, tech services provider Renew Group and aerospace giant Babcock, among others.

Speedy Hire also achieved strong growth in its fuel and energy management activities and slightly increased its rental income due to price increases 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 company expects its healthy pipeline of projects, including infrastructure, nuclear construction and decommissioning, and high-speed rail link HS2, to provide confidence to meet annual expectations despite current macroeconomic challenges.

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

Founded in 1977, Speedy Hire rents 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 stands in numerous B&Q stores.

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

Speedy Hire Stocks were only 0.2 percent higher on Thursday morning at 30.5 pence, while their value is down about 24 percent since early January.