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Profits warning from Speedy

18 Mar 14 Plant and tool hire group Speedy has warned shareholders that its UK rental revenues are not meeting expectations.

In a trading update this morning, Speedy said that while total UK revenues are marginally higher than in the same period last year, reflecting growth in services revenue, the higher margin hire revenues for February and March are below forecast.

It also said that asset sales are running at a slower pace than anticipated and below historical trends.

And trading losses in the Middle East business are likely to be greater than previously thought with the performance of the International division hit by adverse foreign exchange movements relating to its Kazakhstan joint venture with J&J Denholm.

As a consequence, the Speedy board now expects adjusted profit before tax, amortisation and exceptional cost to be in the region of £14.5m for the year ending 31 March 2014.

Speedy is still working to stabilise operations after discovering last year that the managers of its Middle East operations had been fiddling the books.

[See previous reports here and here.]

 In today’s statement, the board said that the focus for the group was now on completing the stabilisation of the International division, and in the UK, focussing the sales effort to take advantage of the improving economic conditions, and delivering the previously announced network and asset optimisation projects.

Speedy’s preliminary results for the year to 31 March 2014 will be announced on 13 May 2014.

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