Speedy Hire's net debt increased by 13% during the three months to 30 June 2010.
In the first quarterly management statement of its current financial year, chairman David Wallis said market conditions “remain challenging”.
Speedy Hire's net debt, which had been reduced from £248.4m a year ago to £119.3m by last May, rose again to £134.9m.
Group revenues, excluding fleet equipment sales, in the three months were 0.7% below the same period last year, though down by 13.7% on the quarter ending 31 March 2010.
Wallis said: “Whilst we are still early into our new financial year, given performance to date the Board confirms that the Group is trading broadly in line with its expectations for the year in respect of adjusted profit before tax.
“The outcome of the UK Government's Autumn Spending Review and the timing of any recovery within private sector construction will, however, be critical determinants of the future outlook for the business. In view of the uncertainty around these areas, we continue to take a cautious view about recovery prospects in the UK for the remainder of this year and next and continue to position the business accordingly, concentrating on the '3 C's' of cash, costs and capex.
“However, with an improving trading performance, a clear market leading position in the UK and proven opportunities in BAS and International, we remain confident that the business is well placed to benefit from the upturn in activity when market recovery takes hold.”