Speedy profits hit by inventory issues

Financial results filed by Speedy Hire for the year to 31^st March 2023 show pre-tax profit of just £1.8m, down from £29.1m the previous year, on turnover up 14% to £440.6m (2022: £386.8m).

The results were impaired by a £20.4m asset write-off, £6.7m restructuring costs and £1.4m of other costs associated with the recent inventory audit.

As previously reported, Speedy disclosed in February that a stock-take had uncovered the £20.4m shortfall in its inventory of non-itemised hire assets – products like scaffold towers, fencing and non-mechanical plant that does not have a unique serial number and is not tracked on an individual asset basis. The subsequent investigation found that it was due to poor systems rather than any kind of fraud or theft.

For new chief executive Dan Evans, who succeeded Russell Down in October last year, it provides a clean platform for his first full year results next year.

He has also announced his new strategy, called Velocity – a five-year transformation and growth strategy plan focused on revenue growth and margin improvement

Excluding the exceptional items, adjusted profit before tax was up 6.6%, with Speedy Services achieving a 9.2% profit margin on sales up 27% to £176.3m, and the hire business making a 7.6% margin on sales up 6% at £258.0m.

“I am pleased to report results that reflect the strong performance we have achieved this year,” Dan Evans said. “Our new strategy, Velocity, is exciting, provides clear direction and we expect it to deliver long term benefits to our customers, our people and our investors. Our strategic goal is to accelerate sustainable growth, leveraging our leading position in our addressable markets, through innovation, an action focused and ambitious ESG strategy, and developing a first class omni-channel customer experience.

“We have made an encouraging start to FY 2024 with a strong pipeline of new customer and project based opportunities. Whilst we acknowledge the continuing challenges of the macro-economic climate, we are excited by the opportunities for success we have in front of us, the key role we play in our customers success and the continued development of our amazing team of people.”

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