REG - Speedy Hire PLC - Financial and trading update

Speedy HireAnnouncement

08/02/2023 07:00

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RNS Number : 2334P  Speedy Hire PLC  08 February 2023

Speedy Hire Plc

("Speedy", "the Company" or "the Group")

 

 8 February 2023

 

Financial and trading update

 

Speedy, the UK's leading tools and equipment hire services company, operating
across the construction, infrastructure and industrial markets, today provides
a financial and trading update.

 

Net book value of hire equipment

 

Following recommendations made at the end of the audit for the year ended 31
March 2022 and as part of the subsequent work being undertaken by management
to review controls around hire equipment, the Group has recently carried out a
comprehensive count of all hire equipment in preparation for the upcoming 2023
audit.

 

As at 31 March 2022, the reported net book value of the Group's hire equipment
assets was £226.9m.  The Company categorises hire equipment into two groups:
those that are individually identifiable by a unique serial number to the
asset register ("itemised assets", representing 78%, or £177.0m, of the total
reported net book value), and other equipment such as scaffolding towers,
fencing and non-mechanical plant which does not have a unique serial
identifier and is not tracked on an individual asset basis ("non-itemised
assets", representing 22%, or £49.9m, of the total reported net book value).
The recently completed comprehensive count has covered both itemised and
non-itemised assets. Whilst this count validated the previously disclosed net
book value of itemised assets, it identified a deficiency in the value of
non-itemised assets of c.£20.4m.

 

Actions taken

The Board has instigated an external investigation into the issue identified
with non-itemised assets, including a review of controls and accounting
procedures. In addition, management has strengthened the control environment
for managing its non-itemised asset fleet, including weekly perpetual asset
counts with additional internal audit focus, enhanced control over purchases
and disposals, and monthly reconciliations against the fixed asset register.
These actions will be further considered in conjunction with the findings of
the external investigation, including any further changes to controls and
processes as appropriate.

Group performing well - No change to the Board's underlying expectations for
2023

 

The Board is reviewing the appropriate accounting treatment of the deficiency.
Whilst this is expected to result in a one-off non-cash write down of the
balance sheet value of non-itemised assets in the year ending 31 March 2023,
it is not expected to impact the Group's cash position or underlying profit*
performance.

 

In the second half the new management team's operational review has included
further progress in the evolution of the depot network towards larger, more
energy efficient low-carbon facilities, located and designed to create a
better experience for all customers and an enhanced working environment for
our colleagues. This has resulted in a net 20 depot reduction at the end of
January 2023.  The cost of these closures will be c.£2.9m and will be taken
as an exceptional cost in the financial year.  The associated benefits are
expected to be in the region of £2.9m per annum.

 

The Group continues to perform well in the second half, with its revenue
(excluding disposals) for the four months to 31 January 2023 up c.16% against
the corresponding period in the prior year and apart from any effects of the
asset loss described above, the Board continues to be confident in delivering
underlying profit* in line with its expectations for the full year.

 

Enquiries:

 

Speedy Hire
Plc
Tel: 01942 720 000

Dan Evans, Chief Executive

Paul Rayner, Interim Chief Financial Officer

 

MHP
Communications
Tel: 0203 128 8540

Oliver Hughes

Charlie Barker

 

 

Notes:

 

* Profit before tax, amortisation and exceptional items

 

Inside Information: This announcement contains inside information.

 

Forward looking statements: The information in this release is based on
management information. This report includes statements that are forward
looking in nature. Forward looking statements involve known and unknown risks,
assumptions, uncertainties and other factors which may cause the actual
results, performance or achievements of the Group to be materially different
from any future results, performance or achievements expressed or implied by
such forward looking statements. Except as required by the Listing Rules and
applicable law, the Company undertakes no obligation to update, revise or
change any forward looking statements to reflect events or developments
occurring after the date of this report.

 

Notes to Editors: Founded in 1977, Speedy is the UK's leading provider of
tools and equipment hire services to a wide range of customers in the
construction, infrastructure and industrial markets, as well as to local trade
and industry.  The Group provides complementary support services through the
provision of training, asset management and compliance services. Speedy is
certified nationally to ISO50001, ISO9001, ISO14001, ISO17020, ISO27001 and
ISO45001. The Group operates from c.200 fixed sites and selected B&Q
stores across the UK and Ireland together with a number of on-site facilities
at client locations and through a joint venture in Kazakhstan.

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