13th May 2014 07:43
LONDON (Alliance News) - Speedy Hire PLC Tuesday reported a drop in profit for its recent full year, as the company tries to rebound from accounting irregularities it discovered in its international unit last autumn.
The company, which provides equipment such as saws to construction firms, posted pretax profit of GBP7.0 million for the year ended March 31, down from GBP11.3 million a year earlier, even though revenue rose 2.9% to GBP349.7 million from GBP340.0 million.
Speedy Hire said financial year 2014 was a "disappointing year" and blamed its results on the issues it faced in the Middle East and the International business.
In November, the company announced that, following management changes within its International Division, information had emerged indicating the mis-statement of a number of accounting balances within the arm over recent accounting periods.
The discovery of accounting irregularities at the international unit led to the resignation of Speedy Hire's previous chief executive, Steve Corcoran, and the finance chief of the international unit.
Speedy Hire said Deloitte's investigation into the accounting irregularities is now complete and it is now in a significantly better position to move its International business forward.
During the period, its international division entered into 50-50 joint venture with J&J Denholm Group to provide asset management and equipment rental services to the oil and gas sector in Kazakhstan, including the "super giant" fields at Tengiz, Karachaganak and Kashagan, three of the largest oilfields in the world.
As part of the transaction, Speedy acquired a 50% interest in Denholm's existing equipment rental operation for a total of USD4.4 million in cash.
Speedy Hire said its UK & Ireland business performed well during the year, with revenue growth of 4.9% on 2013. The firm said the arm won a number of contacts with Babcock International Group PLC, National Grid PLC and Northern Gas Networks Ltd.
Looking ahead the company said its UK & Ireland business continues to make progress. However, the international division will continue to have an impact on its results into 2015.
"Without doubt, this has been a disappointing year of results for Speedy," Chairman Ishbel Macpherson said in a statement. "The issues the group has faced in the Middle East have resulted in a financial impact, distraction in terms of management focus and general levels of disruption."
Macpherson said these issues have now been addressed and "we remain confident that the group has strong potential and the outlook is good".
Despite its woes, the company increased its final dividend to 0.35 pence from 0.31 pence making a
total dividend of 0.61 pence per share, up from 0.53 pence per share.
Speedy Hire shares were quoted at 57.00 Tuesday morning, up 1.8%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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