10th Nov 2015 08:40
LONDON (Alliance News) - Tool and equipment rental company Speedy Hire PLC on Tuesday saw its shares rise as it affirmed its expectations for the full year in the wake of a couple of profit warnings which had hit its shares hard earlier this year.
Speedy said it swung to a pretax loss of GBP13.5 million in the half to the end of September, from a GBP9.5 million profit made a year earlier.
This was driven mainly by the group booking exceptional costs of GBP14.2 million related to the restructuring of its network as it seeks to improve its operating performance.
The profit also fell due to revenue dropping to GBP167.1 million in the half from GBP190.8 million a year earlier as it continued to struggle with legacy issues across the business which are taking longer to sort out than previously anticipated and by weaker-than-expected demand in the UK and Ireland.
Speedy said the actions taken to address its legacy performance are starting to deliver results, with administrative costs now brought down and the redistribution of assets in its depot network improving asset availability. It expects the full benefits of the remedial actions to be felt over the medium-term.
"Following a disappointing and challenging start to the year, reflected in the results we are announcing today, we are beginning to see the benefits of the remedial actions put in place to address the various legacy issues," said Chief Executive Russell Down.
"These are early days in the group's recovery and the full benefits will only be realised over the medium term. However, remedial actions implemented to date have started to stabilise our revenue base and we are expecting to see an improvement in the second half," he added.
Speedy shares were up 10% to 32.0 pence on Tuesday morning, one of the best performers in the FTSE All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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