3rd Feb 2025 09:25
(Alliance News) - Speedy Hire PLC warned on Monday that annual profit for financial 2025 will be lower than expected, citing a slow start to its final quarter and delays in infrastructure projects.
Shares in the Merseyside, England-based tool and equipment hire company fell 29% to 19.52 pence each following the trading update.
Speedy Hire said the "widely reported economic downturn" has led to a slower recovery in demand following the usual December shutdown, particularly across its customer base. It also flagged delays in Network Rail's CP7 rail works as another factor impacting trading.
Despite these headwinds, hire revenue in December was still 5% ahead of the prior year. However, the company noted that new trading relationships in its Trade & Retail division are taking longer to generate the expected levels of hire revenue, which it now anticipates reaching in early financial 2026.
Speedy Hire has been hit by a slowdown in demand in early 2025, with the firm acknowledging that its "positive momentum" towards the end of 2024 was "negatively impacted by the widely reported economic downturn."
The company also cited challenges in its Kazakhstan joint venture, where the early shutdown of major contracts has hurt performance. Speedy Hire expects this to continue affecting results into financial 2026, though it sees "significant growth opportunities" in the region.
Net debt at January 31 increased to GBP123 million, compared to GBP113 million a year earlier, due to higher investment in new contract wins. Speedy Hire warned that elevated debt levels will result in a higher-than-expected interest charge for the year.
Looking ahead, Speedy Hire said it remains optimistic about long-term growth, pointing to a "promising" pipeline of opportunities and potential benefits from increased government spending on infrastructure projects.
However, it acknowledged that the challenging start to its final quarter and macroeconomic uncertainty means the board expects "lower than anticipated profitability" for the full year.
By Eva Castanedo, Alliance News reporter
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