Speedy Hire FY profits decline as margins narrow

(Sharecast News) - Tool hire provider Speedy Hire reported a drop in full-year profitability on Wednesday, with adjusted underlying earnings falling to �85.4m from �97.1m and the group swinging to an adjusted pretax loss of �9.8m, compared with an �8.7m profit a year earlier.

Speedy Hire said margins were hit by lower volumes, wage inflation and higher interest costs following accelerated fleet investment and its partnership with ProService transaction. Adjusted losses per share came to 1.71p, while operating profits also turned negative.

Revenues were broadly stable at �416.1m, with growth in national accounts and services offsetting softer general hire activity. Excluding fuel, revenue rose 3.6%, supported by Customer Solutions and testing, inspection and certification services, with fuel sales declining as Speedy shifted to a thirdparty fulfilment model, while disposals revenue increased to �10.9m following the planned sale of specialist compressors.

Net debt rose to �159m, reflecting strategic investment, though underlying operating cash flow remained strong, with cash conversion above 100% and free cash flow improving to �3m. Leverage temporarily increased to 3.3x, with Speedy expecting "meaningful" deleveraging over the next 12 to 24 months.

Looking ahead, Speedy said the new financial year had started positively, with revenue up around 2% to the end of May and adjusted underlying earnings roughly 13% ahead of last year. Customerled delays were now said to be easing, and the group stated its transformational commercial agreement with ProService was progressing well, supporting expectations for �50 to �55m of annualised revenue and significant earnings accretion in FY27.

Speedy added that it continues to win market share, secure longterm national contracts and benefit from a reshaped operating model,

As of 0815 BST, Speedy shares were up 1.51% at 20.20p.

Reporting by Iain Gilbert at Sharecast.com

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