In the last quarter of 2010, Speedy revenues increase 8.8% on the same period of 2009, reversing a decline in both of the previous two quarters.
Fleet equipment sales revenue totalled £1.3m in the quarter ended 31 December 2010, up 23.1% on Q4 2009.
January trading was also encouraging, the company said, with group revenues (excluding fleet equipment sales) up 2.1% compared to January 2010.
As is typical for winter months, Speedy’s UK Hire business saw the volume of equipment on hire fall 6.2% in Q4 2010 compared to Q3, yet yields increased 3.9%, thanks to a rise in average hire rates.
Speedy’s financial year runs to the end of March. In its first half of 2010/11 it made an operating loss of £4.6m. As long as markets do not take a turn for the worse, it expects to return to profit for the second half.
Speedy said it was seeing an improvement from an earlier restructuring and by increasing focus on growth markets such as water, waste, energy and transport. In particular, the Tools, Lifting & Survey products operations had a strong quarter, with revenues (excluding fleet equipment sales) in the three months to 31 December 2010 up 9.0% on the prior year period. Performance in the UK Power and Space operations, however, continues to lag other product areas.
Net debt at 31 January 2011 was better than forecast, at approximately £126m (31 January 2010 approximately £141m). Prudent cash management and a reduction in forecast net capex for the full year, to around £35m, should ensure that net debt at the year-end will be broadly in line with the prior year (31 March 2010 £119.3m).
Speedy needs to spend £120m to replace equipment reaching the end of its useful economic life over the next three years, which is equivalent to approximately 51% of the current net book value of the hire fleet. The board is confident that it has the financial resources to meet these capital expenditure requirements.
The company’s interim management statement concluded: “The board continues to take a cautious view about short term recovery prospects in the UK and therefore will maintain its concentration on cash, margins and capex, all of which have demonstrated further progress during the period. However, with its strong balance sheet, improving trading performance, market leading position and ever closer alignment to growth markets, the board considers that Speedy is well placed to benefit from the market recovery when it comes.
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