Speedy Hire Plc

("Speedy" or "the Group")

1 March 2021

Trading Update

Speedy, the UK's leading provider of tools and equipment hire, and services to the construction, infrastructure and industrial markets provides an update on its International operations and the Group's trading performance for the year ending 31 March 2021.

International

The Group's Middle East operations provide equipment and manpower services to the oil and gas market in Abu Dhabi; the principal customer is ADNOC Logistics and Services LLC (ADNOC).  The Group has undertaken work for ADNOC since 2012, initially on a five year term but subject to regular renewals subsequently. The contracts with ADNOC expired on 28 February 2021.

The Group has today sold its equipment fleet, stock and other fixed assets relating to its Middle East business to ADNOC, for a consideration of USD18 million. The transaction, which comprised gross assets with a net book value of c.USD16 million concludes the Group's obligations under its contracts with ADNOC. In the year ended 31 March 2020, the Middle East operations generated operating profit of £5.4m; for the six months ended 30 September 2020 operating profit was £1.8m.  The consideration was paid in cash in full on completion; in addition outstanding trade receivables from ADNOC of c.$12 million are payable within 30 days. The net proceeds, after settlement of creditors, will be applied in reduction of Group borrowings. The transaction included the Group entering into a Transitional Services Agreement (TSA) with ADNOC for up to four months, to support the transfer of the assets, during which time it is anticipated that the Group's c.600 UAE-based employees' contracts will be terminated and all colleagues offered re-employment by ADNOC. On conclusion of the TSA the Group intends to wind up its operations in the Middle East.

The Group's International business continues to operate the Kazakhstan JV, which is performing in line with expectations.

Trading update

Trading since 30 September 2020 has been ahead of the Board's expectations. 

Revenue has improved as activity levels have continued to increase. In February 2021, core hire revenue in the UK and Ireland was c.2% higher than the prior year; utilisation for the period 1 October 2020 to date is 58.7% (2020: 56.2%).

Underlying overhead costs across the Group remain tightly controlled. The Group has not utilised government furlough or loan schemes in the second half of the financial year.

As a consequence of stronger than expected revenue recovery, profit before tax for the year ending 31 March 2021 is anticipated to be well ahead of current market expectations.

Commenting on the announcement, Russell Down, Chief Executive of Speedy, said:

"I am pleased to report another period of momentum and resilience for the Group as our colleagues have adapted and supported our customers in these challenging times. Our ongoing positive trading has benefitted from increasing activity levels and shows the strength of our strategy, people and operational delivery.

 "The successful exit from the Middle East operations is an important strategic step for Speedy and we wish the whole of the ADNOC team every success in the future. Looking ahead, we are well positioned to take advantage of the market opportunities in the UK and Ireland as activity levels continue to improve."

Enquiries:  

Inside Information: This announcement contains inside information.

Forward looking statements: The information in this release is based on management information. This report includes statements that are forward looking in nature. Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Except as required by the Listing Rules and applicable law, the Company undertakes no obligation to update, revise or change any forward looking statements to reflect events or developments occurring after the date of this report.

Notes to Editors: Founded in 1977, Speedy is the UK's leading provider of tools, equipment and plant hire services to a wide range of customers in the construction, infrastructure and industrial markets, as well as to local trade and industry.  The Group provides complementary support services through the provision of training, asset management and compliance services. Speedy is certified nationally to ISO50001, ISO9001, ISO14001, ISO17020, ISO27001 and OHSAS18001. The Group operates from over 200 fixed sites across the UK and Ireland together with a number of on-site facilities at client locations and through a joint venture in Kazakhstan.