Speedy Hire plc, the Newton-le-Willows-based tools and equipment hire firm, published an update on the group’s business and trading performance for its Annual General Meeting on Thursday.
The firm said it expects its interest costs to be higher than market expectations and as a result “adjusted profit before tax for the full year is expected to be towards the lower end of range” of current market consensus.
“The Group has delivered a resilient performance in the year to date, with revenue to the end of July up 4.6% on the prior year, notwithstanding continuing challenging market conditions, especially in regional and local markets,” said Speedy Hire.
“Our Velocity strategy and improved platform have enabled us to secure several new large multi-year contracts and we are continuing to gain market share.
“Whilst we have seen previously announced customer led delays on the mobilisation of large contract wins, these contracts have now mobilised and are growing, albeit the rate of growth in some instances is being impacted by market conditions.
“As we announced at our full year results in June, initial trading from our Commercial Agreement with ProService has been encouraging with integration and mobilisation continuing.
“The Commercial Agreement is closely aligned to our Velocity strategy, enhancing the utilisation of our existing asset base, widening our channel availability, and providing a platform for sustainable growth over the medium-term.
“Whilst the market overall remains subdued, we are pleased that our conversion is within the agreed range, demonstrating our operational capabilities and the service levels we expect to deliver.
“Adjusted EBITDA and operating profit margins are improving, reflecting high operational gearing, continued disciplined cost control and efficiency benefits coming through from the conclusion of the Enable phase of our Velocity strategy.
“With the large contracts now mobilised and ramping up, the timing of national customer activity, and our typical seasonal trading patterns, we anticipate a second-half weighting to revenue and profit.
“For the full year, the Board expects revenue to be in line and EBITDA to be broadly in line with market expectations.
“Despite this, the Board is taking a more prudent view of the revenue mix of core hire and services and the level of operating profit margin improvement in FY2027 with increases expected in depreciation as we invest to support the major contract wins.
“In addition, with leverage still running at the top end of the margin ratchet on the RCF and no expected reduction in UK base rates, the Board also expects interest costs to be higher than market expectations.
“As a result, adjusted profit before tax for the full year is expected to be towards the lower end of range of current market consensus.
“We remain pleased with the Group’s progress to date and its ability to win business and gain market share in difficult market conditions.
“With our focused strategy and improved operating platform, the Group remains well positioned to capitalise on current and future growth opportunities.”
Speedy Hire said market expectations for the firm’s FY2027 performance “refer to the analyst consensus compiled by the Company, which as at the date of this announcement stands at Revenue of £459.0m, adjusted EBITDA of £111.6m, adjusted Operating Profit of £33.2m and adjusted Profit before Tax of £14.3m, with a range of £4.6m to £20.0m.”