Speedy Hire PLC Trading Update (6550Q)
March 01 2021 - 2:00AM
UK Regulatory
TIDMSDY
RNS Number : 6550Q
Speedy Hire PLC
01 March 2021
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 GBP5.4m; for the six months ended 30 September 2020
operating profit was GBP1.8m. 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:
Speedy Hire Plc Tel: 01942 720 000
Russell Down, Chief Executive
James Bunn, Chief Financial
Officer
MHP Communications Tel: 0203 128 8778
Oliver Hughes
Andrew Jaques
Inside Information: This announceme nt 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.
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