Yahoo Finance Focus on small businesses helps boost Speedy Hire's turnaround
A renewed focus on small businesses has boosted Speedy Hire’s turnaround plan, pushing profits up 25pc in the last 12 months.
The company enacted a turnaround plan in September 2015 after two volatile years during which it lost its chief executive, issued a string of profit warnings and weathered a row with an influential shareholder over its board make-up.
But it said on Wednesday that a renewed focus on the around 46,000 small firms which use the company to hire tools had enabled it to boost sales. Speedy Hire provides equipment including power tools, lighting and generators to construction, manufacturing and events companies.
“A key strategic priority is to grow market share with SME customers, who remain the bedrock of the hire business,” the company said.
In the year to March 31, pre-tax profits were £18m, up 25pc from the previous year, while revenue was £377.4m, up from £369.4m the previous year, a 2.2pc rise. This is the second consecutive year that the company has been back in the black.
The results are unlikely to come as a surprise to the market after the company boosted its full-year forecasts in March. Its shares were up 1.36pc on Wednesday lunchtime to 59.8p.
As a result of the better performance, Speedy Hire increased its dividend for the year to 165p per share, up from £1 in the previous year.
Russell Down, the company’s chief executive, said he was pleased with the recovery that the company had made.
“The market remains competitive; however the current year has got off to an encouraging start,” he said.
Andrew Nussey, analyst at Peel Hunt, said he was maintaining a cautious outlook for the company’s coming year in case it is hit by fallout from the collapse of Carillion, which could affect the wider construction market.
“We continue to assume some modest Carillion revenue leakage - though nothing of note to date - and this could prove too conservative,” he said.
He added that he expected Speedy Hire to make some acquisitions this year, given the strength of its balance sheet.
