Speedy Hire sees first half revenue up 22 percent

Source: Reuters

Date :08/10/2008 10:42:15

Tool hire company Speedy Hire said on Wednesday its full-year results will be in line with its forecasts as long as there is no further deterioration in the outlook for its end markets.

In a trading statement, the company said the increasing market uncertainty means that, although current trading is satisfactory, the forward outlook remains difficult to forecast.

The country's biggest tool hire company expects revenue for the first half to increase by 22 percent on the comparative period last year and pretax profit before amortisation costs to be broadly in line with the prior year period.

For the first half 2007 the company booked pretax profits before amortisation and exceptionals up 33 percent on the year before to 22.9 million pounds.

It said that while government and regulated industry projects continue to provide good levels of business, uncertainty in the credit markets is impacting on overall activity and reducing confidence within the general construction market.

The Merseyside-based company said it has cut costs -- including a headcount reduction of about 4 percent up to the end of September -- and reduced its capital expenditure. Full-year gross spend is now seen at 75 million pounds compared with the 100 million to 110 million previously expected.

Net debt at the end of September 2008 was approximately 280 million pounds, well within its 325 million pounds of committed bank facilities, it said.

In reaction Altium Securities cut its target price to 545p reflecting the increasingly difficult environment, and said it remained "neutral" in terms of the trading recommendation.

WH Ireland said in a statement it maintained its positive view on the structural drivers behind the tool/equipment hire market, but failed to see a catalyst for an upward re-rating over the coming 12-months.

At 8:21 a.m. shares were up 2 percent at 291.5 pence.

(Reporting by Ben Deighton; Editing by Hans Peters and Mike Nesbit)

LONDON (Reuters)