The UK's largest provider of tool and equipment hire reported an estimated 29 per cent drop in revenues for the six months to September 30 and said there remained "significant uncertainty" in the current outlook.

It reported no sign of improvement in private sector spending and warned of increased sensitivity around the sustainability of Government spend-ing.

Speedy has cut another 270 jobs – 6 per cent of its workforce – in the financial year to date, but said it would be inappropriate to reduce the company's operational footprint any further as this would begin to impact on customer service.

Shares at one stage fell more than 12 per cent as it warned investors that any further slide in revenues forecasts was unlikely to be offset by additional cost reductions.

More than 950 staff left the Haydock-based business between July 2008 and the end of March, while 82 depots – 17 per cent – were closed and 470 vehicles returned to their lessors or sold.

Speedy said recession-related project cancellations, such as the new coal-fired power station at Kingsnorth in Kent, continued to impact demand.

The company added: "There is little evidence that the seasonal pick-up in turnover typically associated with the late September/October period will follow traditional patterns."

Offsetting the gloom, Speedy said turnover generated from the top 50 UK contractors continued to prove more resilient than the wider market and now accounted for 26 per cent of group turnover, against 21.5 per cent a year ago.

Panmure Gordon stockbrokers reduced its profit forecasts and target share price as a result of yesterday's update.

Analyst Paul Jones added: "With a number of major projects delayed or cancelled, the market remains fragile for tool hire operators."

Speedy Hire's shares closed the day down more than 11 per cent – a 5p fall to 38.25p.