Connaught collapse impacts on Speedy Hire

The Merseyside-based company, which operates from 325 sites, said it will incur 1.7m of bad debts in the first half of its financial year as a result of Connaught's recent plunge into administration.

It may also lose up to 1.7m in revenues over the rest of the year, although it hopes to reduce this figure through its close relationships with the two companies that have taken on the bulk of Connaught's contracts.

Speedy said it expected to report an operating loss in the half-year to September 30, but encouraged analysts by adding that it was now trading profitably and on course to meet forecasts for the year as a whole.

It generated a 5m rise in turnover in the quarter to September compared with the April to June period, while in recent weeks it has won a number of major new infrastructure contracts. They have included a five-year sole supplier agreement with Thames Water and a three-year deal with Babcock International to support its marine, nuclear, networks and infrastructure divisions.

Speedy Hire stressed that its forecasts were dependent on business picking up after industry's traditional shutdown over the Christmas period.

Panmure Gordon stockbrokers said it stuck by previous forecasts that Speedy Hire will make profits of 5m in the year to March and a surplus of 15m in the following financial year.