Speedy sees uplift but stays wary

The UK's biggest tool and equipment hire firm hailed a turnaround in trading fortunes yesterday but warned it remained wary about the impact of more corporate misery following the collapse of building firms Rok and Connaught.

Speedy Hire's adjusted pre-tax losses for the six months to September 30 increased by 106 per cent year-on-year to 9.9m but sales, volumes and average hire rates have shown quarter-on-quarter growth since the start of 2010.

Sales declined 4 per cent to 177.3m in the six months to September 30, compared to the same period the previous year, while Speedy's gross margin dropped from 60.2 per cent to 57.9 per cent, which helped worsen its losses.

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However, chief executive Steve Corcoran insisted the company had turned the corner after sales continued to improve in October, when they showed a year-on-year increase of 5 per cent.

Merseyside-based Speedy revealed a 158,000 hit after construction firm Rok went into administration and warned of more business failures to come. It had already lost 1.7m in the first half when social housing company Connaught went under in September.

Mr Corcoran said he expected to see more failures in the construction industry when builders stretched their resources to deal with the increasing demand.

Shares rose as Speedy revealed contract wins with major firms.

Analysts at Panmure Gordon reckon Speedy might turn a slight profit in the next half-year and believed the company may now be over the worst.