Job cuts at Speedy Hire as £13m profit warning issued
The Liverpool based hire company has issued yet another profit warning, the firm, which has suffered a string of setbacks, since revealing trading problems at its Middle East business two years ago, will now streamline its overhead base and operational structure.
In a trading statement this morning, Jan Åstrand, Executive Chairman, said: ”Following the extremely disappointing start to the year, we have taken action to grow revenue and cut costs.
“Whilst these actions will take time to come to fruition, we believe they will deliver material benefits over the medium term.”
In July Speedy Hire’s shares erased two years of steady gains in a matter of minutes when they plunged 32 per cent to a five-year low after the tool hire group issued a profit warning.
In July Speedy identified three key issues hurting its performance:
- A lack of available equipment during the network optimisation programme
- A focus on strategic accounts at the expense of SME customers
- Poor customer service caused by disruption during the implementation of a new IT system
Today it announced several measures to address these problems, including a refocusing on the SME market, an improved IT system and a redistribution of assets “to improve asset availability”.
The management now aims to slash overheads in 2016 by £13m, with around £10m of this saving realised in the UK and Ireland business, of which £6m relates to staff costs.
Åstrand said Speedy would also restructure the sales function to better address the needs of the SME market
In the Middle East, the business continues to break even at an operating profit level, with further opportunities for revenue and margin growth, he added.
The latest shake-up at the hirer will also involve a programme to increase engineering resources, redistribute assets throughout the depot network to improve asset availability, and optimise stock levels.