Speedy Hire has recovered rapidly from the pandemic and is enjoying a healthy 28.2 per cent boost in revenues, lifting expectations for its full-year results.
Its adjusted operating profit has grown to £16.2m, £9.9m higher than the first six months of Speedy Hire’s previous year.
The FTSE-All Share listed tools and equipment rental specialist is now aiming to further expand into the consumer market, and embrace the DIY aspirations of homeowners.
Having previously focused on the full-scale projects of large contractors and SMEs, it has signed an agreement with home improvement giant B&Q to feature in 23 more stores.
The group now offers its services in 40 of its locations nationwide.
Down told City A.M. he sees the market as an “untapped” opportunity.
You are expanding your presence in B&Q, which sounds like a big deal.
For us, the consumer market is not particularly well served by the hire industry. Probably every single one of us owns a drill, electric saw, a lawnmower, a hedge printer.
In reality, when you look at it from an ESG perspective – from a circular economy perspective – is that the right thing to do?
So, we’re working very much with B&Q to offer hire to their customers, particularly where they’re doing the bigger DIY projects. If you need a cement mixer or wacker plate to build your patio then you can get all the materials from B&Q.
You can hire the equipment from us, and we’ll show you how to do it with a video.
So we’re really pushing out in that area and trying to develop the consumer market for hire and B&Q are the obvious partner as they’re the biggest DIY store in the UK. We’ve got a very good relationship with them. We are very happy with how that’s progressing.
As we move into the next financial year we’re looking to set up a new B2C website, with all of those of “How To” videos.
We have a customer service promise that operates nationwide. You can get any one of our top 350 products delivered to you nationally within four hours.
That plays into the consumer market and people that want things straightaway to get on with their DIY project.
How has the pandemic affected your business, and how are your results compared to the last full year before the pandemic was a factor in company performance?
Revenue is up compared to where it was two years ago but profits are relatively flat.
There’s a bit of a mixed impact, as we’ve pulled out of a training business.
As a result, the margins on that have fallen slightly, but overall overheads are lower than they were two years ago and revenue is higher.
So, the pandemic did affect us last year, particularly in the first quarter for us, which was April-June, when the government wasn’t quite so clear around construction and whether it should carry on working or not.
We did suffer a revenue decline during that period, but what you see today is revenue is higher than it was two years ago.
It’s also about 30 per cent higher in the first half than it was last year which was COVID affected.
Where do you think are the main opportunities and headwinds for your company, and the wider industry?
HS2 is a massive infrastructure project and it’s going to go on for many, many years to come, so that gives us significant opportunities.
As does work in the house-building sector, facilities management, and things like that.
In terms of the headwinds, clearly there is a little bit of inflation in the system at the moment.Russell Down
So, we’re seeing cost inflation on the equipment that we buy – really around the single digit area- and some delays in lead times of those coming in.
We mitigate the lead time issues through the use of artificial intelligence and we’re mitigating the cost pressures through effectively putting our sale prices up.
The market is now, for the first time in many years, receptive to price increases, because everyone is aware of the challenges that are around.
So, I think that’s the main headwind is around inflation.
It’s making sure that we pass that through to our end customer, which is what we’re doing at the moment.