SPEEDY Hire is expanding its Merseyside base as part of a restructuring programme to help it cope with the economic crisis and the uncertain outlook in the construction sector.
The Newton-le-Willows group saw pre-tax profits for the six months to September 30 rise 3.9% to £23.8m, compared to the same period last year, while revenues soared 22.3% to £256.3m.
The company has tried to insulate itself from the huge slowdown in the construction sector by teaming up with the UK’s largest construction and development firms, who are more likely to win major Government contracts in the months and years ahead.
Speedy Hire has also launched a huge cost-cutting programme which has so far seen the loss of 429 jobs.
As part of that restructuring, 130 new jobs are being created at its Newton-le-Willows headquarters as it moves back office and financial functions to Merseyside from other bases around the country.
The group’s 50 largest clients, who do substantial work on Government and regulated utility spending programmes, now account for 30% of its income.
Non-construction clients, including utility companies, make up another 30% of its income.
Chairman David Wallis said: “In these uncertain times, we have erred on the side of caution, taking action on costs and spending in response to the more challenging environment.
“Our strategic focus remains to align ourselves more closely with the UK’s major construction and industrial groups and I believe the 36% increase in turnover from the 50 largest of these businesses confirms that this is the correct strategy.
“Notwithstanding a circa 6% shortfall in revenues in October relative to our expectations, the positive impact of cost reduction measures and ongoing cost flexibility, together with reduced interest rates, leads us to maintain our expectations for the current financial year, subject to no further deterioration in the market.
“However, given difficult economic conditions, we remain cautious in our outlook, and will not have sufficient certainty on our position until we are through to the other side of the traditional Christmas shutdown in the construction industry.”
Chief executive Steve Corcoran said he did not expect the market to improve for another 2½ years.
Speedy has seen 700 construction projects cancelled in the last five weeks alone.
The company is now looking for another £18m of annual savings on top of those it has already made through job losses, and allowing some vehicle and building leases to expire.
Mr Corcoran said: “That will be a much bigger and broader challenge.
“We’ll be looking at marketing spend, sales programmes, consultancy expenditure, and corporate entertainment programmes – anything we can do to reduce the cost base of the business.”
Speedy is hopeful it will win work on major public spending projects, including hospitals and school buildings, and is also hopeful of winning more Olympic contracts.
Mr Corcoran said: “We’ve had £4.5m from Olympic projects so far, which is not to be sniffed at.”
