SPEEDY Hire has embarked on a concerted drive to reduce its debts which will halve interest rates on its loans from 4% to 2% by next January.

The Newton-le-Willows based plant hire group, which yesterday announced an exclusive deal to supply a joint venture involving construction giant Carillion in the Middle East, had already lopped off £48m from its debts which stood at £247m by the end of June.

Shareholders at yesterday’s annual meeting heard that £100m from Speedy’s recent rights issue has also been used to reduce exposure to debts, which now total about £140m.

And the board has vowed to carry on reducing debt throughout the current year using ongoing cash generation.

The group has chosen to improve its financial stability in the face of continued challenging trading conditions, the annual meeting was told.

First quarter trading for the 2009 financial year achieved a record 36% increase in revenues.

But first quarter figures for the current year revealed a 30% decline.

The board reassured shareholders that comparisons with the final quarter of 2009 showed a more modest 10% fall in revenues.

But the company, which provides everything from heavy plant to portable toilets, has continued to express caution about the short-term outlook.

Regulated industries, such as utility companies, and public sector contracts are holding up during the credit crunch.

But Speedy Hire admitted that the wider construction market, particularly involving contractors dependent on the private sector, continues to find conditions “very difficult”.

There are some positives even in the current downturn, though, such as a two-year preferred supplier deal with the Headcrown Group clinched this week and a three-year sole supplier contract in the rail sector with Works Infrastructure.

The board believes that such new opportunities and the potential for overseas expansion mean the business is well placed to deal with market conditions over the short to medium term.

And chief executive Steve Corcoran spoke of the exciting potential the Al Futtaim Carillion venture offers: “We see attractive long term growth opportunities in the region.

“Our relationship with Carillion demonstrates that by working with customers more intimately and with a long-term perspective, Speedy can add tangible long-term value.

“We expect this initiative to provide an excellent platform to extend our services across the Middle East and other geographic territories in time.”