Speedy Hire to cut around 200 jobs in the UK amid falling sales
Tool rental business Speedy Hire is cutting around 200 jobs in the UK, as the firm struggles to turn around falling sales.
The Merseyside-based business, which was founded in 1977, issued its second profits warning in three months today, adding that it expects revenues at its core hire unit would be around 10% below last year.
It said it was implementing cutbacks including £6 million cut from staff costs.
The company did not spell out details of job cuts that would result, but it is understood that it will mean 200 jobs to go across the group, with around one third coming through redundancies and the rest achieved via natural wastage.
The business employs 3,200 people in the UK and Ireland and around 3,800 across the group, which also trades in the Middle East and Kazakhstan.
It said in its latest statement that it now anticipates profits will be weighted to the second half of the year and will be "materially below current market expectations".
Shares plummeted more than 13%, and have fallen by more than half this year.
The firm's chief executive, Mark Rogerson, stepped down when it issued its first profits warning in July.
The latest alert comes after rival HSS Hire last week replaced its chief executive, Chris Davies, a month after it reported deepening half-year losses and issued a profit warning that sent its share price plummeting.
HSS blamed slower-than-expected housing and home improvement markets.
Speedy Hire said the measures it has taken to turn around the business include restructuring its depot network and cutting its overheads.
It added that it expects its overheads to be around £13 million below last year, with around £10 million of these savings coming from its UK and Ireland operations, and of this £6 million coming from staff costs.
Executive chairman Jan Astrand 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."
Investec analyst Andrew Gibb added: "Today's trading update conveys further disappointment, with the resolution of the previously identified legacy issues set to take longer than originally anticipated."
Speedy Hire appointed Russell Down, group finance director, as chief executive in July to replace Mr Rogerson, although he will also retain the finance role until a replacement is hired.