Tool hire specialist Speedy Hire has unveiled plans for expansion in the Middle East after striking a deal with Wolverhampton-based Carillion.
Speedy Hire, which is fighting to overcome weak construction markets, said that under the contract it would supply Carillion’s Middle East joint venture Al Futtaim Carillion with equipment, asset management and support services.
The company said the region offers “long-term growth opportunities” and expects the deal to provide a platform to extend its services to other Middle East clients.
The contract announcement came as the company delivered a cautious trading update which revealed a 30 per cent fall in revenues for the first quarter of its financial year compared with the same period a year earlier.
However, Speedy Hire said the decline compared with a record three-month period a year earlier while a quarter-on-quarter fall in turnover was a more modest ten per cent.
The UK’s largest provider of hire tools and equipment, which has outlets throughout the West Midlands, Speedy Hire has been hit by customers delaying or deferring contracts. But it said that, while trading conditions have remained tough, there have been signs in recent weeks that trading is beginning to stabilise.
Speaking at the firm’s AGM, chairman David Wallis said: “With continuing uncertainty around future construction activity, the board remains cautious about the group’s short-term outlook.
“Costs continue to be monitored closely and will be managed to a level which ensures that they remain appropriate for forecast activity levels.”
He added that the outlook for the full-year remains in line with expectations.
Speedy Hire raised £100 million in a rights issue earlier this year, helping it to cut its net debt to £140 million from £248 million at the end of March. It expects its financial position to continue to improve over the remainder of its financial year.
Speedy Hire said the bulk of its major contract customers continue to report strong order books because of on-going infrastructure investment, particularly in energy, including the nuclear sector, water and waste.
However, conditions in the wider construction market, in particular contractors dependent on the private sector, remain “very difficult”, it added.
Shares in the firm, which have plunged 90 per cent in the past year, rose more than three per cent to 29.25p yesterday in response to the latest update.