But plant hire firm reports stabilisation in recent weeks and new Middle East supply deal with Carillion JV
Year-on-year turnover at Speedy Hire was down 30% in the latest quarter, but recent weeks have shown signs that trading is beginning to stabilise, the firm said in a trading update today.
The plant hire firm said tough conditions had continued into the first three months of the new financial year, following a challenging end to 2008/9. Revenue fell by 10% from the final quarter of the last year.
But the firm said it had reduced net debt to £140m, down from £295m a year ago, following a cash management drive and a recent rights issue that raised £100m.
Opportunities from the infrastructure and regulated sectors, including nuclear, water and waste, are increasing but conditions continue to be “very difficult” in the wider construction market, it added.
The update came as Speedy Hire announced it had signed a memorandum of understanding with Carillion's Middle East joint venture, Al Futtaim Carillion, to supply equipment and support services to the firm.
The firm said it believed new work at home and abroad would keep it on track for the year ahead.
It said: “With new opportunities opening up to the business both in the UK and the Middle East, together with a strong balance sheet and a flexible cost base, the board believes that the group is well placed to deal with the conditions that are projected to continue over the short to medium term in construction.
"Whilst acknowledging that challenges remain and that further management action will be required, the board retains its confidence that, despite the uncertainty surrounding many of our markets, the outlook for the year remains in line with its expectations.”