Speedy Hire plummets after gloomy profit guidance

18th Mar 2014 07:56

Shares of Speedy Hire tumbled on Tuesday after the equipment and tool rental firm warned that full-year losses in its Middle East division and revenues from its higher margin business in the UK will be worse than expected.The trading update, released a week earlier than expected, said that the board now expected adjusted pre-tax profit for the year ending March 31st to be "in the region of £14.5m".This is down from £16.8m the previous year and well under current consensus estimates for a figure of around £17.8m.Speedy Hire, which said as recently as February that it would meet its expectations for the full year, said that trading losses in the Middle East "are likely to be greater than anticipated as the business is being stabilised".Middle East operations have also been hit by adverse foreign exchange movements relating to its joint venture in Kazakhstan.In the UK, total UK revenues will be "marginally higher" than last year due to an increase in services turnover, but sales in the higher margin business for February and March failed to meet expectations.Meanwhile, the company also warned that asset sales are running at a slower pace than expected and below historical trends.Speedy Hire said: "Focus for the group is on completing the stabilisation of the International division, and in the UK, focussing the sales effort to take advantage of the improving economic conditions, and delivering the previously announced network and asset optimisation projects."The stock was down as much as 18% at 62.75p in early trading.BC