Mark Rogerson has stepped down as chief executive of Speedy Hire after the firm announced its trading performance for 2016 would be below expectations.
In a trading update to the City, the board said the group’s financial performance for the 2015/16 financial year would be “materially below” expectations and worse than its 2014/15 results.
Group finance director Russell Down will take over from Mr Rogerson, retaining his current role until a replacement is appointed.
Non-executive chairman Jan Åstrand has assumed the role of executive chairman but intends to revert back to a non-executive status in November 2015 – the group’s half-year stage.
The firm said discussions regarding the sale of its oil and gas business in the Middle East had failed to reach a satisfactory conclusion and have been discontinued.
Speedy added that it continues to explore options for this business, which is currently breaking even.
In November 2013 Speedy Hire revelaed a £5m hole in its accounts, following a “mis-statement of accounting balances” within its international division.
Mr Rogerson told Construction News in April this year that the Middle East was now a “much cleaner business”.
In today’s statement a board-initiated review identified the following factors as contributing to the group’s poor revenue performance:
- A lack of available equipment during the network optimisation programme;
- A focus on strategic accounts at the expense of SME customers;
- Poor customer service caused by disruption during the implementation of a new IT and MI system.
In his April interview with Construction News, Mr Rogerson also said it was “unforgiveable” that Speedy had previously run out of equipment.
He said the firm had to meet customer demand by putting “equipment in the right place at the right time”.
Speaking following today’s announcement, Mr Åstrand said: “This is extremely disappointing.
“I believe Speedy remains a fundamentally good business but, while some progress has been made over the last year, the remedial action programmes have not been delivered as needed.
“Our immediate priority is to accelerate the execution of those programmes and realise the upside we believe they will deliver over the medium term.
“Additionally, we will increase our focus on the SME core hire market. Improving performance is our top priority.
“We expect to be able to provide an update when we issue our H1 FY2016 pre-close statement, which will be in the last week of September.”
Analyst view: Kevin Fogarty, Panmure
“With only three months of the financial year complete, it was quite a surprise.
“It would appear that the remedial action being implemented to fix the long-running problems were insufficient to turn the Speedy ship around.
“Given the relatively firm construction market, it is quite surprising to see the UK equipment hire company’s warning.
“Therefore, it probably indicates the problem is with the sector’s capital allocation and forecasting, rather than with underlying demand.”