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Speedy deal swells Hewden profits

Money made on the disposal of its tool hire arm to rival Speedy Hire sent profits soaring at plant hire firm Hewden Stuart last year.

The £47 million it pocketed from the £115 million deal last summer saw pre-tax profits more than double to £60 million in the year to December 2007 from the £25 million it recorded last time. The news means the firm is paying a dividend of £84 million – up from the £2.5 million it shelled out last time.

The rise in turnover at the Glasgow-based group, which now concentrates on hiring out general plant, was rather more steady with revenues rising six per cent to £204 million. But operating profits actually fell, nosediving 30 per cent to £11.6 million.

Hewden has spent £13.5 million on a new IT system which has been bought to improve customer services and cut down on the cost of deals.

In a statement accompanying its results, the firm said: “As the new system improves processes and Hewden’s revised product line becomes fully embedded in rental operations, management believes that utilisation, price realisation and operating results will improve.”

The Speedy deal took out £8 million in wages following the departure of 1,200 people from Hewden's payroll. At the end of last year staff numbers stood at just over 2,700 from the 3,500 last time.

And more will disappear after the firm tied up a deal earlier this year with concrete contractor PC Harrington which picked up Hewden’s hoists division to add to its HTC Plant arm – the company which emerged from Hewden’s sale of its tower crane division to PCH back in 2002.

The salary of Hewden’s highest paid director, who is not named, more than halved in the period to £211,000.