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Speedy Hire cuts 492 jobs and closes 38 depots

Speedy Hire has cut 492 jobs and closed 38 depots in a bid to make cost savings of over £24 million to offset the pressures of the credit crunch.

The reductions come as the plant hire giant’s forward outlook remains ‘cautious’ for the coming year as it said ‘trading has become progressively more challenging since July’.

Around 429 staff had left the business by the end of October with a further 63 to go. Speedy has reduced its vehicle fleet by 260 units with 211 leases already reaching completion and not being renewed.

The equipment hire giant has completed 87 per cent of its site reduction as 33 of its 38 depots to shut have been closed down with assets and business transferred to neighbouring locations.

The firm said: "We are committed to maintaining this aggressive approach to costs and are about to launch a second phase of cost reduction that is targeted to reduce costs by a further £18 million."

But Speedy said ‘resilient performance maintained across the group’ as it reported its half year results for the six months to September 2008.

Group turnover grew 22 per cent to £256.2 million with revenues from its top 50 construction clients increased 36 per cent for the period.

The firm said its business with non-construction clients is ‘progressing well’ and now accounts for over 30 per cent of group revenues. Speedy has seen a ‘significant decline’ in revenues from smaller and medium sized firms.

Pre-tax profits edged up 4 per cent to £23.8 million in the first half compared to £22.9 million for the same period in 2007.

The firm said it has substantially reduced its capital expenditure for both 2008 and 2009.

Speedy Hire chairman David Wallis said: “In these uncertain times we have erred on the side of caution, taking action on costs and spending in response to the more challenging environment.

“Our strategic focus remains to align ourselves more closely with the UK’s major construction and industrial groups and I believe the 36 per cent increase in turnover from the 50 largest of these businesses confirms that this is the correct strategy.”