Connaught to cost Speedy Hire £1.7m

Speedy Hire has is set to lose £1.7m because the collapse of Connaught has saddled it with debts that are unlikely to be paid and equipment that will not be recovered.

The plant hire company, which lent tools and equipment to the collapsed social housing maintenance firm, also announced that it could lose the same amount in revenue because of the failure of Connaught.

In a statement to the City, Speedy said: “Following the recent appointment of joint administrators to Connaught, to which Speedy was an exclusive provider of tool and equipment hire, it is anticipated that Speedy will take a charge of £1.7m in the first half of the current financial year.

“Speedy’s forecasts had included an assumption of approximately £1.7m in revenue from the Connaught group over the remainder of the current financial year (net of rebates). Whilst Speedy has close relationships with the two companies that have taken on the bulk of Connaught’s contracts from the joint administrators, it is currently too early to indicate how much of this revenue will be retained.”

The company said that it expects to report a first half loss when it announces its full year results to the end of September on 17 November, but that the full year results would be in line with expectations provided it saw a strong recovery in the final quarter of the year.

It said: “Although now trading profitably, the group expects to report a first half operating loss (before amortisation and exceptional items), The board confirms that the group is currently trading in line with its expectations for the full year in respect of adjusted profit before tax (before amortisation and exceptional items).

“These expectations are however dependent on the business maintaining momentum into the traditionally stronger second half of the year and, in particular, delivering a strong recovery in the last quarter of the financial year, following the traditional shut down over the Christmas period.”