Speedy sells site hut business to Elliott for £35m

Grant Prior 12 years ago
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Speedy Hire has sold its loss-making site cabin and storage business to rival Elliott Group for £34.9m.

The accommodation hire business – known as Speedy Space – provides a range of temporary accommodation and storage units from 14 depots throughout the UK.

The business has net assets of £52.4m and in the financial year ended 31 March 2010 had a turnover of  £40.6m making a pre-tax loss of £5.3m.

Speedy will use the sale cash to reduce its debts to around £80m and has signed a three-year partnering agreement with Elliott to make the full range of their products and services available to each other’s customers.

Speedy said the deal will result in a £16m exceptional loss but will improve operating margins.

The accommodation hire business has been extremely competitive in recent years as excess capacity drove down prices.

Steve Corcoran, Chief Executive of Speedy, said: “I am very pleased to announce the disposal of the loss making Accommodation Hire business and the partnering agreement with Elliott.

“From a customer service perspective, the partnering agreement we have entered into will provide our customers with a comprehensive accommodation hire offering from the UK’s leading businesses in this market.

“By working as partners with Elliott, our customers can continue to benefit from an integrated service. We look forward to developing this partnership and we see significant opportunities from working together closely in the future.

“Financially, the disposal delivers a pro-forma increase in both operating margin and return on capital. It also delivers a reduction in Group borrowings and enables Speedy to focus on investing in our higher margin core operations and to develop further our non-hire services.”

Elliott rescued the hire arm of prefabricated bathroom pod maker R B Farquhar from the administrators in February.

The deal saved the jobs of 72 staff at the hire unit who transfered to Peterbourough-based Elliott.

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