Speedy to exit from Middle East
By Murray Pollok01 March 2021
UK rental group Speedy is exiting the Middle East market. It is selling its fleet to main customer ADNOC Logistics and Services - part of the Abu Dhabi National Oil Company - and up to 600 staff will transfer to ADNOC.
The exit will not impact Speedy’s Kazakhstan joint venture business, which will continue to operate.
Speedy began working with ADNOC in 2012 and the most recent contact extension expired on 28 February this year. ADNOC will pay Speedy US$18 million for the fleet.
The rental company has signed a four-month agreement to support the transition of the business, after which operations in the region will be closed.
Russell Down, Chief Executive of Speedy, said; “The successful exit from the Middle East operations is an important strategic step for Speedy and we wish the whole of the ADNOC team every success in the future.
“Looking ahead, we are well positioned to take advantage of the market opportunities in the UK and Ireland as activity levels continue to improve.”
In the year ended 31 March 2020, the Middle East operations generated operating profit of £5.4 million. For the six months to 30 September 2020 operating profit was £1.8 million.
Meanwhile, in a trading update, the company said activity levels in the UK continued to increase, with “core” hire revenues in February 2021 around 2% higher that the same month in 2020. Fleet utilisation in the five months from 1 October is 58.7%, compared to 56.2% in the prior year.
Speedy said the “stronger than expected revenue recovery” will mean that profit before tax for the year ending 31 March 2021 “is anticipated to be well ahead of current market expectations.”