Speedy Hire saw share prices drop 15.5 per cent on Monday (September 28th), following the group's issuing of a second profit warning in three months.
The tool hire company, which is based in Liverpool and supplies tools to some of the UK's biggest construction firms, warned that revenue will be down ten per cent this year and profitability will be "materially below current market expectations".
In July, the company's CEO Mark Rogerson abruptly stepped down after 18 months on the job. The company also issued a profit warning at the time and shares dropped 32 per cent.
The firm has faced a number of serious operating issues, including a lack of equipment, a failure to attend adequately to the key market of SMEs and poor customer service following disruption during the set-up of a new IT system.
The company says these legacy issues were "taking longer [to resolve] than originally anticipated".
Commenting on the results so far, executive chairman and Speedy Hire said that the company is working to turn around its fortunes. "Following the extremely disappointing start to the year, we have taken action to grow revenue and cut costs. Whilst these actions will take time to come to fruition, we believe they will deliver material benefits over the medium term," he said.
The company plans to cut costs by £13 million this year, mostly in the UK and Ireland. The group also operates in the Middle East, where it says it is "breaking even".
Speedy Hire is not the only tool hire company to see a fall in share prices. Hire revenue in the UK and Ireland is now thought to be around 10 per cent below last year.
Rival firm HSS Hire has had shares drop 79 per cent since its initial public offering in February. Ashtead shares have fallen 17.6 per cent this year and Lavendon shares have dropped 6.5 per cent. The latter is the only UK tool hire company to outstrip the FTSE 100, which has dropped seven per cent over the year to date.
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