Shares in Speedy Hire (SDY) dropped by 11 per cent after the tool group revealed that £20mn of equipment had gone missing.
In November, Speedy Hire reported that its hire equipment was worth £234mn, and accounted for almost half of its total assets. However, when it was preparing for its end of year audit, it was unable to locate £20.4mn of equipment. These assets are “non-itemised” meaning they don’t have a unique serial number, and could include scaffolding towers, fencing and non-mechanical plant equipment. Given non-itemised equipment only has a total value of £50mn, or 22 per cent of the company's total hire assets, this is a serious amount of kit to be missing or counted incorrectly in the first place.
The board has launched an external investigation into the disappearance, which will include a review of accounting procedures. The company has also started to count its tools on a weekly basis, and is keeping a closer eye on its purchases and disposals.
Speedy Hire expects the loss to result in a one-off, non-cash write down of the balance sheet value of non-itemised assets. However, it is not expected to impact the group's cash position and management said revenue for the four months to 31 January 2023 was up by 16 per cent. Excluding the effects of the asset loss, management is confident of hitting underlying profit forecasts for the year to 31 March 2023.
