Speedy Hire has announced the sale of its Accommodation Hire business, previously known as Speedy Space, to Elliott Group for a total consideration, on a debt and cash-free basis, of £34.9m payable in cash on completion on 30 April.

The Accommodation Hire business provides a range of temporary accommodation and storage units, both portable and modular, for hire or sale from 14 transferring leasehold trading depots throughout the UK. As at 30 September 2010, the business had net assets of £52.4m and gross assets of £53m, excluding working capital which will be retained by Speedy. In the financial year ended 31 March 2010 the business generated revenues of £40.6m, an operating loss (before recharges, central allocations, amortisation and exceptional items) of £2.1m, and a loss before interest and tax of £5.3m.

Unaudited financial highlights for the financial year ended 31 March 2011 include revenues of £35.5m and an operating loss (before re-charges, central allocations, amortisation and exceptional items) of £4.5m.

Speedy and Elliott will enter into a three-year partnering agreement in which both companies will work together to provide customers with an integrated service. Speedy and Elliott will make the full range of their products and services available to each other’s customers on an exclusive basis.
Speedy will also provide service and maintenance support to Elliott’s estimated 1,650 power generation assets, which are integrated within its accommodation units, for an initial period of three years.

Commenting on the disposal, Steve Corcoran, Chief Executive of Speedy, said: “I am very pleased to announce the disposal of the loss making Accommodation Hire business. From a customer service perspective, the partnering agreement will provide our customers with a comprehensive accommodation hire offering from the UK’s leading businesses in this market.

“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.”