Speedy Hire Reports H1 Loss as ProService Deal Boosts Outlook

Speedy Hire’s H1: headline loss, cash discipline, and a ProService kicker for FY2027

Speedy Hire has posted a statutory loss for the six months to 30 September 2025, but the narrative is more nuanced than the headline suggests. Revenue edged up 0.8% to £205.2m, while adjusted EBITDA slipped 12.4% to £38.7m as subdued construction markets and higher wage costs weighed on profitability. The story to watch is the newly signed commercial agreement with ProService, which is already live and expected to add £50-55m of annualised revenue and be significantly earnings accretive in its first full year post integration.

Management kept full-year guidance unchanged and flagged a strong second-half weighting, supported by recent contract wins and the ProService deal.

Key numbers investors need to know

Metric	H1 FY2026	H1 FY2025	Change
Revenue	£205.2m	£203.6m	0.8%
Adjusted EBITDA	£38.7m	£44.2m	(12.4)%
Adjusted (loss)/profit before tax	£(7.2)m	£0.4m	£(7.6)m
Operating (loss)/profit	£(5.8)m	£4.6m	£(10.4)m
Loss before tax	£(15.1)m	£(2.2)m	£(12.9)m
Basic EPS	(2.64)p	(0.35)p	(2.29)p
Underlying operating cash flow	£44.6m	£45.0m	£(0.4)m
Free cash flow	£3.7m	£(1.6)m	£5.3m
Net debt	£118.9m	£111.8m	£7.1m
Dividend per share	0.30p	0.80p	(0.50)p

Quick jargon decoder: adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, excluding specified items. Free cash flow is cash flow after investment in the fleet and the business. Leverage is net debt divided by EBITDA, used here on a pre-IFRS 16 basis.

ProService agreement – why it matters for the equity case

Speedy signed a comprehensive hire and supply agreement with HSS ProService Limited. It gives Speedy a right of first refusal to supply core hire equipment and testing, inspection and certification (TIC) services via Lloyds British. The transaction also included the transfer of certain assets from HSS Service Group and a 9.99% equity subscription in HSS Hire Group plc, to be renamed ProService Building Services Marketplace plc.

The agreement is live now and expected to deliver £50-55m of annualised revenue, with significant earnings accretion in the first full financial year post integration. It also accelerates Speedy’s fleet evolution and is expected to reduce future capex needs. Management invested £35m in ProService and, while leverage has ticked up to 2.2x, they expect meaningful deleveraging over 12-24 months towards the middle of the 1.0-2.0x target range, supported by strong operating cash flow and lower capex.

My take: this is strategically important. It broadens Speedy’s access to demand, makes better use of the network and logistics, and opens an additional route to monetise Lloyds British TIC services. Execution risk remains – integration, service levels and pricing discipline are key – but the economics look attractive if the run-rate lands as guided.

Trading mix – resilience in Services, National customers offset Regional softness

Revenue excluding fuel rose 5.1% to £197.6m. Within this, Hire revenue fell 1.8% to £123.3m, reflecting a weaker market and a softer Regional customer base, partly offset by a strong National performance. Services revenue came in at £75.0m, down 2.0% overall, but up 10.6% excluding fuel as Customer Solutions and Lloyds British both grew. Gross margin edged down to 54.8% from 55.7% due to a greater mix of lower-margin services and disposals.

Fuel revenue declined materially because Speedy moved to a third-party delivery model on which it only earns commission. That has minimal gross profit impact, so the headline revenue mix shift is not as worrying as it first appears.

Disposals revenue increased to £6.9m from £1.6m, mainly the planned sale of specialist compressors ahead of the ProService deal. Hire margin held steady at 78.7%, while Services margin slipped to 18.8% from 19.5% due to mix.

Cost, cash and capex – disciplined in a tough market

Underlying overheads rose 3.8% to £107.4m, driven by national living wage and national insurance increases and the absence of one-off savings from last year. Non-underlying costs were £7.6m, comprising £3.9m of transformation spend, a £2.2m loss on disposing of the Lloyds British manufacturing division, and £1.5m of legal and professional fees linked to the ProService transaction.

Net finance costs increased to £8.9m given higher average net debt and the new debt structure post-refinancing. Facilities now comprise a £150.0m revolving credit facility and a £75.0m private placement term loan. A short-term covenant amendment related to the ProService deal temporarily skewed the balance sheet classification at the half year, but this was resolved in early November.

Cash conversion remains a bright spot. Underlying operating cash flow was £44.6m, equating to 115.2% of EBITDA, and free cash flow turned positive at £3.7m despite ongoing investment in the strategy. Hire fleet additions were £31.9m, with total capex of £34.5m. Management now anticipates lower fleet capex in H2 and a targeted reduction in FY2027 as the fleet is already well invested.

Contracts and pipeline – Thames Water and infrastructure exposure

Speedy continued to win and extend multi-year deals. A major framework with Thames Water will mobilise through H2. Together with ProService and Amey, these long-term agreements represent more than £90m of annual revenue opportunity. The business mix is diversifying further into infrastructure such as rail CP7, water AMP8 and energy, including nuclear. Trade & Retail remains profitable but growth is constrained by the market backdrop.

Operationally, the rollout of the Openfleet logistics management system has reached over 40% of the network, underpinning service quality and efficiency. A new specialist unit, Temporary Site Solutions, is also up and running.

Dividend and outlook – rebased now, confidence building for FY2027

The interim dividend is 0.30p per share, reflecting the previously guided rebasing through the end of FY2028 to help fund the ProService transaction. The Board expects subdued market conditions to continue for the remainder of FY2026, but recent contract wins and the ProService agreement give confidence in a second-half weighting. Trading so far in H2 is in line with expectations, and guidance for FY2026 is unchanged. Management looks to FY2027 with increasing confidence.

Josh’s view – balanced near term, improving medium term

Positives:

• ProService agreement expected to add £50-55m annualised revenue and be earnings accretive post integration.
• Contract momentum, including Thames Water, with more than £90m of annual revenue opportunity across long-term deals.
• Strong cash conversion and positive free cash flow despite lower EBITDA.
• Capex set to ease, supporting deleveraging from 2.2x towards the 1.0-2.0x target range over 12-24 months.

Watch-outs:

• Adjusted PBT swung to a £7.2m loss and statutory loss before tax widened to £15.1m.
• Services margin pressure from mix and continuing wage inflation.
• Execution risk around ProService integration and mobilisation of new frameworks.
• Leverage is temporarily above target and finance costs are higher after refinancing.

What to monitor in H2 FY2026

• Hire revenue trajectory as large contracts, including ProService and Thames Water, ramp up.
• Services growth excluding fuel and any recovery in Services margin.
• Capex discipline versus plan and the pace of disposals.
• Cash generation, debtor days and movement in leverage from 2.2x towards c.2.1x by March 2026.
• Operational benefits from Openfleet as rollout extends across the network.
• Progress at Lloyds British post manufacturing divestment and management changes.

Final word

Speedy Hire’s first half shows the strain of a soft construction market and higher labour costs, but the strategy is steadily reshaping the business. If ProService delivers as guided and recent contract wins mobilise cleanly, FY2027 could look very different to FY2026. For now, this is a story of holding the line on costs and cash, while laying foundations for earnings recovery.