Speedy Hire’s recent accession to the FTSE 250 and the PLC award it won for best IR program have taken the UK tool and equipment hire firm to new heights. Neil O’Brien spills the beans on how to cope with his dual role of Cfo and Iro in an ill-defined sector.
What was your reaction on discovering Speedy Hire had entered the FTSE 250?
Having been pretty close for a while, but never getting promoted, it was definitely a surprise. It gives us a much higher profile and that spreads outside the financial community to dealing with customers and potential employees. It’s a very convenient badge that provides a strong reference point and helps in several ways, not just financially.
Does it make your work within IR easier?
Yes, it gives us access to a range of fund managers we’d previously have been considered too small to go and see. It gives us a certain kind of status.
Of four short-listed companies, Speedy Hire won an award for best IR program at a recent Plc event. What do you think swung it?
I suspect it was the report and accounts, as they are critical for communication in any year. The first part in particular explains to everyone what we do, how we do it and who our customers are. It’s a simple explanation of the business, because we’re a B2B operation rather than a retail brand, so people need to get their head around that pretty quickly. We’ve taken a lot of care over the last couple of years to improve the website, improve the quality of the Agm and make sure we communicate honestly and openly with shareholders.
Would you say your approach to IR is to keep it simple?
Very much so. It’s boiling it down to a few key messages you really want to deliver. It’s telling people the good and the bad and the things you’ve still got to improve on. It’s very easy to fall into the trap of giving lots of corporate speak, but if you do too much of that people just don’t believe it. We try to use straightforward examples and language that we’d use on our day-to-day dealings with our depots and trading companies. We don’t try to be fancy about it – it’s a case of what you see is what you get.
How do you deliver bad news, and what kind of bad news have you had to deliver?
In recent years we’ve been hitting our numbers from the City point of view, but a number of the projects we work on don’t always go to plan or to timetable. If there’s a good reason why something’s not bang on track, you explain why. Being able to say, ‘The results are good, but there’s a lot more we can do’ is obviously a good combination for investors.
Are investors sometimes wary about Speedy Hire being part of an ill-defined sector?
Yes – support services is a very mixed bag, comprising recruitment consultants, IT firms and a number of hire companies, so I think it does cause some problems. Within the hire industry, a number of our listed competitors have had difficult times in recent years and people were asking us, ‘How come you’re doing so well when everyone else is struggling?’
And what did you tell them?
Well, we like to think they were struggling because we were doing well! A number of them went overseas and bought businesses that stretched their management and their finances. At the moment, we’re very UK-centric – we do have operations in the Irish Republic, but we’re 99 percent UK-based, so we haven’t been suffering those kinds of problems.
How do you cope with the dual role of CFO and IRO?
As a CFO you spend a lot of your time being the goalkeeper, looking for risks and downsides. Then suddenly you’re sent out on an IR program and you’ve got to do marketing, selling and all the things that don’t come naturally to a CFO. I’ve got two heads really. As we’re not London-based, when I travel south I have to get more of a marketing time feel as I come through Euston station.
Any plans to appoint a separate IRO?
At some point yes, but we were only promoted to the Ftse 250 last year. At the moment, the general flow of governance is to disclose more information and report more frequently, so the pressure will only increase.
What is Speedy Hire’s attitude to corporate social responsibility (CSR)?
We started working on CSR around two years ago and have made great strides. Health and safety is a huge topic for us as there are more fatalities in construction than any other industry in the UK.
Safety legislation is almost annually upgraded and we have made sure our equipment already conforms to this year’s noise and dust regulations. We have the largest capex program in the industry, so we like to think all of the kit coming out of our depots will conform to the latest noise and dust rules.
We see the structure in a lot of the work that goes on – our depots have the authority to help out individual community projects. We see CSR as good for our revenue because we can show we’re a good company. We supply builders that are involved with a number of government projects.
Why has Speedy Hire gone ahead with the operating and financial review (OFR)?
The OFR has had a checkered history – it was coming, then it was pulled very late on and replaced with an enhanced director’s report.
With so much chopping and changing, we have started to give extra disclosure. Given that we’re got ourselves there, we decided to just stick with telling people what we’re doing, how we’re doing it and the areas we’ve still got to work on to make the business better.
Your ambitious stock-earning scheme is turning a lot of your employees into shareholders. How did this come about?
We’ve got a staff of 3,500 in the UK and just under three years ago we started running save as you earn (Saye) schemes. The first of these comes to fruition at Christmas and some 40 percent of our workforce is investing in it.
We do suffer staff churning in certain job areas, like drivers and sales reps, but a high proportion of the core workforce (depot managers and above) are investing part of their monthly pay role into Speedy shares. This shows their commitment and belief in the value of the group. Hopefully it will give them a good return on their investment as well.
How big a role would you say IR has played in the company’s success?
Probably an awful lot. Over the last five years we began upgrading our seriousness and the group’s ratings have improved substantially. Our profile is much higher than it was – people used to say, ‘Speedy who?’
But now when we see people they have all heard of us, they know what we do and how we do it. It is something you have to work at for years and not just think, ‘We’ll give it a go for a couple of months’.
