Speedy Hire PLC (LSE:SDY), the tools and equipment services company, said it has launched an investigation after identifying a deficiency in the net book value of its hire equipment.
According to a trading update, the group noticed a deficiency of £20.4mln in its non-itemised assets (those assets which do not have a unique serial number and are not tracked, such as fencing) in preparation for its 2023 audit.
As a result, Speedy said it has instigated an external investigation into the issue, which includes a review of its control and accounting procedures.
Speedy also said it has strengthened its control environment for managing its non-itemised assets, including weekly counts and an internal audit focus.
While the deficiency is expected to result in a one-off non-cash write down of non-itemised assets for year to 31 March 2023, it is not expected to impact the group’s cash or underlying profit performance.
Revenue in the four months to 31 January 2023 was up 16% against the same period a year earlier, and the board remains confident in achieving underlying profit in line with expectations, it said.
New management introducing operational changes led to a 20-depot reduction, the closures of which will cost £2.9mln, although it is expected to produce savings of £2.9mln per year.