EQUIPMENT rental firm Speedy Hire is to play a role in a major £12bn oil drilling project in the Middle East.
The Merseyside-based firm will provide tools, power generators and other equipment for a £12.2bn project to build four artificial islands at the world’s fourth biggest oilfield.
Speedy is best known for supplying builders in the UK, but two years ago it set up an international division in the Middle East to reduce its exposure to weak domestic markets.
Although the division currently accounts for just 5% of its revenues, the company said the contract win – which will be worth at least £40.7m over a five-year period, is “a key development”.
Speedy’s closed 0.5p or 2% higher at 23.8p.
The contract with the support services arm of the Abu Dhabi National Oil Company was described as “major” by chief executive Steve Corcoran.
Investec analyst Andrew Gibb added: “This is an important win for the group and underlines its ability to carry out more value-added activities for clients.”
He upgraded his forecasts and now believes profits in the year to March, 2014, will be £500,000 higher at £20.5m, while the following year will be boosted by a similar amount.
As well as branching out overseas, Speedy has been targeting infrastructure and energy projects, which now make up a quarter of its revenues.
For example, it works with every water company in the UK, with Carillion on London’s Crossrail project and has a contract with ExxonMobil at its refinery in Southampton.
These trends helped the group’s UK and Ireland division, which still makes up the lion’s share of its business, improve underlying revenues by 2.5% in the three months to June 30 despite disruption from the Diamond Jubilee celebrations.
Meanwhile, Speedy repeated a warning that restrictions and interruptions to construction projects in London due to the Olympics was set to disrupt trading in the current quarter.