Business

Speedy Hire shares dive and chief quits over accounts hole

Speedy Hire

Last Updated at 20 Sep 2017, 15:30 GMT *Chart shows local time Speedy Hire intraday chart
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Shares in Speedy Hire have dived 16% and its chief executive has resigned following the discovery of a £5m hole in its accounts.

The building equipment supplier found "accounting irregularities" in its international division. The unit's finance director has been suspended.

The firm said it was in "a constructive dialogue with its lenders".

Given the events, Speedy Hire said chief executive Steve Corcoran felt it was "appropriate that he resigns".

Mr Corcoran will step down from Speedy Hire's board and will leave the firm at a date yet to be decided.

Law firm Addleshaw Goddard has been appointed to carry out an independent legal investigation in to the matter.

'Mis-statements'

Speedy Hire's international division accounts for about 5% of the group's revenues, and operates mainly in the Middle East.

The company said that following recent management changes in its international division it uncovered "the mis-statement of a number of accounting balances" within the unit.

It said it appeared that some control process within the division had been "repeatedly and deliberately circumvented".

As well as the international division's finance director being suspended, Speedy Hire said "other senior divisional management are the subject of further investigation".

The total impact of the issues is expected to be about £4.5m-£5m. It estimates this will cut pre-tax profits by about £3m for the current financial year, and may lead to the restatement of financial results for the two previous financial years.

Speedy Hire said it remained "in compliance" with financial covenants, but added "these circumstances have resulted in a breach of certain other items".

"The group is engaged in a constructive dialogue with its lenders," it said.

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