News
28 Feb 2014

Speedy confirms £4.8m accounting irregularities

Building construction equipment hirer Speedy Hire has confirmed that the accounting irregularities it uncovered in its international division in November last year amount to £4.8m

This is some £200,000 less than the worst case scenario set out by the group at the time.

The confirmation follows an independent legal and forensic investigation into the irregularities carried out by Deloitte and lawyers Addleshaw Goddard and an internal review the group carried out itself of the carrying values in the international balance sheet.

Speedy Hire blames the irregularities on the deliberate actions of a small number of employees in the Middle East where the international division is based, all of whom have now left the business.

It says that the total financial impact is £4.8m plus fees and that the profit and loss adjustment to the current financial year to 31 March 2014 will be £2.7m, with the balance arising in prior periods.

It has now strengthened internal cost controls and implemented a new reporting structure which will provide much greater transparency on activities in the international division.

Speedy chairman Ishbel Macpherson said that the group had established a platform in the Middle East, built up local relationships and won major contracts. “The discovery of the activities of a small number of individuals that resulted in these accounting irregularities has been more than disappointing.

“The board has acted quickly and decisively to confirm the impact, embedded a new management team and improved financial controls.

“While there will be an impact on both the current and previous financial years, the group remains committed to our customers in the region and positive about the opportunities.”

The scandal led to the resignation of the group chief executive Steve Corcoran who had joined the business in 1987 and became CEO in 2005. He said that, in the light of what had happened, his resignation was “appropriate”.

He stayed on until 27 January when Speedy announced it had found a new chief executive. Corcoran's replacement is Mark Rogerson, who joined the Speedy board in December as chief operating officer.

Macpherson paid tribute to the “significant” contribution Corcoran made over the 25 years he worked for the business. “Steve has been at the forefront in the transformation of Speedy and I would like to personally thank him for his commitment and leadership and wish him well in his future career.”

Julia Irvine

 

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