Speedy Chief Executive Resigns over Middle East Accounting Misstatements

Dec. 4, 2013

The U.K.’s largest equipment rental company, Speedy Hire, said its chief executive Steve Corcoran has resigned after the misstatement of a number of accounting balances within its International Division during recent accounting periods. Speedy said the issues were limited to smaller contracts in the Middle East. The international division accounts for 5 percent of group revenue, the company said.

“The information currently available suggests that certain control processes within the international division have been repeatedly and deliberately circumvented,” the company said in a statement.

Speedy said the accounting misstatements are isolated to the international division and are not expected to have a material impact on cash. The total aggregate impact of the issues is estimated between £4.5 million and £5 million (between U.S. $6.5 million and $8.2 million), and would likely reduce pre-tax profit by about £3 million (about U.S. $4.9 million), with the balance resulting in a restatement of the reported financial performance for fiscal year 2012 and 2013.

“Given these events, Steve Corcoran believes it is appropriate that he resigns as group chief executive, will be stepping down from the board of Speedy Hire and will be leaving the company at a date to be finalized,” the company said. “He will remain with the business for a period to allow for continuity with customers, suppliers and employees and pending the appointment of a new group chief executive.”

Speedy also said the finance director of its international unit has been suspended and that other divisional management staff is being investigated. Speedy said its U.K. businesses, representing 95 percent of group revenue and 96 percent of group EBITA in the year ended March 31, 2013, are unaffected by the issues. It added that Speedy remains in compliance with the financial covenants under its banking facilities, but that the circumstances have resulted in a breach of certain other terms. Speedy is engaged in a constructive dialog with its lenders, the statement said.

Speedy is headquartered in Newton-le-Willows, Merseyside, U.K.