Shares in Speedy Hire, which hires out plant and equipment to construction companies, fell by 3 per cent in early trading this morning over fears that a Christmas shutdown had come early to the construction sector.

Speedy Hire's shares fell despite its reports of a "resilient" performance in challenging times.

It said it was seeing continuing strong demand from the infrastructure and utilities sectors, including a pick-up in London Olympics-related work but added that there had been a "severe contraction in general construction activity, primarily funded by the private sector" due to lack of confidence and capital.

"Our strategic focus remains to align ourselves more closely with the UK's major construction and industrial groups," David Wallis, chairman, said.

However, the company reported a 6 per cent decline in revenues in October and said that it remained "cautious" in its outlook and would "not have sufficient certainty on our position until we are through to the other side of the traditional Christmas shutdown".

“Obviously people are very worried about the cautious outlook, it’s quite clear from what they’re saying that October was a dreadful month and people are concerned ... that the Christmas shutdown has come early,” said Paul Jones, analyst at Panmure Gordon.

Speedy Hire said it would hold the interim dividend at 6.4p a share, unchanged from last year, as a prudent measure given the poor forward visibility for construction.

The equipment firm unveiled a cost-cutting plan in July and said today that it had reduced its headcount by 429, out of 492 planned job cuts. Its vehicle fleet has also been reduced by 260 units. The company has also closed 33 depots in a bid to maintain a strong financial footing.

Capital expenditure, pencilled in at £100 to £150 million for the year, has also been cut to £75 million.

Net debt at September 30 stood at £276.8 million, down £17.9 million from June. The company said it was continuing to target further debt reduction and expected its debt to fall to £256 million by the year-end. It added that it continued to operate within the terms of its loans and its facility is not due to be renewed until mid-2012.

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