These results show Speedy Hire's focus on regulated industries like water, waste and energy - where contracts are longer and funding more reliable - is paying off. Last year's half-year loss of £9.9m turned into an underlying pre-tax profit of £4.8m and, reassuringly, the tool hire company is confident of hitting targets for the full year.
Underlying revenue, which strips out the loss-making accommodation business sold earlier this year and an old Network Rail contract, grew 2.1 per cent to £158.9m, and infrastructure projects are likely to remain the principal driver of growth, believes chief executive Steve Corcoran. Selling that lower-margin business means analysts at broker Evolution Securities now expect an increase in operating margin to 9 per cent this year, another step closer to pre-downturn levels of 15 per cent. Free cash flow of £37.4m also owed much to the sale, which helped slash net debt by 32 per cent to £77m. And, while work on the Olympics site in Stratford may be slowing down, focus is shifting to the lucrative London Crossrail project.
Evolution expects full-year adjusted pre-tax profit of £12m and adjusted EPS of 1.7p (£0.7m loss and nil in 2011).
SPEEDY HIRE (SDY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 20p | MARKET VALUE: | £103.4m | |
| TOUCH: | 20-20.25p | 12-MONTH HIGH: | 34.5p | Low: 18.5p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | na | |
| NET ASSET VALUE: | 44p* | NET DEBT: | 34% | |
| Half-yearto 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 177 | -13.8 | -2.42 | 0.2 |
| 2011 | 162 | -2.30 | -0.16 | 0.2 |
| % change | -8 | - | - | - |
Ex-div: 4 Jan Payment: 27 Jan *Includes intangible assets of £58.2m, or 11p a share | ||||
