After being hit by accounting irregularities at its Middle East unit last November, not to mention a profit warning in March, equipment hire specialist Speedy Hire (SDY) appears to be on the mend. Adjusted cash profit at the half-year stage grew almost a quarter year on year to £37.5m.
The dominant UK and Ireland unit grew operating profit by 44 per cent to £16.7m. That mainly reflects the impact of a self-help regime under new chief executive Mark Rogerson. But the business is also beginning to benefit from an improving construction market, driven by the UK's substantial programme of infrastructure regeneration. Just 10 of Speedy's customers generate a fifth of group revenue, and it's precisely these big players that are most exposed to large-scale projects. Asset disposals are making a growing contribution, too. These generated £1.8m, compared with just £0.8m a year earlier, and analysts expect these gains to mount as Mr Rogerson's restructuring efforts filter through.
But the Middle East-focused international unit remains problematic. That delivered a £3.3m operating loss, reflecting a legacy cost base and weak demand for general and spot hire. Management plans to exit the segment in order to focus on oil and gas business.
Broker Investec Securities expects full-year pre-tax profit of £20m, giving EPS of 2.8p (from £14.6m and 2.1p in 2014).
SPEEDY HIRE (SDY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 68p | MARKET VALUE: | £354m | |
| TOUCH: | 67-68p | 12-MONTH HIGH: | 83p | LOW: 49p |
| DIVIDEND YIELD: | 1% | PE RATIO: | 73 | |
| NET ASSET VALUE: | 46p* | NET DEBT: | 43% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 169 | 3.0 | 0.41 | 0.26 |
| 2014 | 189 | 5.3 | 0.56 | 0.3 |
| % change | +12 | +77 | +37 | +15 |
Ex-div: 8 Jan Payment: 30 Jan *Includes intangible assets of £50m, or 10p a share | ||||
