It's been a long road to recovery for Speedy Hire (SDY) after a difficult 2015, which included the departure of a chief executive, followed by the unsuccessful campaign of activist investor Toscafund to oust chairman Jan Astrand. But at long last chief executive Russell Down is ready to declare the recovery a success and the group is again able to focus on growth.
The size of the hire fleet has been reduced by 11.4 per cent in a bid to maximise asset utilisation. This helped the return on capital employed - a crucial measure of profitability - to reach 7.7 per cent in the reported period, up from 3.2 per cent in the previous financial year.
Stripping out the impact of currency movements and planned disposals, revenue was up 7 per cent, with the major UK and Ireland business bolstered by partnered services, where it re-hires other companies' equipment - a capital-light approach.
Asset utilisation was up 7 per cent for the year, to an average of 51.5 per cent. Improving this forms a key part of management's growth strategy, which is focused on driving capital efficiency. Management now hopes to reach a double-digit return on employed capital. It is also open to pursuing acquisitions "that will bolt on and give specialised skills", Mr Down said.
Analysts at Liberum are forecasting adjusted profit before tax of £20m, giving fully diluted EPS of 3.1p in the year to March 2018 (up from £16m and 2.4p in FY2017).
SPEEDY HIRE (SDY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 56p | MARKET VALUE: | £293m | |
| TOUCH: | 55-56p | 12-MONTH HIGH: | 56p | LOW: 29.5p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 36p | NET DEBT: | 38% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 340 | 11.3 | 1.4 | 0.53 |
| 2014 | 350 | 7.0 | 0.8 | 0.61 |
| 2015 | 386 | 2.1 | 0.0 | 0.70 |
| 2016 | 329 | -57.6 | -10.2 | 0.70 |
| 2017 | 369 | 14.4 | 2.2 | 1.00 |
| % change | +12 | - | - | +43 |
Ex-div: 6 Jul Payment: 11 Aug | ||||
