Half-year results from Speedy Hire (SDY) presented a recovery in full swing, sending the share price up 15 per cent on the day. It remains to be seen whether this will silence activist shareholder Toscafund, which has been vocal in its attempts to oust now non-executive chairman Jan Astrand and for the company to merge with peer HSS Hire (HSS). But chief executive Russell Down has once again shunned that idea, stating "we have a recovery plan in place and any merger will derail that".
A reorganisation, better availability of equipment and improved pricing has drawn in customers. As a result underlying revenue rose 5.2 per cent to £171m and that growth is accelerating; second-quarter sales were up 8.6 per cent year on year, compared with 1.6 per cent in the first quarter.
The group also received a £12.1m revenue boost from the sale of its heavy vehicles fleet and will record another £2m in the second half. This one-off payment and a jump in cash flow pushed net debt from its year-end position of £103m to £85m. With revenue up and staff and vehicle costs down, pre-tax profit before exceptional items more than tripled to £6.8m.
Broker Panmure Gordon has upgraded earnings forecasts for the year to March 2017 and now expects adjusted pre-tax profit of £12.8m and EPS of 2p (from £5m and 0.8p in FY2016).
SPEEDY HIRE (SDY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 41.3p | MARKET VALUE: | £216m | |
| TOUCH: | 41.3-42p | 12-MONTH HIGH: | 44p | LOW: 30p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 35p | NET DEBT: | 47% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 165 | -13.5 | -2.2 | 0.30 |
| 2016 | 187 | 5.4 | 0.8 | 0.33 |
| % change | +13 | - | - | +10 |
Ex-div: 15 Dec Payment: 27 Jan | ||||
