As statements of intent go, the divisional breakdown of Speedy Hire’s first-half results takes some beating. Next to the numbers reported for the core equipment hire business - which generates 99.6 per cent of turnover - sits a near empty column for Speedy’s new international and advisory businesses that's crying out to be filled.
The foundation for the international business was the recent signing of a five-year partnership deal with Carillion for 'full outsourcing' in the Middle East, while the first revenues from advisory have come from training. But while the growth ambition in these fledgling interests is clear, the key to Speedy remains its domestic hire operations and trading here remains horrid. The usual seasonal pick-up hasn't materialised and Speedy only expects to break even in the second half. What’s more, further cost reductions may be hard to deliver now that £82m of savings have been found. And there are concerns about delays to public sector projects given the upcoming general election and worries about the budget deficit.
A £6.6m increase in operating cash flow to £25.6m is encouraging, but has to be seen in the context of capital expenditure falling £19.7m below depreciation, compared with £7.2m above depreciation in last year's first half. Broker WH Ireland expects a full-year loss of £5.2m, giving a loss per share of 1p (2009: £33.9m/48.9p).
| Speedy Hire (SDY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 30p | MARKET VALUE: | £155m | |
| TOUCH: | 30-31p | 12-MONTH HIGH: | 71p | LOW: 9.4p |
| DIVIDEND YIELD: | 6.7% | PE RATIO: | na | |
| NET ASSET VALUE: | 49p* | NET DEBT: | 53% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 256 | 19.4 | 7.61 | 1.7 |
| 2009 | 185 | -13.6 | -4.08 | 0.2 |
| % change | -28 | - | - | -88 |
Ex-div: 6 Jan Payment: 22 Jan *Includes intangible assets of £68m, or 13p per share | ||||
