Restructuring efforts appear to be paying off at plant hire specialist Speedy Hire (SDY). Indeed, adjusted full-year pre-tax profit increased 35 per cent year on year to £16.8m, while the operating margin improved by 1.2 percentage points to 7.2 per cent.
Crucially, revenue from construction has been cut from 65 per cent of the group total in 2010 to 49 per cent. That's wise given that construction markets are tough - total output in the UK construction sector fell 8.8 per cent in 2012. The shift has allowed Speedy to focus on more reliable work from the water, waste, energy and transport sectors - where revenue rose to 28 per cent of the total - while industrial-related revenue now generates 14 per cent of the total.
Operationally, Speedy's UK & Ireland unit increased revenue 1.9 per cent to £321.4m and divisional operating profit rose 11.8 per cent to £31.2m - helped by the closure of a further 19 depots and a 3.9 per cent cut in headcount. The small overseas unit boosted revenue by 73 per cent, too, to £19m and turned last year's loss into an £0.8m operating profit. Cash flow was also strong and funded net capital expenditure of £49.5m.
Broker Panmure Gordon expects adjusted pre-tax profit of £19.8m for 2014, giving EPS of 2.7p (£16.8m and 1.7p for 2013).
SPEEDY HIRE (SDY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 52p | MARKET VALUE: | £269m | |
| TOUCH: | 51-52p | 12-MONTH HIGH: | 53p | LOW: 22p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 46p* | NET DEBT: | 31% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 483 | -71.1 | -29.6 | 3.47 |
| 2010 | 351 | -22.8 | -4.40 | 0.40 |
| 2011 | 354 | -27.0 | -3.81 | 0.40 |
| 2012 | 329 | 3.20 | 0.33 | 0.46 |
| 2013 | 340 | 12.8 | 1.72 | 0.53 |
| % change | +3 | +300 | +421 | +15 |
Ex-div: 12 Jun Payment: 14 Aug *Includes intangible assets of £54m, or 10p a share | ||||
