Shares in equipment rental company Speedy Hire (SDY) have been on a steady upward trajectory in recent months and enjoyed another jump following a pre-close trading update from the group. Excluding disposals, revenues are expected to be around 6.5 per cent ahead of the prior period at about £195m.
Sales appear to be driven by the services side of the business - which provides testing, inspection and training - where growth is expected to come in at 8 per cent. Management has been attempting to increase revenues from services, which is less capital intensive, as part of its drive to hit a return on capital employed (ROCE) target of 15 per cent. ROCE for the first half of the year is expected to be in excess of 12 per cent, from 11.5 per cent at the end of March. As well as rising services revenue, ROCE has been helped by better utilisation of its equipment for hire, with usage rates of 56 per cent expected in the UK, from 55.4 per cent previously.
