AIM-Listed SDY said its recovery was well underway, and that it expected to beat expectations
Companies: Speedy Hire Plc
Speedy Hire Plc (LSE: SDY) has reported strong half-year results this morning, confirming that its performance has "significantly improved" since its profit warning in mid-2015 and that its recovery is now well established. In a very positive update for investors, the company said it now expected full-year results to be ahead of its previous expectations.
Revenues increased by 5.2% to £171m, with operating profit up a whopping 86.7% (£8.4m). The increase materially improved adj PBT, more than tripling its 2015 total, and giving the business an EPS of 81p up from a £2.21 loss last year.
The company's balance sheet also improved dramatically, with net debt being reduced significantly to below 1.5x EBITDA.
The FTSE AIM-listed firm is one of the UK's leading tools, equipment, and plant hire companies, with operations across multiple industries. Management also reported that it had disposed of its heavy plant to focus on core operations, and confirmed it had strategically reduced its fleet of hire vehicles and equipment by 10%, improving asset utilization.
City stockbrokers Panmure, N+1 Singer, and Liberum covered the update. Liberum said Speedy Hire's self-help strategy was starting to pay dividends, whilst N1 Singer said the results had confirmed SDY's turnaround was going well:
"...results confirm that the turnaround programme is continuing to plan. Full year PBT is now expected to be ahead of our forecast at around £12.5m vs. our current forecast of £11.2m, the second upgrade this year."
Panmure also upgraded forecasts:
"Interim results from Speedy Hire show concrete progress in turning around the business. Pre-disposal revenues +5.2% to £171.4, ahead of our expectations (PG £168.9m). PBT £6.8m (1H17) vs £2.0m (1H16), this compares with PG forecast of £5.7m."
CEO Russell Down said the interims confirmed that the recovery was well established:
"We are now focussed on the strategic development of the business over the medium-term and are implementing a range of customer service initiatives to ensure that Speedy is competitively positioned to grow profitable market share.
Reflecting the progress the Group has made, we now expect results for the full year to be ahead of the Board's previous expectations."
SDY's share price jumped 14% as the market opened.