Today’s trading update confirms that the positive trend in both revenues and ROCE have continued throughout H1. Group revenues for the period to 30th September are anticipated to be c.6.5% ahead of the prior year, with services revenue growth of c.8.0%. UK and Ireland core hire LFL revenues are broadly flat, with strong growth in the higher margin SME market which has offset lost revenue following the liquidation of Carillion. Trading remains in line with expectations and we make no changes to our forecasts, with adj. PBT anticipated to increase by 17% in the current year. We believe that Speedy’s growth trajectory, upgrade momentum, its strong and improving balance sheet and its in line dividend yield justifies a sector EV/EBITDA rating (5.6x). We maintain our Buy recommendation and 70p TP.
