The new ProService Agreement is the dominant feature of year-to-date performance, driving an uplift in revenue and profitability despite subdued market conditions. Velocity implementation continues, moving from enabling to growth phases. While higher interest costs reduce FY26 estimates, the ProService deal materially enhances expected earnings thereafter, and we have raised our fair value to 61p per share to reflect this.
ProService acts as a strategy accelerator. As the third and final year of Speedy’s digitally-led Velocity enabling phase progresses, complementary workstreams are coming to fruition alongside refinements to the business model, such as outsourcing fuel services and sharpening TIC focus. The ProService Agreement is a well-timed, additive deal and a unique growth opportunity, now live and expected to enhance earnings by around 40% in a full year. The initial contracted term is up to eight years.
H1 FY26 results underline challenging market conditions, with growth hard to achieve and margins constrained. Speedy maintained gross profitability near prior-year levels through recent contract wins, despite higher staff and interest costs. Management anticipates a significantly stronger second half as these wins and the ProService Agreement take effect. We have reduced underlying EBIT by about 14% for the current year, amplified at PBT level by interest costs, but factoring in ProService, FY26 PBT/EPS is only modestly lower and rises 35–40% over the following two years.
