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It’s not the current bosses you should be angry at. It has been through a string of private equity owners, each gouging out their pound of flesh. It was saddled with too much debt, the senior debt is expensive. Exponent were ludicrously greedy (at one stage talked about a £600m value). The over leveraging of companies gives then no room for manoeuvre when things go awry
“Cash is always short December and they'll need their Creditors support again. Will they get it?” They have already squeezed working capital and there is a limit to how many time you can pull that trick off. Quarterly property rent payments due Xmas day. In these circumstances, suppliers start to get very nervous, particularly those supplying stuff they can’t get back, good people start to look for new jobs and customers drift away. I may have a punt at 10p but the next 6 weeks critical - they may soldier on if they can get to mid January safely. Good luck if you hold shares and fingers crossed for the people working there - never much fun in these situations if you have a mortgage.
That’s the only reason for continuing to hold them / could you live with yourself if you had sold Ashtead in 2003 for pennies ? I don’t hold HSS but can’t see it happening, it needs luck, refinance and superb management. Ashtead were oversold at 2p, I mean their accounting problem at Sunbelt was not as bad as it could have been. HSS aren’t yet oversold at 25p
While Toscafund have 26% of HSS, the stake is worth a mere �13m and falling. The people calling the shots are the senior secured notes holders - �130m They will get their money out, as will the banks providing the �69m revolving credit facility. The suppliers ? I'm not so sure, they'll be taking a haircut for sure. This company needed a significant share issue to re-finance - and I'm talking at least �100m. The feeling among of some main share holders is that it would be throwing good money after bad & arguably its getting too late in the day - they would have to issue the shares at something like 10-15p. And really that's what the shares are worth - its a penny stock that 8 times out of 10 will be going pop, but occasionally miracles happen and things turn around. As far as the Speedy Hire stake goes - the board can at least point out the calamity of a merger that was being foisted upon them. They have largely been proved right. The merger had great operational and commercial logic, but HSS simply was a basket case with far too much debt
This is a very fair point peabop. VP have a very strong board who know the market really well & looking to grow the business, Speedy hire has a board full of 'brought in' bean counters - Astrand, Russel Down and David Garman would all be happy to sell the business on at anything north of 90p over the next 18 months. Speedy Hire is what it is now, a stable, fairly dull business. I'm a buyer at anything less than 55p but while I think they are over due an upgrade, they aren't at the moment a growth story long term. I'll be selling 1/2 my holdings at anything around the 70p mark.
This time last year Liberium (house broker) & Peel issued buy notes and target prices of 49p and 50p. Shares reached that level fairly quickly (from 40p) Add N+1 Singer also targeting 63p and I'd be confident that shares will exceed 65p by mid December then mark time for a while.
Upsides Nice increase in dividend. Total dividends of 1.5p will support the shares. very strong balance sheet. Tangible book value per share around 36p Full year adjusted EPS should be around 3.5p Downsides To really get the share price zipping upwards we need to see some organic growth in core business, ideally alongside some more bolt on acquisitions. Lets hope this is the last time we see 'significant exceptional items. Was it a missed opportunity with Brandon Hire ? Possibly, but the adage 'never buy anything from private equity sellers' may apply. Presumably waiting for HSS to die and then pick what they can out of the carcass. Full year PE ratio is around 16, scope for 15-20% increase in share price in next 3 months.
in fairness they have been utterly becalmed for the who of this calendar year. My view is that operationally they are doing very well and should be up rated however against that is; Construction sector looks likely to slow HSS hangs over the sector like a lead weight - that business is effectively worthless but could prove disruptive in its death throws. Still post half yearly results has typically been good for speedy hire.
I think the recent uptick is down to increasing confidence that there have been no nasty surprises since the last trading update prior to the 1/2 year results. In fact the forecast then was for net debt to be less than �70m at 30th September and subsequently this is now likely to be less than �65m (12th Oct).
I never like to see exceptional charges but think share price doesn't reflect what the 1/2 year results will be. Revenue up 7.5% Margins up due to better sales mix Overheads controlled Debt down despite decent capex spend this half Financial expenses down Excellent run rate into 2nd half. Hoping to see shares at 70p before Xmas Only medium term worries are; UK economy & scope for long term growth The dreaded HSS merger talk - hope this is avoided like the plague.