Member Info for rumbers2

Nice positive write up in today's Evening Standard:
https://www.standard.co.uk/business/speedy-hire-after-the-plant-and-equipment-specialist-b937163.html

Excellent post F1. You outline clearly all the essential facts investors here should consider but rarely do.
I'd love your appraisal of Speedy Hire if you have time. I have a strong feeling their Final Results expected in May will exceed all expectations but would like your take on it.

At first glance it reads well with its spin of triumph over adversity.
But the true figures speak for themselves:
Fy Operating Profit 1.5 Million Stg Versus 16.8 Million Stg Year Ago
Fy Adjusted Ebitda Fell 26.4 Percent To 47 Million Stg
Fy Revenue Fell 17.7 Percent To 269.9 Million Stg
Fy Loss Per Share 2.03 Pence Versus 2.31 Pence Profit Year Ago

Welcome thinker, a very small group you'll find here, but am confident Speedy will beat expectations as the year progresses. I had a few bites of the cherry just now when the price momentarily dipped to 62p having sold some at 70p last November. This could dip back into the 50's but the half year report sounded quite bullish and hopefully that momentum is still building as we speak.
It's now twelve weeks since that report so a good trading update would be most welcome right now to lift the SP back up to that 69p support level

Decisions decisions!
Geason Training 's under-performance resulted in net exceptional items of £12.2m. £12.2m ouch!!
Management say changes are been implemented (including new managers) to turn it around.
On the plus side Peel Hunt have reiterated their buy recommendation, raising target price from 60p to 65p.
The dilemma now is whether to buy or sell!

Any thoughts on how the markets will react to tomorrow's results?
I hope we get a bullish move tomorrow. but it can't be overlooked Speedy's purchase of Geason was a stupid blunder. Considering how they keep banging on about making sound bolt-on acquisitions when it was prudent to do so and then discover a £2.6 millon claim for overpayment is pending! Yes Speedy can take this hit but at the same time as the Covid 19 crisis hitting profits as well?
Speedy do make a habit of shooting themselves in the foot every few years.

That was unexpected news this morning.Looks like Speedy were sold a pup with Geason not performing to expectations plus there's a separate expensive litigation pending also. The FD as a consequence has been given the boot .

Liberum cut its target price on Speedy Hire to 72p from 86p, noting: “Looking around at other countries, it is by no means clear whether construction sites will all close or remain open.”

But it argued that Speedy Hire was well positioned financially: “It has £180m of committed facilities and £220m of uncommitted facilities, and the ability to cut cost and flex capex further. These give it scope to weather much more significant revenue falls that we have modelled. The shares are attractively value, looking out to the other side, and we see over 50% upside to our target price of 72p.”
Shares in Speedy Hire were off 10% at 42.0p by 1330 GMT.

Took the opportunity to reinvest this morning at 63p. SP plummeted to 57p support for split second before clambering back to MA200 at 62.7p. We are now back to where we were on election day.

..Except it's impossible to buy any at the moment except the occasional 1 or 2 thousand.
I employed same strategy as you Nohearts. Sold a chunk at 75p and grimaced for weeks as the sp soared to 87p. I sold another chunk at 85p just before the drubbing which was a wise move. Will be happy to buy back at 66p here if in the next fortnight the world hasn't gone to hell in a handcart!

What a great run we've had and what happens next is anybody's guess. My only comment is we have risen from 45p to fleetingly touch 81p yesterday. As i believe in 6p support/resistance levels my theory seems to have played out well. The sp bounced off 45p last August and rocketed through 51p, 57p (a real toughnut to crack), 63p, 69p, 75p before faltering and recoiling from 81p back to 77p now.
That's some performance smashing through six barriers. I think some retrace is overdue but that's only my own personal opinion and may be wrong. I took 20% of my holding off the table at 75p and was wrong. This morning i sold another 20% at 79p but could be wrong on that too. Good luck all whatever you decide.

Nearer 70p on the rally up to Xmas with a Conservative win i reckon Steve. All eyes will then focus on the mother of a giveaway budget in the new year with massive spending on infrastructure first and foremost.
I think we will be break the 2015 highs of 79p by next Spring. This is a chance for Walking Boss to invest (and his newly created alias Kork) but he's too dim to do so.
We can look now forward to a prolonged period of clarity and accelerated growth following three and half years of paralysis and fog.

UK Investor magazine are forecasting 8% growth in revenues to £426.8m this year and a 13% rise in underlying pre-tax profit to £36.2m. They expect net debt to decline from £89.4m to £77m by March 2020, even after hefty capital investment.

"The total dividend is expected to grow by 10% to 2.2p a share this year. That is a forecast yield of 3.7%. The prospective 2019 multiple of nearly 11 is not unusual for a hire company, but the increasing importance of services, and their growth potential, means that Speedy Hire deserves a higher rating."

JackHammers at least take the time to read Walking Boss history of diatribe which dates back well over four years. He's a disgruntled employee who hates Speedy with a passion. Whenever results are due he appears like the grim reaper frothing at the mouth with his warnings of impending doom. In fact the SP is guaranteed to rise whenever WalkingBoss sounds his death knell.

A massive political event like Brexit has left investors transfixed with fear. I prefer to focus on the large institutional buying that's been taking place in the last fortnight - Polar Capital & Merian Global Investors who have hoovered up more than 10.5 million shares between them. More massive buying going on yesterday and then again this afternoon a purchase of 2 million shares.. My hunch is that they are still accumulating and expecting another RNS in a day or two.

Schroders added another 1.5 million shares yesterday.
(10.2% total)

With London traffic gridlocked Max i can see a lot of customers claiming there free-week hire by default.

NoHearts agreed Speedy need to be more aggressive in growing organically. They have plenty of headroom to borrow more should a bargain arise.
The Shares magazine today suggests growth for Speedy is in services rather than plant hire.

<Lloyds British is a gem of a business with very high returns. For example testing and inspection firm Intertek (ITRK) has a ROCE of over 27%>

https://www.sharesmagazine.co.uk/news/shares/speedy-hire-delivers-strong-growth-and-dividend-hike

Shares “materially undervalued” says broker

In a note to clients, analysts at City broker Liberum said the results provided evidence that the group was continuing “to deliver on its strategic aims”, adding that “improving asset utilisation and significant share gains with SME clients suggest an encouraging outlook”.

The broker also said that with the balance sheet providing “an additional source of optionality in the medium term”, the shares were “materially undervalued” and pegged the stock with a 74p price target, a 27% premium on the last close of 58.2p.

In early trading Wednesday, Speedy Hire shares were steady at 58.2p.

Liberum's latest notes are quite bullish:

"Despite the headwinds created by the liquidation of one of its largest clients, Speedy has delivered impressive revenue growth in 1H19. This has been helped by a particularly strong performance in its SME business. The successful execution of this part of the strategy, combined with continued focus on asset optimisation, leaves the company in a strong position to deliver continued improved return on capital employed and cash returns. With 18% total shareholder return potential to our unchanged target price of 74p we reiterate our buy rating."

Peel Hunt raises its target price from 65p to 70p.