Speedy Hire PLC (LSE:SDY) shares fell 6% to 33.5p after it said full-year results would be at the lower end of the board’s previous expectations.
Results for the first half to 30 September showed profit before tax fell 57.6% to £5.6 million but the construction market backdrop was said to be “challenging but manageable”.
Revenue of £208.5 million in the period was down 2.9% on a year ago, with underlying profit (EBITDA) sliding 2.5% to £46.2 million.
Free cash flow improved to £10.6 million from less than £1 million a year ago, allowing the interim dividend to comfortably be kept at 0.8p per share.
Chief executive Dan Evans said the hire company demonstrated its “ability to perform resiliently against challenging but manageable market conditions, by maintaining price and cost discipline whilst investing in and executing on our Velocity Strategy”.
Under the Velocity plans it invested £0.5 million in hydrogen electric powered access with Niftylift, entered into a joint venture agreement with AFC Energy PLC (AIM:AFC, OTC:AFGYF) to provide hydrogen-powered off-grid generators, and acquired Green Power Hire, which was said to have enjoyed a good first month of trading with “significant interest from customers”.
Evans also flagged that the partnership with B&Q was now available online, offering home delivery tool hire proposition via the diy.com and trade-point.co.uk websites, which will then be extended into over 300 stores, which he said would be a lower cost to serve operating model.
“We expect to see the benefits of our investments in our Velocity strategy including operational efficiency and supply chain optimisation, in the second half and beyond,” he said, adding that the macroeconomic outlook is uncertain but the group remains “confident of delivering results, albeit towards the lower end of the board's expectations".