Speedy Hire PLC (LSE:SDY) expects adjusted profit before tax for the full year to come in towards the lower end of market forecasts despite year-to-date revenue growth and improving margins.
Revenue to the end of July was 4.6% ahead of the prior year, supported by new multi-year contract wins and continued market share gains, although trading conditions remain challenging, particularly across regional and local markets.
Several previously delayed large contracts have now been mobilised and are ramping up, while early trading under Speedy Hire’s commercial agreement with ProService has been encouraging.
Adjusted EBITDA and operating profit margins are also improving as cost control and efficiency benefits from the group’s Velocity strategy begin to come through.
However, Speedy Hire now expects a second-half weighting to both revenue and profit, reflecting the timing of national customer activity and seasonal trading patterns.
For the full year, revenue is expected to be in line with market expectations and EBITDA broadly in line.
The board has nevertheless adopted a more cautious view on the revenue mix between core hire and services, as well as the pace of operating margin improvement.
Higher depreciation linked to investment in major contract wins and increased interest costs are also expected to weigh on adjusted profit before tax.
Current market consensus stands at £459.0 million of revenue, adjusted EBITDA of £111.6 million, adjusted operating profit of £33.2 million and adjusted profit before tax of £14.3 million, with forecasts ranging from £4.6 million to £20.0 million.
Speedy Hire remains focused on winning new business and gaining market share despite subdued conditions.
