Tools and equipment hire specialist Speedy Hire Plc (LON:SDY) has brought to an end its streak of profit warnings by raising full-year profit expectations.
Shares in the company to surged 42.75p this morning from 36.75p overnight as the company revealed adjusted profit before tax in the six months to 30 September had risen to £6.8mln from £2.0mln.
It’s barely two months since hedge fund Toscafund agitated successfully to get turnaround specialist David Shearer elected to the Speedy Hire board, so either he is some kind of instantaneous miracle worker or his appointment was, arguably, unnecessary.
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The group’s revenue rose 13.4% to £187.1mln from £165.0mln the year before.
Net debt tumbled to £85.4mln from £102.6mln a year earlier, bringing its gearing – net debt divided by rolling 12-months underlying earnings (EBITDA) – down to 1.47 from 1.69.
The interim dividend has been hiked by 10% to 0.33p.
"These encouraging interim results confirm that our recovery is well established,” said Russell Down, chief executive of Speedy Hire.
“Reflecting the progress the group has made, we now expect results for the full year to be ahead of the board's previous expectations," Down said.
The upbeat statement will ease pressure on the group’s embattled chairman, Jan Astrand, who fought off an attempt in September by Toscafund to replace him with David Shearer.
Shares in Speedy Hire have halved since March 2014.
Liberum Capital Markets said the interims were proof that the group’s self-help strategy is delivering ahead of expectations.
Pre-tax profit was 31% ahead of the broker’s expectations, due to higher sales and bigger contributions from joint ventures.
“Speedy is well placed to benefit from the expected growth in construction, driven by the anticipated increase in infrastructure investment in the coming years,” Liberum argued.
The broker has a price target of 49p for Speedy Hire.
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