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  • Writer's pictureMark Watson-Mitchell

Speedy Hire, Currys, Windward And H&T

Speedy Hire (LON:SDY) – Setting A New Target Price


I know that I have Profiled this tool and equipment hire group several times before, but I have to say that I still like its business model and reckon that its shares are undervalued.


The group, which operates from some180 fixed sites and selected B&Q stores across the UK and Ireland, also has a number of on-site facilities at client locations.


Additionally, it has a joint venture in Kazakhstan.


Speedy is the UK’s leading provider of tools and equipment hire services to a wide range of customers in the construction, infrastructure and industrial markets, as well as to local trade and industry.


As an extension to its business the company provides complementary support services by way of providing training, asset management and compliance services.


Last Tuesday the group issued a first-half Trading Update, declaring that its performance was ‘satisfactory’ with 5% increased revenues from its national customers, while being impacted by lower sales from its regional clients.


That will not last, in my view, the second half year will be stronger while the group also anticipates picking up new business.


Following on from its recent power and energy solutions joint venture with AFC Energy, last Tuesday also saw the group announced its acquisition of Green Power Hire, a leading supplier of battery storage units, very much doing business in a key growth area.


Analysts Charlie Campbell and Edward Prest at Liberum Capital are looking forward to the group’s Interim Results being reported on 22nd November.


In the meantime, they have a Buy note out on the shares, looking for a Price Objective of 70p a share.


Their estimates for the current year are for sales to end March 2024 to rise slightly to £446m (£441m) but with rising pre-tax profits of £32.5m (£30.7m), generating 5.2p (4.9p) earnings and covering an increased dividend at 2.7p (2.6p) per share.


Moving forward to 2025 they see sales of £472m, £38.0m profits, 6.1p earnings and a 2.9p dividend.


Despite some 2.2m shares being traded yesterday, this £146m valued group’s shares, which closed at 31.50p are trading at far too low a rating and will, in my view, soon achieve my new Target Price of 42p.


(Profile 15.10.19 @ 52p set a Target Price of 75p*)


Currys (LON:CURY) – You Can See Why Ashley Is Buying


It is now apparent that there could well be a number of bidders for this electrical retailer’s Greek empire, or at least various parts of it.


Kotsovolos is the market-leading electricals retailer in Greece.


It joined force with the Dixons Group way back in 2005 and today has some 92 stores across Greece and Cyprus, satisfying millions of customers.


Way back in the middle of June the UK group declared that it was carrying out a strategic review of that business.


The result has, to date, been that several potential buyers have expressed their interest to the Currys Management.


Furthermore, some non-binding offers have been submitted, which are being considered.


The British technology products and services PLC has some 823 stores in 8 different countries, also including the UK, Ireland and Nordic countries apart from the Greek contingent.


The Nordic side has not performed too well of late and now needs to get back on track or be cast off perhaps.


Despite loads of wildfires over in Greece that business saw robust trading.


Closer to home in the UK and Ireland its revenue trends have been improving, while its management aim is to improve its gross margins and deliver against its cost saving targets.


The recent visit by Rishi Sunak to the Currys Repair and Customers Warehouse in Newark gave the company an ideal spotlight upon its centre, which is Europe’s largest tech repair facility that is now generating close to £700m a year in sales.


Over the last three year or so the retailer has widened its repair and returns services, including establishing a route of business with E-Bay for reselling used and refurbished electronics on its the marketplace platform.


Over at Liberum Capital their analysts Adam Tomlinson and Wayne Brown note that the retail group’s shares are 30% below early Covid levels.


They bullishly rate the shares as a Buy with a Price Objective of 135p, which is nearly treble last night’s closing price of 47.72p.


Their figure is almost double the consensus average at 70.2p a share.


They estimate that the current year to end April 2024 will see sales revenues fall back from £9.51bn to £9.04bn, while pre-tax profits could ease to £110.6m (£119.0m), easing back earnings to 7.3p (8.3p) per share, with the dividend being held this year.


Their predictions for the coming year are for £9.34bn takings, £139.9m profits, together with 9.2p of earnings per share.


On these estimates one can easily see why Mike Ashley’s Frasers Group (LON:FRAS) has been an ongoing buyer of the £541m capitalised group’s stock, now holding at least 144.29m shares, some 12.73% of the equity.


Don’t underestimate either Ashley or Alex Baldock, the Currys CEO – both are very determined men with strong strategies in view.


(Profile 10.07.23 @ 49p set a Target Price of 61p)


And Finally ……


Windward (LON:WNWD) – Did you see the business in this Israeli-based maritime awareness technology group yesterday?


They spurted strongly, by some 16%, to close up 10p at 72.5p – and that was on the back of over 1.12m shares changing hands, which is nearly twenty times the recent daily average.


On Wednesday I suggested that there was an advantage to be taken as the group’s shares were knocked back due to the Israel War.


I clearly stated that this fast-developing, highly technologically advanced company will, in my opinion, very soon show its ability for dynamic organic growth, such that its shares now down some 5p this week, at the current 62.5p look too appealing to ignore.


Obviously other investors are now beginning to become aware of the £62m capitalised group’s potential.


Brokers Canaccord Genuity came out with a Buy note on the group, noting the recent contract wins in the States, looking for 115p a share.


I would hold very tightly to existing positions.


(Profile 03.04.23 @ 37.5p set a Target Price of 47p*)


H&T Group (LON:HAT)– Also on the move upwards yesterday was one of my favourite pawnbroking groups.


Its shares closed the day marked at 453p, up 26p, some 6.1% better than the previous night’s close.


Not many shares were traded, with just around 54,000 dealt.


Apart from the shares being cheap I do not know the reason for the sudden activity.


However, just two months ago I stated that on the back of Shore Capital’s recent estimates the shares of the H&T Group are substantially undervalued and very capable of putting on a spurt above the 500p, then up to the 550p levels very soon.


They were then 403.5p, at which level I considered them to be a ‘steal’.


(Profile 06.07.22 @ 332.5p set a Target Price of 400p*)


(Asterisks * denote that Target Prices have been achieved since Profile publication)

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