On Thursday of this week, 21st November, I would like to see a positive statement from Speedy Hire (LON:SDY), certainly good enough to rekindle some upward action in the group’s share price.
Currently, they are trading at around the 29.80p level, while analysts are valuing them at up to 51.7p.
The Business
Speedy Hire, which was set up in 1977, today is the UK's leading provider of tools and equipment hire services to a substantial range of customers in the construction, infrastructure, industrial, and support services markets.
It also deals with local trade and industrial companies across the country, as well as with the general public.
The £140m-capitalised group operates from 144 Service Centres and on-site locations across the UK and Ireland, and through a joint venture in Kazakhstan.
The group provides a unique industry-leading national four-hour delivery promise on its 350 most popular products.
It has some 300,000 itemised assets for hire and employs over 3,300 people.
In addition, it also provides complementary support services through the provision of training, asset management and compliance services.
It supplies large national customers, including some 86 of the UK’s top 100 contractors.
The company hires out a range of tools and accessories, including access, lighting, survey, lifting, rail, safety equipment and ATEX, plant, site and traffic management, communications, and pipework and engineering equipment; compressors, generators, and pumps; and heating, ventilation, and cooling equipment.
Additionally, the group sells access, lifting, survey, rail, and personal protective and safety equipment; various tools and equipment; and cutting, grinding, and sanding equipment, as well as site supplies.
The business offers partnered fuel management, testing inspection and certification, advisory/technical, powered access, out-of-hours, building information modelling, and aviation services, as well as customer service centres and training services.
The group signed off a significant infrastructure contract with Amey Group Services in June this year.
Amey, which is a prominent provider of engineering, operations, and de-carbonisation solutions for UK infrastructure, selected Speedy Hire for its sustainability credentials and its range of eco-friendly products.
The new long-term agreement, which is set to generate up to £25m annually, was expected to start in the second half of Speedy's financial year, after a transition period to ensure seamless integration.
Analyst Views
Analysts Joe Brent and Sanjay Vidyarthi, at Panmure Liberum, rate the group’s shares as a Buy, looking for 47p as their Price Objective.
After the recent Trading Update, they now estimate that the year to end-March 2025, will show increased sales of £446m (£422m), with pre-tax profits of £24.1m (£14.7m), lifting earnings to 3.9p (2.3p) and maintain its dividend at 2.6p per share.
For the coming year to end-March 2026, they have pencilled in £465m revenues, £30.2m of profits, 4.9p of earnings and an increased dividend of 3.0p per share.
Looking further out, the analysts have pencilled in £485m sales, £37.1m profits, earnings of 6.0p and a 3.5p dividend.
The analysts remain upbeat about the group’s outlook, especially with the kicking in of operational gearing helping to push the group’s earnings up to 9.2p a share in due course.
Over at Equity Development, its analysts Toby Thorrington and Hannah Crowe have a 51.1p per share ‘fair value’ on the equity.
They are looking for £444.5m revenue in the current year, with adjusted pre-tax profits of £22.4m, 3.72p of earnings and paying a 2.60p per share dividend.
For the 2026 year they see £464.9m sales, £29.8m profits, 4.97p earnings and 2.73p per share of dividend.
Equity Development concludes that the reaffirmation of growth expectations in this week’s Interim Results could prove to be a catalyst for restoring share price momentum.
In April this year, the group’s shares were down to as low as 23.5p, before rising to the year’s high of 41.4p.
They are now trading at around the 29.8p level, at which the group is valued at some £138m.
In My View
Ahead of the half-way statement on Thursday morning, I consider the shares of Speedy Hire have been oversold and could well make an interesting purchase of what will prove to be a constructive growth recovery situation.
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