Speedy Hire – trading on 9.4 then 5.7 times earnings for the next two years, and at a third less than their NAV, the shares at 24.50p are set to rise, brokers TP 57p

04.09.2025

This morning’s AGM Trading Update from Speedy Hire (LON:SDY), the UK and Ireland's leading provider of tools, specialist equipment and services, could have been more positive perhaps, but do remember that the current Government measures have deflated the main sectors in which this group operates.

However, I now think that the £113m-capitalised group’s shares at just 24.50p could well prove to be a very good one-year bargain!

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. 

Last year the group signed off a significant infrastructure contract with Amey Group Services. 

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.

The AGM Trading Update

The group stated that overall market conditions remain subdued and while the UK Government's commitment to growth has yet to translate into meaningful stimulus across key sectors, it is well positioned for the opportunities this should provide in its end markets.

To date, the group’s hire revenue is marginally behind the same period last year although, consistent with prior periods, but it anticipates a second-half weighting to both revenue and profit, reflecting seasonal trading patterns, the timing of major customer activity and anticipated growth in its trade and retail customers.

The group is encouraged by recent contract wins.

The company declares that its Management continues to apply rigorous discipline to costs, margin and pricing, which they hope, should yield further benefit in the second half.

On the basis of the above, the Board's expectations for the full year remain unchanged.

Broker’s Views

At Dowgate Capital, its analysts Mark Howson and Paul Richards, rate the group’s shares as a Buy, with a Target Price of 57p, against the current 24.50p.

For the year to end-March 2026 they estimate group revenues will increase to £450.9m (£416.6m), while its adjusted pre-tax profits could well stage a big recovery, doubling to £16.2m (£8.1m), increasing its earnings to 2.6p (1.4p) per share.

For the 2027 year, they see £465.3m sales, £26.5m profits, and 4.3p of earnings per share.

Noteworthy are the estimates of the hire group’s net asset values for 2026 of 37p and then 39p for 2027 – compared to the 2025 figure of 35p.

My View

I rather like the look of Speedy Hire right now at 24.50p.

On the basis of the broker’s estimates, we can be looking for sales and profit increases each year for the next couple of years, with the shares trading on just 9.4 times current year earnings and a mere 5.7 times prospective - while the shares trade 34% below their net asset value.

I now set a new Target Price at 30.50p.

(Profile 04.09.25 @ 24.50p set a Target Price of 30.50p)