Hss Hire Share Discussion Threads

[effortless cool] 03/12/2015 13:40

kingston78,

You may be right. But if I am wrong on closing my long, I believe will get the chance to hitch a ride for part of the way, albeit I will have to buy in again higher up. If you are wrong on maintaining your long position, any downwards correction is likely to be swift and painful.

As I said, I prefer to sit and wait for now. Good luck to you in the meantime, however.

[strategicinvestor2] 03/12/2015 13:36

Balance sheet is no real issue given future cash generation machine HSS is. I also see corporate change giving short term 80p to 100p value. I would rather HSS wasn't sold cheap at those sort of silly low levels though...

[kingston78] 03/12/2015 13:34

Effortless Cool,

I think you have closed your long position too soon, just as the share is at the beginning of a new phase rising, imho. New management can be installed under new ownership. The buyer will look at the transaction from a different point of view as to whether it will make adequate return from their investment. Debts can be restructured.

I have been fortunate in a sense in spotting similar situations before, making very handsome profits. I have invested in HSS based on recovery as well as takeover potential.

Only time will tell whether I am proven correct.

[effortless cool] 03/12/2015 13:19

I don't give takeover hopes much credence. Why would anyone want to pay for HSS's balance sheet and management?

[effortless cool] 03/12/2015 13:16

Header updated. I have closed my long position. I am now watching from the sidelines and awaiting full year results before deciding whether to commit again, either long or short.

[kingston78] 03/12/2015 13:12

I have always been suspicious of merger talks behind closed doors. Despite an open denial so as to comply with takeover code this action will open the door to a takeover by other parties, in which case, Speedy Hire can come back to table a counter offer.

I speculate that a third party, say a private equity company, can offer 80 p per share and still make a lot of money out of the transaction by flogging it off in a few years time.

HSS is turning the corner in its operation. The ship is steady, though not in tip top shape. I am waiting for the 100 p target price within a year even if there is no takeover.

[strategicinvestor2] 03/12/2015 12:45

Speedy decibels need HSS more than vice versa ...

[it_trader] 03/12/2015 12:29

Speedy now issued RNS, it's a not happening. HSS need Speedy more than Speedy need HSS imo

[pictureframe] 03/12/2015 12:26

Speedy confirms that it is not considering a combination with HSS.

My guess Private Equity will come sniffing shortly

[dealy] 03/12/2015 11:54

If not, why not?

[my retirement fund] 03/12/2015 11:28

SPEEDY HIRE PLC ("SPEEDY")

STATEMENT RE. HSS Hire Group plc ("HSS")

Following recent press comment, Speedy confirms that it is not considering a combination with HSS.

This statement is subject to Rule 2.8 of the Takeover Code.

This information is provided by RNS

The company news service from the London Stock Exchange

END

STRMMMGZMFDGKZM

(END) Dow Jones Newswires

December 03, 2015 06:18 ET (11:18 GMT)

[rumbers2] 03/12/2015 11:07

Sky news latest;
Two of the UK's biggest tool and equipment hire groups have abandoned secret talks about a £300m merger after a boardroom bust-up prompted two directors to quit.

Sky News has learnt that HSS and Speedy Hire had been in preliminary discussions about a tie-up until last month.

A deal is understood to have had the backing of a number of the largest shareholders in both companies, which have been hit by a string of profit warnings during the course of this year.

However, two Speedy Hire non-executive directors, Chris Masters and James Morley, are said to have opposed the merger, triggering their exit from the company's board.

Insiders said on Thursday that Speedy Hire was now lining up Bob Contreras, the chief executive of van rental group Northgate, to replace one of the departed directors.

A second new director is also in the process of being recruited.

Mr Masters is understood to have been pushing for the ousting of Speedy Hire's chairman, Jan Astrand, a move which angered boardroom colleagues and some of the company's leading investors.

Sources said they were hopeful that the resolution of boardroom tensions would lead to a revival of the merger discussions, which could generate substantial cost savings.

HSS floated on the stock market earlier this year, with the shares being sold for 210p.

However, a number of profit alerts and the exit of its chief executive has sent its value spiralling downward, despite the fact that it should demonstrate respectable growth figures during this financial year.

On Thursday its shares, the majority of which continue to be held by Exponent Private Equity, were trading at roughly 51p, giving it a market value of just £80m.

Speedy Hire has seen its shares lose more than half their value over the last 12 months, and it now has a market capitalisation of just over £180m.

It has blamed its woes on a range of issues, including a lack of equipment, disruption caused by poor IT systems and a mistaken focus on larger clients at the expense of smaller ones.

Both companies specialise in leasing tools and equipment such as generators, pumps and concrete mixers, and analysts believe there is considerable logic in combining them.

Rothschild and Investec are understood to have been advising Speedy Hire on the early-stage merger talks, with HSBC advising HSS.

Both HSS and Speedy Hire declined to comment.

[kingston78] 03/12/2015 11:04

I think it is now appropriate to change the thread heading to "The Long Story" or " A new beginning", or " The turnaround ".

[strategicinvestor2] 03/12/2015 02:57

Bulls are beginning to dominate as more analyse the potential of HSS, bears have mainly changed their view/positions. Leading up to year end results we should see a scale rerating of this stock on my opinion ...

[rumbers2] 01/12/2015 13:06

..and the bulls suddenly came charging back moments ago beating the bears into a hasty retreat.

[strategicinvestor2] 30/11/2015 11:57

MMs willing to buy large volumes at premium to the 52p quote - tried 20,000 shares. They are hungry for stock...

[dealy] 30/11/2015 07:28

good Posts over the Weekend. I am also bullish here. Take out ratio's for companies like this at present are about EV/Ebitda of 7. Current EV of HSS is 300m with 2016 Ebitda probably around 80m so current Ratio here is just 4.

Applying a 7 multiple would give a 560m EV, minus 200m of debt next year equals 360m of equity value compared to current 80. That is a best case of course could be achieved over the next 2 years if they execute the plan.

[strategicinvestor2] 29/11/2015 22:49

Secured Note holder recording on the HSS website confirms:

Only significant banking covenant is a very low EBITDA covenant

Refinancing of borrowings not sensible in Feb 16 as no net benefit, interest costs would be lower but less long term flexibility

Borrowings expected to reduce in 2016 based on forecast strong cash flow generation

Capex in 2016 expected to be c£20m to £25m lower than 2015 reflecting investments and efficiency improvements

Banks are offering increased facilities to HSS but borrowings expected to reduce by end of 2016

If I have picked up anything incorrectly guys listening to the call - in Investor Relations section of website , let me know.

A very helpful recording from Management. The news on not refinancing and on confirming plans to pay down borrowings in 2016 are new pieces of confirmation to me.

[strategicinvestor2] 29/11/2015 22:39

Secured Note holder recording on the HSS website confirms

Only significant banking c

[my retirement fund] 29/11/2015 21:34

Good luck with your expectations then for 2016 lets see what it brings.I have shorter expections myself, for example on 25 Dec im expecting Santa to have a magic key when he drops off his presents this year as we dont have a chimney anymore; )

[strategicinvestor2] 29/11/2015 21:21

Effortlesslycool - we you able change the title on your shorters thread to long/ buyers thread as you had planned. Well done on closing your short and now making money buying in now we have had the information from the trading update..

[strategicinvestor2] 29/11/2015 19:27

Top line is increasing as market share held by HSS increases and efficiencies and asset utilisation seem to be improving all the time. I expect asset utilisation to increase further in 2016, hopefully impressive benefits from central distribution model which looks like the ideal tactic with volumes increasing day on day...

[strategicinvestor2] 29/11/2015 19:24

I expect this to massively outperform based on improving cash flow visibility today going into 2016. I expect creditors will be happy to reduce rates on borrowings given risks are reducing all the time. I expect borrowings to be paid down in coming years as all the kickers further enhance prospects.

[my retirement fund] 29/11/2015 18:50

No your wrong, generally creditors are not charged with doing others jobs in order to ensure they are lending within favourable terms they simply set their terms within the scope of a companies current accounts - which also includes its valuation.

Auditors look at longer term cash flow based on current - which is why I am saying the intangibles are overvalued, it may come as a complete shock to you but the spending spree (mostly pre ipo) simply now shows that the income from its present incarnation does not support the original sums paid and what's even worse for shareholders is that because they borrowed to do this its all "geared"

The company either needs to drastically decrease overheads or increase revenue without affecting its present costs - ie putting its prices up without seeing a reduction in sales or reducing rental and staff wages for example.

As I understand it, it can do neither and on top of this it has an extensive equipment inventory which it needs to replace as it ages.

I'm not sure how it would be possible to survive unless it can raise further funds in a sustainable manner - eg. from shareholders.

[strategicinvestor2] 29/11/2015 17:35

Creditors look at longer term cash flow to ensure they get their money back - HSS should have no problem there with a strong EBITDA. I suspect HSS intangible more than justified based on discounted cash flow valuation. Share price being so low makes it risky but reward could be a doubling in the medium term to about half issue price ....