Speedy Hire Share Discussion Threads

[rumbers2] 15/8/2016 10:52

Pauly, I'm convinced Martin Hughes was reading your posts yesterday because today he's backtracked somewhat stating "sector consolidation is not vital" but installing an independent chairman is.
He's obviously been picking up on the fears many Speedy investors must now have - that we'll be taken for mugs saddled for years to come paying HSS Hire's astronomical debt.

[my retirement fund] 14/8/2016 22:17

Then i stand corrected.

[paulypilot] 14/8/2016 16:13

Hi mrf,

I'm afraid you're wrong there, Speedy has a sound balance sheet - vastly better than HSS. Here are some figures for you;

Speedy Hire (SDY)

Mkt cap £202m at 38.6p per share

Last balance sheet 31 Mar 2016:

Net assets £178.4m, less intangibles of £1.6m = NTAV £176.8m

Total hire assets = £220.4m, less: net debt £102.6m = £117.8m equity in hire fleet



HSS (HSS)

Mkt cap £115.3m at 74.5p per share

Last balance sheet 26 Dec 2015:

Net assets £158.3m, less intangibles of £179.9m = NTAV MINUS £21.6m

Total hire assets = £143.3m (see note 8 of accounts), less: net debt £218.1m = MINUS £74.8m equity in hire fleet


So as you can see, the 2 companies' balance sheets are like chalk & cheese!
Speedy is well structured, with plenty of equity in the hire fleet, whilst HSS has clearly very considerably over-borrowed, as the bank have funded its entire hire fleet, plus another £74.8m over and above that.

This is why I am very much opposed to Speedy being persuaded or forced to bid for HSS, and thereby getting HSS shareholders & its bank off the hook.

Regards, Paul.

[rumbers2] 14/8/2016 15:28

Institutions own 68% of the issued shares. Now that Tosca & Schroders have revealed their hand (30% combined) the balance of power now clearly lies with the few remaining large players.
Will Aberforth (9.9%), FIL (7.6%) Majedie (6.5%) and Artemis (5.15%) give Hughes the 21% he needs for victory?
I will be very interested to hear their views over the next three weeks. I am assuming they would want to sway shareholders one way or the other?

Pauly and MRF are you expecting the market to react negatively if Hughes gets his way and deposes Astrand?

[my retirement fund] 14/8/2016 13:24

Speedyy also has a train wreck of a balance sheet - albeit not as bad as HSS which one could argue is insolvent.

I Suspect the master plan is to merge the two in conjunction with a monumental funding from major shareholders and to close half the combined stores.

Clearly small shareholders are likely to be virtually diluted out of existence.

[paulypilot] 14/8/2016 09:15

Hi rumbers2,

The trouble is, Toscafund want Speedy to merge with HSS.
Have you seen the balance sheet of HSS? It's an absolute train wreck.

So the last thing I want to see, is Speedy's good balance sheet destroyed by it effectively being forced to take on HSS's debt!

The solid balance sheet is one of the few attractive features of Speedy.

I don't like the concept of a major shareholder seeking to force a company to merge with another of their big shareholdings. Sounds like they want Speedy to bail out their mistake in buying HSS shares?

Regards, Paul (long SDY, no position in HSS)

[rumbers2] 14/8/2016 07:56

From today's Telegraph:

Jan Astrand, chairman of tool rental firm Speedy Hire is brave. By refusing to heed calls from top shareholder Toscafund to stand down, Astrand is daring to go up against Martin Hughes, the fund’s fearsome boss, who presumably didn’t get the nickname “The Rottweiler” for being cuddly.

Hughes insists the 69-year-old has presided over a mess and thumbed his nose at corporate governance standards, but Astrand is boldly standing firm. I expect Hughes, a veteran of boardroom dust-ups, to amass enough support for his proposals and to dispatch Astrand with canine-like speed.>


I understand Hughes now has the backing of Schroders who own 10% of the shares. With known support now running at over 30% it will only take another two of the big institutional shareholders to jump aboard to secure a majority here.

I think these changes will be good for both the business and the share price and I am hopeful fellow private investors like myself will vote accordingly.

[american idiot] 11/8/2016 20:29

Nice rise in the shareprice here today.

I'm back to breakeven on my poorly timed trade here now.

Hoping for more tomorrow. All this shareholder action from Tosca can only be good for the shareprice.

[rumbers2] 10/8/2016 11:19

Tosca shaking everything up

[rumbers2] 10/8/2016 10:33

From FT:


Toscafund Asset Management, the UK hedge fund manager, has stepped up its pressure on Speedy Hire executive chairman Jan Åstrand, calling on the tool hire group’s boss to resign with immediate effect.

Toscafund is Speedy Hire’s largest single shareholder, and had already forced the company to announce a special general meeting for shareholders to vote on Mr Åstrand’s removal.

In an open letter today, however, Toscafund chief executive Martin Hughes pushed for Mr Åstrand to leave even sooner. He wrote:

The simple fact is that you have failed to deliver during your tenure as executive chairman and we do not believe you have the appropriate track record or attitude to oversee the Company’s turnaround.

Having consulted with our fellow shareholders, Toscafund is of the firm view that you should stand down from the board with immediate effect. If you do not, we will continue to urge our fellow shareholders to remove you as the Company’s executive chairman at the General Meeting and to appoint David Shearer as a director.

Shares in Liverpool-based Speedy Hire have been hammered by a long run of rough trading, and are down 29 per cent in the last year.

Toscafund has proposed that Mr Åstrand be replaced on the board by turnround specialist David Shearer.

Mr Hughes was said to be particularly annoyed by Mr Åstrand’s decision to back out of deal talks with rival plant hire group HSS, in which it is also a significant investor.

In December, Speedy Hire denied media reports that it was considering a tie-up with HSS. In his letter today, however, Mr Hughes said Mr Åstrand “inexplicably halted” prolonged talks with HSS. Toscafund believed a deal would be beneficial, but wrote that Mr Åstrand was “aware that there was unlikely to be a role for you in the combined business.”

[rumbers2] 25/7/2016 07:22

Here's the FT story:

Toscafund pushes for turnaround specialist at Speedy Hire

Speedy Hire will hold a special general meeting to discuss the removal of its executive chairman after pressure from the troubled equipment rental group’s largest shareholder.

Toscafund Asset Management, which owns 19.5 per cent of Speedy Hire’s shares, has proposed that executive chairman Jan Åstrand be removed from the board and replaced by David Shearer.

Mr Shearer is a turnaround specialist who has worked on restructurings at companies including Superglass and Crest Nicholson, the housebuilder. He has already confirmed that he is willing to join the board of Speedy Hire, according to Toscafund.

Toscafund said Mr Åstrand has been “indecisive as a business leader, failed to support Speedy Hire’s executive management fully and failed to consult with shareholders regarding key board appointments.”

It added that Mr Åstrand’s role as executive chairman is incompatible with the UK Corporate Governance Code as the company already has “an effective chief executive.”

Speedy Hire said it intends to call a general meeting of shareholders in response to the requisition within 21 days.

Earlier this month Speedy Hire upgraded its full-year results forecasts after a decent start to the year, but the announcement came after a long run of profit warnings and boardroom departures despite strength in the broader equipment rental industry. Shares in the group lost more than half their value last year.

Martin Hughes, Toscafund founder, said:
The decision to call a general meeting has not been taken lightly. Toscafund takes pride in supporting the businesses in which it invests and invariably votes in favour of their AGM motions. This is the first time in our 16 year history that we have felt compelled to take such action. Now we have made these issues public, we would welcome open dialogue with all other shareholders.

[rumbers2] 25/7/2016 05:49

Rebellion is in the air. This short report from City AM but there is a longer story in the FT which I cannot access.

SPEEDY HIRE RAISES HACKLES OF ROTTWEILLER

One of Speedy Hire’s largest shareholders will call for an extraordinary general meeting this morning due to frustrations around its performance and management. The building equipment supplier’s share price has fallen sharply over the last couple of years due to a series of profit warnings.

Toscafund, which has a near 20 per cent stake in Speedy Hire, will make the call for the EGM in order to oust the firm’s executive chairman Jan Astrand.

Martin Hughes founder of Toscafund has been given the name of 'the Rottweiler' in the City for his aggressive investing practices.

Hughes is understood to be pushing for David Shearer, a chartered accountant and former chair of the housebuilder Crest Nicholson to take over.

[pugugly] 27/6/2016 12:57

aim-master thanks -
As a matter of interest how do you rate the quality of the research notes on research-tree £40 per month ? However many of the suppliers listed are very small brokers/paid research houses so quality ??

[pugugly] 27/6/2016 09:36

Very quiet - being ignored in the rout of house builders/construction/ and builders merchants - WHY ?? If it follows the market might be looking for another 20% fall (imo).

Any thoughts as to why SDY is holding up during the BREXIT inspired fall of others in the sector ??

[american idiot] 26/5/2016 21:02

To me, SDY looks like a buy now. A recovery stock in play.

Just thinking / hoping for a small dip in the shareprice heading into the Brexit vote. Markets are bound to be volatile in the run up and no immediate rush to buy here is there.

I think we will see 36p here so that is my target to buy :-)

(Was a dirty great 200k bid placed on 39p today on Level 2 so hopefully it'll read my post and move down to 36p lol)

[rumbers2] 23/5/2016 09:25

I'm not a chartist but it looks like we are approaching a 'Golden Cross' late this week/early next, with both the MA20 & MA50 crossing over the MA200 for the first time in ages (currently 37.88p).
Whether it actually means anything or not is debatable, but psychologically it is bound to increase the growing bullish sentiment.

[napoleon 14th] 18/5/2016 12:52

From Chronic Investor:

Speedy Hire recovery will take time

It's going to be a long road back to recovery for tool hire group Speedy Hire
(SDY), but chief executive Russell Down - who took the reins last July - says the bulk of the restructuring is complete. That restructuring led to £59.9m in exceptional costs last year, including a £45.9m goodwill impairment charge, and largely explains the crash in reported pre-tax profits. Even on an adjusted basis, which excludes amortisation and exceptional items, pre-tax profits still plunged 77.2 per cent to just £5m, reflecting lower revenues.

However, Mr Down is staying positive. He said revenue trends improved towards the end of the financial year, and net debt and cash flow were better than expected. This was down to some serious overhaul measures, including cutting overheads, improving IT systems and tightening operational management structures. On the international side, Mr Down said the overseas business would be retained for now, having moved back into the black last year.

Numbers are under review, but analysts at Panmure Gordon don't expect much change to their forecasts for pre-tax profits of £9.1m for the year ending March 2017, giving EPS of 1.4p. That compares to £5m and 0.8p for FY2016.

ORD PRICE: 39p MARKET VALUE: £204m
TOUCH: 39-39.25p 12-MONTH HIGH: 77p LOW: 28p
DIVIDEND YIELD: 1.8% PE RATIO: na
NET ASSET VALUE: 34p NET DEBT: 58%

IC VIEW:

This might be as bad as it gets for Speedy Hire, but it's our view that the first-quarter results from FY2017 will be crucial in showing Mr Down's progress. Until then, with the stock trading on 28 times forward earnings, we’d say any future recovery potential appears entirely priced in. Hold.

Last IC view: Hold, 32p, 10 November 2015

[hippo] 18/5/2016 12:51

It's in the price, viewed as recovery from here, final quarter was evidence of that.