Speedy Hire Share Discussion Threads

[rumbers2] 01/12/2017 18:01

Thanks rounder for the swift response. I can only speculate blindly what's been going on in the boardroom behind the scenes here. Irreconcilable differences leading to a locking of horns between management and Martin Hughes/David Shearer perhaps?

[rounder2] 01/12/2017 17:40

December, 2017 | 5:06PM
 
 
 



LONDON (Alliance News) - Speedy Hire PLC said on Friday Toscafund Asset Management PLC more than halved its stake in the equipment rental hire company in a transaction on Thursday as Credit Suisse AG also reduced its position the same day.
After the transaction, Toscafund held 43.1 million shares which is equivalent to a 8.2% holding in the company.
Prior to the transaction, Toscafund had held a 20.0% stake in the firm.
Also on Thursday, Swiss banking giant Credit Suisse cut its holding in Speedy Hire below the notifiable threshold after building up a 10.0% stake on Wednesday.
Credit Suisse bulked up its stake in Speedy Hire on Wednesday to 10.0% from 7.6% previously through an expansion in its holding of swaps in the company. However, on Thursday it sold down its stake to the point at which it was no longer notifiable.
No further details regarding Credit Suisse's holding after the Thursday transaction were disclosed.
In mid-November, Speedy Hire hiked its interim dividend more than 50% after reporting half year pretax profit widened 11% to GBP6.0 million from GBP5.4 million the year prior.
Shares in Speedy Hire closed 2.6% lower at 56.00 pence on Friday.
By Ahren Lester; [e-mail].
Copyright 2017 Alliance News Limited. All Rights Reserved.

[derwent4] 01/12/2017 16:56

LOOKS LIKE CREDIIT SUISSE ARE BUYING AND TOSCA SELLING

[gary38] 30/11/2017 17:47

14,492,272 buy 17.01

[derwent4] 29/11/2017 17:56

just a thought now sdy taking off and hss now starting to do the business perhaps it would be a good time to merge

[rumbers2] 29/11/2017 11:21

Despite the gloom and doom of some recent posts N+1 Singer sees continuing earnings momentum with the recent acquisitions and have upgraded their FY18 and 19 EPS forecasts by 84% and 59% respectively. Target price raised today from 63p to 68p.

[derwent4] 27/11/2017 17:35

Schroders in for some more

[noelypoley] 25/11/2017 16:51

I am in the building trade and have noticed a downturn in the last 6 months. I think there will be som tough times ahead.
What sector would you favour now then Kingston?

[kingston78] 25/11/2017 12:12

There was a press report a few months ago to say that many bosses of leading house builders were selling some shares that they owned in their companies. We should follow their action.

Some house builders are now changing their strategies of building lower priced dwellings, diverting from the luxury ends. For well publicised reasons there is less demand for more expensive houses. House builders should be able to weather the storm financially, but I do not see much upside in their share price. I personally would scale down or avoid completely investing in them.

As regards the contracting side, people who are working down the supply chain, we have witnessed the complete collapse in the share price of Carillion. Chasing turnover at the expense of profit margin is the wrong strategy to take.

By way of comparison the price wars amongst supermarkets all these years have damaged their profitability. Not only is it difficult to recover from a weak position, Aldi and Lidl have taken a large market share from them. You would not believe that an upstart company Just Eat Plc is now valued more highly than famous names such as M&S, Sainsbury's and Morrison.

Turning back to Carillion I see no value in the company. No one will take it over because the buyer will inherit £1.5 billion of liability [huge debt and pension deficit]. I don't think their existing contracts are profitable. It is a silly way of doing business. Their previous years' accounts must have been mis-stated. Carillion will cause havoc to their suppliers, including plant hire companies. Believe me, the outcome of a restructuring of Carillion will cause enormous pain to their shareholders, lenders , employees and suppliers. Some suppliers will have to write off huge amount of debt owed to them.

I always use conservative financial measurements, such as Profit before and after tax, return on capital, not EBITDA which is misleading and should not apply to mature businesses. One should remember that Interest and Tax need to be paid. depreciation and amortisation are a real cost, as the fixed assets will be getting old and replaced one day. Whilst accounting profit is important I pay more attention to cash flow.

Most business models rely heavily on Turnover, but difficult to reduce overheads, especially the fixed overheads such as rent,rates and insurance. A decline of any significance will impact on the bottom line profit, earning per share, cash flow and the company's ability to pay a dividend. As the P/E ratio is a very important financial ratio, the share price will drop dramatically when things turn ugly.

In conclusion, I will stay away from the investing in the building and construction industry and their related supply chain companies.

[firtashia] 25/11/2017 10:13

Kingston78- Appreciate your post. With respect to your last paragraph, in your opinion how much of a future decline in the construction industry has already been priced into SDY's share price?

[kingston78] 25/11/2017 00:05

The comment by House Broker Liberum that "both businesses being bought at close to book value" is misleading.

So far as I know Platform Sales and Hire has a net asset value of £2.2 million as at 28/2/2017 being the latest audited accounts. The purchase price including assumed debt is £10.7 million.

Small plant hire companies may be profitable (accounting profit) but there is little or no cash in the bank because of huge commitment to HP payments. Typically they finance nearly all of their purchases of new plant and equipment using HP/Finance Lease at 90% or more (similar to a big mortgage). They would not survive in an economic downturn due to cash flow problems. This is one of the reasons why they would fit better into a larger company with stronger finances.

However, after analysing the accounts of the target companies I am not sure whether Speedy Hire will actually benefit as much as they have boasted. In a way Speedy Hire might enhance its overall earnings per share with these acquisitions, but there are hidden costs that they may not be aware of. There is also a risk of poor post acquisition integration.

There is a saying that turnover is vanity, profit is sanity and cash is king. Growing by acquisition in this economic climate carries a lot of risk and this may come back to haunt the management. I fear that the construction industry will decline despite the government wanting more houses to be built. A weak demand will cause problems for all plant hire companies. The bigger they are the deeper the problem. They will eventually be forced to divest, cutting labour force and closing down unprofitable outlets.

[rumbers2] 24/11/2017 10:42

House broker Liberum said the new assets should “fit nicely” into the group’s existing portfolio from a strategic perspective.
 
“It should also enable Speedy to bring in house some of its existing rehire revenues at higher margins, as well as providing the business with a platform to grow its powered access offering going forward,” said Liberum analyst Rahim Karim.

“From a financial perspective the deal also looks attractive with both businesses being bought at close to book value and an implied EV/EBITDA multiple of 4.4x.”

“Beyond this headline valuation we would expect Speedy to drive both revenue and cost synergies over time, highlighting the accretive nature of the deals. “

[rumbers2] 24/11/2017 08:31

Note Speedy would be the UK's No.1 supplier if it ever acquired the HSS fleet (13,732 units total)

[rumbers2] 24/11/2017 08:19

Speedy on the acquisition trail with two choice purchases this morning.

According to specialist publication Cranes & Access, the addition of 1,620 platforms to Speedy’s fleet, which it estimates at 3,000 units, would take it just above A-Plant in its annual rankings of powered access platform fleets. A-Plant is credited with having 4,500 units.
The top three are Nationwide (11,145 units), HSS (9,112) and AFI (6,219).

[firtashia] 17/11/2017 11:14

rumbers2- and theres a load more of those bungling fatheads in parliament as well.

[rumbers2] 17/11/2017 09:21

It's incredulous i know. It beggars belief that so many of these bungling fatheads are our captains of industry.

[mirabeau] 17/11/2017 09:08

What doesn't make sense in the slightest is why companies are still signing off commercial contracts with CLLN? In the last few weeks alone CLLN has signed off on two contracts, from memory. Customers must be aware of their liquidity problems, must have performed due diligence but still these companies sign off on contracts with Carillion

It does suggest that these contracts may been signed with CLLN's more viable subsidiaries

very, very odd

[rumbers2] 17/11/2017 09:04

Carillion massacred today and possibly in the first stages of its protracted death throes. HSS Hire likely to go same way too in update expected next week. High-time too as this process of weeding out/sector consolidation is long overdue.

For those businesses who have demonstrated good husbandry the bloody aftermath will reveal a lot of rich pickings to be had. I think Speedy is fairly placed in the queue to pick up some of these bargains in 2018.

[derwent4] 15/11/2017 17:14

feel sure that soon we will be merging with hss.their share price is plummeting and ripe for the taking.

[mirabeau] 14/11/2017 18:32

IC update

'Speedy Hire’s (SDY) shares have shot up more than 4 per cent this morning after the equipment hire specialist reported results ahead of expectations. The groups restructuring efforts are paying off, leading return on capital employed to jump to 9.4 per cent from 5.1 per cent last year, underlying pre tax profit to climb 58.8 per cent from last year to £10.8m and net debt to drop to £63.1m from £71.4m. The group’s recovery looks to be well underway. Buy.'

[firtashia] 14/11/2017 11:47

Noticed HSS hitting a 52 week low today & I remember people selling out of SDY because HSS results were poor & it's problems were possibly considered sector specific. Looks like people are selling out of HSS today because they've realised its not!

[rumbers2] 14/11/2017 08:59

Peel Hunt lifts target price to 65p from 60p.

[sspurt] 14/11/2017 08:32

Glad to see this recovery story very much intacto delecto. Looks like eps upgrades of 7-10%.