Speedy Hire Share Discussion Threads

[smithie6] 22/6/2023 16:38

£70 million depreciation

on hire assets of ~£200 million
& right of use assets of ~£80 million

depreciation charge looks an unusually high % imo

[american idiot] 22/6/2023 15:02

Another director buy incoming....

91995 @ 32.3p
158005 @ 32.3p

260k in total to be announced soon :-)

Can't blame them when theres a 8.5% yield here lol

[american idiot] 22/6/2023 15:00

Smithie...

2014 - That was fraud yes...A £4.8m hit to profits I believe.



“The discovery of the activities of a small number of individuals that resulted in these accounting irregularities has been more than disappointing.”

..........

Thankfully all a long time ago now but I do remember yes.

[american idiot] 22/6/2023 14:55

2nd director buy.......

Paul Rayner - Chief Financial Officer

£0.31309 - 50,000 shares

Claire Rayner (PCA of Paul Rayner, Chief Financial Officer)

£0.31309 - 60,000 shares

[smithie6] 22/6/2023 14:54

American Idiot

was it SDY that had a prior accounting fraud in its middle east division ?

or was it a different hire company ?

ie. that the co. stumbles from one screw up to the next ?

[american idiot] 22/6/2023 14:46

I do see your point Smithie6 :-)

Incompetence / bad (or non existent) record keeping...Its very poor.

Speedy have re-assured investors that matters have been dealt with...We have to take that on trust I guess.

[smithie6] 22/6/2023 14:40

American Idiot

but, do you agree with my general point

that what this company specialises in is hiring out assets & keeping records for each of those assets, when rented out, to who, their address, when due back, how much yet to pay, the age of that unit, servicing history of that unit, current depreciated value of that unit, depreciation this year for that unit....

a major part of the business is just doing documentation

so, it is quite funny imo that they admitted that they were completely incompetent & unable to do/manage paperwork & their assets.

[american idiot] 22/6/2023 14:40

Smithie6

I believe there was an external investigation...



As previously announced, as part of the new controls, the asset count at the end of March 2023 did not identify the need to increase the existing provision.

[american idiot] 22/6/2023 14:36

Here come the director buys....

David Shearer

£0.315089 - 165,000

£0.310499 - 80,000

£0.312250 - 5,000


Aggregated volume 250,000

Price £78,390.86

[american idiot] 22/6/2023 14:34

Smithie...Lost £20m of non itemised assets probably over several years...

Some of that wouldn't have been returned, some lost and I would guess a lot damaged and binned without any records kept.

You make it sound like it was all one persons doing lol whereas in reality it will have been many depots over many years and nothing accounted for...Bad record keeping...

[american idiot] 22/6/2023 14:27

Sleepy,

Gross margins did fall a few % over the year.

Its in the 'Revenue and margin analysis' section of todays results...

Hire £258m revenues at a gross margin of 78.8% (6% growth)

V

Services £176.3m revenues at a gross margin of 18.9% (27.4% growth)

So, to answer. A large proportion of Speedys revenue growth came from 'services' which has a far lower gross margin than that of tool hire.

Gross margins decreased from 57.2% to 54.3%, resulting from a shift in sales mix. Hire margin increased to 78.8% (FY2022: 77.6%) through rate increases and diligent control of other direct costs. Asset utilisation on itemised assets for the year decreased to 54.4%. Services margin of 18.9% was impacted by sales mix with comparably stronger revenue performance in lower margin fuel (FY2022: 22.1%).

I'm no expert by the way so I could well be wrong :-)

[smithie6] 22/6/2023 14:25

have to laugh

a company whose business is to have a big list of assets & to hire them out (using a contract, to a documented renter, at a documented price....& then the co. has to document that the asset is returned & that the correct hire fees are charged for the correct number of days, at the correct rate...)

'loses' £20 million of assets

not £20k, not £200k but £20 million !!

whoever managed to nick the stuff had quite a job on their hands just to move so much stuff & manage to sell it to get cash, & without getting caught.
Well, I guess the equipment included a grinder to use to remove any serial numbers !!

[smithie6] 22/6/2023 14:15

so, they never found the missing £20million of equipment ?!

ffs !

is the company managed by school kids or what ?

-----

Was it also SDY that had an accounting fraud a few years ago, false numbers from an overseas division, or was that a different hire company ?

----

They invested shed loads in 2022 just as the building sector goes in to slow down due to higher % rates. Perfect !! :-(

[sleepy] 22/6/2023 13:41

Thank you for response. Sales are up from 387m to 441m. Operating profit Before exceptionals is only up from 32.6m to 34.1m

[american idiot] 22/6/2023 13:15

Sleepy,

Speedy had a few exceptionals during the financial year...

Asset impairment of £20.4m (non-itemised assets shortfall write-off)
Legal / Professional fees of £1.4m
Restructuring costs of £6.7m (Speedy closed/Merged a few depots)

Total £28.5m

The £20.4m really is a one-off as well.

[sleepy] 22/6/2023 13:02

Thank you both for the informed comments. Why has such a large increase in sales resulted in such a small increase in adjusted operating profits?

[american idiot] 22/6/2023 12:32

I respect your views all the same :-)

Debt isn't a problem here. Speedy have always maintained debt of about £60m. It's only higher because of the share buybacks. This will enhance EPS massively and will most certainly benefit shareholders in the future.

They've plenty of headroom on their 2026 credit facilities as well. Obviously rising interest rates will add to interest payments but its all very manageable. I believe a small amount of depots have closed / merged with others which will generate annual savings of £5m (offset a portion of higher interest charges if clutching at straws!)

The only reason Speedy is 30p/share is because of the dire state of the UK economy yet we can clearly see from todays numbers that Speedy are chugging along very nicely.

Theres plenty of room for the shareprice to bounce now. I think 35p short-term is possible.(Back to where the share price was a month or two ago)

Best of luck to you and all.

[master rsi] 22/6/2023 12:10

I made my points very clear, and I am not in not out of this stock, I had SDY sometime back (years) but at the moment not a stock to be in for the reasons I said.

Due to interest rates, building, and construction stocks are mainly in the doldrums for some time now.

Bank of England Raises Interest Rates by 50 bp

"Today, all eyes were on the Bank of England and its latest interest rate decision.
The institution decided to set rates at 5%, while the forecast stood at 4.75%, which is a slight increase from the previous decision that set rates at 4.50%."

[american idiot] 22/6/2023 11:53

Master RSI,

Short away then please....

You will be wrong on this...and I will be here with the 'Told you so'

I've seen you around on these BBs for many years. Quite surprised at your views here.

This is an absolute nobrainer.

[master rsi] 22/6/2023 10:38

£92.4m debt and today another rise in interest rates is expected, which does NOT sound very promising for the company.

£24M was spent on share buyback, but did nothing for the share price as is at its lowest for some years, but put the company in a serious debt burden.

The ones at the top did not think ahead, just like Boris Johnson with Brexit.

8.50% yield on dividend, but after paying it will be a further rise in the DEBT.

Conclusion, not the time to buy shares with such a large DEBT sorry to say

Net debt at £92.4m after spending £24m in year completing the share buyback, leverage6 of 1.3x

[american idiot] 22/6/2023 07:45

What a fantastic set of results....

The markets are gonna love these :-

Financial highlights

Group revenue increased by 13.9% to £440.6m (FY2022: £386.8m) with adjusted PBT up 6.6%, contributing to a 24% increase in adjusted EPS.

Strong revenue growth of 13.9%

Record year in Customer Solutions (previously branded Partnered Services)

· Adjusted profit before tax up 6.6% and adjusted earnings per share up 23.8%

· Profit before tax of £1.8m significantly impacted by the £20.4m asset write off in the year, resulting in basic EPS of 0.25pps

· Significant free cash flow of £10.6m (FY2022: outflow of £18.5m) driven by improved working capital management

· Net debt at £92.4m after spending £24m in year completing the share buyback, leverage6 of 1.3x

In view of the continuing strong performance of the business and with confidence in the future, the Board has recommended a final dividend of 1.80pps for the year (FY2022: 1.45pps), making the full year dividend 2.60pps (FY2022: 2.20pps) and an increase of 18% on the prior year.

............

So, at a shareprice of 30.5p the divi yields a very nice 8.5%

Lots and lots of room for capital appreciation in the medium term as well once inflation / interest rates subside....

This is an absolute stonkingly STRONG BUY.

[brucie5] 01/6/2023 10:36

Maybe, but this looks like a base forming - for the brave!

[davius] 31/5/2023 14:41

3rd worse performing share in the All share index, today.

Another stock take found the head office has been borrowed and not brought back?