Speedy Hire Share Discussion Threads

[46maxon] 01/7/2023 16:29

My experience of collection on any thing now in London is a round trip of 1/2 day.
Delivery is the future.
Most days now north London is at a snail pace.

[46maxon] 01/7/2023 16:26

Consider how many people now live in small flats and have zero storage.
Surly they will want to jog- off to B&Q to hire something sometime soon.

[46maxon] 01/7/2023 16:23

Water companies could now be an increase on hire equipment going forward for past failures!

[smithie6] 01/7/2023 09:49

...yes, and they need to do billions of £ in works to stop the release of sewage in to rivers, estuaries etc. Finally it looks like they might be forced to act, ...after many years of little investment.

[zeek] 30/6/2023 18:32

no worries from water companies. They will always need to carry out works regardless of their funding issues.

[smithie6] 30/6/2023 15:48

I don't think Speedy is dependant on any 1 customer. Has lots of different customers, of all different sizes.

Construction sector is a big client, but that must vary from office buildings, warehouses, big conversions, residential, some maintainence work, & site surveying before everything else, & the HS2 train line work is surely hiring some Speedy equipment.....small home loft additions, kitchen extensions, conservatories, removing a driveway etc

[smithie6] 30/6/2023 15:41

you mean like, flooding !

je je. ;-)

[46maxon] 30/6/2023 15:22

Are we vulnerable to any water company!

[smithie6] 30/6/2023 14:30

AI

depreciation of "right of use assets" is ~£25million/year

is this actually a lease cost ? ( for leased buildings, depots & any leased equipment )
& is called depreciation due to the wonders of IFRS16 ?

[smithie6] 30/6/2023 13:38

yes...

worth noting my points about depreciation & Capex imo

they bumped up Capex in '21 & '22 in advance of growth, now they can reduce capex imo in the coming years

(capex reduced from ~£70million/year to ~£50 million....that is £20million, big chunk of change (the finance cost is £8-9 million/yr)

[american idiot] 30/6/2023 13:02

Smithie...

Yes, of course Speedy can adjust to economic conditions appropriately be reducing capex on hire equipment.

Debt is no problem for Speedy but if needed then cut cap-ex in half and they could significantly reduce debt over a 2 year period...

IMO this wont happen though as Speedy is positioning itself for growth :-)

[smithie6] 30/6/2023 09:27

btw

hire equipt depreciation charged in recent financial yr

= £33.9 million.

from note 11 in the recent prelims

(hire equipt book value in March '23
£208 million)

£33.9 million of depreciation is ~16% of the value, inferring that hire equipt is depreciated over ~7 years, not 3 years as Roland writes in his analysis

This does not infer a replacement cycle of every 3 years as written by Roland Head

wrt hire equipt. purchases it appears to me that the total current value of hire equipt should be increasing in '21 & '22 because the expenditure has been 60-70 million in each year, notably higher than the depreciation of the hire equipt.

but about the same as overall depreciation which includes depreciation of
- land & buildings
- other assets

I don't understand/follow the depreciation on those items, partly since little info is given in these prelim results. When I can I will try to look at this in the '21 annual report & see if it gives more info....unless I can avoid it by finding something more interesting to do !!

(land & buildings normally have low depreciation % whereas hire equipment is much higher, normally depreciated over 5-10 yrs, but depends on the unit.

=====

so, imo the co. can reduce its annual capex on hire equipt. in the coming years vs the last 2 years, as it has stated for '24, £50 million. (one guess is that they needed to buy more hire equipt in 2021 & '21 in Kazatan area for big contract that started there in 2022 & for suitable hire equipt to put in to B & Q stores)
So, more cashflow can imo be used in coming years to reduce the debt ;-)

[clocktower] 30/6/2023 07:29

If the arrangements made with B&Q are successful surely it must be a precursor to swallowing Speedy?

Having cleaned up the books with that £20,000,000 disappearing act, B&Q will soon be in a position to evaluate the potential as they themselves need to reinvent their business.

Keep an eye on B&Q as a takeover may come sooner than anyone may think if you see them attracting a lot of business for Speedy.

[smithie6] 28/6/2023 20:55

..some good analysis by Roland Head imo including some good long term graphs

however

he contradicts himself perhaps
...he criticises the divi as too high & infers/says the co. can not afford it but then goes on to say it is half of the expected eps, ie. that it is affordable !

He gives no discussion or comment on the high gross profit (before depreciation), I could argue that is a weakness/fault of the analysis.

(I think his depreciation comment is wrong, because not all of the depreciation number comes from hire equipment as he states; about 1/2 of the total for depreciation comes from hire equipment, so it is expected to last for closer to 6 years rather than the 3 years that Roland Head gives. The other half of the depreciation comes from things like leases & buildings I think. For depreciation on leases & is it accounting std. IFRS16, my brain starts glazing over).

But each to their own. Each investor has their own preferences when picking where to invest.

-----

He is right to show in a useful chart that VP. has done better than Speedy over the last X years.
But any investor has to decide if that difference will continue or whether it is phps over done at this instant & Speedy is now in a catch up phase.

[smithie6] 28/6/2023 19:43

depends on what one wants as a high quality business.

Could it be a new Next, Sage, Apple, Amazon ?
obviously not.

(although Aggreko is in the same old boring hire sector & I assume it made its investors rich from its growth)

but as an under priced hire sector share I think it ticks a number of boxes.

One can buy expensive shares like Tesla, Ocado, Deliveroo etc at a high p/e....or Speedy at a low p/e. Each person to their own preference.

(the charts show that buying shares at a high p/e can often cost an investor a lot of money !)

[brucie5] 28/6/2023 16:51

Maybe a revival in fortunes here. I notice that Roland Head saw value here recently but declined to be a buyer. So it probably doesn't have many friends, even at this level.

"Personally, I'm not tempted. I don't think Speedy Hire is a high quality business and I certainly don't see it as a quality dividend stock, despite the high yield."

Happy to say that I hold from 32p- but second time round!

[american idiot] 28/6/2023 12:38

All looking strong Smithie....backed up by excellent fundamentals and a 8% divi yield.

The share price is re-rating upwards.

[smithie6] 28/6/2023 11:58

real price to sell is 34.26p

while the MMs keep moving the price to sell up & down at around 33.7p, 33.8p, 33.9p...trying to trigger some sellers....but getting very few in the last hour

[smithie6] 28/6/2023 09:50

Above 34.0p to sell now.

Just a bit more to go up through the ceiling of the trading range. If it makes it, it should attract more buyers.

From 31p to 34p the price action looks strong, nice up trend. We will see if it continues, I think it will.

[smithie6] 27/6/2023 11:21

..a few stale bulls to be cleared out then this might be 'off to the races' !

[american idiot] 26/6/2023 18:51

Nice little grab at the end today...

The spread was 33.6p - 34p towards 4.30pm yet the UT was 32.4p.

[tole] 26/6/2023 06:36

https://citywire.com/funds-insider/news/expert-view-ncc-ds-smith-musicmagpie-burford-capital-and-speedy-hire/Liberum: more to come from Speedy Hire sharesTool and equipment hire group Speedy Hire (SDY) has delivered positive surprises in its full-year results, but the shares still trade far below Liberum's 'fair value'.Analyst Charlie Campbell retained his 'buy' recommendation and 70p 'fair value' target price on the Citywire Elite Companies plus-rated stock, which rose 1.4%, or 0.5p, to 33.5p on Friday.Full-year results beat consensus with a 24% increase in earnings per share, and management has 'signalled confidence by surprising on the dividend, paying 2.6p in total, offering an almost 9% yield'.'Its confidence is underpinned by the infrastructure outlook, rising hire rates, new client wins, and the start of Velocity, a five-year plan aimed at improving growth and efficiency by leveraging technology and energy efficient equipment,' Campbell said.He nudged up his 2024 estimates and said despite a re-rating in the shares, they have further to go to hit 'fair value' of 70p.

[master rsi] 25/6/2023 21:27

Polar Capital LLP

Cut their stake from 5,99% to 4.5%
I suspect the day of the results they went under 5%, but could be selling slowly earlier, but not reaching under 5% went they have to declare, like now.

Date on which the threshold was crossed 22-Jun-2023

[sleepy] 23/6/2023 13:14

AI - thank you. Would have preferred such information to be easily available to investors