Speedy Hire Share Discussion Threads

[chriss911911] 12/4/2024 14:40

We know the cash its factual, there is not the room for debate or "spin" on that one, unless the only thing that matters is headlines, which in my book is not the case.

The analyst at ED put it across very simply and convincing so, if you want to convince on higher number , I can either ignore it, or if convincing accept it in which case the answer is higher, so doesn't change a thing.

As for listed companies spinning their results, and quoting adjusted EBITDA and exceptional what else is new, will not change, but the approach to it, can.

Its not mandatory to read the "spin" or place the emphasis of matter on it, it's a choice in the end, and I made my choice.

[fenners66] 12/4/2024 12:35

You will have to wait for the "separately reported at the year end "
as to whether the auditors believe its exceptional - but regardless, the cost will be OUT of the
"adjusted numbers"
And it will be the adjusted numbers that will be headlined and trumpetted

look we made this much cash £ xxx *

* as long as you ignore the cost of all our previous failings - those costs being rolled up after previously being ignored and not fixed

Too easy - there are accounting standards - but most companies just bypass them in their headline numbers and say everything is rosy.

[chriss911911] 12/4/2024 11:51

They cannot gloss over the cash, earnings, well its always an opinion, if they have saved ongoing, and it's a material one time cost that consumed cash which we see already in net debt. Better to see any reorg one time costs, it adds to the understanding what constrained cash, but still net overall they generated +10m in H2, so don't see how showing it hinders it.

Would be audit opinion if accessed as exceptional, so needs to be real, for me showing it gives more info, not less, if they dint show it, we have no idea that they are glossing over.

[fenners66] 12/4/2024 11:09

I wonder just how much management time was sitting in a room coming up with the word.....

Velocity.

Reminds me of the Apprentice tv show sitting around arguing about a name instead of getting on with stuff.

No one seems to have picked up on

"The investment in implementing our strategy and executing our transformation programme represents a significant cost to the business and will be reported separately at the year end"

In other words after years of inept management we are going to charge a massive one off cost and presumably seperate it out as an exceptional or "adjusted" so we can all forget about how much the incompetance has cost...
This will be then touted as a good thing....

No doubt they will take the opportunity to dump any marginal stuff in there to try and package it as a one off too.

Fantastic what an opportunity. Sorry sarcasm does not come over well in text. That was sarcastic.

I think its shocking what management think they can gloss over if they call it a one off !

[chriss911911] 12/4/2024 09:51

they generated 10m+ in cash in H2, the new business wins did much to impede cash, and little to add to it so far, the prospects for a bounce back is high, and downside risk very limited. The valuation is on the floor already. I don't see the asset exposure or otherwise to warrant any further meaningful weakness, if there is, it will be short lived, if it ever arises, which i doubt it will.

[tenapen] 12/4/2024 07:33

The past is poor - the future is clean air and bright.

B&Q never made sense - but if they had not tried to drive sales and expend .... the usual suspects would be on here bemoaning company inactivity.

[sidam] 11/4/2024 22:21

Nice one pager from Equity Development. If their numbers are correct, the shares would be on pe of 6.5 and yield of 8 for the year we are now in and a pe of just over 5 and a yield of 12 for March 2026. That is a possible double in my view. Hope the numbers are correct.

[clocktower] 11/4/2024 15:57

It is a surprise that the share has no dipped below 20p as prospects are poor.

[chriss911911] 11/4/2024 09:49

The whole UK rental market was impacted in 2023 especially second half, per ONS, so Speedy was 2% above average per last trading update. Prior to that speedy had gained 14% FY23 on FY22 in sales, again slightly above average growth per ONS.

The Velocity strategy was set out end of 2023, for 5 years, bit early after 5 months to imagine it has failed.

What we are told by company..

" the Group has secured additional annual turnover in excess of £40m across multi-year contracts with new and existing customers"

What we are told by Office for Budget Responsibility (OBR)

"expected inflation to hit an average of 2.2% over the course of 2024, and 1.5% over the duration of 2025"

What the S&P Global UK Construction Purchasing Managers’ Index (PMI) says:

"UK construction companies indicated a renewed increase in total industry activity during March 24, thereby ending a six-month period of decline"

The green business is tiny v group and profitable, so I doubt that will make a difference any time soon to the direction of travel which appears to have move things pointing favourably than not, not least infrastructure spend morphing into a period of unprecedented levels of capex spend, amplified no doubt by rate cuts come the autumn.

This business converts cash at 80%+, with debt having fallen despite a downturn year, and is well placed to recover strongly, with modest leverage below 50% of enterprise value with leverage under 1x to EBITDA, based on historic earnings. I see every reason that they can reproduce performance in FY25, which coincidentally is same as current market cap 0.1m. Risk/reward seems appealingly strong, with a price that has little scope to go any lower, unless something dramatic new emerges, but every chance to go back to levels seen in 2021.


...that directors have acquired additional shares since the FY24 pre-close statement was announced

[edmonda] 11/4/2024 09:28

"Building a robust platform for growth" (FY24 pre-close statement)

Against a tough trading background in FY24, Speedy Hire has taken steps to build a platform for long term sustainable growth through the launch of its Velocity strategy. While progress has been more strategic than financial in the year – although we note positive underlying cash flow was achieved - new business wins, the acquisition of Green Power Hire and a transitioned B&Q model all suggest that profitability is likely to move ahead again from FY25 onwards.

Speedy’s FY24 pre close statement echoed January’s trading update, pointing to successful new business wins with National customers but also some mobilisation and adverse seasonal effects. Stated group revenue of c.£420m infers that H2 was slightly ahead of H124’s reported £208.5m. While closing year earnings expectations are likely to nudge down further, the prospect of year-on-year progress from FY25 onwards appears to be intact.

The launch of Speedy’s Velocity strategy in FY24 laid out clear group financial (FY28 revenue of £650m, EBITDA margin 28% with conservative gearing metrics) and operational ambitions (to deliver sustainable growth from an efficient digital and data-driven platform). The primary enabling actions are expected to be in place by the end of FY26, though there is clear capacity to accommodate an earnings recovery and growth beginning in FY25.

Notwithstanding market conditions, the company has taken clear strides in FY24 towards achieving its five-year targets, investing accordingly.

Link to research note:

[rumbers2] 11/4/2024 07:50

Never a truer word said Smithie. Just wait until you see the size of the one off 'green' charge that will impact the share price come mid June. It's going to be massive.

[smithie6] 10/4/2024 22:41

The mess up with the B & Q arrangements.

Yet another screw up by this bod.

The dirs really do seem to be completely useless imo.

[baddeal] 10/4/2024 17:14

And you think speedy will take that market with a few generators!

[sidam] 10/4/2024 13:02

The past is now unimportant. It is the prospects which will matter and on that the tone appeared positive.

[smithie6] 10/4/2024 12:34

So, you recommend to buy AFC shares, not SDY ?

[halfpenny] 10/4/2024 09:20

Need to look at direction and Huge market in Green Energy Supply from AFC. This will be Transformative for SDY.

Demand for Green Energy is now Top of Management Agenda and Success.

Future bright BUT at these levels are a Takeover Target Value 95p.

[creditcrunchies] 10/4/2024 09:14

This is an easy business to run where this management just blow it all up

[smithie6] 10/4/2024 09:14

Had a quick look.

Two words come to mind.

"Complete incompetence"

(eg. the B&Q screw up & loss, & "Velocity"
& turnover down despite notable inflation)

[wigwammer] 10/4/2024 09:06

Good post Chris, and I agree in the main. But management do seem to have made a few unsettling decisions - purchase of the nascent green power business for £20m, the confusion and naivety of the b&q strategy, the consequent increase in leverage. I find a lot of the rhetoric around "velocity" to be babble rather than showcasing experience and grip on the underlying business. Am sure the reaction from 35p is overdone, but management do not feel like an asset here. Fingers crossed they buy a few shares soon and demonstrate some conviction.

[my retirement fund] 10/4/2024 08:55

Feel sorry for you guys. Calibre of management here must be truly shocking. Many of these folk aren't fit to run a bath, but they alwayd seem to be in the right circles to be given these positions. In the bigger picture, it's just another symptom of basket case Britain. Along with things like Brexit, high taxes, low productivity, uncontrolled government spending, and public debt balanced on a perpetual precipice.

[chriss911911] 10/4/2024 08:44

Not sure why the lack of balance in perspective, debt fell as expected, trading in the range previously advised, if anyone was expected something different when most of last year was known already, is just repeating the same things.

Debt less than 50% of enterprise value as today's lower price so not heavily levered, debt has fallen despite tough trading, cash generative, had a tough couple of years, but growing new streams of revenue.

The outlook is more bullish than before, and they give a clue, indicating latest comparatives are positive, I see it as an opportunity, rather than a risk, and reasons to imagine new things that are so bad the price should fall further which will likely be short lived, more likely range bound for a while, but still a good opportunity to invest at low price.

[brucie5] 10/4/2024 08:09

And down it goes... I wonder where and how the turnaround begins..?
I no longer hold.

[jubberjim] 10/4/2024 07:42

Well one can't say we weren't warned

Very disappointing!

[clocktower] 10/4/2024 07:14

Gloomy RNS and the outlook doesn’t sound much better either.

B&Q turned out to be another disaster in such a short period as well, £2 million down the plug hole.

[brucie5] 01/4/2024 09:43

Well Paul Hill likes them.