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Birmingham Post
Birmingham Post
Business
Jon Robinson

City analyst 'bullish' on Speedy Hire as B&Q partnership accelerates

A City analyst remains "bullish" over the prospects of Speedy Hire as the listed group revealed an acceleration in its partnership with B&Q.

Panmure Gordon issued its verdict on the Merseyside-headquartered provider of tools and equipment hire, and services to the construction, infrastructure and industrial markets as it published an update for its year to March 31, 2022.

Speedy Hire said it is set to report results for the year in line with the board's expectations while its presence in B&Q stores is on track to rise from 16 to 38 by Easter.

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In a statement issued to the London Stock Exchange, Speedy Hire said: "The group has seen a continuation of the positive trading momentum achieved throughout the year, with UK and Ireland hire revenue for the year c.5% ahead of FY2020.

"Hire revenue in Q4 FY2022 was c.7% ahead of the corresponding period in FY2021, which now represents a more meaningful comparator.

"The group's key end markets continue to deliver growth through demand-driven volume improvements, with better rates helping to mitigate inflationary cost pressures.

"The group has invested c.£70m in the hire fleet during the year, accelerating its capital expenditure programme in response to continued strong demand and to mitigate supply chain pressure.

"Consistent with the group's strategic goals, the investment has been focused on sustainable products. We have maintained strong asset utilisation rates on our enlarged hire fleet, with utilisation for FY2022 of 57.0% (FY2020 - 55.5%).

"The balance sheet remains strong, with net debt at 31 March 2022 of less than £70m, inclusive of £6m spent to date under the share buyback scheme."

Chief executive Russell Down added: "I am pleased to report that our positive trading momentum has continued with further revenue growth in Q4.

"This has been supported by positive end markets, with strong demand resulting in increased volumes, better rates and higher utilisation, on an enlarged hire fleet. Results for the year are expected to be in line with the board's expectations."

Panmure Gordon's statement also said: "The solid top-line performance, combined with the acceleration in RoIC trends reflects Speedy Hire's position within the sector.

"With the price-to-book trading at 1.4x investors are assuming that returns reverse their upward trend.

"Given the healthily underlying sector trends, underpinned by government spend, we remain bullish on the group's prospects and see scope for the price-to-book to rebound."

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