- The company’s shares were the biggest faller on the FTSE All-Share Index
- Panmure Liberum reduced Speedy Hire’s turnover outlook by £10m to £436m
Speedy Hire shares lost more than a quarter of their value on Monday morning after the tool hire firm warned its full-year profits would be lower than expected.
The group blamed a ‘widely reported economic downturn’ after an initial strong start to its fiscal fourth quarter was derailed by a slower post-December shutdown recovery across most of its customer base.
The company also highlighted Network Rail’s decision to delay spending on projects that form part of a five-year £45.4billion rail improvement plan.
Engineering services contractor Renew Holdings likewise cautioned last month that its annual adjusted operating profits would be less than forecast due to delays in rail upgrade schemes.
Speedy Hire also revealed that its joint venture business in Kazakhstan had suffered ‘a significant downturn in performance’ after the early closure of some contracts.
The Merseyside-based group’s shares were the biggest faller on the FTSE All-Share Index, plummeting by 27.6 per cent to 19.9p.
Plunge: Speedy Hire shares collapsed on Monday morning after the tool hire firm warned its full-year profits would be lower than expected
The firm, which was founded in Wigan in 1977, expects these conditions will continue to impact the business into the 2026 financial year.
It said: ‘With the challenging start to our final quarter and ongoing macroeconomic uncertainty, the Board expects lower than anticipated profitability for the full year.’
Broker Panmure Liberum reduced Speedy Hire’s turnover outlook by £10million to £436million following the trading update, equivalent to a 3.5 per cent year-on-year increase.
This was despite the group revealing it achieved ‘promising’ growth in the final three months of 2024, thanks partly to hire revenue expanding by 5 per cent in December.
Around £8million of the cutback was attributed to macroeconomic factors and the ‘slower mobilisation’ of a new partner at its trade and retail proposition.
Panmure has additionally pared back its share price target from 47p to 30p for the company to reflect its higher debts and lower earnings per share.
Speedy Hire expects to report net debts totalled £123million at the end of January because of capital expenditure to gain new contracts.
Russ Mould, investment director at AJ Bell, said: ‘In good times, equipment companies benefit from rising rental income, and they reinvest money back into the business to expand their fleet.
‘In bad times, they suffer weaker rental fees and typically stop buying more equipment.
‘Speedy Hire needs to decide whether market issues are short-term setbacks or the start of something more serious.’
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