Speedy Hire (LON:SDY) - new research note: https://www.equitydevelopment....
Consistent with Speedy’s AGM statement (on 5 September) H125 hire segment revenue is in line with the prior year and management expectations for the full year are unchanged. We expect a H1 bias to capex and, relatedly, a H2 bias to profitability both driven primarily by new business. Growth and margin expansion are key Velocity objectives; this should become increasingly visible as H2 progresses. H125 results are scheduled for 21 November.
Speedy’s share price has traded between 35p-40p range over the last quarter. Currently sitting at the lower end of this range, performance is now broadly in line with the FTSE All-Share Index YTD. With no material changes to underlying estimates, previous comments relating to low and rapidly compressing earnings multiples still apply. Reaffirmation of FY growth expectations at the H125 results announcement stage could be a catalyst for restoring share price momentum in our view. Ahead of that, our flat, unchanged dividend expectation offers a prospective 7.2% yield and our fair value is 51p.
