UK's Speedy Hire slumps over 20% on profit warning (updated)
30/01/2024 09:12
(Updates share move in paragraph 2, details of revenue in
paragraph 4)
Jan 30 (Reuters) - Shares of Speedy Hire Plc SDY.L
slumped more than 20% in early trading on Tuesday after the
British tool and equipment rental firm cut its profit
expectations, citing weakness in the construction sector and a
milder winter.
The stock of the Newton-le-Willows, UK-headquartered company
dropped as much as 20.3% to 28.70 pence, marking its lowest
level since Nov. 10, and bottoming the FTSE Small Cap .FTSC
index. The shares later pared some of the losses and were down
about 17% at 30 pence as of 0835 GMT.
The company rents out tools to multiple sectors,
including construction, rail, landscaping, lighting, lifting and
survey, while also providing heating and cooling equipment.
It said the revenue growth from national customers
slowed to 3% at the end of the third quarter, compared with a 5%
rise at the half-year end, due to challenges in the construction
sector.
The warmer winter period affected revenue from seasonal
products, while new contract wins took longer to mobilise, the
London-listed company said in a trading statement.
Peel Hunt analysts reduced their fiscal 2024 profit
estimates for Speedy Hire by more than 34%, citing the impact of
reduced revenues from market and customer-specific challenges.
The brokerage cut the stock's target price to 60 pence from 70
pence, while maintaining its "buy" rating.
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by
Savio D'Souza and Dhanya Ann Thoppil)
((abyjose.koilparambil@thomsonreuters.com))