It has been a tumultuous year for Speedy Hire. And chief executive Russell Down would be one of the first people to say so.
The tool and equipment rental business was on the end of arguably the most high-profile activist investor attack of 2016.
Toscafund, whose chief executive Martin Hughes has earned the City nickname Rottweiler, issued a series of public statements criticising the management of the company over the summer and forced an extraordinary general meeting (EGM) in September.
In the end, Toscafund – Speedy’s biggest shareholder, with a 19.4 per cent stake – failed to oust the firm’s chairman, Jan Astrand, but succeeded in nominating a new board member, David Shearer.
If Down is bitter about the experience, he doesn’t show it.
“The process is concluded now, all the shareholders had a vote, David Shearer is on the board – and he’s making a very good contribution to the board,” Down tells City A.M. “That chapter is over and we move on to the next one.”
A Speedy recovery?
Things appear to be on the mend for Speedy.
Its shares are up by more than 40 per cent to above 50p since the Tosca-forced EGM. The company reported a 13 per cent growth in group revenue in the six months to 30 September and profits were also up from £2m to £6.8m.
The company’s share price was also boosted yesterday by the acquisition of lifting equipment business Lloyds British Test from administrator PwC.
For the record, Toscafund is happy with the performance.
Chief exec Hughes tells City A.M.:
We are pleased that David Shearer has proven to add value as we expected. Also, as the largest shareholder, we are pleased to see the improved performance and expect it to continue as returns rise towards sector peers.
The importance of health and safety
If 2016 has been a tough year for Speedy, 2015 wasn’t much easier.
Down joined the firm – which is headquartered in Haydock, between Liverpool and Manchester – from Hyder Consulting in April last year as group finance director.
He was propelled into the top job in July as the company issued a surprise profit warning and Mark Rogerson stood down after 18 months in the job. Another was issued in September that year and turnover and profits continued to decline until the start of this financial year.
Down says that with competition from HSS Hire, A-Plant, Ashtead, Gap and even corner shops, one of the keys to success for Speedy is to differentiate itself.
He says: “Is it our health and safety record? Is it the sustainability of the hire fleet? Is it the knowledge of our people? Is it our depot locations? Is it the fact that we’ve got a really nice coffee machine out front and all of the builders want to come in and get a cup of coffee in the morning? It’s little things that make people want to come to us.”
Making tools sexy
Health and safety and coffee machines are, no doubt, important to Speedy Hire. But it’s difficult to imagine those outside the trade getting excited about these topics, or indeed tool hire generally.
Is there a challenge in attracting attention and investor interest to Speedy, bearing in mind it is perhaps not the sexiest of companies?
“It doesn’t frustrate me,” says Down. “My style is not to go out there and be plastered across the front pages. I just want to keep under the radar, do a good job and the publicity comes with it. We’ll keep on, we’ll put the numbers out.”
For now, Down is happy to keep a reasonably low profile.
“The company has had a tumultuous few years,” he says. “There was an accounting fraud in the Middle East going back probably four years; it had a rights issue going back probably eight years; then Steve Corcoran, the previous chief executive [before Rogerson], resigned in 2014; the last chief executive stood down in 2015…
“So there have been a few issues around the company. My task [is to] stabilise it, get it running on an even keel, and then people will start to take notice.”
He adds: “I’m not interested in going out onto the rooftops shouting about what a brilliant job we’ve done. We’ll just keep on doing the job that we’re doing.”