Speedy Hire upped its dividend after growing revenue and more than doubling profit in its half-year results today, sending shares upwards slightly.
The tool hire company said it was well on the way to delivering its turnaround plan years after a battle between the board and activist investor Toscafund, which wanted it to merge with HSS.
The company, which hires out tools and equipment to contractors across the UK, posted revenues of £195m in the first half of the financial year, a six per cent increase from 2017.
Meanwhile, profit before tax skyrocketed by 120 per cent year on year to £13m after it was hit last year by one-off costs of £4.7m relating to property and redundancy expenses.
Net debt grew marginally to £62.7m but basic earnings per share soared from 0.8p this time last year to 2p this year.
Speedy upped its dividend per share to 0.6p from 0.5p last year.
Why it’s interesting
The future of Speedy Hire was in the balance three years ago, as activist investor Toscafund pushed to merge the company with HSS.
Toscafund chief executive Martin Hughes had amassed nearly 20 per cent of Speedy’s shares and had the backing of other shareholders.
But Jan Astrand, the Swede chairing the board at the time, blocked the move, saying Speedy was on track to recover.
Astrand survived an attempted coup by Tosca, and despite appointing board member David Shearer, the activist investor later disposed of its shares in the company.
At the time Astrand said Shearer’s experience was no longer relevant to the business. But when Astrand stepped down this year, it was Shearer who took over his seat, with the former chairman’s full backing.
Chief executive Russell Down told City A.M.: “Two years ago there might have been a little bit of drama [over the move], but today it is a seamless transition, no drama whatsoever.”
The business shifted more focus to small and medium-sized enterprises by promising next-day delivery on selected products, and four-hour deliveries within the M25, helping it reach 46,000 small businesses.
Data, artificial intelligence and machine learning are also helping the Speedy focus its resources where they are needed, Down told City A.M.
“We now know what assets what customers want. We can be confident we have the right stock in each depot, that we’re not holding too little stock and losing revenue as a result. It also means we can target marketing offers to new customers,” he said.
Speedy “continues to deliver on its strategic aims,” Rahim Karim, an analyst at Liberum, said. “A strong set of results provide evidence that the group continues to deliver on its strategic aims. Improving asset utilisation and significant share gains with SME clients suggest an encouraging outlook.”