Tools and equipment for hire provider Speedy Hire (AIM: SDY) reported a below expectations H1 turnover decline of 29% and said it was not expecting revenues to pick up in September/October following a slow start to the second half, causing its shares to dip 13%.
Speedy Hire, however, said that it still expected pre-exceptional EBITA (earnings before interest, taxes and amortization) to be in line with expectations following a cost cutting campaign, which helped the group save £70 million in eliminated costs since August last year, which, coupled with a £100 million rights issue in May, helped it trim the net debt to £135 million compared to £248 million at the start of the financial year in April, with a further reduction to £120 million targeted before year end.
The group has laid off 6% of its workforce and merged 5% of its depots with other local sites since April.
Broker Panmure Gordon was downbeat on Speedy Hire following the release of the trading update, downgrading the group to “sell” from “hold” and cutting its target price to 24 pence per share from 28 pence, saying its forecasts for 2010 were too high and the stock was overvalued. FinnCap also issued a “sell” recommendation for the group.
Speedy Hire last traded at 37.5 pence per share.