The UK’s equipment rental sector took another blow today as market leader Speedy Hire (SDY) warns on profits – just three months after its last earnings downgrades.
The UK’s top two tool rental outfits – Speedy and HSS Hire (HSS) – both fired their chief executives in the past three months as performance slumped. Today Speedy flagged sales would be 10% lower than last year's in a trading update.
Commentators remain undecided whether the issues are company-specific or signs the wider industry is falling into difficulty.
Rivals Lavendon (LVD) and Ashtead (AHT), which specialise in heavier equipment, both reported better performance in the UK this year.
Privately-owned UK diggers manufacturer JCB also reported a solid year of unit sales in the country, with construction machinery volumes up 30% year-on-year.
‘As we expected, Speedy Hire has warned that profits will be ‘materially’ below market expectations,’ writes Panmure Gordon analyst Adrian Kearsey.
‘Revenues are expected to be 10% below last year and the operational issues identified in July are taking longer than anticipated to be resolved. Remedial action has been taken but it is unlikely to help drive an improved operational performance this side of Christmas.’
Kearsey has his earnings estimates and price target on the stock ‘under review’.
Shares in Speedy are down 13.3% at 32.1p and HSS is down 0.8% at 59.5p.