Speedy Hire shares soar as turnaround plan sees profits leap to £6.8m
Shares in tool rental firm Speedy Hire soared after the company said its turnaround plan helped send half-year profits surging.
The firm said underlying pre-tax profits excluding restructuring costs jumped to £6.8 million in the six months to September 30, compared with £2 million a year earlier.
On a bottom-line basis, the company swung to a profit of £5.4 million from a loss of £13.5 million a year earlier.
The firm now expects full-year earnings to beat the board's forecasts.
The news sent Speedy Hire shares as much as 16% higher.
It comes after the company launched a strategic overhaul last year which resulted in a 10% cut to its hire fleet and the disposal of its heavy plant for £14.4 million in August.
Speedy Hire also cut its headcount by 3.9% across the UK and Ireland after restructuring its core tools, lifting and survey business into two regional operating divisions.
Chief executive Russell Down said: "These encouraging interim results confirm that our recovery is well established.
"We are now focused on the strategic development of the business over the medium term and are implementing a range of customer service initiatives to ensure that Speedy is competitively positioned to grow profitable market share."
The results are good news for Speedy Hire, which had been fighting off calls from an activist investor to oust its executive chairman and merge with rival HSS Hire.
Toscafund said Speedy Hire's executive chairman, Jan Astrand, had ''failed to deliver'' during his tenure and it was in the best interests of shareholders that he stepped down.
Speedy Hire brushed aside the asset manager's request, saying it believed Mr Astrand played a key role in the company's recovery, and that a tie-up with HSS would put its strategic plans in jeopardy.
However, Mr Astrand was later made non-executive chairman on September 30.
Peel Hunt has raised pre-tax profit forecasts for Speedy Hire from £11 million to £13 million following the release of the six-month results.
Analyst Andrew Nussey said: "Overall the outlook is slightly more optimistic, although there is still some uncertainty.
"Near term, the strategic focus remains in maximising returns from the existing fleet and clear progress is being made."