Investment Column: Strong trading means Speedy Hire is still a buy

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The Independent Online

Speedy hire lends saws, drills, cement mixers, ladders, pumps, whatever, to the UK's army of small tradesmen from its network of 286 depots across the country. As such it is the UK's largest tool hire company. It boosted sales by 18 per cent and profits by 17 per cent last year, and it is promising to continue its expansion.

It is also one of The Independent's share tips for 2004, and is up 13 per cent to date.

There are challenges ahead. The retirement of John Brown as chief executive looms, although there is no shortage of internal candidates to ensure continuity. As the market leader, it will no doubt come under increasing competitive pressure, while it is also engaged in UK-wide "preferred supplier" contracts with giant construction firms which could have the muscle to drive down margins. Also, Speedy's focus is increasingly switching to new, more capital intensive areas, such as the hire of portable accommodation and power generators.

But these are opportunities, too, and current trading is very strong, with private sector clients reporting strong order books. Unless there is a sudden change in the economic environment, Speedy shares are worth buying still.

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