Hewden waits for plant hire heaven: The Investment Column

Hewden Stuart's figures for the year to the end of January show the full impact of a hostile trading environment in which plant hire firms geared up for a surge in demand which failed to materialise. Pre-tax profits fell 19 per cent to pounds 29.45m while earnings per share slipped 17 per cent to 7.53p.

On the hire side turnover only edged up 5 per cent to pounds 187.5m. Margins were eroded and profits fell 15 per cent to pounds 28.45m. Sales were even worse, with the bulk of construction equipment now being sold to plant hire businesses instead of through agencies to the construction industry. Divisional turnover fell 10 per cent to pounds 89m and the contribution to profits fell to just pounds 1m from pounds 2.7m in the previous year.

But the final dividend makes 3.2p for the year, up from 3p. This reflects chairman and chief executive Sandy Findlay's firm belief that the outlook is improving, as the construction industry responds to an upturn in housebuilding and commercial building. He also thinks more contractors will follow Kvaerner's lead and get rid of their plant hire subsidiaries to concentrate on what they do best. According to Mr Findlay, customers are looking to forge long-term relationships with those plant suppliers who can provide the necessary standards of service.

The City took heart from the thought that 3 per cent growth in the construction industry would create a much kinder environment, increase capacity use and quite possibly push up hire charges. In a business where every extra pound of turnover converts into 60p-65p of extra profit, this ought to be plant hire heaven.

Brokers' forecasts for the current year have moved up from an average pounds 36m to nearer pounds 38m, equal to up to 9.4p of earnings. The shares rose 13p to 139.5p, pricing them at just over 15 times prospective earnings, which looks high enough for an industry where new capacity can be quickly added.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test