Stay on board at Speedy Hire for more fast growth

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The Independent Online

It is a performance worthy of Speedy Gonzales. At Speedy Hire, sales, profits and the share price have all zoomed ahead over the past three years.

It is a performance worthy of Speedy Gonzales. At Speedy Hire, sales, profits and the share price have all zoomed ahead over the past three years.

The UK's number one tool hire company opened its 300th outlet a few weeks back. Yesterday, it reported a £23.8m profit for the year to March, up 12 per cent. And its shares soared over 700p, taking the market value of the company to within a drill bit of £300m.

Steve Corcoran, the chief executive, is as enthusiastic about the future as the irrepressible cartoon Speedy. The company has invested a record £60m in new tools and a wider range of equipment over the past year. Although he can see consumer confidence coming off the boil like everyone else, at this stage his construction and support services customers still see strong orders across their industries (which are as much affected by business confidence and government investment as by housebuilders' selling prices and demand for domestic refurbishment). Speedy can turn off its investment programme quickly if there is a downturn, and there might also be acquisition opportunities if local rivals get into distress.

At 14 times forecast earnings, the stock is no longer the bargain it was when we began tipping it at 271p in 2003, but resist the temptation to take profits.

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