Market Report: Speedy Hire issues profit warning on slower turnaroundComments Off on Market Report: Speedy Hire issues profit warning on slower turnaround
The turnaround at Speedy Hire might not be that speedy after all.
The tool hire firm issued its second profit warning in three months, revealing that cutting costs is taking longer than planned.
The company said full-year revenues in the UK are now expected to be around 10% lower than last year — and it has not even reached the halfway mark yet. Profits will now be weighted towards the second half of the year, it added.
The news triggered an exodus from the stock, which plummeted to 32.07p, 4.93p or 13% lower.
Speedy Hire, whose rivals HSS Hire and Ashtead Group have also suffered, has now lost almost 60% of its value in 2015.
Investec, which had urged clients to buy the shares after the last profit warning, dropped its Buy rating “until we get more clarity on the turnaround”.
London’s blue-chip stocks could not build on a strong finish to last week’s trading when comments from Federal Reserve chairman Janet Yellen reassured investors that a rise in US interest rates would still happen this year.
The FTSE 100 slipped 21.33 points to 6087.68 as the index continued to blow hot and cold in a volatile trading environment.
Profits for Chinese industrial companies fell by nearly 9% in August, heaping more pressure on mining stocks.
Heavyweight Anglo American retreated 17.3p to 597.3p and peer Rio Tinto sank 44.5p to 2172.5p.
However, commodities giant Glencore was the biggest loser, tanking 10.07p to new lows of 87.15p.
It sold off a non-core nickel project in Brazil inherited from Xstrata for a knock-down price of $8 million to AIM-listed Horizonte Minerals, which edged up 0.06p to 1.61p.
Traders toasted the possibility of a higher offer from Budweiser brewer AB InBev for rival SABMiller, up 129.5p at 3717.5p. Rumours are swirling that a bid as tasty as 4500p could be in the offing.
A 35% decline this year from Home Retail has made the Argos owner a bargain, according to Cantor Fitzgerald’s scribblers. Their upgrade to buy lifted the shares 1.6p to 135.1p.
On the Beach, which specialises in cheap holidays for sun-seekers, was 0.57p firmer at 221.57p on the first day that retail punters could buy the shares, meaning they missed out on the early gains last week after the 184p-a-share float.
A return to profitability in the second half of the year for Ten Alps, the TV production company behind Selling Houses with Amanda Lamb, failed to budge the shares, which were unmoved at 3p.