Speedy Hire slows down as a bearish outlook causes its shares to nose dive
TOOL hire company Speedy Hire yesterday saw its shares nosedive after it warned investors its revenue was running below forecasts.
The group’s shares slumped by 11.5 per cent to 38.25p.
Speedy Hire said first-half turnover was likely to be around 29 per cent below the same period last year.
The group said that with no sign of improvement in private sector spending and increased sensitivity around the sustainability of government spending, there is still significant uncertainty in the current outlook for construction.
Chief executive Steven Corcoran said: “Whilst trading in recent months has begun to stabilise, risks to the group’s revenue forecasts remain on the downside in the short term.”
He added: “Any further deterioration in the group’s revenue forecasts is unlikely to be offset significantly by additional cost reductions.”
The group said that it has already slashed £70m of costs, but to cost cut further would mean “impairing customer service”.
Broker Panmure Gordon yesterday moved its recommendation from “hold” to “sell”.
Panmure Gordon analyst Paul Allen said: “A downbeat start to the second half suggests that the disappointment in first half revenue will not be recovered by cost cutting measures and that our current forecasts for 2010 are too high.”