Speedy Hire bounces back after securing £25m deal with leading UK infrastructure provider
Shares in tool and machinery specialist Speedy Hire rose this morning after it secured a major new contract with Amey Group.
The deal will bring in up to £25m per year for the firm once it mobilises during the second half of the financial calendar.
It comes after a difficult set of full-year results on Thursday, which saw pre-tax profit fall by 52 per cent to £14.7m amid ongoing cost inflation.
As part of the contract with Amey, Speedy Hire will provide non-operated plant hire to its partner’s operations across sectors including rail, highways and public estates.
Dan Evans, Speedy Hire’s Chief Executive, said: “We are delighted to commence our relationship with Amey by securing this new contract, which is testament to our leadership position in our sector, along with our ability to service major customers with commercially sustainable products and services.
“Our Velocity strategy positions Speedy Hire strongly to continue to support all our customers, which we are very pleased now includes Amey.”
John Faulkner, chief operating officer at Amey, added: “This new contract signifies a strategic alliance between Amey and Speedy Hire in our common goals to play a critical role in protecting the natural environment while accelerating the UK’s transition to Net Zero.”
Speedy Hire has endured a challenging 12 months along with the wider UK construction scene. Inflation, warmer weather in the winter months and softer demand have conspired to send the share price down 15 per cent this year to date.
In January, the Newton-le-Willows-headquartered issued a profit warning that cut half-year forecasts from £13.2m to £5.6m.
But analysts have issued a string of upbeat statements in the last few days. Joe Brent from Liberum said: “The year has started marginally ahead and we are optimistic about the self-help levers and some market recovery in the second half.”
Peel Hunt’s Andrew Nussey reiterated his buy rating on the stock. He said underlying strategic and operational progress had been “impressive” since the company launched its Velocity strategy in May 2023.
“Management is delivering well in our opinion, and this should support investor confidence,” Nussey added.