Speedy Hire bids £13.5m for Jewson arm
Article Date: Jan 02 2002Tool hire venture Speedy Hire looks set to snap up Jewson's standalone hire branches from its present parent company, the French Saint Gobain group, through a £13.5 million all-cash offer, writes James Crux.
Jewson has 20 tool and equipment hire branches in the South West, 14 in Greater London and three in the Home Counties, which together made operating profits of £1.8 million last year on sales of £17.9 million. Speedy Hire's (SDY) offer is open until Sunday 6 January and, if it goes through, the enlarged group will then have more than 250 branches.
Speedy Hire's finance director Neil O'Brien claims the deal will 'add about 2 per cent of the market to our market share, which is currently 16 per cent', reinforce the company's position in the South East and 'significantly strengthen' its operations in Cornwall and Devon. Payment of the £13.5 million cash is subject to a completion stocktake and consultation with Jewson staff under employment law.
Last year brought transition to Speedy Hire following a decision to concentrate solely on tool hire. Formerly focused on construction and known as Allen, it then sold off its troubled construction arm and its non-core Ryan Utility Services to Alfred McAlpine for £12.9 million.
Tool hire is now Speedy Hire's core business, with additional sales coming from portable accommodation, lifting, survey and power work. Pre-tax profits for the six months to September raced ahead from £535,000 to £8 million ? though last year's figure included £4.4 million worth of costs which arose as it dumped several haemorrhaging businesses ? and sales from continuing businesses were healthy, putting on 16 per cent at £54.9 million.
Analysts suggest pre-tax profits of £16 million before goodwill and exceptionals for the current year to March, giving earnings of 26.7p a share. In early dealings today, the shares sparked up by 4p to 297p, valuing the business at £126.13 million.
The shares are trading on what analysts consider a modest prospective p/e of 11.4. This falls to 9.9 for the following year.
This story is from Growth Company Investor, the independent voice on fast-growing companies. Subscribe today for the latest AIM recommendations.
