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Speedy Hire to buy UK cherry picker provider Lifterz for £9.6mln

Last updated: 06:00 20 Mar 2019 EDT, First published: 05:25 20 Mar 2019 EDT

Speedy
Speedy expects the acquisition of Lifterz to deliver revenue and cost synergies

Speedy Hire Plc (LON:SDY) shares zipped higher after announcing the acquisition of UK-firm Lifterz Holdings Limited and maintaining its full-year guidance. 

The equipment and tool hire agreed to buy Lifterz, which rents out cherry pickers and scissor lifts, for £9.6mln in cash.  Net debt of £11.9mln was also assumed in the transaction.

READ: Speedy Hire hikes interim dividend as SME targeting pays off in half-year results

Speedy said the deal complements its previous powered access acquisitions and will allow it to service customers nationally with larger specialist equipment.

Since November 2017, it has invested more than £50mln in the powered access market through in-fill acquisitions and organic capital expenditure.

The group expects the acquisition of Lifterz to deliver revenue and cost synergies.

In the year to January 31, Lifterz generated revenue of £15.2mln and normalised earnings (EBITDA) of £3.3mln.

Speedy trading in line with expectations

As for its own results, Speedy expects revenue to rise by 5.5% in the year to March 31.

It also sees growth in adjusted profit before tax in line with previous estimates.

"The acquisition of Lifterz announced today is strategically important giving us a national powered access offering and enabling us to provide an end to end service to our customers right across the UK,” said Speedy chief executive, Russell Down.

“We are also pleased to report that full-year revenues and profits will be ahead of the prior year and our results will be in line with expectations."

In morning trading, shares rose 1.4% to 57p. 

Liberum raises EPS estimates and keeps 'buy' stance

Liberum maintained a 'buy' rating and target price of 74p, saying the acquisition will give Speedy "critical mass and nationwide coverage in powered access, where demand is growing and utilisation rates are high".

"The combination of this news and a steady update on current trading has led us to upgrade earnings per share estimates by 2.5% in 2020 and 2021, set conservatively," the broker said. 

"We reiterate our Buy rating, and see over 30% upside to our target price, set using the group's potential for further improvements in return on capital."

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