MIDAS SHARE TIPS UPDATE: Speedy Hire declines, but can new boss take stock back up?
It was all going so well at equipment rental group Speedy Hire.
Recommended in February at 69½p, the company seemed to be resolving old problems and pursuing an effective strategy under chief executive Mark Rogerson.
Last week, however, the group revealed that profits for the year to next March would be materially lower than expectations and Rogerson was stepping down to be replaced by finance director Russell Down.
Bad news: Speedy said that profits for the year to next March would be materially lower than expectations
The shares tumbled from 72½p to 51½p as analysts expressed their frustration. Rogerson was supposed to be Speedy’s saviour after several years of underperformance. But he, too, has failed to deliver and shareholders are paying the price.
Midas verdict: Speedy Hire has proved extraordinarily accident-prone and the stock is now 25 per cent lower than in February – a huge disappointment. But selling a stock immediately after a profits warning can prove to be a hasty mistake. Down is well regarded and perhaps he can finally help this company fulfil its potential. Hold for now, but monitor the situation to make sure it is Down and up rather than Down and out.
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