(Reuters) -Shares of Speedy Hire Plc slumped more than 20% in early trading on Tuesday after the British tool and equipment rental firm cut its profit expectations, citing weakness in the construction sector and a milder winter.
The stock of the Newton-le-Willows, UK-headquartered company dropped as much as 20.3% to 28.70 pence, marking its lowest level since Nov.
10, and bottoming the FTSE Small Cap index. The shares later pared some of the losses and were down about 17% at 30 pence as of 0835 GMT.
The company rents out tools to multiple sectors, including construction, rail, landscaping, lighting, lifting and survey, while also providing heating and cooling equipment.
It said the revenue growth from national customers slowed to 3% at the end of the third quarter, compared with a 5% rise at the half-year end, due to challenges in the construction sector.
The warmer winter period affected revenue from seasonal products, while new contract wins took longer to mobilise, the London-listed company said in a trading statement.
Peel Hunt analysts reduced their fiscal 2024 profit estimates for Speedy Hire by more than 34%, citing the impact of reduced revenues from market and customer-specific challenges.
The brokerage cut the stock’s target price to 60 pence from 70 pence, while maintaining its “buy” rating.
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Savio D’Souza and Dhanya Ann Thoppil)
