MARKET WATCH


HSS shares have lifted on hopes of recovery.


Brexhog Day forever?


EHN’s financial analyst, Nick Spoliar of WH Ireland, gives his thoughts on the hire market as we enter 2019.


So, farewell then, 2018. A year marked by stumbles or failures of major construction companies Carillion and Kier. In the case of the latter, investors had so little confidence that only 38% of the shares were subscribed for in last month’s emergency rights issue, despite the shares, which were trading at £8, being priced at a near- 50% discount.


A-Plant recently grew its specialist lifting business with the acquisition of Hoist-It Ltd.


Reading the runes for the construction sector in 2019, first up is the Markit confidence survey of


3 January. This indicated a three-month low in the pace of construction growth and anecdotal evidence suggesting slowing demand. Hopes remain for an infrastructure boost which would inevitably trickle through to the rental sector, and there is the argument that, in tighter times, hire companies benefit from increased penetration as against owned machines, even in a relatively mature market such as the UK.


The quoted sector


Turning to the quoted sector, how have our four horsemen fared in the recent market sell-off? As many readers will be all too aware,


this has been dramatic, with the AIM All Share down by 18.2% YoY, the FTSE 12.5% and the FTSE 250 by 15.6%.


On a three-month basis, four main rental stocks - Ashtead, HSS, Speedy Hire and Vp - are down 10%. However: (1) arguably this is not a bad result against the indices, and (2) like many composite statistics, it is misleading. Ashtead, which lost ground over the year as a whole, nonetheless managed a positive share price in one of the worst months for the stock market in the past decade - after posting Q2 results better than expected on 11 December. Ill wind - it is also a dollar earner.


Beyond this, percentage-wise, HSS shares have seen a decent lift on hopes of recovery, but remain at very low levels. Vp indicated progress with Brandon Hire at the end of November - one to watch. Speedy Hire continues to benefit from hard graft at the top.


Brandon Hire Station’s 2019 catalogue reflects the operation’s new branding.


Speaking about hard graft, small companies in general are seen stepping up to the plate as well, and indeed raising capital - with institutional private equity investments on the radar right through to the closing days of the year. Some good news, then.


On the bigger picture, however, my first day back in the office could perhaps be best described as Brexhog Day as I spied endlessly spooling words on the screen which were new, but somehow all-too-familiar. I expect all the readers of this piece feel the same.


Happy New Year! •


WH Ireland disclaimer: WH Ireland states that this is not an offer or a solicitation to buy or sell any security. Please refer


to http://research.whirelandplc.com/research/regulatory.asp and Speedy continues to make progress. 15


http://research.whirelandplc.com/research/conflicts_of_interest.asp for WH Ireland’s research disclosure and disclaimers and conflict management policy regarding Non-Independent Research. WH Ireland Limited is authorised and regulated by the Financial Conduct Authority (Financial Services Register number: 140773)


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