28 May 2015 – AGM statement
The group has issued a very disappointing AGM statement this morning stating that the lack of any recovery in its oil and gas related rental business would lead to a loss in the first half. Given the fact that no recovery is likely until 2016/17 the group is taking action to reduce gearing including disposing of some businesses, reducing capital expenditure and reducing its head count. The group has reorganised its banking facilities to give it additional flexibility although it hopes that its actions will allow it to have eliminated most borrowings by the end of 2016. Although the group expects to be profitable and cash generative for the year as a whole, pre-tax profit expectations for the year as a whole have been significantly reduced. Until further guidance from the company has been received we maintain our recommendation of HOLD.