Insider: Bosses confident of repeat success

Speedy going Hire

If proof were needed that director share purchases matter when making investment decisions, heavy buying by Speedy Hire's top brass back in November was a classic example.

Shares in the tool hire firm crashed over 60% in 2015 following a series of profit warnings in 2015 triggered by internal issues and a lull in demand across the industry. Their high fixed costs always hurt when business dries up.

Speedy lost its chief executive, and the new board fought off an attempted coup by activist shareholder Toscafund.

A turnaround programme, including heavy cost-cutting, was clearly bearing fruit and, in last November's half-year results, new boss Russell Down said full year numbers would be ahead of the expectations.

Chairman Jan Åstrand, who survived the Toscafund revolt, bought 150,000 shares at between 40.5p and 44.6p, finance director Chris Morgan had almost 118,000 at 43p, and new non-executive director David Shearer - a turnaround expert backed by Toscafund - acquired 100,000 at 42.5p.

They're all sitting pretty now, counting paper profits in the tens of thousands. Investors who followed are too. Now, after Tuesday's upbeat trading statement, they're at it again.

Morgan has just bought 61,929 Speedy shares at 51.875p and non-exec Bob Contreras has picked up 40,000 at 51.93p.

It's because third-quarter like-for-like revenue grew by 10.6%, benefitting partly from the timing of Christmas holidays. Overheads, rental assets and net debt are all down, and customer service initiatives are winning new business and keeping existing contracts. It's why, again, adjusted profit before tax for the full year will be ahead of its previous expectations.

That meant double-digit upgrades to Panmure Gordon analyst Adrian Kearsey's estimates. He now pencils in March 2017 profit of £14.3 million, up from £12.8 million previously, and an extra £1.1 million for 2018 at £19.4 million.

"The turnaround in the operational performance is likely to stimulate another improvement in sentiment towards Speedy Hire," he says. "After many years of disappointing this business appears on the right track."

Buying before Henderson's New York trip

Fund manager Henderson Group has had a rough ride too, but without any of recovery upside seen at Speedy.

Its shares are still down around a third since the end of 2015 at a seven-month low, and full-year results on Thursday, largely in line with expectations, failed to generate much interest.

Indeed, UBS analyst Michael Werner kept his 'neutral' rating. He thinks the shares could one day be worth 255p, but did note that fund performance weakened during the second half with only 50% of Henderson funds topping benchmark, down from 55% in June 2016 and 78% at the end of 2015.

It's a far cry from last October when Henderson announced its merger with American peer Janus Group. Then, the share rocketed 20% and investors were optimistic.

However, Henderson is giving up its London listing as part of the deal, and these numbers were not a great sign-off. A net £4.6 billion of retail money flowed out of its funds over the 12 months as political events reduced risk appetite.

One City commentator suggested there are "better places to invest".

Richard Gillingwater, chairman since May 2013, and chief executive Andrew Formica think otherwise. Gillingwater has just spent £44,592 on 21,114 shares at 211p, while Formica has dug deep and coughed up almost £1.3 million for 600,000 shares at a fraction less.

They'll be hoping investors in New York show greater appreciation of the business when trading starts there after completion during the second quarter.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.