TWO pieces of good news were behind a surge in the share price of Merseyside’s largest listed company, Speedy Hire.

The FTSE-250 company’s stock rose 27% on Monday and Tuesday after data provided a timely boost to the construction sector.

On Monday, a monthly construction industry study showed the year-on-year value of civil engineering contracts rose 18% in January.

It was the first time the Glenigan index had shown a positive figure since June.

This was followed by a report by analyst Paul Jones, from Panmure Gordon’s Liverpool office, which reiterated a buy recommendation on Lavendon, which rents aerial work platforms.

It offered a strong recommendation because Lavendon has not seen its shares rally following the falls the sector saw after Speedy Hire’s profit warning.

The markets reacted badly when the Newton-le-Willows tool hire firm said it expected pre-tax profits for the year to be between £33m and £38m, compared with £48.1m last year. The share price fell 48% to 49p.

At the time, chief executive Steve Corcoran remained upbeat.

He said the company had taken a financial hit as the downturn in the private sector had been sharper than expected but said the company was well-placed to weather the recessionary storm by focussing on projects in the public sector and in regulated industries where investment is continuing.

Since then it had climbed up to 90p at the close last Friday but then increased 15% on Monday and gained a further 7% in early trading yesterday. Although it fell back from yesterday’s high, it still closed up slightly, at 104.5p. However, despite the gains, Speedy Hire’s stock is still trading nearly 90% down from its year-high of 859p reached last February.

The firm announced in November it had cut 500 jobs from its 5,000-strong workforce in the first phase of a major cost reduction drive. Speedy had 500 branches in the UK and Ireland, but recently closed 38 sites and reduced its vehicle fleet.

alex.turner