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HSS Hire shares jump as it identifies further costs savings to lift profits

HSS Hire has laid out its financial targets to achieve by 2020
HSS is working on its turnaround

HSS Hire Group PLC (LON:HSS) said a strategic review has identified further cost savings to reduce leverage and lift profits as the tool hire company overhauls the business.

A further £10mln- £14mln in cost savings have been identified, on top of the £13mln of annualised savings announced in the third quarter trading update in November.

READ: HSS's cost savings initiatives contribute to an improving profits trend

HSS will focus on the tool hire business and more profitable opportunities in local markets, while continuing to improve its digital offering.

The company said these actions will deliver a “significantly improved business performance”. 

By 2020, the group aims to achieve revenue growth in line with the market, an increase in rental revenue ahead of the market, an underlying earnings (EBITDA) margin higher than 20%, leverage of less than three times and return on assets above 20%.

“Our strategic review, the most detailed in the company's history, has provided us with deep insights on HSS's trading performance and enabled us to devise a clear and actionable set of priorities,” said chief executive Steve Ashmore.

“We have made progress over the past six months to return the business to operating profitability, providing us with a platform from which to make further improvements.”

READ: HSS Hire's boss steps down after annual losses widen

The third quarter trading update revealed the group had enjoyed its fifth successive month of positive EBITA while underlying rental revenue was flat.

Shares rose 5.58% to 30.75p in morning trading. 

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HSS Hire Group Timeline

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