HSS Hire Group PLC (LON:HSS) saw its shares jump 9% higher on Thursday after the equipment hire firm saw its first-half losses narrow helped by a cost reduction programme, with Numis Securities prompted to upgrade its rating for the stock.
The FTSE Fledgling-listed firm reported a pre-tax loss of £7.1mln for the 26 weeks to June 30, down from a £30.1mln loss a year earlier, as revenue rose by 5.8% to £169.8mln, up from £160.5mln.
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HSS Hire said the rise in revenue was driven by improved trading across both its Rental and Services segments.
The group also said it had reduced its distribution costs in the period to £20.7mln from £23.4mln, while administrative expenses were also lower at £70.1mln, down from £84.9mln.
It added that net debt at the end of the period stood at £225.2mln, down £7.5mln in the first-half.
Significant operational change
HSS Hire chief executive Steve Ashmore said: "We are eight months into our new strategy and the group has made significant progress."
He added: "With significant operational change behind us and continued momentum in current trading, we look forward with confidence as our attention turns to driving improved performance from the tool hire business and strengthening the group's commercial proposition.”
In afternoon trading, HSS Hire shares were 9.1% higher at 30.30p.
Numis ups rating to ‘add’
In a note to clients, Numis’ analysts raised their rating for HSS Hire to ‘add’ from ‘hold’ after increasing their target price to 33p from 30p.
They said: “The combination of a return to rental revenue growth in H1 and the cost savings initiatives being pursued by management has driven a c.75% growth in adjusted EBITDA.
“Net leverage remains elevated (3.7x ND/EBITDA) but is now reducing, and the absolute level of net debt should reduce materially in H2 with the disposal of the UK Platforms business.”