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HSS Hire narrows 2018 loss on cost cuts and higher revenue

Published: 09:08 04 Apr 2019 BST

HSS Hire
Shares in HSS Hire rose 2.5% in morning trading

HSS Hire Group PLC (LON:HSS) shares gained after losses narrowed at the tool and equipment hire firm slashed on the back of cost cuts and revenue growth.

The company reported a loss before tax of £4.5mln for 2018, compared to a loss of £85.2mln the previous year.

READ: HSS Hire refinances debt on more onerous terms

Revenue from continuing operations rose 6.2% to £322.8mln with rental revenue up 3.8% to £226mln and services revenue up 12.2% to £96.8mln.

Margins improved by 5.6 percentage points to 20.2%, supported by reduced costs.  

“Over the year we made a series of important strategic and operational changes including the seamless transition to a new distribution model which significantly reduces costs, the successful refinancing of the group giving us long-term stability, and the sale of UK Platforms, allowing us to focus on the tool hire business and further reduce debt,” said chief executive Steve Ashmore.

Net debt increased to £235.6mln last year from £223mln in 2017 after entering into a new term loan facility and revolving credit facility last June. 

HHS Hire said after “careful consideration” of its performance, it believes it is in the best interest of shareholders to not pay a final dividend as it focuses on its turnaround plan.

 “We are now focused on transforming our proposition to take advantage of the fragmented and digitally immature equipment hire market,” said Ashmore.

“This will include creating an end-to-end digital offering in our Tool Hire business and transforming OneCall to ensure a seamless rehire experience.

“While the broader economic outlook remains uncertain, our leaner operating model, excellent market positions and clear strategy leave us well placed to continue to grow market share in any market."

Shares rose 2.5% to 36p in morning trading.

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