HSS Hire Group PLC (LON:HSS) has said it will cut around 300 jobs as it closes 134 of its 250 locations and moves to a more on-line model in the face of the coronavirus (COVID-19) pandemic.
The tool and equipment hire group reported a £12.9mln loss before tax on revenues down 22% to £126mln in the half-year to June 27, 2020, though it said underlying profits (EBITDA) have remained positive through the pandemic.
While revenue in the third quarter is currently at 90% of last year’s levels, up from 63% in the second quarter, chief executive Steve Ashmore said that “COVID-19 has demonstrated that we are now ready to accelerate our strategy by further investing in our technological platforms”.
Investments in digital channels, the launch of new click-and-collect service and using space in third-party builders merchant locations will, Ashmore said, allow the group to reduce its store estate and reduce costs.
“Whilst the COVID-19 had a significant impact on our performance in the first six months, I am encouraged by the resilience of HSS during a very challenging period,” he added in the results statement.
HSS shares rose 6% to 21.2p in early trade on Thursday.
In a note to clients, analysts at broker Liberum Capital said: “This is a very radical strategy, and while the cost reduction potential is obvious, the real test is how well it can hold onto its top line.”