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April 5, 2018

HSS reports £85m loss

Filed under: Latest News — EHN Team @ 10:19 am

In its results for the year ended 30 December 2017 announced today, HSS Hire Group reports a full-year pre-tax loss of £85.2m, compared with a £17.4m loss in 2016. Year-on-year revenue decreased 2% to £335.8m, impacted by operating model changes in 2016 and branch closures.

However, HSS says it has seen an improving trend in performance in the second half of the financial year, and that measures being implemented following its strategic review outlined in December will deliver further efficiencies.

The company reports revenue growth of 1.1% in H2 17 compared to H2 16, and an adjusted EBITA increase of £1.8m compared to the first half.

HSS says it delivered £13m of annualised cost savings through network efficiencies, reduced central head count and 55 depot closures, with Q4 overheads £3.3m lower than Q1. The strategic review identified a further £10m-£14m of annualised cost savings to be delivered in FY18 and FY19, and exceptional costs of £66.6m arose, primarily to realise savings implemented in the year and to enable changes to the supply chain model.

The company says the review involved the analysis of 20 million contract lines, more than 35,000 customers, 1,600 products and 250 locations, and focused on areas such as profitability, cost of operations, processes and market opportunities. It identified three priorities to ‘Delever’ by reducing costs and increasing efficiencies, to ‘Repair the Tool Hire Business’ by principally re-focusing on customer’s specific equipment needs and achieving consistent pricing, and to ‘Strengthen the Group’ commercial proposition by serving the requirements of key customer segments and developing sales channels.

Steve Ashmore, Chief Executive Officer of HSS Hire, said, “Overall 2017 was a difficult year for HSS, mainly due to the impact of operational changes made in 2016. We have addressed this by focusing on the core rental business and reducing our cost base and I am pleased with how the business responded in the second half of the year. When I arrived in June, I instigated a thorough strategic review process, the results of which have given us clear direction and an ambition to restore the business to historic levels of performance. Whilst we are only a few months into implementing the strategy, early signs are encouraging.”

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