A sobering report from HSS, as it posts a £23.6 million pre-tax loss to the year ending 26.12.20. This on top of already having closed 134 of its 234 sites and laying off 300 of its staff. Better times are returning, it says, and the business is now in the right shape to move forward.
The pandemic is partially to blame, of course, resulting in a revenue shortfall in 2020 - down 18% to a still substantial £269.9m. Profit is a different story, the company struggling to make one since 2015 when it was floated on the London Stock Exchange.
“HSS has delivered a resilient performance in a year of unprecedented disruption. The onset of the pandemic had a significant impact across our markets but decisive action to preserve cash and adapt our business supported a strong recovery in the second half of the year with EBITDA ahead of 2019 levels in the final quarter," explains HSS CEO Steve Ashmore in his financial commentary.
"During the course of the year, we took the decision to accelerate the implementation of our strategy. By increasing our focus on digital platforms, closing 134 of our branches, and partnering with builders merchants, we have been able to maintain national coverage while significantly reducing fixed costs. We are grateful for the overwhelming shareholder support for our strategy and in October successfully completed a £53m capital raise, further strengthening our balance sheet.
"This significant progress has been possible due to the hard work and dedication of our colleagues who have shown outstanding commitment during a uniquely challenging year. Our people are the heart of our business and our most important asset and I would like to thank them for their hard work.
"We have had an encouraging start to 2021, with EBITDA in the first quarter ahead of 2019 and 2020 levels. We are well positioned to capitalise on market opportunities as we continue to build on our differentiated commercial proposition to create the most advanced, customer-centric offer in the tool hire marketplace.”
In terms of other measures, as well as expanding its network of builders merchants HSS has introduced a digital operating model. This has resulted in a £15m reduction in fixed costs, while net debt overall was shrunk by £59m to £120m. Otherwise, and in a sign of a corner being turned, fleet utilisation for Q1 2021 is slightly higher than the same period last year, which would have been pre-lockdown, and by March 21 was running at 56%.
For the full results and commentary, see here