04.06.2014

HSS boosts revenues but not profits

UK based rental company HSS has reported first quarter revenues up more than 29 percent to £62.9 million, at the same time the company saw last year’s pre-tax loss jump from £1.3 million to £8.9 million thanks to higher administration and distribution costs, and a steep rise in interest payments from 3.1 to £11 million. Some of these higher costs are due to the acquisition of UK Platforms and debt restructuring, however the business is carrying a higher debt burden than before.

Chief executive Chris Davies said: "We have completed another solid quarter of growth and I'm encouraged to see the positive trend our strategy promoted throughout 2013 continue, with £62.9m in revenue, up 29.4 percent, year-on-year. This is a strong start to the year achieved by organic growth across all customer groups, businesses and geographies, complemented by contributions from our recent acquisitions and improving market conditions.

"We will continue to invest in our core fleet to meet rising customer demand against improving economic conditions and to promote the growth of our business throughout 2014."

Vertikal Comment

HSS is performing well in terms of winning customers over and generating more revenue, however the company has been leveraged with a high debt load which is causing it to lose money in what is a relatively buoyant market.

Financially the business has a long way to go before it starts generating really positive returns, but this could begin to take shape in the second half. It has the right attitude, the market is there it just needs to reduce its debt or generate a fair bit more revenue and it can shine.