30.08.2018

HSS cuts losses

UK rental company HSS - owner of UK Platforms – has reported higher first half revenues with a smaller loss.

Total revenues for the six months were 5.8 percent higher at £169.8 million, this is made up of a 2.9 percent growth in rental revenues to £122.7 million, while Services were 13.9 percent higher at £47 million – mostly training and its ‘One Call’ service. The higher revenues and lower overhead costs, along with lower exceptional costs, helped reduce the pre-tax loss from £30 million in the same period last year to £7.1 million this year. Capital expenditure was cut by 28 percent to £13.1 million which helped reduce net debt by 2.4 percent to £225.2 million. The company said that the period since the end of June has seen the growth trend continue.

Chief executive Steve Ashmore said: “We are eight months into our new strategy and the group has made significant progress. In this time we transitioned seamlessly to a new distribution model, refinanced the group giving us long term stability and announced the sale of our UK Platforms business, allowing us to focus on the tool hire business and further reduce our debt.”

“Alongside this strong operational progress, trading has been much improved, helped by our increased focus on our tool hire business and by customer demand for our extensive range of relevant seasonal products. With significant operational change behind us and continued momentum in current trading, we look forward with confidence as our attention turns to driving improved performance from the tool hire business and strengthening the group’s commercial proposition.”
See Loxam/Nationwide acquires UK Platforms

Vertikal Comment

HSS is certainly on the way beck to profitability, however it is still struggling with its core tool hire business, and the sale of UK Platforms - which looks set to complete in the fourth quarter – will remove a decent profit contributor and overhead coverage, putting more pressure on the businesses that remain – ‘Central costs’ in the six months have been cut, from £20.7 to £14.1 million, they are still high, depending what is included of course.

It is possible that the company will at least break even for the full year, although the fourth fiscal quarter will lack the contribution from UK Platforms, but will benefit from a reduction in finance costs. It will be interesting to see how this develops.