08.10.2020

HSS struggles on

UK rental company HSS says that utilisation is back up to around 90 percent of last year’s levels, even with 145 branches closed.

Half year revenues to the end of June are down 22.1 percent on last year to £125.8 million, while the pre-tax loss jumped from £7.37 million last year to £12.89 million this year. This was all due to the Lockdown from March 23rd followed by a lose return toward normal. The company also reduced its net debt from £179.5 million to £156.7 million, although it is now obliged to treat operating lease commitments in the same way as depreciation leading to a further £81.8 million being added back onto its reported net debt for a grand total of £236.8 million.

Given the improving performance while so many branches remain closed, and the fact that around 30 percent of its business has moved online, HSS also announced the permanent closure of 134 branches out of its total network of almost 300 locations, with around 300 job losses.

Chief Executive Steve Ashmore said: “Our primary concern since the outbreak of Covid-19 has been the safety and wellbeing of our colleagues, customers, suppliers and other stakeholders. We responded quickly and decisively to preserve cash, optimise financial performance and ensure continuity of supply to our customers. I am incredibly proud of all our employees for their dedicated hard work in helping do this.”

“Whilst 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. Our recent investment in technology has proved critical, allowing us to support our customers during lockdown, our digital channels and Click and Collect service providing low-contact alternatives to branches. As a result, we have now seen revenue return to above 90 percent of 2019 levels with profitability back to pre-Covid-19 levels.”

“While our strategic ambitions remain unchanged, Covid-19 has demonstrated that we are now ready to accelerate our strategy by further investing in our technological platforms. These investments will allow us to reduce our physical footprint which, whilst regrettably resulting in the loss of around 300 roles, allows us to become a more agile, technology-driven business which is essential in our markets as well as reducing costs and enhancing shareholder value. This will build on our already differentiated commercial proposition and create the most advanced, customer-centric offer in an increasingly competitive marketplace.”

Comments

AccessChap
Sad to see HSS’s struggles continue and I genuinely hope they get back to where they once were. Great values and know how to treat a customer. They’re not on their own and you only have to see the current state of NWP and AFI to know that complacency catches us all up.

Oct 9, 2020

Paul Richards
HSS share price and enterprise value is at its lowest for some time, as a shareholder I can state that without fear of contradiction.
The last - ridiculous - paragraph of the statement by the HSS spokesperson confirms that this is an organisation has lost its way, and (hopefully) primed for takeover - Speedy take note.

Oct 8, 2020
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