HSS cost reductions working as Q1 results meet expectations
HSS Hire Group, which has the majority of its workforce based at Trafford Park in Manchester, says its first quarter trading to the period ending April 2 is in line with expectations as it continues to deliver cost reductions.
Revenue is up 16.3% to £84.3m (Q1 2015: £72.5m) and adjusted EBITDA has risen 14% to £17.6m (Q1 2015: £15.4m).
Turnover in the core business grew by 15.8% to &71,9m, reflecting strong growth in its OneCall and Training businesses as the company supported new customer wins.
Specialist revenue was up 18.1% to £12.4m, 6.1% of which was due to the inclusion of revenues from All Season Hire which was acquired by HSS in May 2015.
Group EBITA margins increased to 5.8% (Q1 15: 5.2%) driven by revenue growth and the impact of the cost reduction actions implemented in 2015, which are delivering to plan.
Additional rationalisation will continue through 2016 to ensure the company delivers its objective of driving sustainable margin improvement, it said.
A statement said: “Market conditions remain very competitive with some signs of softness in the broader UK economy; however trading in Q2 16 has started ahead of Q2 15.
“Our fleet investment will remain demand-led in line with our aim to drive capital efficiency through the business.”
Chief executive John Gill said: “HSS continued to grow ahead of the tool & equipment hire market during the period.
“This growth reflects a number of factors, including the positive revenue contribution of new customer wins and the benefit of investment in our hire fleet through 2015.
“We remain focused on growing operating margins and driving capital efficiency through careful management of our operational cost base and demand-led fleet investment.”
“Selective openings of new local branches, a further four in the first quarter, and the phased introduction of the new NDEC from March 2016 will continue to enhance our national footprint and improve product availability for customers.”
