Investment and rental downturn add £17m losses for HSS

Major investment and an under-performing rental arm at HSS Hire Group, the tool hire company with the majority of its workforce based at Manchester’s Trafford Park, have resulted in pre-tax losses of £17.4m.

Although revenue grew 9.6% to £342.2m in the year to December 31, 2016, the firm ploughed cash into a new distribution network structure, including non-finance exceptional costs of £17m.

Meanwhile, in a continued focus on efficiency, capital expenditure was actively reduced to £42.4m from its 2015 level of £84m.

HSS also said significant changes in its operating model had been implemented and were ongoing.

Chief executive John Gill said: “2016 was a year of significant operational change and investment for the group.

“The result is an enhanced operating platform that will enable us to deliver superior fleet availability to customers right across our network, creating the foundation for future sustainable profit growth.

“While we made good progress in key accounts, specialist rental and our fast-growing services business during the year, this was not matched by revenue growth in our core rental business and re-establishing momentum in this area is our primary focus in 2017 and beyond.

“With our new platform in place that we can now optimise and then leverage, we are firmly focused on pressing home our competitive advantage to drive growth in rental revenues, particularly in our smaller and medium-sized accounts.

“In particular, we appointed a chief commercial officer in early 2017, with the objective of strengthening our customer proposition throughout our network.

“While we remain at the start of this journey, there are some encouraging initial signs that this strategy is beginning to gain traction in key markets such as London.

“In tandem, we will continue to grow our capital-light services businesses, One-Call and HSS Training, where we are seeing strong demand from both existing and new customers.  We expect to see the benefits of these activities deliver margin improvement in H2 17.

“Our markets remain competitive on price, but the initiatives implemented over the last 12 months – and the ongoing programme of network optimisation – have strengthened our capabilities and leave the Group well positioned to continue to serve our existing and future customers.”