Tool hire group reports dramatic reduction in annual losses
HSS Hire, the Manchester-based tool hire firm, has grown revenues and dramatically reduced pre-tax losses, it revealed in final figures for the year to December 29, 2018, today.
Turnover rose 5% to £352.5m, while the reported loss before tax of £4.5m was down from £85.2m the previous year.
Today’s results show HSS delivered its highest adjusted Total EBITDA in the group’s history, up 45.8% to £71.3m.
Total Rental revenue growth, and a focus on profitability and cost initiatives improved margins by 5.6% to 20.2%.
The group said its underlying total rental revenue growth of 4.1% was driven by improved availability, sales initiatives and strength of seasonal product range.
During the year HSS successfully secured £245m of new debt facilities and it said its cash and total facility headroom was greater than £40m as at December 29.
Net debt was further reduced following the disposal of UK Platforms for net cash proceeds of £47.5m in January 2019.
Significant progress was made against other strategic priorities. A major network reconfiguration was successfully delivered while maintaining high customer service levels. Material cost savings were delivered with overheads reduced by £20m, and the return on capital employed increased significantly to 16.2%, compared with 1% the previous year.
The next phase of the group’s strategy is focused on developing its strong commercial proposition, including transforming the proposition to provide a more seamless digital experience for both tool hire and OneCall customers, in order to differentiate HSS in the equipment hire market.
Trading for the 13 weeks to March 30, 2019, is in line with management expectations, and the term debt facility has been reduced by £38m following the disposal of UK Platforms
Chief executive Steve Ashmore said today: “In 2018 we made significant progress against our strategic priorities and delivered the highest adjusted total EBITDA in the group’s history.
“Over the year we made a series of important strategic and operational changes, including the seamless transition to a new distribution model which significantly reduces costs, the successful refinancing of the group giving us long-term stability, and the sale of UK Platforms, allowing us to focus on the tool hire business and further reduce debt.
“Alongside these changes we have maintained trading momentum with good underlying revenue growth.
“Our increased focus on improving profitability has also proved successful with margins enhanced across both our rental and services segments, combined with a material reduction in our cost base.”
He said: “We are now focused on transforming our proposition to take advantage of the fragmented and digitally immature equipment hire market.
“This will include creating an end-to-end digital offering in our tool hire business and transforming OneCall to ensure a seamless rehire experience.
“While the broader economic outlook remains uncertain, our leaner operating model, excellent market positions and clear strategy leave us well placed to continue to grow market share in any market.”
