HSS back in the black after strong interim trading period

Steve Ashmore
X The Business Desk

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Manchester-based tool hire group, HSS, has returned to half year profit, its interim figures revealed today.

During the six months to July 3, it recorded sales of £150.5m, up from £120.7m the previous year, while a 2020 pre-tax loss of £12.9m was turned into a pre-tax profit of £11.2m this year.

HSS further strengthened its balance sheet in the reporting period, with net debt reduced further to £97.6m, compared with £120.4m at the end of the 2020 fiscal year. The sale of Laois completed in April 2021, for €11.2m, and it said efficient working capital management has been maintained, while overdue debt remains at low levels.

Revealing its current trading and outlook, the group said revenue, EBITDA and EBITA are all above management expectations in the third quarter 2021, to date.

Management now expects full year EBITDA, on a non-IFRS16, continuing operations basis, to be ahead of market expectations and EBITA to be materially ahead.

The sale of All Seasons Hire completed on September 29, for a gross consideration of £55m, with proceeds to be used to further reduce debt.

A refinancing process is under way, and HSS is well placed for a material reduction in group interest costs, it said

Chief executive Steve Ashmore, said: “The first half of 2021 has been one of significant progress and I am very pleased with what we have accomplished.

“We started the year with strong momentum and trading continued to improve over the period, with Q2 21 revenues at 102% of 2019 levels, EBITDA and EBITA margins up and ROCE at a record level.

“This strong performance, combined with the post balance sheet date sale of All Seasons Hire, has allowed us to reduce leverage to around 1.0x, well below our 2.0x target, completing the final element of the strategic plan set out in 2017, to delever the group, transform the tool hire business and strengthen our commercial proposition.”

He added: “The group has made strong progress over the last four years so that HSS today is unrecognisable from the HSS of 2017.

“Our unrivalled digital capabilities allow us to offer our customer what they need, when they need it, servicing demand through our 500+ partner supply chain.

“Leveraging our differentiated customer offering, highly evolved technology platform, and scalable structure built around two key divisions, we are uniquely positioned to capitalise on market opportunities as we begin the next exciting phase of our growth.”