Hire group sees first half revenues rise and reintroduces dividend payments
Manchester-based tool and equipment hire group, HSS Hire, has reported a strong first half trading period, in the six months to July 2, 2022.
Revenues rose 11.3% on a like for like basis to £159.9m, although pre-tax profits fell slightly from £6.8m the previous year to £6.5m.
Net debt was £103.2m, a reduction of £54.5m from the £157.8m level last year. This has been driven by improved EBITDA, strong working capital management, disposal proceeds and a reduction in lease liabilities following property surrenders.
The group said it has made great progress in delivering its strategy, including strengthening the balance sheet, which has resulted in increased profitability and cash generation while continuing to invest in the technology roadmap. The board has, therefore, decided to reintroduce dividend payments and implement a progressive dividend policy, and an interim dividend of 0.17p per share will be paid during November 2022.
HSS said it had reduced exposure to interest base rate changes following its successful 2021 refinancing.
Delivery of its technology roadmap is ahead of plan, it revealed, and it is well positioned to build on the strong first half performance.
In the current trading period, the group recorded revenue growth of 10% in the third quarter to date, with EBITDA and EBITA in line with management expectations.
Management said it remains confident that full year EBITA will be in line with market expectations.
Chief executive, Steve Ashmore, said: “I am very pleased with our performance in the first half of 2022.
“Despite the volatile macroeconomic backdrop, we achieved double digit revenue growth with our capital-light, technology-led business providing flexibility and the data to deliver for our customers while effectively managing prices to navigate inflationary pressures.
“The board’s decision to reinstate the dividend reflects the confidence it has in our long term growth strategy.”
He added: “We have continued to invest in our digital capabilities, achieving key milestones on our technology roadmap ahead of schedule, which will underpin the future growth of our two businesses: HSS ProService and HSS Operations.
“The roadmap includes the roll-out of our new portal for larger customers – a self-service platform where all hire requirements can be efficiently managed in one place. Our first customer is already being onboarded with significant expansion to come in the next 12 months.”
“While mindful of the macroeconomic backdrop, we are confident that full year EBITA will be in line with market expectations as our operating model continues to drive growth and further cement our position as a technology leader within the industry.”
