HSS Hire more than doubles pre-tax profits as market bounces back

HSS Hire Group, the Manchester-based tool and equipment hire business, more than doubled annual profits in the year to December 31, 2022.
Its results today showed a 138% increase in pre-tax profits of £18.9m, on the back of a 9.7% boost to revenues of £332.8m, driven by its capital-light Services business.
Net debt fell slightly from £45.4m the previous year to £41.5m, reflecting improved profitability and working capital management.
The group enjoyed strong free cash flow generation of £28.4m, despite increased capex investment.
The board is recommending a final dividend of 0.37p per share, bringing the total dividend for the year to 0.54p, following the reinstatement of a progressive dividend policy this year.
During the year nine customers successfully transitioned to the HSS Pro self-service platform with average growth of 45% post migration and positive feedback, with a strong pipeline of customers lined up to use the platform.
Further investment in the data-driven central sales team delivered 10% revenue growth in Q4 22 with an improving trend.
The training business delivered 16% growth and record profit levels, reflective of clear customer demand.
HSS’s low-cost builders’ merchant network expanded to 63 locations, compared with 55 a year ago,, and delivered 22% growth on a same store basis.
Also, continued technology enhancements improved enquiry conversion to 74% (FY21: 71%) with more than 20% of transactions through the online channel.
Revenue growth, EBITDA and EBITA for the first quarter of the current fiscal year are in line with management expectations.
The capital expenditure investment forecast in 2023 is expected to be £34-£38m including around £5m to support further delivery of the technology roadmap. Management remains confident that full year EBITA will be in line with market expectations.
Chief executive, Steve Ashmore, said: “HSS achieved a second consecutive year of double-digit revenue growth in 2022 with our technology-led strategy continuing to deliver strong results.
“The business has been restored to full health, supported by motivated and engaged colleagues who are fully embracing our innovative customer-offering.”
He added: “We continue to deploy new technologies across both HSS ProService and HSS Operations with all these initiatives remaining on track or ahead of plan.
“In ProService, our digital self-serve portal – HSS Pro – is delivering stronger than anticipated results. Our growing pipeline of customers waiting to be onboarded to the portal reflects the significant need and demand that exists for our evolving marketplace proposition and differentiates HSS in the fragmented building services market. For HSS Operations, our technology has enabled enhancement to the service we offer while efficiently managing our well invested fleet.
“Our systems are also working to support our ESG agenda, allowing both HSS and our customers to make data driven choices on carbon emissions.
“We have started 2023 well, building on the previous year’s momentum, and our focus remains firmly on sustaining our growth and upholding our position as the technology frontrunner in our sector.”