City round-up: HSS Hire Group; Knights; Manx Financial
HSS Hire, the Manchester-based tool and equipment hire group, has reported a “solid revenue performance in challenging markets” for its first half period, to June 29, 2024.
Its unaudited interim results show a 3.2% improvement in turnover of £170.8m, although it recorded a pre-tax loss on continuing operations of £1.257m, compared with a pre-tax profit of £4.727m in the previous period.
It blamed seasonal product weakness for its lack of profitability and said it had initiated targeted cost action to create operational efficiency to mitigate demand softness in certain end markets.
It added it enjoyed continued strong returns with return on capital employed above the group’s cost of capital and that it has a robust balance sheet.
The net proceeds of the £20m sale of the Power business has been used to reduce debt and further strengthen the balance sheet, while it has a material liquidity headroom of £75m to support its ongoing strategy development.
The interim dividend has been maintained at 0.18p per share.
Following the legal separation of ProService and Operations in 2022, the commercial and operational activities of each entity will now be fully separated, said HSS.
Each business will now pursue complementary growth strategies with separate management teams and greater control over resources and investment decisions.
The group said while a continued weakness in seasonal products has led to a more challenging start to its second half, it is “somewhat encouraged by lead macroeconomic indicators for UK construction beginning to trend in a positive direction”.
It added both of its businesses are positively positioned to capitalise on improving markets and it shortly expects to mobilise on a number of large accounts won over the summer.
Chief executive, Steve Ashmore, said: “The group delivered a solid first half performance against a challenging market backdrop, with above-market growth in our ProService marketplace business and continued good utilisation in Operations.
“Today we are meaningfully progressing our growth strategy with the announcement of the commercial and operational separation of ProService and Operations. This will enable each business to pursue complementary growth strategies under independent leadership teams with greater control over resources and investment decisions.”
He added: “Looking ahead, we are well placed to capitalise on any change to market conditions and in the meantime have a number of new contracts mobilising in H2. However, as a result of the new group structure and the period of transition that this will involve, the board believes it is prudent to remove guidance until further notice.
“The board and I are excited about this next stage in the development of our strategy, which we are confident will fully unlock the growth potential of each business and provide greater optionality to maximise future value for shareholders.”
The group also announced today that Amanda Burton, Senior Independent Director and Remuneration Committee and Market Disclosure Committee Chairperson, is to step down after nine years at HSS, with effect from October 1, 2024.
The search for a new independent non-executive director is under way.
Chairman, Alan Peterson, said: “Amanda has been with HSS since our IPO in 2015 and has made an important contribution to the business as a director and via our Committees. On behalf of everyone at HSS, I would like to thank Amanda for her unfailing commitment, particularly through the transformation at HSS during her tenure, and we wish her the very best for the future.”
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Dave Wilson
Listed legal group Knights holds its Annual General Meeting today (24 September 2024) in Wilmslow, and Chairman, Dave Wilson, will say:
“Knights delivered a good financial performance for the last financial year with underlying PBT1 growth of 17% against a challenging market backdrop. This performance reflected the strength of our diversified service offering, and continued execution against our strategy, and built on our strong track record of profitable growth.”
“Our unique culture continues to be a differentiator for us in the UK legal market and a key driver of our momentum in attracting new talent, through both recruitment and acquisition. This underpins the Board’s confidence in the current year.”
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Jim Mellon
Manx Financial, the Isle of Man based finance group which owns Conister Bank says it is to commence taking retail deposits in the UK. In a statement accompanying half year results this morning the AIM listed business says the move will “provide Conister Bank with a source of alternative liquidity to alleviate the reliance on our loyal Isle of Man retail and commercial deposit customers”.
Jim Mellon, Executive Chair, said: “I am pleased to report another set of record results with a 16% increase in Profit Before Tax to £3.5 million.”
Conister Bank showed a net loan book growth of £10.3 million to £370.4 million (31 December 2023: £360.1 million) supported by a greater increase in deposits to £409.3 million (31 December 2023: £390.4 million) the Bank’s Loan to Deposit ratio eased to 90.5%.
Last week (16 September) Manx Financial announced it had completed the acquisition of the remaining shareholding (49.9%) in Payment Assist Limited for £5 million.
However, he also warned that difficult conditions lie ahead. He said it was “pleasing to announce another record half year with a 16% increase in our Profit Before Tax to £3.5 million (30 June 2023: £3.0 million)…despite these impressive results, the Group is still trading at a 45% discount to Net Asset Value as at 19 September 2024.”
