Costs increase, margins decline, but outlook better at right-sized HSS
HSS Hire Group’s new structure will deliver sustainable growth when market conditions improve, the company said in a statement to the stock market this morning.
The group said it has delivered “a resilient top-line performance” against a continued challenging market backdrop, with like-for-like revenues for the calendar year, excluding the Power business sold in March 2024, down 2% on prior year at £333m.
Gross margin declined by 180bps from 47.0% to 45.2% reflecting a change in sales mix with more rehire business.
The listed equipment hire company will separate out HSS ProService and HSS The Hire Service Company as standalone businesses.
HSS said this morning that Pro’s attractive Self Serve marketplace platform is growing market presence, with a broad range of customers registered and a healthy pipeline of new large customers.
THSC’s sales team has been strengthened and the business is already seeing a growing pipeline of direct customers as it continues to develop its builders merchant model.
Cost cutting last year to “right-size” THSC closed 10 operating sites.
As a result of these strategic actions to build a platform to deliver sustainable growth, the net increase to operating costs was 3% YoY. The reduction in gross profit together with the net increase in costs over the prior year resulted in underlying EBITDA for the 12-month period of c.£48.5m and underlying EBITA of c.£10m.
Steve Ashmore
Steve Ashmore, Executive Chair, HSS ProService and Director, HSS Hire Group plc said: “Whilst market conditions remained challenging in the second half of 2024, following the well-executed restructuring and streamlining of our core operations, HSS is now better positioned to deliver sustainable growth as market conditions improve.
“We are excited for the Group’s future, with re-invigorated leadership teams better equipped to develop their respective businesses from solid and sustainable foundations. We look forward to updating shareholders on the progress and opportunities of ProService and THSC in due course.”
