HSS profits fall amid strong competition

HSS Hire Group’s profits have dipped marginally as the company invests in new local branches as it also battles to reduce costs in a “very competitive” trading environment.

Adjusted EBITDA for the nine months to September 26, was £51.2m (9M 2014: £51.9m), reflecting the opening of new outlets, revenue mix and the first year of plc costs.

However, revenue for the tool hire company, which has the majority of its workforce based at Trafford Park in Manchester, was up 10.7% to £230.8m (9M 2014: £208.5m).

The company said that trading for the 39-week period was in line with management expectations, with continued revenue growth in both the core and specialist businesses.

“New key account wins through H1 and into Q3 are helping to build our pipeline for the remainder of FY15 and into FY16,” the company statement said. “In addition, this morning the Group opened its 50th new local branch in 2015 in Loughborough.”

HSS chief executive John Gill said: “Our revenue growth for the period is in line with our expectations, but the trading environment remains very competitive.

“We have made significant progress in reducing our cost structure and in developing and growing our specialist businesses.
 
“As we approach the end of this year we are starting to see the benefits of this cost restructuring, with the full year effect to be realised through the 2016 financial year.
 
“The pipeline for the branch roll out next year is in place and we are also in the final stages of planning for the opening of our new National Distribution Centre in the first half of 2016, which will drive further efficiency into our network and customer proposition.

“These focus areas are important building blocks for growth in the medium and long term and the Group will update on each of these with the full year results in April 2016.”

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