5th Sep 2019 11:55
(Alliance News) - HSS Hire Group PLC on Thursday said its full-year expectations were unchanged following a first-half where it narrowed its losses on a rise in revenue and lower expenses.
In the 26-week period ended June 29, the equipment supplier reported a 3.9% year-on-year increase in revenue to GBP161.4 million from GBP155.4 million.
Revenue rose in its rental segment by 1.1% to GBP110.3 million from GBP109.1 million and in its Services operations by 11% to GBP51.2 million from GBP46.3 million.
Pretax loss for the period narrowed to GBP7.4 million from GBP10.2 million last year, with administrative expenses falling by 5.3% to GBP64.3 million from GBP67.9 million following a cost saving initiative.
Exceptional items also fell, by 13%, to GBP2.8 million from GBP3.2 million. This was despite HSS incurring GBP1.7 million worth of accelerated amortisation fees due to the early repayment of a debt following its disposal of a business unit. In January, the company sold its UK Platforms Ltd rental unit to Nationwide Platforms Ltd, generating GBP47.5 million before transaction costs.
The disposal helped lower the company's net debt to GBP186.0 million at June 29 from GBP238.7 million from the end of December, HSS explained.
The company also noted that adjusted earnings before, interest, taxes, depreciation and amortisations rose by 11% to GBP27.0 million from GBP24.4 million. This performance indicator does not consider exceptional costs.
Like last year, HSS has decided against paying an interim dividend, preferring to reduce net debt instead.
For the rest of 2019, the company expects its full-year profit to be in line with market expectations. HSS said the main risks to a positive performance in the remaining 26-weeks are macro-economic conditions, including the impact from "Brexit related developments".
Chief Executive Steve Ashmore said: "I am pleased to report a solid performance for the first half of 2019 in which the continued focus on driving profitable revenue growth through strong price control and effective cost management led to a significant improvement in return on capital and a further reduction in leverage.
"The widely reported headwinds in the economy have affected the tool hire market but HSS is well placed to manage these more challenging conditions. We have taken additional action to further optimise our operating cost base and have a clear strategy to build upon our existing excellent market positions, leaving us well placed to continue to grow share in all of our markets."
Shares in HSS were 0.2% lower at 31.43 pence each in London on Thursday morning.
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