Final Results - Strategic transformation complete

HSS Hire Group Plc

Strategic transformation complete

Long term commercial agreement for ProService and conditional sale of The Hire Service Company

HSS Hire Group plc ("HSS" or the "Group") today announces results for the 15-month period ended 31 March 2025.

Delivered resilient results against a challenging backdrop and further strategic progress achieved to unlock long-term value for shareholders

Notes

1) Results for FY25, 2023 are on a continuing operations basis; excluding the Power businesses which were disposed of in March 2024 and HSS Ireland which was held for sale at 31 March 2025 and sold in May 2025.

2) Underlying EBITDA is defined as operating profit before depreciation, amortisation, and non-underlying items. For this purpose, depreciation includes the net book value of hire stock losses and write-offs, and the net book value of other fixed asset disposals less the proceeds on those disposals.

3) Underlying EBITA defined as Underlying EBITDA less depreciation

4) Underlying Profit before tax defined as profit before tax excluding amortisation of brand and customer lists and non-underlying items

5) IFRS16 leverage is calculated as closing net debt divided by underlying EBITDA. Comparators on a reported basis with no pro-forma adjustments to reflect the disposal of the Power businesses

6) LTM25 (and the comparative LTM24) refers to a management's estimated view of the income statement for the last twelve months (LTM) ending 31st March 2025 and the 12 months ending 31st March 2024 and excludes discontinued operations including the disposal of the Power businesses announced on 7 March 2024 and the disposal of HSS Ireland announced on 1 April 2025 and held for sale at 31 March 2025.

Financial highlights

· The Group delivered a solid performance as it continued to navigate a challenging market environment and focus on the split of the business into two distinct operations with the associated disruption of separation, which occurred on 1 October 2024.

· Recognising the difference in periods (15 months for FY25 vs 12 months for 2023) and also the material changes to the business that took effect from 1 October 2024, including reallocating certain revenues and costs between ProService and The Hire Service Company ("THSC"), reallocating central costs where appropriate and also restructuring THSC following the separation, we have presented Group LTM numbers for FY25 vs the same period in 2024 above but to give a true indication of business performance we have included in each divisional review below a more detailed analysis of both the LTM to March 2025 and proforma numbers for the year ending 31 March 2025.

· Group Revenue on a continuing basis for FY25 was £379.0m (2023: £312.4m), reflecting the additional three months in the reporting period.

· On a last twelve months ("LTM") basis, revenue for LTM25 decreased 5.2% to £298.2m (LTM24: £314.4m) reflecting the contract loss of Amey in June 2024, together with the overall challenging market, offset somewhat by growth in rehire and other revenues in the period.

· ProService reported revenue for FY25 of £362.8m; THSC revenue for FY25 was £132.1m which included £115.9m of intra-group revenue with ProService.

· Underlying EBITDA was £50.5m, with a reduction in margin to 13.3% (2023: 17.4%) reflecting increased costs and a change in revenue mix impacting gross margins.

· On an LTM basis Underlying EBITDA declined 26.7% reflecting the reduction in revenue, a reduction in gross margin with a mix shift towards lower margin rehire and other categories together with increased costs related to the separation and THSC re-sizing and associated cost reductions occurring in the second half. This resulted in LTM25 EBITA falling 80.1% to £3.9m after taking into account relatively fixed depreciation and finance costs.

· Net debt (IFRS16) decreased £14.0m to £97.6m (2023: £111.6m) (Net debt excluding lease obligations decreased £11.1m to £43.2m); proceeds of £30.1m from the strategic exits of Power during the period and HSS Hire Ireland after the period end, were used to repay borrowings and further strengthen the Group's balance sheet.

· IFRS16 leverage as per the Group's covenants at the period end was 2.3x (2023: 1.9x) and interest cover was 4.5x (2023: 6.1x) and within covenant compliance.

· Loss before tax on a continuing basis of (£130.3m) included an impairment charge relating to THSC of £113.5m reflecting the reduced outlook for this business given current market conditions and also the negative impact on expected future performance from the right-sizing that has taken place to reduce THSC's geographical footprint.

Operational highlights

· Significant strategic progress made to evolve HSS with the separation of THSC and ProService on 1 October 2024 enabling each business to independently shape and advance their own growth agenda.

· New structure provided greater optionality to maximise future value for shareholders, enabling the Group to become the market-leading, digitally-led brand for equipment services.

· THSC (formerly HSS Operations) has been re-branded and re-structured operationally, with a number of depots closed to reduce costs. Since the period end it has been expanding its offering to include a range of new small plant and Mechanical and Electrical (M&E) equipment. A review of strategic options for this division is now underway given the current difficult market backdrop which has resulted in the lower levels of profitability in the period continuing in the current year to date.

· ProService has continued to strengthen its attractive technology platform and in the Group's view continues to be the leading digital marketplace for building services in Europe servicing a broad range of buyers and sellers. With over 3,200 customers having used the online marketplace and a growing range of product verticals, ProService is on track to achieve its medium-term target of 7,000 customers self-serving.

Current trading and outlook

The separation of ProService and THSC created a solid foundation for ProService to continue to grow its unique marketplace offering to be able to deliver strong returns from its cash generative model and enables the restructured THSC to continue to diversify the customer base beyond ProService.

The announcement today of a large scale, long-term commercial agreement between ProService and Speedy Hire Plc together with the conditional sale of THSC to funds advised by Endless LLP is a transformational deal for HSS creating an asset-light, full service marketplace business. This deal is expected to close before the end of 2025.

Alan Peterson, Non-Executive Chairman of HSS Hire Group said:

"HSS delivered strong strategic progress during the period in reshaping the Group by successfully separating ProService and THSC. Despite having to bear the considerable burden of increased taxation that came into effect in April 2025, our two businesses are well placed to focus on their respective strategic priorities.

Since the period end we have continued the focus on broadening ProService's product offering whilst maintaining our emphasis on its core hire vertical. In THSC we have completed the rightsizing of the geographical footprint whilst carefully targeting new capital investment in higher demand categories and have continued to develop its direct selling channels. However, the market has remained subdued in H1 to date which has impacted our core hire business in particular which has also continued to be impacted by the loss of the Amey contract in June 2024. We considered how best to allow both businesses to develop and have concluded a transformational deal including a long-term commercial agreement with Speedy Hire Plc. In order to fully focus on our ProService business we have also conditionally agreed the disposal of THSC to Project Mansell Newco Limited Limited, a newly formed company indirectly owned by investment funds managed by Endless LLP.

We are confident that this transformational deal will deliver material added value to our shareholders and customers as we are able to focus our capital on this asset-light, full service marketplace business which is growing at pace."

FY25 Results Presentation

HSS Hire Group Plc will host a virtual presentation for analysts at 9:00am on 6 October 2025. Analysts wishing to attend should contact FTI Consulting to register: [email protected]

An audio recording will be available on our website in due course.

Notes

1) Results for FY25, 2023 are on a continuing operations basis; excluding the Power businesses which were disposed of in March 2024 and HSS Ireland which was held for sale at 31 March 2025 and sold in May 2025.

2) Underlying EBITDA is defined as operating profit before depreciation, amortisation, and non-underlying items. For this purpose, depreciation includes the net book value of hire stock losses and write-offs, and the net book value of other fixed asset disposals less the proceeds on those disposals.

3) Underlying EBITA defined as Underlying EBITDA less depreciation

4) Underlying Profit before tax defined as profit before tax excluding amortisation of brand and customer lists and non-underlying items

5) IFRS16 leverage is calculated as closing net debt divided by underlying EBITDA. Comparators on a reported basis with no pro-forma adjustments to reflect the disposal of the Power businesses.

Notes to editors

HSS Hire Group plc operates through two separate but complementary businesses serving predominantly business customers:

HSS ProService ("ProService") is a leading Digital marketplace business focussed on customer and supplier acquisition. Technology driven, scalable and uniquely differentiated, ProService is a one-stop-shop providing a wide range of building-related product and services for over 7,000 active account customers per month, in product verticals including equipment hire, training, fuel, equipment sales and building materials. ProService acts as principal with buyers and sellers, but all deliveries and collections are the responsibility of sellers (direct to buyer).

HSS The Hire Services Company ("THSC") formerly known as HSS Operations, provides building-related tools, equipment and powered access via its extensive nationwide network of over 130 locations. THSC is dedicated to delivering a personable hire service to over 9,500 end customers across the UK including tradespeople, facilities management and construction companies.

HSS is listed on the AIM Market of the London Stock Exchange. For more information, please see www.hsshiregroup.com.

For further information, please contact:

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018, as amended (together, "MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person responsible for arranging the release of this announcement on behalf of HSS is Richard Jones, Interim Group Chief Financial Officer.

Chairman's Statement

The past 15 months represents a period of significant transformation for HSS Hire Group, in line with the strategy we announced in 2022 to better position the Group for long-term, profitable growth. The separation of THSC and ProService has enabled the two businesses to independently shape and advance their own growth agenda, tailored to their individual needs and strategic direction. The foundations are now in place to create long-term value for shareholders.

Our results

We delivered another set of resilient results reflecting the persistent end market headwinds we experienced in the period and our transition to a new operating model. Revenue for FY25 of £379.0m for the 15-month period compared to £312.4m in 2023. Gross margin declined by 250bps as we refocused the business for growth across two discrete verticals, whilst driving operating efficiencies and cost control at a Group level. These cost efficiencies were offset by strategic actions taken during the period to continue to build the ProService platform to position it to deliver sustainable growth and reflecting the costs of separating our ProService and THSC into two fully separate operations. Overall, this resulted in FY25 Underlying EBITDA of £50.5m (2023: £54.5m) and FY25 Underlying EBITA of £6.6m (2023: £21.6m) and a reduction in Underlying EBITDA margin of 410bps. After taking account of non-underlying costs including the impairment relating to THSC, we reported a loss before tax of £130.3m (2023: Profit of £6.9m). 

Whilst the change to our year-end and the strategic changes we made to the business during the period make comparisons difficult, we have provided some LTM analysis for both 2025 and the prior year which shows our revenue, EBITDA and EBITA comparing the 12 months to March 2025 with the same prior period on a continuing operations basis. This showed that revenues declined to £298.2m (2023: £314.4m) or 5.2% YoY as a result of the impact of the loss of the Amey contract in late 2024, as previously announced, together with the impact of reducing the size of THSC, offset somewhat by growth in our ProService offering. This reduction in revenue, together with the increased running costs associated with running two discrete management teams, resulted in Underlying EBITDA reducing to £38.8m (2023: 52.9m) or 26.7% YoY and Underlying EBITA reducing 80.1%.

Operational progress

HSS's vision is to be the market-leading, digitally-led brand for equipment services, with sustainability at our core. In order to achieve this, decisive strategic steps have been taken to improve each business and better serve our customers through the separation of ProService and THSC. Strong management teams are now in place for each and the new structure positions THSC as the key supplier to ProService, giving each business space to grow, to drive market share and achieve higher returns.

Led by its new management team, ProService has continued to strengthen its attractive technology platform, helping it to become what we believe is the leading digital marketplace for building services in the UK. With over 7,000 active account customers and over 11,000 active cash customers per month, ProService's lower-cost and flexible operating model provides a key platform for aggregating buyers and sellers across a broad range of building-related products and services. In addition to the equipment rental offering, new and wider ranges of non-rental product verticals have been introduced for our customers in the areas of Equipment Sales, Building Materials and Fuel. The response has been positive, particularly in Fuel, and customer and supplier behaviours continue to evolve as we further deploy our technology. Over 3,200 of our customers have now used our marketplace platform on a self-serve basis and we are targeting 7,000 over the medium term which increases engagement, the opportunity to cross sell and reduces our cost per transaction. ProService's asset-light business model has proven it can deliver excellent customer service in an efficient way, paving the way to becoming the UK's leading business-to-business platform for building services.

For our traditional hire business, this has meant launching a new brand HSS The Hire Service Company ("THSC") previously HSS Operations, in October 2024 supported by a new management team to effect change. During the year and into the current year, THSC has been right-sized operationally, closing several depots to reduce costs and move equipment geographically into areas of the UK where there is more demand whilst continuing to expand the builders merchant model. Since the period end it has also been expanding its offering to include a range of new small plant and M&E equipment. THSC is now well placed to leverage its diverse product offering and extensive network, although the Board will continue to explore further areas of rationalisation where the outcome is to improve return on capital employed for shareholders. The builders' merchant model has continued to expand, working with new partners such as leading building materials merchants, and there are currently over THSC 130 hire locations, with more merchants in the pipeline and this together with THSC's direct sales model into customers from the sales team established in October 2024 continue to generate new demand.

A sustainable business

Our sustainability agenda remains a key component of our strategic growth plan which reflects both our culture and the business models we have rolled out to support our customers.

In recognition of our commitment to our Net Zero 2040 goal we are proud to be the first in our sector to have our Science Based Targets validated by the SBTi. For the third year in succession, we retained our gold rating in EcoVadis' annual sustainability assessment, which is awarded to only the top 5% of all companies assessed.

2025 also saw ProService launch Greener Alternatives, a tool which complements our Customer Carbon Reporting dashboard to help customers make more informed, sustainability-led choices. These not only represent industry firsts but are a key differentiator to attract further new business. THSC's commitment to sustainability was further demonstrated this year by the launch of our Internal Sustainability Champions Network to recognise greener practices and help local initiatives and has also resulted in the launch of several depot-led projects.

We continued to seek out ways to support our customers in achieving their Net Zero goals, upgrading our fleets, exploring fuel alternatives and other ways to reduce our carbon emissions.

Both businesses remain firmly aligned in their commitment to creating a supportive and inclusive working environment. At THSC, we continue to support and grow our ED&I strategy, inspiring young people through our "Open Door" programme, which is now in its third year. This initiative was further supported with the launch of a dedicated female mentoring scheme at ProService, aimed at progressing women to senior leadership roles.

Colleague engagement, wellbeing, and a strong sense of belonging continue to be shared priorities, reflecting a unified Group-wide ethos that places people at the heart of the Group's long-term success.

Divestments

HSS Power

During March 2024, the Group announced the sale of ABird Limited, ABird Superior Limited and Apex Generators Limited (together the 'Power' Companies) to CES Global for consideration of £20.7m. The sale was undertaken as part of a strategic decision to focus on the core THSC hire business and growth of the ProService. The Group utilised £12.5m of the disposal proceeds to repay borrowings and further strengthen the Group's balance sheet position.

As part of this transaction, HSS entered into a commercial agreement with CES for the cross-hire of power generators and related services to ensure the broadest possible distribution of, and customer access to existing fleets of CES and HSS.

HSS Hire Ireland Limited

On 2 April 2025, the Group announced the sale of HSS Hire Ireland Limited ('HIL'), the Group's Republic of Ireland operations, to Grafton Group plc for total consideration, after taking account of completion adjustments of €28.9m (c.£24.3m), representing a transaction multiple of c.8.7x of HIL's 2024 Underlying EBITA.

The sale completed on 31 May 2025 and reflects the Group's strategic objective of creating a more focused business with reduced debt. Shortly after completion of the disposal, the Group utilised £17.6m of the proceeds to repay borrowings and further strengthen the Group's balance sheet position.

Transformational re-shaping of the Group.

The financial and legal separation of our ProService and THSC businesses equipped each division with the autonomy and leadership to pursue separate growth strategies. The Board is committed to building on the strong proposition of ProService, including broadening the range of suppliers on the platform together with an expanded product offering and reinvesting free cash flow into sales and marketing to support growth initiatives.

Details of the Speedy Hire Commercial Agreement and sale of THSC are detailed in a separate announcement made to the market on 6 October 2025, outlining the strategic progress achieved in order to position the Group to deliver long term profitability.

Our Board

A period of significant transition for the Group resulted in re-invigorating our divisional leadership teams and several Board changes. After eight years in the role, Paul Quested stepped down as Chief Financial Officer on 30 August 2024. On behalf of the Board, I would like to thank Paul for his significant contribution to the Group.

Richard Jones joined HSS as interim CFO on 9 August 2024. With over a decade of experience in financial roles in UK public and private companies, Richard is well placed to help us achieve our strategic, financial and operational objectives. Furthermore, following the separation of ProService and Operations, now THSC, Steve Ashmore was appointed as Executive Chairman of ProService on 1 October 2024 and remains on the Board as an Executive Director and Alan Peterson became non-Executive Chairman of THSC and retained his role as non-Executive Chair of HSS.

FY25 saw some changes to the independent non-executive Board and its committees with the departure of long-serving Directors, Amanda Burton and Doug Robertson and the arrival of Neil Cooper also on 7 January 2025, whose experience and insight is proving valuable to the Board. Ernst Kastner, previously an observer on HSS's Board on behalf of HSS's second largest shareholder since 2020 was also appointed to the Board on 7 January 2025. The experienced Board supports two strong and senior management teams with the execution of their strategic objectives whilst they independently progress their strategy in areas such as ESG, technology development and talent creation.

Dividend

Whist an interim dividend of 0.187 pence per share was paid in November 2024, the Board have decided not to declare a final dividend for the extended period ending 31 March 2025 reflecting the need to prioritise the allocation of our capital to the ongoing business.

Outlook

HSS has delivered strong strategic progress during the period in reshaping the Group by successfully separating ProService and THSC. Despite having to bear the considerable burden of increased taxation that came into effect in April 2025, following the split of the two businesses we are well placed to focus on ProService's strategic priorities and to drive improved performance at THSC.

With an encouraging pipeline of opportunities for ProService's digital marketplace, the Group is well positioned to benefit as end market conditions improve. Whilst the current market conditions remain challenging, we are optimistic about our long-term prospects and the opportunity to create significant value for shareholders. As part of our strategic review, we are confident in being able to execute our plans to provide longer term capital for the Group to replace our existing lending facilities which are due to be repaid in September 2026.

As part of our strategic review, we are confident in being able to execute our plans to provide longer term capital for the Group to replace our existing lending facilities which are due to be repaid in September 2026 and in doing so, resolve the material uncertainty over going concern.

Alan Peterson OBE

Chairman

6 October 2025

Group Chief Financial Officer Review

Financial highlights

The Group disposed of two businesses, using the funds generated to pay down debt and create additional working capital. During the period, the Power division was sold, and the Group's operations in the Republic of Ireland were then sold subsequent to the year end as part of a strategic decision to focus on the core hire business of THSC.

In addition to the effort expended by the Group's management teams on the restructuring activities above, there has been a continued focus on delivering a leaner operating model. This included further cost saving activities in THSC, with additional location closures on underperforming sites and a focus on higher utilisation locations to drive profitability and reduce operating costs. The cost of implementing these efficiencies in the business was £2.7m which is included within non-underlying items.

The Group's progress on its strategic objective to operationally separate the two divisions, along with the disposal of non-core businesses, has positioned the Group well to deliver on the Board's long-term strategic aims and maximise shareholder value.

Revenue

Group revenue for FY25 was £379.0m (2023: £312.4m). This movement is primarily driven by the current, fifteen-month period being compared against twelve months in the prior year. The average monthly revenue year on year declined slightly, with the difficult market conditions from the prior year continuing into the current period. Revenues on an LTM basis decreased 5.2% to LTM25 revenues of £298.2m (LTM24: £314.4m) reflecting the impact of the contract loss of Amey announced in June 2024 offset somewhat by growth in hire and other revenues in the period.

Group revenue growth is one of our KPIs as, combined with estimates of market size and growth rates, it provides us with a measure of our market share. HSS's revenue recognition accounting policy includes the judgment that some of the Group's contracts with customers contain leases. Accordingly, the policy explains that the Group's hire and rehire revenue streams fall within the scope of IFRS 16 Leases. (see note 4 in the Consolidated Financial Statements).

Segmental performance

Highlights from the Group's segments are shown below, all presented on a continuing basis.

¹ The 'Eliminations' column shows the value of eliminations in revenue between the trading segments Operations - UK and ProService. Corporate includes only those corporate costs incurred centrally to support the businesses.

Proforma information on ProService and THSC

The operational separation of the ProService and THSC businesses occurred on 1 October 2024. This included the reallocation of certain customers and associated costs from ProService to THSC relating primarily to non-ProService marketplace customers and also the allocation of central costs to ProService and THSC based on staff reallocations and new TSA arrangements.

The Group also changed its year end such that FY25 is a 15-month period whereas 2023 was a 12-month reporting period. The Board acknowledges the challenges that this presents in comparing financial performance period on period.

Therefore, in addition to the twelve month Group proforma financial information provided, proforma financial information for ProService and THSC for the 12-month period ended 31 March 2025 has been prepared and is contained in the respective ProService business review and THSC business review, assuming that the separation of the two businesses occurred on 1 April 2024 rather than 1 October 2024, to assist in investor understanding of the performance of ProService and THSC. No comparative proforma financial information for ProService has been prepared as it was not possible to accurately calculate on an equivalent basis.

Costs

Cost of sales were £209.9m (2023: £165.2m). Gross profit margin fell by 2.5% to 44.6% (2023: 47.1%), partly due to a change in revenue mix, with rehire revenues representing a higher percentage of Group revenue in the current period.

Administrative expenses were £137.5m (2023: £102.1m), and this included non-underlying costs of £4.9m incurred in connection with the operational separation of the two divisions during the period.

Underlying EBITDA and Underlying EBITA

Continuing Underlying EBITDA for FY25 was £50.5m (2023: £54.5m) with Continuing Underlying EBITDA margins lower than FY23 at 13.3% (2023: 17.4%). The reduction in margin period on period is primarily caused by the increased costs relating to the separation and non-underlying costs together with the impact of lower gross margins. Continuing Underlying EBITDA on an LTM basis decreased 26.7% to £38.8m (2023: 52.9m) reflecting the reduction in revenues, a change of mix impacting gross margins and the increased costs of the re-organisation.

Continuing Underlying EBITA for FY25 was £6.6m (2023: £21.6m), a combination of the fall in Continuing Underlying EBITDA noted above and an increased depreciation charge reflecting the 15-month period. On an LTM basis Continuing Underlying EBITA decreased 80.1% to £3.9m (2023: £19.6m) reflecting the reduction in Continuing Underlying EBITDA together with the relatively fixed costs of depreciation and amortisation.

Operating loss and loss before tax

The Group generated an operating loss of £117.8m in FY25 (2023: profit of £17.4m). This included a one-off impairment charge of £113.5m, in the period relating to THSC. As a result loss before tax was £130.3m (2023: profit of £6.9m).

Non-underlying items

During the period, the Group introduced a new Alternative Performance Measure (APM) which distinguished between underlying and non-underlying results. This change was made to allow the users of the financial statements to get a clear view of the underlying performance of the business, excluding the effects of items of income or expense which are not reflective of underlying trading performance.

The table below shows the nature and values of the major categories of non-underlying items on a continuing basis in the current period:

The most significant item in non-underlying costs is the impairment charge that was recognised against segmental assets allocated to the HSS Operations UK CGU, which includes the operations of THSC. The reason for the impairment charge was a downwards revision in future forecast profits consistent with the Group's recent experience of prolonged, challenging market conditions and expectation that these will continue in the short-term.

The impairment charge recognised is the difference between the segmental assets allocated to the CGU and the estimated recoverable amount, which continues to be based on a value-in-use calculations, with the reduction in the overall value-in-use, an impairment charge of £113.5m has arisen.

Finance costs

The Group incurred finance costs in the period of £12.6m on a continuing basis (2023: £10.4m). These costs relate primarily to the charges associated with the Group's senior finance facility which were £5.9m during the period (2023: £5.3m). The increase period on period was due to the elongated reporting period offset slightly by a fall in SONIA rates during the current period. The Group's leases and hire purchase arrangements gave rise to finance costs of £5.3m (2023: £4.0m), which increased due to an increase in THSC leasing levels during the period, offset by the sale of Power which reduced the lease portfolio.

Taxation

The Group had a tax charge for the year of £0.7m (2023: £4.0m) on continuing operations. The total tax charge including discontinued operations was £1.3m, with a current tax charge of £0.7m (2023: credit of £0.8m) and a deferred tax charge of £0.6m (2023: £5.6m). The deferred tax charge in the previous period was significantly higher due to the derecognition of deferred tax assets in respect of losses when forecasts for the current period results were revised downwards.

Deferred tax assets have been recognised to the extent that management considers it probable that tax losses will be utilised. In the current period a three-year (2023: three-year) recognition window has been applied.

Reported and underlying earnings per share

Our basic and diluted earnings per share ("EPS"), both on a reported and underlying basis, reduced in the current period with reported EPS moving to a loss per share of (18.48) pence (2023: profit per share of 0.42 pence). This was driven by the reduced profit levels in the current period and most significantly, by the impairment charge of £113.5m.

Capital expenditure

Additions to intangible assets during the period were £3.6m (2023: £7.1m). The majority of this spending relates to investment in technology, principally in our Brenda platform to support ProService's future marketplace business growth. The decrease in additions during the period relates principally to the maturity of the platform, with a shift towards more maintenance expenditure and less cost of the costs incurred being original development eligible for capitalisation.

Additions to our property, plant and equipment in respect of hire fleet was £24.3m (2023: £29.6m). The decrease between periods is partly due to the network restructure, which saw a significant volume of hire fleet redeployed to locations with higher utilisation, reducing capital expenditure requirements. This was offset somewhat after the period by THSC expanding its offering to include a range of new land moving equipment, a completely new product line for the segment.

Trade and other receivables

Gross trade debtors fell significantly in the period, from £76.6m to £64.4m. This decrease is most significantly due to the disposal of the Power companies and the presentation of Ireland as a disposal group classified as held for sale. The disposal of Power reduced trade debtors by £2.2m and £7.5m of trade debtors were classified as held for sale at the balance sheet date.

The remaining decrease of £2.5m has been the product of significant focus and improved performance on cash collections. However, with the ongoing macroeconomic uncertainty, we continue to adapt our processes and systems to mitigate this risk (refer to Principal Risk and Uncertainties) and have applied an adjusted risk factor to expected loss rates in determining the provision for impairment.

Provisions

Provisions reduced £8.5m to £10.1m (2023: £18.6m). The vast majority of this reduction relates to the ongoing annual onerous contract payments to Unipart following the exit from the National Distribution and Engineering Centre in 2018. At 31 March 2025, the remaining balance on this provision was £2.9m, which is due to be fully utilised in the next financial period which will therefore end the contractual obligations to Unipart.

Cash generated from operations

Net cash generated from operating activities was £28.4m, an increase of £8.2m compared with 2023. The increase has been driven by a combination of improved working capital management (inflow of £7.3m compared with an outflow of £11.3m in 2023) and a reduction of £3.2m in hire equipment cash outflows in the current period.

Leverage and net debt

Net debt levels improved by £14.0m to £97.6m (2023: £111.6m) and at 31 March 2025 the Group had access to £58.3m (2023: £68.2m) of combined liquidity from available cash and undrawn borrowing facilities. With the reduced Underlying EBITDA and higher net debt, leverage increased to 2.3x (2023: 1.9x). Interest cover was 4.5x (2023: 6.1x)

The Group refinanced during the current period with changes to its covenant levels to take account of the disposal of Ireland. These are tested quarterly and all have passed with headroom during the period.

Our lenders have provided their support to the transformational re-shaping of the Group announced today including re-setting covenants for the remaining term of the facilities.

Going concern

The Group has continued to trade with sufficient liquidity to fund day to day operations and this has also benefitted from the reduction in the senior term facility following the utilisation of receipts from divestments and the retention of the surplus balance relating to the sale of Ireland, together with careful management of capital including more targeted capex and no final dividend declared for the period.

However, whilst our lenders have approved the reshaping of the Group including the commercial agreement with Speedy Hire and the disposal of THSC which included the re-setting of covenants through to September 2026, ongoing discussions to fully refinance the facilities due to expire in September 2026 have not yet concluded, and as the outcome of these discussions remains uncertain, this gives rise to a material uncertainty as to going concern that the Board is confident will be resolved in the near term following the outcome of the strategic review and conclusion of refinancing discussions.

Use of alternative performance measures to assess and monitor performance

In addition to the statutory figures reported in accordance with IFRS, we use alternative performance measures (APMs) to assess the Group's ongoing performance. The main APMs we use are Underlying EBITDA, Underlying EBITA, Underlying profit before tax, Underlying earnings per share, Net debt and leverage (or Net Debt Ratio).

We believe that Underlying EBITDA, a widely used and reported metric amongst listed and private companies, presents a 'cleaner' view of the Group's operating profitability for the year by excluding non-underlying costs (including exceptional items), finance costs, tax charges and non-cash accounting elements such as depreciation and amortisation.

Additionally, analysts and investors assess our operating profitability using the Underlying EBITA metric, which treats depreciation charges as an operating cost to reflect the capital-intensive nature of the sector in which we operate. This metric is used to calculate annual bonuses payable to Executive Directors.

The Underlying profit before tax figure comprises the reported profit before tax, amortisation of customer relationships and brands-related intangibles as well as exceptional costs added back. This amount is then reduced by an illustrative tax charge at the prevailing rate of corporation tax to give an Underlying profit after tax.

Analysts and investors also assess our earnings per share using our Underlying earnings per share measure, calculated by dividing Underlying profit after tax by the weighted average number of shares in issue over the period. This approach aims to show the implied underlying earnings of the Group.

In accordance with broader market practice, we comment on the amount of net debt in the business by reference to leverage (or Net Debt Ratio), which is the multiple of our Underlying EBITDA that the net debt represents over a twelve-month period on a last twelve-month basis.

Discontinued operations

During the current period, the Group disposed of the Power CGU and HSS Ireland, a second CGU was classified as an asset held for sale at the period end. As a result, the Group presented these two CGUs as discontinued operations in accordance with the requirements of IFRS 5.

As a result of adopting this presentation, the income statement and related notes to the accounts have been adjusted to show the results consistently on a continuing basis, which includes restating certain comparatives. The results of discontinued operations including the result on disposal were £1.3m in the current period (2023: £1.3m).

Post balance sheet events

Sale of HSS Hire Ireland Limited

Subsequent to the year end, on 1 April 2025, the Group entered into an agreement for the sale of HSS Hire Ireland Limited to a third party, Chadwick's Holdings Limited, a subsidiary of Grafton Group plc.

The sale completed on 31 May 2025 and the business was sold for gross consideration of €28.0m, with customary working capital and debt adjustments resulting in total net cash consideration of €28.9m (c. £24.3m). Net assets disposed were £23.0m (including consolidation related intangibles of £7.5m) for a gain before transaction costs of £1.3m. In connection with the sale of the businesses the Group has incurred transaction costs of c. £1.0m.

The disposed entity was presented as a discontinued operation within these financial statements and contributed revenues of £34.3m to the Group in the current period.

Subsequent to the sale, proceeds of £17.6m were used to make a partial repayment of the Group's senior loan facility, reducing the total liability from £57.5m to £39.9m post period end. The balance of the proceeds were retained as cash on deposit.

Commercial agreement with Speedy Hire and disposal of THSC

Details of the Speedy Hire Commercial Agreement and sale of THSC are detailed in a separate announcement made to the market on 6 October 2025, outlining the strategic progress achieved for the long-term profitability of the Group, more details are included in note 21 below.

Drawdown of the Group's RCF

Subsequent to the year end, on 1 April 2025, the Group drew down £5.0m of the revolving credit facility, leaving £15.0m of the facility available. The £5.0m was drawn to facilitate payments to exit certain THSC trading locations and accelerate cost saving plans in association with the THSC branch network restructure.

The amounts drawn attract interest on the same basis as the Group's senior facility, being SONIA plus margin.

Issue of Shares

After the period end, on 6 June 2025, the Group issued 3,404,025 shares in connection with the Group's share schemes. These shares were part of the FY22 RSA share scheme and were issued for nil consideration. The total increase in the Group's share capital was £34.0k.

Richard Jones

Chief Financial Officer

6 October 2025

ProService Business Review

HSS ProService is a market-leading marketplace for building services in the UK. Acting as principal between buyers and sellers, it offers a one-stop-shop for building-related products and services for a wide range of customers including construction companies, facilities managers and tradespeople across all end-user markets with its suppliers responsible for delivery of hire equipment and other products. We currently have over 7,000 active account customers and 11,000 active cash customers per month, with c.400 active sellers each month in product verticals including equipment hire, training, fuel, equipment sales and building materials. Our buyers range from large enterprises to SMEs and tradespeople. Our sellers range from national players to small local independents.

Investment case

Our business model is asset-light and inherently scalable. Our potential for growth is significant given the size of our market and our technology platform, which has taken several years to develop and we believe is not easily replicated given the complexity of the service offering, particularly in relation to equipment hire. We also believe we have a head-start in terms of our network, with over 7,000 active buyers and c400 active sellers per month, and we have the critical mass to generate powerful network effects. The breadth of our supply chain provides superior availability for buyers, and as more-and-more buyers adopt our marketplace its scale becomes more attractive to sellers.

Our investment case is summarized in four elements:

· Large Building Services Market: highly fragmented, with low digital adoption and limited differentiation, well placed for digital aggregation

· Unique Proposition: omnichannel and easy, push-button technology, already scaled with circular economy dynamics and strong network effects

· Established Proprietary Technology Platform: Underpins our scalable business model and not quickly replicated

· Clear Leader and Significant Head Start: Already the largest rehire broker in Europe. Well established buyer and seller networks

ProService Chief Executive Officer's Review

I would like to thank the entire ProService team for their contribution to our results and their hard work in achieving the reorganisation over several months last year. I continue to be impressed by their dedication to our business and our shared vision.

Our financial results are explained in more detail below. We believe we are the largest digital marketplace for building services in Europe.

Over 3,200 account customers have used our self-serve marketplace with c,2,000 logging in each month. Our medium-term target is to have 7,000 customers that have self-served.

We have started the journey of product diversification and exited the period with 27% of our revenues in March 2025 generated from non-hire product categories, up from 16% in April 2024.

We currently have over 7,000 active account customers and 11,000 active cash customers per month. Average revenue per account customer (ARPC) is over £2,500, and customer churn is c4%. Over one-third of ProService orders are raised by customers themselves, on either our marketplace platform (account customers) or hss.com (cash customers). We have c. 400 active sellers each month. In due course we will be providing selected additional key performance indicators which will assist investors in understanding the performance of the ProService business.

I believe our proposition is market-leading and we are well placed to take advantage of the fragmented nature of the building services sector. We are now wholly focused on driving our marketplace measures and look forward to reporting on our progress.

Tom Shorten

Chief Executive Officer, ProService

ProService Financial Review

The operational separation of the ProService occurred on 1 October 2024. This included the reallocation of certain customers and associated costs from ProService to THSC relating primarily to non-ProService marketplace customers and also the allocation of central costs to ProService based on staff reallocations and new TSA arrangements.

The above tables include financial information prepared on two bases:

(i) Last Twelve Months (LTM) - The financial performance for ProService over the past 12 months, split into two 6-month periods to reflect the separation occurring on 1 October 2024.

(ii) Proforma - The financial performance for ProService over the past 12 months assuming that the separation of the two businesses had occurred on 1 April 2024 and adjusting for the revenue and cost impact of the Business Transfer Agreement between ProService and THSC as if this occurred from 1 April 2024 rather than 1 October 2024.

This has been provided to assist in investor understanding of the performance of ProService. No comparative proforma financial information for ProService has been prepared as it was not possible to accurately calculate on an equivalent basis.

Overview

ProService has delivered a resilient set of results in a period of transformation. The business is now well positioned to deliver profitable growth from our broad range of buyers and sellers operating on what we believe to be the leading marketplace in building services.

Financial highlights

FY25 has been a year of transformation for ProService. In September 2024, the management and trading operations of ProService and THSC were separated and in the months prior to this, the current management team was appointed.

As part of the separation a significant number of customer relationships were transferred to THSC (generally, smaller non-marketplace customers), resulting in a material intra-group transfer of sales and profit allowing each business to pursue their different but complementary growth objectives. As part of the mobilisation, intercompany trading arrangements and transitional services were established, with these also implemented from 1 October 2024.

The organisational change inevitably diverted attention from trading in the short term, and this, combined with the relatively weak economic backdrop, made for difficult trading conditions throughout the period. Despite this, and thanks to the efforts of the whole team, ProService delivered a resilient set of results.

Revenue

ProService reported revenue in FY25 was £362.8m (2023: £311.0m). On an LTM basis revenue was £282.1m with the decrease of £20.6m between the first and second 6-month period reflecting both trading performance, but also the transfer of a number of customers to THSC from 1 October. On a proforma basis, revenue for the last twelve-month period to 31 March 2025 was £266.1m.

Hire-related revenue represented c.82% of total ProService revenue before rebates and other income. Our sale verticals of Equipment Sales, Building Materials and Fuel collectively provided 10% of total ProService revenues, with Training the remaining 8% of total ProService revenues. We expect to see growth in non-hire verticals outstrip that of Hire as we expand our product offering to buyers through our growing network of sellers.

Costs

Cost of sales for FY25 was £280.9m, resulting in a gross profit margin of 22.6%. (2023: £242.5m, resulting in gross profit margin of 22.0%). Whilst there is a year-on-year increase, after the separation margins reduced slightly due to the transfer of customers to THSC, but also due to mix. The margins in the new verticals of Equipment, Fuel and Building Materials are lower than Hire and Training.

Consequently, as revenue growth in new verticals outperforms Hire and Training growth this creates a change of mix resulting in slight gross profit margin reduction over time. However, as the cost to transact these new verticals is lower this should improve operating leverage overall and thus should result in rising net profit margins over time.

Indirect costs for the period were £66.3m (2023: £55.9m). The increase was driven primarily by the additional three months in the current period, however the level of indirect costs incurred are lower post separation and these more accurately reflect the go-forward costs for ProService under the Group's revised operating model.

Underlying EBITDA and Underlying EBITA

Underlying EBITDA for FY25 was £15.6m (2023: £12.6m). FY25 results were an Underlying EBITDA margin of 4.3% (2023: 4.1%). Underlying EBITDA expressed as a percentage of Gross Profit, which is a useful indicator of scalable profitability, was 19.0%. On an LTM basis Underlying EBITDA was £12.6m with the change in the last six-month period reflecting a reduction in revenue transferred to THSC, a reduction in gross margin due to changing mix and increased costs relating to the separation. On a proforma basis, Underlying EBITDA was £11.0m (assuming that the separation of the ProService and THSC had occurred on 1 April 2024).

Underlying EBITA for FY25 was £13.2m (2023: £11.0m). This was after taking account of an increase in amortisation charge relating to capitalised IT costs which somewhat offset the increase in Underlying EBITA reported above. Proforma Underlying EBITA was £9.3m (assuming that the separation of the ProService and THSC had occurred on 1 April 2024).

Finance costs

Net finance expenses of £0.4m mainly relates to the discounting on IFRS16 lease liabilities.

Capital expenditure

Additions to intangible assets, property plant and equipment and right of use assets were £5.6m in the 15 months to 31 March 2025 (2023: £9.2m). The main driver of the decrease was a reduction in the amount of capitalised development spend on our marketplace platforms, with a higher volume of spending relating to operational and maintenance activities as the platform matures. In addition, during the year we completely rebuilt the infrastructure and front end of our B2C channel HSS.com, and this was launched at the end of April 2025.

Provisions

Provisions of £0.4m (2023: £0.3m) relate to dilapidations on the handful of properties leased by ProService.

The Hire Service Company (THSC)

HSS The Hire Service Company is a UK-based tool and equipment hire company, established in 1957. The company provides building-related tools, equipment, and powered access throughout the UK. THSC serves over 9,500 end customers, including tradespeople, facilities management, and construction companies in various markets.

Investment case

With an efficient and widespread distribution network and key partnerships with a number of builders' merchants we are well placed to meet the needs of the whole market. We are a key supplier to the ProService business but are expanding our own route to markets, which we expect will reduce the overall reliance on ProService over time.

Our investment case is summarised in four key factors:

1. Market for Hire: the spend on infrastructure and both residential and commercial projects provides market indicators for hire.

2. Distribution network: Our distribution network is significant with a national coverage and high performing depots and an expanding network of builders' merchants as well as a direct sales force operating regionally.

3. Product range: Our product range covers a wide range of the market needs and the mix has been shifted to focus on higher utilisation products over recent years.

4. People: our leadership team has significant tenure in the hire industry and within HSS which is also reflected in the operational levels, bringing best practice across the entire estate to drive profitability.

THSC Chief Executive Officer's Review

I am pleased to report my first results as CEO of THSC. Firstly, it has taken a huge effort from everyone in THSC to change the way they have been working and build out the new processes required to run as an independent business and I would like to thank all the people across the organisation for their contribution to making this a successful transition. I have always been impressed by the versatility of the people within the core HSS business and over the last six months they have shown their commitment to our combined vision for the future of THSC.

Operationally, the business has continued to work in a safe manner and with 7 RIDDORs (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations) and 18 LTIs (Lost Time Injury) which compare well to market safety measures.

We have taken steps to right size the business and to develop our own sales channels separate to ProService. This has led to the decision to close certain subscale depots and focus our revised network closer to the depots.

We now have 4,000 customers trading directly with THSC and continue to build this route to market through our 114 builders merchant desks and 21 CDC counters.

We have targeted increasing our revenues from customers other than ProService and whilst in 2023 well over 90% of revenue was from ProService by March 2025 this had reduced to 67% and continues to reduce as we grow our other channels to market. We have added new product ranges towards the end of the year with a return to the inclusion of a range of new small plant and M&E equipment within our core offering. These will provide further momentum to the diversification of the customer base.

Average Order Values (AOV) has improved from £207 in September 2024 to £237 in March 2025 and average hire duration has increased 2.1% over that same period.

Jon Overman

Chief Executive Officer, THSC

THSC Financial Review

The operational separation of THSC occurred on 1 October 2024. This included the reallocation of certain customers and associated costs from ProService to THSC relating primarily to non-ProService marketplace customers and also the allocation of central costs to THSC based on staff reallocations and new TSA arrangements.

The above tables include financial information prepared on two bases:

(i) Last Twelve Months (LTM) - The financial performance for THSC over the past 12 months, split into two 6-month periods to reflect the separation occurring on 1 October 2024.

(ii) Proforma - The financial performance for THSC over the past 12 months assuming that the separation of the two businesses had occurred on 1 April 2024 and adjusting for the revenue and cost impact of the Business Transfer Agreement between ProService and THSC as if this occurred from 1 April 2024 rather than 1 October 2024.

This has been provided to assist in investor understanding of the performance of THSC. No comparative proforma financial information for THSC has been prepared as it was not possible to accurately calculate on an equivalent basis.

Financial highlights

FY25 has been a period of transition for THSC, starting the year as the operational arm of the Group fully reliant on intercompany trade with ProService and moving to a standalone business trading both with ProService and directly with its own external customer base, On 1 October 2024, the management and trading operations of ProService and The Hire Service Company were separated and in the months prior to this, the current management team was appointed.

As part of the separation a significant number of customer relationships and associated costs to service these customers were transferred to THSC from ProService, in parallel with the creation of the new trading name THSC. This change allows each business to pursue their different but complementary growth objectives. As part of the separation, intercompany trading arrangements and transitional services were established, with these implemented from the 1 October 2024.

The organisational changes naturally drew focus away from trading in the short term, and when combined with a subdued economic environment, created challenging conditions during the final six months of the period.

Revenue

THSC reported revenue in the period was £132.1m (2023: £109.4m). On an LTM basis revenue was £107.2m, with an increase of £6.0m between the first six months and second six months of the LTM period reflecting both trading performance including new direct channel sales initiatives but also the transfer of a number of customers to THSC from 6 October 2025. On a proforma basis revenue was £116.7m (assuming the separation of THSC had occurred on 1 April 2024).

Core hire revenue was £122.3m representing 92% of revenue with the balance attributed to rehire (through ProService) (3%) and resale (5%). We continue to focus on driving our own customer strategy and investing in further complementary product ranges, which in turn is expected to drive higher attachment rates for other revenue streams as we build deeper customer relationships.

Costs

Our cost of sales, distribution and stock maintenance costs for the period were £49.0m before inclusion of depreciation, resulting in a contribution margin of 62.9% (2023: 68.2%). The decrease was driven by an increase in the post-separation rehire revenue at a much lower margin than core hire together with associated distribution costs. We have continued to focus on cost saving in the indirect costs bases and rationalise the network to provide a stable cost base from which to provide future EBITDA growth.

Indirect costs (excluding depreciation and amortisation) for the period totalled £45.2m (2023: £30.8m).

Underlying EBITDA and Underlying EBITA

Continuing Underlying EBITDA for the period was £37.9m (2023: £43.7m) and in the current period Underlying EBITDA margin was 28.7% (2023: 40.0%). On an LTM basis, Underlying EBITDA was £28.7m with the £12.9m in the second six-month portion of the period reflecting the positive contribution from revenue from customers transferred from ProService on 1 October 2024, offset by a decline relating to the restructuring from October 2024 and increased costs relating to the separation. On a Proforma basis Underlying EBITDA was £30.2m (which assumes the transfer to THSC had occurred on 1 April 2024).

The decrease from 2023 reflects the change to the operating model, which includes a higher mix of lower margin revenue lines like rehire, alongside the increased indirect costs assumed from ProService to manage the builders' merchant locations.

Underlying EBITA for the period was a loss of £3.6m (2023: £12.3m). The loss was a result of higher depreciation on property leases and expanded hire stock and a higher cost base following separation and the impact of lower underlying EBITDA. On a proforma basis Underlying EBITA was a loss of £2.8m. (assuming the separation of THSC had occurred on 1 April 2024).

Impairment of tangible and intangible assets

The division recognised an impairment charge of £113.5m, first against allocated goodwill of £64.3m and software of £3.5m, then allocated pro-rata amongst the tangible assets of the CGU for a total of £45.7m impairment of tangible assets including right of use assets.

The impairment charge was driven by challenging trading conditions experienced during the reporting period continuing after the period end necessitating a downwards revision of the forecasts for the CGU. The outcome of the strategic review of THSC has been announced with these results and is discussed in more detail in note 21 to the financial statements.

Finance costs

Net finance expense of £5.5m (including non-underlying items) mainly reflects the discounting on IFRS16 lease liabilities across properties, vehicles and some hire stock assets. Additionally, £1.1m relates to the interest on hire purchase arrangements secured against specific items of hire stock.

Capital allocation

Our objective is to create a sustainable business by strengthening our direct routes to market, thereby reducing our dependency on ProService as our major customer. To support this strategy, whilst we have continued to be cautious about the overall level of capital investment in our hire fleet overall, we will continue to invest selectively in certain areas of our hire fleet where possible to enhance the breadth and quality of service we offer our customers.

Capital expenditure

Additions to hire fleet assets, property plant and equipment and right of use assets were £46.8m in the period (2023: £41.2m). The main driver of the increase is the additional three-month period. The reduction in the average monthly investment in the hire fleet is due to the reduction in the size of the network and allowed for consolidation of our stock lines, aimed at creating greater efficiency and improved utilisation of the products.

Provisions

Provisions of £9.8m (2023: £17.5m) relate mainly to dilapidations on the leased properties with the reduction due to the reduction in size of the estate and settlements on closed sites in the period.

GROUP SUSTAINABILITY

In FY24 we published our third ESG Impact Report, in line with our commitment to update and publish annually so that, as a Group, we continue to hold ourselves accountable to our ESG vision, strategy and goals.

SUSTAINABLITY AT HSS PROSERVICE

ProService is the technology-based business unit of the HSS Group. As a marketplace business, its purpose is to offer our buyers (customers) tens of thousands of products and services wherever and whenever they want, at the click of a button, via our sellers (suppliers).

As an asset-free business, the challenges faced are materially different from those of THSC, however the commitment to minimising our environmental impact and scale our sustainability efforts remains steadfast.

By leveraging the data and digital tools available in-house, we are becoming the more reliable and sustainable organisation in our market.

SCIENCE BASED TARGETS INITIATIVE

We take our ambitious Net Zero 2040 target seriously. That is why we are proud to be the first in our sector to have our Science Based Targets (SBTs) validated by the Science Based Target initiative (SBTi) in May 2023.

This means that our near and long-term emissions reduction targets, whilst drastic, are achievable. We've also committed to align with a 1.5°C rise in global temperatures compared with pre-industrial levels through the Business Ambition for 1.5°C campaign.

ECOVADIS GOLD AWARD

For the third time now, we have participated in a group-wide EcoVadis audit, and yet again we have made progress in our efforts. In 2024, we maintained our prestigious Gold award and climbed from the top 95th percentile to the top 98th percentile, just narrowly coming short of a Platinum award by 1%.

With over 130,000 rated companies in more than 180 countries globally, EcoVadis is one of the world's most trusted platforms for externally verifying an organisation's sustainability efforts, covering a wide range of topics pertaining to the Environment, Labour & Human Rights, Ethics and Sustainable Procurement. Therefore, to be in the top 2% is testament to our progress.

CARBON DISCLOSURE PROJECT (CDP)

The CDP is a global non-profit organisation that allows companies, cities, states and regions manage and disclose their environmental impacts. Every year, since our inaugural disclosure we have attained a higher mark. In 2024, we were proud to achieve an A rating for the first time.

GREENER ALTERNATIVES

In 2024 we launched the Greener Alternatives feature to our self-service platform, ProService Marketplace. This revolutionary tool is designed to help buyers make more sustainable choices by highlighting environmentally friendlier equipment options at point of order, alongside the commercial implications in terms of price.

By providing clear comparisons between standard and low-emission or electric alternatives, it empowers our users to consciously reduce their carbon footprint without compromising on performance. This feature not only supports businesses in meeting their environmental goals but also simplifies the decision-making process and provides easy oversight as to which users are making greener choices, and those that aren't. This enables more senior members of an organisation to look at individual adoption rates and have targeted discussions to enforce a culture.

CUSTOMER CARBON REPORTING

Following a successful and informative series of pilot projects in 2023, we launched our industry-first Customer Carbon Reporting Dashboard at scale, for all customers on HSS ProService Marketplace in 2024. This is a key milestone in our commitment to delivering innovative, value-added services to our already revolutionary self-service platform.

Since launch the feedback from our stakeholders has been overwhelmingly positive. It empowers our customers to monitor and manage their use-phase and transport-associated carbon emissions with clarity and confidence, whilst providing our internal stakeholders with a powerful key differentiator to attract new business with confidence.

However, we never rest on our laurels at ProService and we're already exploring ways to expand this further by aligning to our verticals such as fuel, building materials, equipment sales, training and more. We look forward to providing further updates on our efforts in this area, but providing a free, easy to use and accurate tool that is third party verified is proving vital to customer retention.

SOCIAL VALUE

Increasing emphasis is being placed on measuring the positive social value we, as a Group, are having on communities and the nation owing to our operations. Increasingly, social value is a deciding factor on whether bid submissions are successful or not, as a result a growing number of our stakeholders have asked us to quantify this. We have listened and acted.

In 2024, we engaged a specialist partner in THRIVE to help us measure, track and improve the already impressive social value we add. We now have the facility to quantify this and are happy to report that in 2024 we added £197.0m in social value, focusing specifically on three themes in our first reporting year: Tackling Economic Inequality, Fighting Climate Change and Well-being.

This in inaugural report is great step on our way to becoming an even better company for all our stakeholders, and no doubt there are data points we've been unable to report on until we further develop our ERP system, which is an ongoing project.

The weighting of our first social value reports (on a calendar year basis) and their sub-themes are:

Tackling Economic Inequality: £197,010,435

·  Create new businesses, new jobs and new skills

·  Increase supply chain resilience and capacity

Fighting Climate Change: £2,093,645

·  Effective stewardship of the environment

Wellbeing: £333,841

·  Improve health and wellbeing

·  Improve community integration

VOLUNTEERING HOURS

4,551

DONATONS

£125,366

SUPPLIER AUDITING

In 2024, we continued to maintain the safest and largest network of sellers in Europe, offering our buyers the peace of mind that whatever they hire or buy they will receive the same level of excellent service, quality and safe products and services.

For this reason, we have a supplier auditing policy which stipulates that all preferred suppliers must pass an audit annually, carried out by our internal team of qualified, competent and experienced auditors. The type of audit i.e. physical or desktop varies depending on their risk rating, however no supplier is permitted to have two consecutive desktop audits. This somewhat stringent measure ensures that we are operate in an effective working partnership with our entire supply chain, using it as an opportunity not to be punitive but supportive to our crucial supply chain.

The next step is to automate this process, and we are developing an all-in-one seller portal which will streamline the commercial, operational and ESG aspects of our individual seller relationships. This will not replace the important work of our auditors, merely complement it by automating certain aspects such as compliance documentation, insurance documentation, product offerings, pricing, coverage etc.

WASTE

ProService has a much smaller estate than our partners at THSC, comprising of an office in Manchester and a training location in Birmingham. As an asset-free business, the waste that we produce as a result of our operations is different in nature and volume than that of THSC. However, we are still committed to achieving improved landfill diversion rate, recycling ratios and altogether avoiding the creation of new waste.

We have a well-established Dry Mixed Recycling bin system that all colleagues have received training on and are working towards the elimination of single-use plastics in our operations, which has contributed to a rise in our recycling ratio to 27%

As a technology-based business, every colleague at ProService is issued with a company laptop to ensure that all colleagues have the tools necessary to effectively carry out their duties, wherever they are. We have engaged with a specialist Waste Electrical and Electronic Equipment (WEEE) company to effectively and responsibly dispose of our electric waste at the end of its ProService life.

This ensures that all possible WEEE waste has its data securely and irrevocably removed, before being refurbished and sold to other organisations, thus extending its lifespan further. The agreement we have made is that 60% of net profits from the resale of these items comes back to ProService.

Taking this further, we are exploring options for a similar partnership to remove and recycle other office waste such as chairs, desks etc.

ROADSHOWS

Product innovation is vital for the construction industry to reduce its environmental impact and play its part in helping the UK reach net zero. According to Hansard and UK Government data, the construction process is responsible for 10 to 13% of UK's annual greenhouse gas emissions. However, if you take into account the built environment as a whole (including embodied carbon) this figure rises to c25%.

As we expand our verticals such as building materials, equipment sales and fuel the need for product innovation is more important than ever. Therefore, in 2024 we continued with our now well-established Innovation Roadshows.

Spread across four locations throughout the UK, 90 suppliers met with over 500 colleagues and customers, showcasing hundreds of the most innovative products available on HSS ProService Marketplace. The purpose was simple: spread awareness of the fantastic products and services available to drive new enquiries that grow business and reduce environmental impact.

SUSTAINABILITY AT HSS: THE HIRE SERVICE COMPANY

HSS: THSC is the operational and asset-heavy business unit of the HSS Group. As a traditional hire company, with locations throughout the UK, a vast commercial transport fleet and extensive fleet of equipment, THSC remains a leading UK-based tool and equipment hire specialist.

The very nature of the business means that it is crucial to the HSS Group reaching our stated ESG goals, including Net Zero 2040. Whilst the challenges faced are different to that of ProService, it is crucial that both businesses focus on their own respective areas where they have a material impact.

By continuing in our well-established efforts to reduce operational emissions, THSC is already a leader in reducing its environmental impact.

FLEET

We have continued to make progress on our journey to transitioning our company car and operational fleet of vehicles into low-carbon alternatives or electric vehicles (EVs) where practicably possible, given current business requirements.

In 2024, as vehicle leases expired, we moved to 83% of our company car fleet being either plug-in hybrids (PHEV's) or EVs (31% being pure EV) with the remaining 17% of vehicles with emissions of less than 120g CO2. This means we are on target to achieve our 2030 goal to exceed 60% of our company car fleet being either PHEVs or EVs and have already exceeded our 2025 goal of 40%.

Unfortunately, EV and PHEV technology still is not able to deliver the mileage we require to maintain our high level of customer service in our commercial fleet, if we were to convert our entire fleet to EV/PHEV. That's why we have introduced 3.5t EV Dropside vehicles in targeted locations where their daily requirements are in line with current mileage technology.

However, we are taking action where we can; for example, we have converted 50% of our mobile engineer fleet to low-emission PHEV vans from diesel vans and have introduced four x EV pick-up trucks which are suitable for the more rugged, brownfield sites we sometimes have to attend.

After analysing our routing and miles per job data for each location, combined with trials in 2023, we are proud to announce that 13% of our 3.5 ton delivery vehicles are now zero-emissions.

We aren't just stopping there: our partnership with Microlise continues and means that we can monitor our drivers' habits and behaviours on the road, such as excessive acceleration and braking, all of which can potentially be unsafe, burn unnecessary fuel and potentially damage our brand reputation. This software enables our operation managers to review this data and have targeted conversations with our driver colleagues, so that we are completing jobs safely, economically and with reduced environmental impact.

WASTE

With a vast network of locations throughout the UK, THSC produces a different type of waste than their office-based partners in ProService.

In 2023, we removed general waste skips from all locations to improve our waste segregation and therefore recycling ratios. This had an immediate positive effect, and we're happy to report that this trend has continued in 2024, with our recycling ratio for skips improved - contributing to the overall increase in landfill diversion rate, from 90% to 97% in 2024.

We have also continued with our proven waste league tables per location. This encourages healthy competition between branches with incentives on offer for categories such as least waste produced, most recycled, etc.

Combined with our colleagues' efforts in ProService, this means we are well on target to achieve 95% zero-waste to landfill target in 2025 and 60% reuse and recycle rate across all locations.

WATER

Water saving is an often-forgotten aspect of improving environmental performance. However, we recognise that the nature of our operations and the changing climate means that it is of increasing importance to us.

We use water for a range of necessary things, from ensuring a clean and safe workspace, personal hygiene and also cleaning equipment. In 2023, we started to take action and gained 81% visibility of water usage across our entire estate.

Now that we have a clear understanding of the water we use, we can start to implement water-saving measures and are actively exploring a range of measures such as: low-flow taps, toilets and urinals, leak detectors and closed-loop water systems for equipment cleaning.

Staff training is vital, and we are working with our L&D team to implement a training module that educates on the importance of water conservation and how best to achieve it. We are looking forward to updating you further on our efforts in this regard.

KEY BIODIVERSE AREA (KBA) REPORT

HSS has always fostered a strong reputation for effective governance which we feel is necessary for an ethical, profitable and environmentally sustainable business. This is one of the reasons that we submitted a voluntary Task Force on Climate-related Financial Disclosures (TCFD) Report in 2022.

With the Taskforce for Nature-related Financial Disclosures (TNFD) on the horizon, we have produced our first ever HSS Sites Biodiversity Report. This report identifies whether our business has operational activities which are proximal to biodiversity-sensitive areas and details our potential environmental risk, impact and mitigation measures.

This report provides an early indication of potential concerns regarding biodiversity, and serves to give guidance that can be used for informed decision making within THSC.

As the nature of and composition of our estate changes over time, we will update this report and look forward to sharing our progress.

EMPOWERING OUR PEOPLE

At THSC, we recognise that building a sustainable business starts with empowering our people. We have always believed and understand that as the challenges change and ESG landscape evolves, so must we. In 2024, we expanded our e-learning courses to include an additional 13 modules, ensuring that all colleagues understand the role they play in supporting our sustainability goals. These modules cover topics such as energy conservation, responsible waste management and the environmental impact of our operations.

However, all things in business are only effective if they are driven from a strong leadership position. For that reason, environmental responsibility is embedded at all levels of leadership within THSC, from our senior leadership team (SLT) right through to our junior managers.

Regular updates on environmental performance and initiatives are reviewed by our SLT, ensuring accountability and strategic alignment with our goals. This top-down commitment is complemented by the launch of our Internal Sustainability Champions Network, which sees colleagues from across the business who advocate for greener practices and help local initiatives. The purpose of these champions is to act as conduits between our high-level sustainability goals and our day-to-day operations, encouraging further behavioural change and identifying any opportunities for improvement that may have been overlooked.

This relatively new initiative has already contributed to several successful depot-led projects which we look forward to updating you on in 2026. We believe this demonstrates that our approach to including all colleagues, at all levels, is central to our success.

ENERGY EFFICIENCY IN OUR OPERATIONS

As a part of our ongoing commitment to reducing our environmental impact, THSC has continued to invest in energy-efficient technologies and practices across our operations, following the findings from the UK Government's Energy Savings Opportunity Scheme (ESOS) in which we identified energy-efficiency projects across our entire estate in 2023.

For the past 5 years we have invested in greener products, including upgrading our lighting systems in 2024 across all branches and distribution centres to LED and automatic light sensors, which improve energy efficiency and improve safety by ensuring areas are properly illuminated when required, resulting in measurable reductions in electricity usage. We are already well on our way to reduce energy consumption by 30% per site by 2030, and will exceed this target if we remain on our current trajectory.

We have continued to track and monitor energy use across our operations and produce monthly reports on energy consumption, supplemented with quarterly league tables on performance. This healthy competition, reinforced by energy efficiency training to all staff, will contribute to the behavioural change that we will require in order to decarbonise our operations in line with our targets.

Our transition towards lower carbon operations must also include more technology however, so we have begun evaluating the installation of solar photovoltaic (PV) potential across all locations - despite already procuring 100% green electricity.

We are already well on our way to reduce energy consumption by 30% per site by 2030, and will exceed this target if we remain on our current trajectory.

IMPROVING PRODUCT CIRCULARITY

In line with our commitment to make the hire industry improve its already impressive circularity credentials, we have advanced our efforts to extend the lifespan of our products and reduce waste in new and innovative ways.

Whilst we continue to send safe equipment to auction and strip other equipment for parts to maximise the lifespan of equipment as much as possible, in 2024 we began a new initiative with original equipment manufacturers (OEMs), specifically piloting a scheme to manage the end-of-life process for fibreglass steps - a frequently used and difficult to recycle product in our fleet.

This pilot has proven both operationally effective and environmentally beneficial, successfully diverting material from landfill whilst strengthening further our partnership attitude with suppliers.

Building on this success, we plan to expand the programme to include more difficult to recycle or resell product categories and deepen our collaboration with OEMs.

RISK MANAGEMENT

MANAGING RISK AND UNCERTAINTY

"We have empowered Group businesses to grow, working closely with management teams to build bespoke risk registers and assurance programmes, to help identify and manage emerging issues."

Mark Shirley

Risk and Assurance Director

We employ a comprehensive risk management process to help the Group identify emerging risks, assessing impact and ensuring appropriate mitigating actions are put in place. Assurance programmes are in place to support Group business, with monthly Executive Management Team (EMT) discussions and quarterly Board review.

Ownership

The EMTs are responsible for delivery, setting the risk appetite, tolerance and culture to achieve its goals. The Audit Committee plays a key supporting role through monitoring the effectiveness of risk management and the control environment, reviewing and requesting deep dives on emerging risk areas and directing and reviewing independent assurance.

The Group's EMTs have overall responsibility for day-to-day risk management. Mark Shirley, HSS' Risk and Assurance Director, maintains the Group's risk register which is reviewed in detail by the Audit Committee on a quarterly basis with changes to the risk landscape, assessment and mitigating actions agreed.

The ProService risk register is maintained by ESG Director Matt Adams and THSC Risk Register is maintained by Mark Shirley. Both are reviewed quarterly by the respective EMTs teams with each risk assigned a specific risk owner to manage mitigation actions for each identified risk.

Identification and assessment

Risks are identified through a variety of sources, both internal and external, to ensure that key developing themes are considered. This process is focused on those risks which, if they occurred, would have a material financial or reputational impact on the Group.

Management identifies the controls in place for each risk and assesses the impact and likelihood of the risk occurring, taking into account the effect of these controls, with the result being the residual risk. This assessment is compared with the Group's risk appetite to determine whether further mitigating actions are required.

All risks have an overall EMT owner responsible for their day-to-day management. Health and safety and ESG are key areas in our industry and, as such, require collective ownership to continually improve. There is an established Executive Health and Safety Forum (THSC) which is CEO-Chaired, made up of the EMTs, the Risk and Assurance Director, the Quality Manager and Head of Learning and Development. The Forum meets bi-monthly (and more frequently if required) to review trends, incidents and issues.

Throughout the year an ESG Committee chaired by the ESG Director oversaw improvement actions and monitored risk and opportunities. ESG risk is integrated into our risk management process as part of the Group's commitment to the requirements of CFD.

Monitoring

The Risk and Assurance Director reports and meets with the Group CFO and each divisional CFO monthly to review the findings of risk-based assurance activity. Risk-based assurance work is then reported to the Audit Committee on a quarterly basis for review.

Culture and values

The Board is cognisant that risk management processes alone are not enough to mitigate risk, and behaviour is a critical element in risk management. The well-being of our colleagues, the drive and skill sets they bring and the training and environment we provide are key to our success. These are underpinned in the HSS values, which are vital in us achieving our strategy as well as mitigating the risks associated with it.

HOW WE MANAGE RISK

We adopt a three lines of defence model for managing risk, providing the Board and the EMTs with assurance that risk is appropriately managed. This is achieved by dividing responsibilities as follows:

THE FIRST LINE OF DEFENCE

Functions that own and manage risk.

THE SECOND LINE OF DEFENCE

Functions that oversee or specialise in specific risk such as Health, Safety, Environment and Quality (HSEQ), Supply Chain Auditors, Performance Reporting, and Control Risk Self-Assessment (CRSA) audits undertaken by regional management.

THE THIRD LINE OF DEFENCE

Functions that provide independent assurance, in the HSS case primarily Internal Audit.

Macroeconomic risk

This continues to be the highest-rated risk facing the Group with a combination of conflict, political change, protectionism, increased National Insurance rates and high interest rates affecting consumer confidence in construction and therefore UK growth. Continued high levels of insolvency mean we continue to refine and invest in our credit control systems.

Within THSC, over the past 12 months we have closed a number of depots to reduce costs and move equipment geographically into areas where there is more demand. The company has also restructured its business to have one reporting line for sales and operations for locations under the COO.

ProService's lower-cost and flexible operating model continues to be key in combating inflationary pressures.

We closely monitor conditions and take action as appropriate to manage the trading conditions.

Business separation

With the Group separating into two businesses with their own management teams, there has been a degree of supporting activity and change to assurance projects and programmes across the year.

Both ProService and THSC have established risk registers that reflect their own individual risks that feed into the Group risk register. Both businesses have separate assurance programmes and monthly reports and meetings to update EMTs on any emerging issues so they can be managed.

RISK MANAGEMENT FRAMEWORK

1ST LINE OF DEFENCE

Owns and manages risk and implements/operates business controls

Who is responsible:

·  Operational management/colleagues

Activity/controls:

·  Policies and procedures

·  Internal controls

·  Planning, budgeting, forecasting processes

·  Delegated authorities

·  Business workflows/IT system controls

·  Personal objectives and incentives

2ND LINE OF DEFENCE

Oversight of risks and control compliance through dedicated compliance teams, CRSA, and financial and operational reporting and monitoring

Who is responsible:

·  Compliance/oversight functions, finance and regional management

Activity/controls:

·  HSEQ team with audit programme in place

·  Rehire Supply Chain Audit Team

·  Environmental/legal/regulatory compliance

·  Risk management

·  Controls compliance monitoring

·  Management/Board reporting and review of KPIs and financial performance

·  Corporate policies and central function oversight

3RD LINE OF DEFENCE

Segregated functions that provide assurance

Who is responsible:

·  Internal Audit

Activity/controls:

·  Approved internal audit plan

·  Internal Audit has reporting line to Audit Committee

·  Regular Internal Audit updates at Audit Committee

INDUSTRY AND ISO ACCREDITATIONS

EXTERNAL AUDIT

FY24/25 RISK MANAGEMENT DEVELOPMENTS

The focus in FY24/25 changed to focus organisation's risk and assurance needs on the separate businesses, ensuring each business had access to appropriate resources to support the EMTs whilst maintaining PLC Board oversight of risk via the Group Audit Committee.

Introduced a balanced scorecard to evaluate health and safety performance across locations and departments, using a blend of audit scores and performance data, with a focus on safety and standards and communicating and celebrating good performance in our location.

Built separate risk registers and assurance programmes for ProService and THSC.

Created separate tracking reports for both businesses around health and safety and fraud risk.

Built capacity in both businesses to enable separate application for ISO accreditation, ensuring each business has separate policy, procedures and management systems.

Fraud Training implemented for both customer-facing colleagues and credit controllers across Group businesses. Real-life examples flagged through the industry fraud forum used to bring emerging trends to light.

ProService developed a new customer complaints module to give better insight into supply chain performance.

FY25/26 PLANNED IMPROVEMENTS TO RISK MANAGEMENT PROCESS

The focus for FY25/26 will be on building on the initiatives launched in 24/25 and ensuring we support individual businesses to grow alongside the Group.

Introduce a balanced scorecard relating to Internal Audit activity, building on the balanced scorecard launched for health and safety last year.

The realigning of sales and operations enables the audit team to do more analysis around how effectively assets are utilised, to improve efficiency and reduce costs.

Work with a third party specialist to revamp health and safety training, drawing on trainers with a military background experience.

Evolve the risk management process, to make the Group analysis of risk less manual from each business.

Increase intercompany audit work to give the Board assurance that the businesses continue to work effectively to grow the Group revenue and profit.

Expand the coverage of ISO 27001 to get wider assurance over information security management.

PRINCIPAL RISKS AND UNCERTAINTIES

Key - Movement No movement: = Up: - Down: ¯

CONSOLIDATED INCOME STATEMENT

FOR THE PERIOD ENDED 31 MARCH 2025

1 The notes supporting the income statement have been restated to disclose continuing operations (see note 19), the comparative figures for prior period have been re-presented, so that amounts relate to all operations that have been discontinued by the end of the reporting period for the latest period presented

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31 MARCH 2025

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FOR THE PERIOD ENDED 31 MARCH 2025

The Financial Statements were approved and authorised for issue by the Board of Directors on 6 October 2025 and were signed on its behalf by:

Richard Jones

Director

6 October 2025

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 MARCH 2025

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 31 MARCH 2025

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 MARCH 2025

1. BASIS OF PREPARATION

a) Reporting entity

The Company is a public limited company which was listed on the London Stock Exchange up until 14 January 2021, when the Group's ordinary shares of one pence each were admitted to trading on AIM. The Company is incorporated under the Companies Act 2006 and domiciled in the United Kingdom. The address of the Company's registered office is Building 2, Think Park, Mosley Road, Manchester, M17 1FQ. These Consolidated Financial Statements comprise the Company and its subsidiaries (the Group).

The financial information for the period ended 31 March 2025 and the year ended 30 December 2023 does not constitute the company's statutory accounts for those years. Statutory accounts for the year ended 30 December 2023 have been delivered to the Registrar of Companies. The statutory accounts for the period ended 31 March 2025 will be delivered to the Registrar of Companies following the Company's Annual General Meeting

The auditors' reports on the accounts for the period ended 31 March 2025 and for the year ended 30 December 2023 were unqualified and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The auditors report on the accounts for the period ended 31 March 2025 drew attention to a material uncertainty relating to going concern. No such matter was drawn to the reader's attention in the auditors report on the accounts for the year ended 30 December 2023.

The Annual Report and Accounts for the period ended 31 March 2025 will be posted to shareholders during October 2025.

b) Statement of compliance

The Group Financial Statements of HSS Hire Group plc have been prepared in accordance with UK adopted international accounting standards and the Companies Act 2006.

During the period, the Group has changed its accounting reference date from 31 December to 31 March. This change was made to accommodate group restructuring activities.

Historically, the Directors have taken advantage of the option within Section 390 of the Companies Act 2006 to prepare their Financial Statements up to a date seven days either side of the Group's former accounting reference date of 31 December. These accounts cover the 65-week period from 31 December 2023 to 31 March 2025 (2023: 52-week period from 1 January 2023 to 30 December 2023).

c) Functional and presentational currency

These Financial Statements are presented in pounds sterling (£), which is the Group's presentational currency. The functional currency of the parent and subsidiaries is pounds sterling, except for HSS Hire Ireland Limited that is incorporated in the Republic of Ireland, which has the euro as its functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

d) Basis of preparation

These Financial Statements have been prepared under the historical cost convention. The accounting policies set out below have been applied consistently to all periods presented in these Financial Statements.

e) Going concern

At 31 March 2025, the Group's financing arrangements consisted of a drawn senior finance facility of £57.5m, and an undrawn revolving credit facility (RCF) of £20.0m, of which £5m was drawn as on 1 April 2025. Cash at the balance sheet date was £23.9m (excluding cash within disposal groups) providing available liquidity of £43.9m (2023: £56.9m). Since the year end, following the sale of the HSS Ireland business for £24.3m (see note 34), the Group has repaid £17.6m of senior finance facility leaving a balance of £39.9m remaining. Both the senior finance facility and RCF are subject to net debt leverage and interest cover financial covenant tests each quarter. At the financial year end the Group had 34% and 29% headroom against these covenants respectively (2023: 44% and 54% respectively).

Since the period end we have been focused on continuing to broaden ProService's offering whilst continuing to focus on its core hire vertical. In THSC we have completed the rightsizing of the geographical footprint whilst carefully targeting new capital investment in higher demand categories and have continued to develop its direct selling channels. However, the market has remained subdued to date and has impacted our core hire business in particular which, has also continued to be impacted by the loss of the Amey contract in June 2024.

During the 15 month period to 31 March 2025, the Group completed an extension agreement in respect of its existing finance facilities. This extension took the Group's facilities from the initial expiry date of November 2025 to the end of September 2026, which falls within the period in the Going Concern assessment.

In determining whether the Going Concern basis of preparation is appropriate, the Group considers its ability to continue in operation whilst meeting its liabilities as they fall due for the foreseeable future. This assessment includes consideration of the Group's covenants in respect of the term loan and revolving credit facility (RCF).

In accordance with the requirements of IAS 1 Presentation of Financial Statements, the Directors have assessed the Group's ability to continue as a going concern for a period of at least twelve months from the date of approval of these financial statements, to the end of October 2026 (the "assessment period").

In doing so, the Group has evaluated base case forecasts which include a reasonably probable downside scenario. This includes lower revenue expectations as compared to the initial budget, reflective of the continuing subdued market for hire, assumes no improvement in the market for the rest of our financial year, further delay in the conversion of new larger customers in ProService and continued caution in terms of capital deployed into our hire fleet with a resultant impact on core hire revenues. The Directors, when considering mitigating actions, have also considered a range of further potential downside scenarios, including more severe but plausible trading outcomes, further cost inflation, delayed revenue recovery, and the crystallisation of identified operational risks.

Management has also prepared contingency scenarios involving more extensive restructuring, targeted asset disposals to reduce debt and provide additional group liquidity and execution of other strategic initiatives to focus on high value areas of the business with lower capital requirements and reduced operating costs. As noted above, under the base case scenario, the forecasts indicate a breach of the Group's financial covenants during the assessment period and insufficient liquidity to settle the Group's bank facilities at the end of September 2026.

Should a breach of covenants occur, the facilities may be withdrawn and require immediate repayment. The Group's forecasted cash is insufficient to immediately repay these if repayment is demanded following a breach of covenants, or to repay the facilities at the settlement date. In mitigation of these risks, as separately announced today, the Directors have entered into several commercial arrangements to resolve the covenant issue:

· An arrangement between HSS ProService and SpeedyHire for ProService's platforms to be used to serve Speedy's customers, with the hire contracts fulfilled using Speedy's distribution network and plant,

· A buyer has been identified for THSC following the Board's strategic review of the business, and;

· Consent has been arranged with the Group's lenders for the proposed transactions, which also include the provision of a covenant waiver and adjustment for the post-disposal period to allow the Group time to embed the operational changes, but no commitment to refinance the Group's existing bank facilities at the end of their current term.

Despite the potential covenant breach in the base case, the outcome of these Commercial Arrangements demonstrate that the Group will maintain sufficient liquidity headroom and cash reserves throughout the assessment period, until the time when the Group's bank facilities fall due for repayment, as well as mitigating the covenant breach that has been forecast.

However, notwithstanding the announcement of the above commercial arrangement, completion of these remains conditional and therefore covenant breaches could still occur and the loan facilities remain due for repayment at the end of September 2026. As such, the Directors acknowledge the existence of a material uncertainty, which may cast significant doubt upon the Group's ability to continue as a going concern.

If the above commercial arrangements do not complete as expected, or if the Groups bank facilities are not refinanced in due course, the facilities may be withdrawn and require immediate repayment. As such, the Group may be unable to realise its assets and discharge its liabilities in its ordinary course of business. However, the Group continues to explore refinancing options with existing and alternative lenders and remains confident that new facilities will be in place prior to the expiry of existing ones.

On this basis, the Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future and that it remains appropriate to prepare the financial statements on a going concern basis.

The financial statements have been prepared on a going concern basis and do not include any adjustments that would be required should the going concern basis of preparation no longer be appropriate. Such adjustments could be material and could affect the carrying amounts assets and liabilities reported in the statement of financial position. Areas of the financial statements that could be impacted include, but are not limited to:

-  Useful economic lives and residual values of tangible and intangible assets;

-  Valuation of goodwill;

-  Measurement of right-of-use assets (currently based on a value-in-use approach assuming continuation of operations without realisation of strategic options); and

-  Recognition of deferred tax assets.

f) Basis of consolidation

Subsidiaries are all entities over which the Company has control. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred.

Unless merger accounting has been adopted in specific circumstances, the Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are expensed as incurred.

2. SEGMENT REPORTING

As discussed in the Group's H1-24 interim financial statements, the Group had moved on from the legal separation of ProService and Operations in 2022, to full separation of the commercial and operational activities of both of the major divisions. The main two divisional structures remain:

·  ProService - Digital marketplace business focused on customer and supplier acquisition. Technology-driven, extremely scalable and uniquely differentiated including training services.

·  Operations - Fulfilment business including power generation, focused on health and safety and quality, with circular economy credentials, comprehensive national footprint and high customer satisfaction.

Despite the changes in the organisation during the period, the Group's Chief Operating Decision Maker continues to be the Board of Directors for the Group as a whole.

The Group formalised the commercial and operational separation of THSC and ProService through a Business Transfer Agreement ('BTA') at the end of September 2024. As part of this agreement, specific assets and liabilities of the ProService business were transferred to THSC. In addition to the transfer of these assets and liabilities, certain specific customer contracts and employees were also transferred. The net assets transferred during the period were £6.1m which were settled through Intercompany. The impact of the transfer of customer contracts was an additional £21.5m of revenue within the Operations - UK segment in the current period. If the transaction happened at the start of the period, the approximate additional revenue would have been £13.4m.

With the operational and commercial separation of the two major divisions during the period, it has become possible to more directly assign the Group's central costs against the operating segments they principally relate to. Accordingly, the Group has revised its segments during the period to present a 'Corporate' costs segment, which has a lower cost base than the historic 'Central' segment. Due to this change, in accordance with IFRS 8, comparative information for the Group's operating segments has been restated to present the previous segment note on this basis. The total figure for central costs retrospectively allocated to HSS ProService and HSS Operations from the Central segment in the comparative period information is £9.4m.

In addition, the elimination of transactions between trading segments on consolidation has been presented in a separate standalone column 'Eliminations', rather than presented in combination with the 'Corporate' costs. The comparative period has also been restated to be shown on this basis for comparability.

All segment revenue, operating profit, assets and liabilities are attributable to the principal activity of the Group, being the provision of tool and equipment hire and related services in, and to customers in, the United Kingdom except for the HSS Operations - Ireland segment whose revenues are derived from customers in the Republic of Ireland. No single customer represented more than 10% of Group revenue in the current year (2023: none).

The 'Eliminations' column shows the value of eliminations in revenue between the trading segments Operations - UK and ProService. Corporate includes only those corporate costs incurred centrally to support the businesses.

In the current period, the Group designated the assets and liabilities of HSS Hire Ireland Limited as held for sale. This entity represents the entirety of the Operations - Ireland segment and accordingly does not feature in the segmental balance sheet above as at 31 March 2025. The prior period comparatives have been prepared in a manner consistent with the balance sheet and accordingly include the assets and liabilities of Operations - Ireland; see note 18 for more details.

The timing of the satisfaction of performance obligations as it relates to revenue recognition is shown below:

3. OTHER OPERATING INCOME

During the period, the Group received sublet rental income of £0.1m (2023: £0.1m) on vacant properties.

4. NON-UNDERLYING AND EXCEPTIONAL ITEMS

Items of income or expense have been shown as exceptional either because of their size or nature or because they are outside the normal course of business. As a result, during the period ended 31 March 2025 the Group has recognised exceptional items as follows:

During the year ended 30 December 2023, the Group recognised exceptional items analysed as follows:

Non-underlying and exceptional items incurred in FY25 and FY23

Costs related to onerous properties:

The Group continues to incur some costs in respect of historic properties closed as part of the exit of a number of stores announced back in October 2020. In the period, an exceptional cost of £0.5m (2023: £0.8m) has been recognised against these locations.

Costs related to group restructure

During the current year, the Group continued to develop its strategy of operational separation of the Operations and ProService segments and at the start of October, conducted a restructuring exercise to enable both businesses to operate on a standalone basis. This included the transfer of certain customer contracts, as well as the assets and liabilities of the builders merchant locations previously operated by ProService.

The costs included in the current year of £4.9m relate primarily to the legal and professional fees associated with these restructuring activities. The Group expects similar costs to be incurred in the future as the businesses continue to operate more independently, however there is no reliable estimate of these costs available at this time. In the prior year, the group restructure costs relate to £0.2m of residual costs incurred in connection with the original separation of the ProService business.

Costs related to branch network restructure

During the prior year, the Group took the strategic decision to migrate the remaining UK HSS branches to the builders merchant model. The impact of the change includes the closure of 31 locations during the current period (2023: 16 branches). This strategic initiative is expected to generate annual cost savings of c£1.9m (2023: c£1.0m).

The total costs incurred in respect of the UK branch network restructure in the current period were £2.7m (2023: £1.5m). These costs materially all relate to accelerated depreciation on the exit of these trading locations. These costs are incurred where useful economic life estimates for assets at these branches, which cannot be repurposed elsewhere, have been revised downwards to the expected closure date.

Onerous contract

The Group maintains a provision to cover the expected outflows related to its onerous contract with Unipart for the NDEC operation which ceased in early 2018 (note 15). The liability at the balance sheet date is £2.9m (2023: £6.8m). The discount rate used to calculate the present value of the provision is the five-year UK gilt rate of 4.05% (2023: 3.98%). Application of the new discount rate at the balance sheet date resulted in a credit to the income statement of £Nil (2023: credit of £28k), recognised as exceptional in line with the original provision. A finance charge for the discount unwind of £0.3m (2023: £0.3m) was recognised through exceptional finance costs.

Impairment loss on tangible and intangible assets (see notes 8, 9 and 10)

During the period, the Group identified indicators of impairment and following the completion of the impairment review, an impairment charge of £113.5m was recognised against the goodwill, intangible and tangible assets allocated to the HSS Operations UK CGU. More details can be found in note 8.

5. NET FINANCE EXPENSE

6. INCOME TAX CHARGE

a) Analysis of tax charge in the period

b) Factors that may affect future tax charge

The standard rate of UK corporation tax increased to 25% from 1 April 2023. The increased rate has been used to calculate the above deferred tax disclosures.

At 31 March 2025 the Group had an unrecognised deferred tax asset relating to losses of £29.5m (2023: £21.1m). The gross value of this balance at 31 March 2025 was £117.9m (2023: £84.5m).

At 31 March 2025 the Group also had an unrecognised deferred tax asset relating to temporary differences on plant and equipment, intangible assets and provisions of £11.8m (2023: £3.1m). The gross value of this balance at 31 March 2025 was £47.3m (2023: £12.5m).

The unrecognised deferred tax assets have not been recognised on the basis that it is not sufficiently certain when taxable profits that can be utilised to absorb the reversal of the temporary difference will occur.

c) Factors affecting the income tax charge/(credit) in the period

The tax assessed on the profit for the period differs from the standard UK corporation rate of tax. The differences are explained below:

The charge of £17.4m (2023: £0.3m) arising in respect of expenses not deductible is mainly attributable to costs associated with the impairment of intangible assets, share options awarded to some employees and the Group exiting property leases. The amount has increased in the current period due mainly to the impairment losses (see note 8).

The deferred tax charge of £0.6m (2023: £5.6m) was substantially lower as during the prior year there was a marked reduction in forecasted levels of loss utilisation with an associated derecognition of deferred tax assets on the balance sheet.

7. EARNINGS PER SHARE

Basic earnings per share:

Basic earnings per share is calculated by dividing the result attributable to equity holders by the weighted average number of ordinary shares in issue for that period. Diluted earnings per share is calculated using the profit for the period divided by the weighted average number of shares outstanding assuming the conversion of potentially dilutive equity derivatives outstanding, being market value options, nil-cost share options (LTIP shares) and restricted stock grants.

Diluted earnings per share:

The following reconciles basic earnings per share and the underlying basic earnings per share:

The following reconciles diluted earnings per share and adjusted diluted earnings per share:

1 Non-underlying items per share is calculated as total finance and non-finance non-underlying items divided by the diluted weighted average number of shares in issue through the period.

2 Amortisation of customer relationships and brands per share is calculated as the amortisation charge on customer relationships and brands divided by the diluted weighted average number of shares in issue through the period.

All of the Group's potentially dilutive equity derivative securities were dilutive for the purpose of diluted earnings per share in both 2025 and 2023. The weighted average number of shares for the purposes of calculating the underlying diluted earnings per share is as follows:

8. INTANGIBLE ASSETS