HSS Hire Q1 revenue up but warns of softness in UK economy

HSS Hire Group reported a rise in first-quarter revenue and earnings but warned that market conditions remain “very competitive” and there are signs of softness in the broader UK economy.

In the 14 weeks ended 2 April, revenue grew 16.3% from the same period last year to £84.3, while adjusted earnings before interest, tax, depreciation and amortisation were up 14.3% to £17.6m. The comparable period in 2015 was a week shorter.

The company said first-quarter trading was in line with its expectations, with continued growth in both the core and specialist businesses.

Net debt came in at £234m versus £218.1m in 2015, which HSS said reflected a full-year 2015 capex settlement, two quarterly rental payments – a consequence of the extra week in the quarter – and set-up costs relating to the National Distribution and Engineering Centre .

Chief executive officer John Gill said: “HSS continued to grow ahead of the tool & equipment hire market during the period. This growth reflects a number of factors, including the positive revenue contribution of new customer wins and the benefit of investment in our hire fleet through 2015.

“We remain focused on growing operating margins and driving capital efficiency through careful management of our operational cost base and demand-led fleet investment."

HSS said second-quarter trading has started ahead of last year.

The group also announced the appointment of Paul Quested as chief financial officer. He will become an executive member of the board with effect from 22 August.

Quested, who kicked off his career and qualified as an accountant with Coopers and Lybrand, is currently chief corporate development officer of Electrocomponents.

He has previously held finance roles at Whitbread and InBev.

At 1105 BST, HSS Hire shares were down 8.5% to 92p.