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20.04.2015

HSS posts 25% revenue jump

UK rental company HSS has published the results for 2014, which show higher revenues but lower profits. The results are actually for its former holding company, which changed when it floated earlier this year.

Total revenues for the year, increased by more than 25 percent to £284.6 million, of which 18.7 percent was organic - however at the same time pre-tax profits plummeted from a positive £2.6 million last year to a loss of £8.5 million this year, due mainly to higher depreciation and write downs, which resulted in a only modest improvement to operating profits, while a £10 million increase in borrowing costs - related to the issue of £200 million of Senior Secured Notes in February 2014 - caused the pre-tax loss.

The company says that 2015 has started well and that it continues to expand with optimism.

Chief executive Chris Davies said: “2014 was a year of excellent progress as we continued to deliver strong growth across both our Core and Specialist businesses. This performance reflects both our focus on the less cyclical and higher value-added ‘maintain’ and ‘operate’ segments of the market and a deliberate customer demand-led approach to investment in our hire fleet”.

“We have made an encouraging start to 2015 and trading is in line with our expectations. The roll-out of our Local Branches is continuing to plan, with new branches opening at the rate of one a week, and the customer response continues to be positive”.

“Our new equipment refurbishment facility, which opens in Q4 2015, will help us extend the life of our asset base and improve the service we provide to customers, and we are continuing to capitalise on the trend to outsourcing by further developing our larger Key Accounts. In addition, we continue to review a number of potential Specialist acquisition targets”

“Our growth aspirations are based on a disciplined approach, a clear strategy and solid financial foundations. 2015 will see us continue to strengthen the business and create new ways to exceed our customers’ expectations. While the forthcoming UK general election creates an element of short term uncertainty for our customers, HSS is in good shape and we look to the future with confidence.”

Vertikal Comment

HSS went public during the year and clearly decided to clear any issues in its balance sheet upfront, it has also invested heavily in expansion. While the results look dreadful, the company is making strong progress in the market and should have a good few years to benefit from the changes it is making, which is likely to see a strong return to profit as we move forward. If not then I am sure certain questions will be asked.

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