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Trading statements

HSS Hire's revenue

24 November 2016 07:28

HSS Hire Group's revenues rose to £256.0m in the 40 weeks to to 1 October - up 10.9% on the 39-week period last year but warns Q4 trading will be at the lower end of management's expectations.

Adjusted EBITDA rose by 2.3% to £52.4m and adjusted EBITA increased by 5.8% to £14.6m.

An update on current trading says: "Given the scale, complexity and investment in the operational change being rolled out across the Group, we have taken the decision to extend the implementation period through to Q1 17. This will impact on our core Rental and related revenue growth, and reduce the speed at which we can optimise our remaining network and reduce operating costs.

"As a result, Q4 trading will be at the lower end of management's expectations.

"Our focus on reducing operational cost continues; we have closed 18 underperforming branches in October and 4 distribution centres since the end of H1 16. Combined with the extension of our NDEC implementation timetable, full year exceptional costs to continue at the current run rate.

"Net debt has increased slightly to £240.4m, reflecting increased exceptional costs, which largely relate to the NDEC implementation, together with the additional rent payment taken in Q1 of this year."

Chief executive John Gill said: ""We made further progress with our strategy in the period, particularly with the growth in our market share and the implementation of the NDEC. Our investment through FY16 has laid the foundations for us to improve our customer experience and service proposition and deliver capital and operational efficiency.

"Given the scale and complexity of this transformational operational change within the Group, we have taken the decision to extend the implementation into Q1 17. While we are seeing some impact on performance in FY16, the Board remains confident that the initiatives being pursued will position the business to drive improved shareholder returns in what remains a competitive and fragmented marketplace.

"Looking ahead to 2017 we will continue the optimisation of our network across both distribution centres and local branches to deliver the benefits of our new operating platform, delivering an enhanced customer proposition, with a primary focus to drive EBITA margin growth."

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