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Interim Results

HSS adjusted earnings fall 46.7%

30 August 2017 07:25

HSS Hire Group posted an adjusted pre-tax loss of £14.2m for the 26 weeks to the 1 July compared with a profit of £2.2m a year ago.

Revenue fell by 3.4% to £160.5m and adjusted EBITDA was down 46.7% at £17.1m.

The group said that as expected, H1 profitability was hit by substantial operating model changes.

The group's reported pre-tax losses rose to £30.1m from £7.8m last time.

The group has not declared an interim dividend - 0.57p was paid a year ago.

Chief executive Steve Ashmore said: "While significant operational change was achieved during H1 17, both Rental revenue growth and the cost base were temporarily impacted leading to reduced profitability.

"We are facing into these challenges by taking decisive action to reinvigorate Rental revenue growth through the implementation of new sales initiatives and by rolling-out cost actions that will deliver annualised cost savings of c. £13m, a number of which are enabled by the recent investment in our centralised engineering and distribution capability.

"As a result of these actions the Group returned to profitability in June with revenue in growth for the first 8 weeks of Q3 17 and this momentum will result in a stronger H2 relative to H1 performance leading to a healthier exit rate as we head into 2018.

"Whilst the rate of recovery in our Rental revenues has been positive, it has been materially slower than originally targeted leading to lower than expected profitability over this period. On this basis we expect H2 Adjusted EBITA profit to be in the range of £8m to £11m.

"The new leadership team is currently conducting a thorough review of the Group's strategy to gain profitable share in what remains an attractive and fragmented market. We will update the market on the outcome of this process during Q4 17."

Story provided by StockMarketWire.com

Related Company: HSS

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