HSS Hire (HSS) continues to be hammered by the market with interim results knocking another 6 per cent off the share price. Still, the tool rental company has seen revenues on the rise in the reported period, which chief executive John Gill attributes to "winning market share and refining the operating model". Organic growth accounted for the vast majority of the overall revenue increase in the period, with a small contribution from All Seasons Hire, the business acquired in May 2015.
But after a terrible 2015, profitability remained elusive in this year's first half. At least pre-tax losses have narrowed, a result of lower management headcount and the positive impact of increasing high margin services revenue. Stripping out depreciation, amortisation and exceptionals, adjusted operating profits rose 11 per cent to £32m.
The reported period saw further investment into the group's new National Distribution and Engineering Centre. This now supports half of the group's network and is on track for completion by the end of the calendar year. Mr Gill expects the improvement in customer services that should come from this centre will help the group "ramp-up for nationwide coverage".
Broker Numis expects adjusted pre-tax profits of £8.6m giving adjusted EPS of 4.5p for the year to December (from £3.6m and 1.8p in 2015).
HSS HIRE (HSS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 79p | MARKET VALUE: | £122m | |
| TOUCH: | 78-80p | 12-MONTH HIGH: | 117p | LOW: 46p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | na | |
| NET ASSET VALUE: | 96p* | NET DEBT: | 161% | |
| Half-year to 2 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 146 | -14.1 | -10.5 | 0.57 |
| 2016 | 166 | -9.8 | -6.6 | 0.57 |
| % change | +14 | - | - | - |
Ex-div: 8 Sep Payment: 6 Oct *Includes intangible assets of £180m, or 116p a share | ||||
