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HSS Hire paints a confident outlook despite major profit decline in 2023

09:40 01/05/24

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Equipment rental company HSS rental said it expects current year results to be in line with market forecasts despite an uncertain macro environment, after reporting a sharp decline in annual profit for 2023 and the resignation of its chief financial officer.

HSS, which mainly rents tools and equipment to business customers in the UK and Ireland, said pre-tax profits fell to £11.8 million in the 52 weeks to December 30, compared with £18.9 million the year before, resulting in earnings per share from 2.9 cents to just 0.6 cents.

Nevertheless, the company said this was still the second-highest pre-tax profit level in the group’s listed history as it invested £5.1m in operating expenditure and £1.3m in one-off technology investments – “both to to stimulate future growth through new routes to the market”. Sales costs, distribution costs and administration costs were also higher than in 2022.

HSS said it achieved a “solid trading performance” in 2023, with sales up 5% to £349.1m, outperforming the wider market, despite some weak demand in certain customer segments and for seasonal products. Services income rose 12% to £141.8 million, while rental income rose just 0.5% to £207.3 million.

The company recommended a final dividend of 0.38p per share, bringing the total payout for the year to 0.56p, an increase of 4% on the previous year.

“I am pleased to report another year of significant strategic progress, alongside resilient financial performance, with revenue growth ahead of the market, despite a more challenging macro environment,” said CEO Steve Ashmore.

“We are more confident than ever in our strategy and the strength of our technology platforms. We are well positioned to take full advantage when the market recovers.”

The company said it remains confident that full-year EBITA will be in line with market expectations.

In a separate statement, HSS said CFO Paul Quested will leave the board in September to “dedicate time to his family for the foreseeable future” while the search for his successor is now underway.

“Since joining in 2016, Paul has worked tirelessly to improve the business and has played a key role in HSS’s transformation journey and commercial success,” the company said.

The stock rose just 0.2% to 2,211 pence by 9:34am BST.