Tool hire group HSS has reported a 5% rise in revenues for 2011 and a modest rise in underlying profitability.

HSS Hire Service Group made revenues of £180.2m for the full year, up from £171.0m in 2010.

Earnings before interest, taxation, depreciation and amortisation (Ebitda) were £39.8m, up 2% on 2010.

The company said that revenue and Ebitda growth had come despite the loss of its Network Rail contract and significantly lower than usual revenue from air-conditioning and heating due to the mild weather.

Significant costs in the year included investment in a new operating platform designed to deliver improved customer service levels and operating efficiencies.

Investment in the hire fleet was also ramped up, particularly in powered access equipment for customers in retail and facilities management markets. HSS claims to be now the second largest provider of low-level powered access in the UK.

Chairman Archie Norman, the former Asda boss and Tory MP, said: “HSS has made good progress against its strategic development plan in 2011, and the business is well positioned as a trusted partner and service leader in the tools and equipment rental, outsourcing and services sector.”

Chief executive Chris Davies said: “I am pleased with the progress of the business in 2011. We achieved both revenue and profit growth against a tough market whilst implementing major change to our logistics and maintenance operation to provide increased fleet availability for our customers.

“Key accounts have continued to be an important part of our growth in 2011 and I am delighted that, through focusing on the key customer needs, we have won significant new opportunities with a number of large national accounts in the fourth quarter, including an outsourced equipment management partnership with Enterprise Group that demonstrates innovation in our service model.  We continue to benefit from excellent customer relationships in Retail, Fit-out, Facilities Management and Airports.

“HSS Training has continued to grow organically – it now leads the market in PASMA and is the second largest provider of IPAF training in the UK. We have continued to invest in our training venues and facilities for our customers and have launched a fully interactive course booking website to provide customers with ease of transaction.

“As planned, we invested heavily in the roll-out of our new logistics and operating platform and while costs associated with supporting this transition did impact our earnings in the short-term, we have laid excellent foundations for efficiency gains, higher utilisation and service-level improvements into 2012 and beyond.

“2012 will undoubtedly present us with challenging conditions – not least with the unseasonably mild winter continuing into the start of the year - but we are well positioned to keep building our business. We’ll continue to drive sales growth whilst focusing on improving margins. As always we will continue to concentrate on the things we know matter most to our customers whilst investing in our colleagues and managing our cash generation and costs in order to take our business forward.”

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