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Sat July 11 2020

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HSS makes £5.8m pre-tax loss

27 May Tool hire chain HSS continued show losses in its 2019 accounts and it looks unlikely that 2020 will provide salvation.

Despite operating profit growing 50% to £16.8m for the year, 2019 saw HSS make a pre-tax loss of £5.8m (2018: £9.2m loss). Revenue was up 1.6% to £328m (2018: £323m).

However, the addition of nearly £14.8m profit on the disposal of discontinued operations gave a bottom line profit for the year of £8.7m, to camouflage the red ink.

Chief executive Steve Ashmore said: “I am delighted 2019 was another year of excellent strategic progress enabling us to post record profits in a market impacted by uncertainty. The benefits of the work we have done since 2017 are coming to fruition and HSS is evolving towards a digital-led equipment services business.”

Then came 2020.

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HSS traded in line with expectations for the first 12 weeks of 2020 with the first signs of a Covid-19 related trading slowdown seen in the last week of March as the lockdown was enforced. Following government guidelines all HSS branches were closed and staff furloughed. Only the central distribution centres and the OneCall re-hire business continued to operate to support customers.

Since the start of April, HSS has seen revenues fall to about 40% below normal levels, it said, although the trend is now improving,

Steve Ashmore said: "Our primary focus since the start of the Covid-19 outbreak has been, and remains, the safety and wellbeing of our colleagues, customers, suppliers and other stakeholders and this is what informs our decision making. We took immediate and decisive action to preserve cash ahead of what has been a period of significantly reduced economic activity. I am proud of how our team has stepped up and maintained continuity of service to fulfil our role as an essential service for critical customers who need our kit to continue their vital work.

“The outlook for the remainder of the year is uncertain but we have taken, and continue to take, action to reduce the impact of an extended period of lower revenues, albeit we have been encouraged by recent increases in activity. Our strategic ambitions remain unchanged with the pandemic demonstrating the importance of digital capability. Our digital transformation is well underway with the new customer app in tool hire gaining traction in our trial markets, and in the Services business where our new automated system has been very well received. We will continue to manage the business prudently through this crisis but also ensure we continue to progress our digital journey in order to create the most advanced, customer centric offer in the marketplace."

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