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HSS makes steps towards recovery

4 Jul 17 Loss-making tool hire chain HSS reports good progress with cost reduction and improved fleet utilisation.

In a pre-close trading update for the 13 weeks ended 1st July 2017, HSS said that underlying revenue in the second quarter was marginally ahead of last year as the programme of sales initiatives begun in March began to pay off.

Cost reduction initiatives have seen £10m stripped out in the past few weeks, with up to £3m more still to be trimmed.

HSS made pre-tax losses of £17.4m in 2016 and £13.8m in 2015. In the first three months of 2017 HSS made an operating loss of £4.5m.

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Chairman Alan Peterson said: "Our clear focus during Q2 has been on translating our market-leading fleet availability into sales growth within our rental business.  We are therefore pleased to see underlying core hire sales momentum building month by month across the quarter as initiatives targeting smaller and medium sized customers have begun to have an impact.

"In parallel, the operating model is also delivering the planned benefits of greater capital efficiency, which is reducing our investment requirement, and higher cost savings through operational efficiency.  We are encouraged by these initial signs that our operating model is delivering the benefits we expected."

Steve Ashmore, who joined HSS as chief executive on 1st June, added: "Having only joined the group towards the end of the quarter, I have spent the last few weeks familiarising myself with its operations and meeting the team.  While this process is ongoing, it is already clear to me that we have a fundamentally strong business with the building blocks in place to deliver improved customer experience and shareholder returns."

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