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HSS revenues were £260 million last year. The debt pile is nearly 50% of income. Hardly peanuts is it?
The is debt is peanuts for companies like this. Other companies have more than 10x this debt. This company in in transformation phase. Sp recovery is in action. Lot more highers and higher lows to see...
Taken from last week's results..
Looking ahead, HSS makes strong start to new financial year, with first quarter earnings before interest, tax, depreciation and amortisation ahead of the same period the year before.
I get the feeling that the debt is weighing heavily on the share price at the moment. From a recent high of over 25pps, the price has slumped by nearly 25% on no news. the recent RNS highlighted a reduction in the overall debt but the company are still carrying the burden of £120 million in debt after paying down nearly £60 million.
These kind of statement worry me: Strong working capital management, overdue debt at lowest level in over 5 years
Overdue debt!! It doesn't read well and once this gets back into the low 20s I'm out. A decent recovery is going to take a few years and that's assuming the current strategy of piggy backing the business outlets onto builders merchants works out for the best. Too many risks makes this a gamble.
Thanks, Halfpenny. I like the feel of this company more and more.
Found this from a couple of days ago.
ABird Power Solutions, part of HSS Hire, has used the COVID enforced downtime to transform the management of its mobile operation. Using the latest mobile workforce technology from BigChange, the generator hire company has made considerable cost reductions in administrative resource alone – savings that can be repeated year on year. The cloud-based, 5-in-1 solution has also joined up previously disconnected parts of the business which is reducing lead times and improving customer service.
“We had been using BigChange for some time but, if I am honest, only to a fraction of its capacity,” commented Simon Taylor, General Manager at ABird Power Solutions. “Lockdown gave us time to reflect and time to improve. By using more of the BigChange functionality, we have automated more of our administration resulting in significant cost savings for the business. We also had time to adopt new working practices including the use of BigChange CRM which gives us time-critical intelligence which can be used across all aspects of the business.”
ABird Power Solutions is an established leader in the supply of power solutions, including generators, lighting towers and RFM (Remote Fleet Management). Part of the HSS Hire Service Group, ABird has 7 specialist depots across England and Wales and 2 in Scotland supporting a team of 35 mobile service engineers. ABird designs, delivers and maintains both short- and long-term smart generator hire solutions with units ranging from 20kVA to 1260kVA.
Although ABird originally introduced BigChange to track vehicles and schedule routine maintenance tasks additional aspects of the operation have recently been transferred to BigChange. By providing a single platform CRM, Job Scheduling, Mobile App, Vehicle Tracking and Online Portal, BigChange has automated many of the routine tasks associated with the hire process. From issuing of quotes, stock assignment and delivery through to maintenance scheduling, fuel reporting and equipment collection, BigChange powers a seamless, paperless exchange of information.
“I call it BigChange 360 because that is what it gives me; 360 degree visibility of the entire operation,” Taylor continued. “From the moment a hire is agreed I know which driver will deliver the unit and I can track its progress to site. I know when the generator is running, how much fuel it is using and who will do its routine service and when. I even know when it’s finished at that site which depot it needs to be returned to and where it will go next – all with a few taps on my phone!”
Speaking to my local hss shop this afternoon and was told they're flat out busy. What's not to like..
For what its worth!!
LIBERUM RAISES HSS HIRE PRICE TARGET TO 21 (12) PENCE - 'HOLD'
Should receive positive press coverage in the financials over this weekend
Theyve stolen a march by making it click and collect and cutting costs by utilising existing builders merchants rather than overheads on leased properties.Why do you think CIL bought in they see the turnaround very clearly .
Looking ahead, HSS makes strong start to new financial year, with first quarter earnings before interest, tax, depreciation and amortisation ahead of the same period the year before.
As predicted they've hit the ground running.
Directors exercise their options and purchase shared...
Directors exercise their options and purchase shared...
isn't the purpose of being in business to make profit? - how have they stolen a march on competitors? all their competitors consistently make money. They have racked up loss after loss year after year resulting in leadership changes and new ideas all of which have failed - DYOR
HSS - How to make a simple business complicated!
Strategy 1 - expand the number of stores and have one near every Screwfix - failed (Lose Chief Exec)
Strategy 2 - remove all vehicles from branch network and lose all fitting staff relying on Unipart to fulfil these activities centrally in 1m sq ft unit in Oxford - failed big exceptional cost of £40m (lose Chief Exec)
Strategy 3 - scale down the branch network by 134 branches and service customer base from 40 locations and a selection of builders merchants - sit the branch managers from the closed branches in their bedrooms and ask them to maintain relationships with customers - this will also fail as those relationships will deteriorate as mgrs. get snapped up by competitors and customers will follow - this will lead to revenues diminishing and wipe out cost savings made
this was once a market leading business with a simple operating model - mismanagement over the years has led to the business shrinking year on year, continually writing off past errors and searching for a new modus operandi
It is a crying shame - no profit over the last 8-10 years, a ridiculous finance charge and a management team set to benefit handsomely from an earn out that may see an improvement in share price but no long term future for the business
Excellent post F1. You outline clearly all the essential facts investors here should consider but rarely do.
I'd love your appraisal of Speedy Hire if you have time. I have a strong feeling their Final Results expected in May will exceed all expectations but would like your take on it.
The debt that HSS carries has always held the company back since flotation in 2015. The debt was refinanced expensively (700bps over LIBOR) in 2018 - https://www.lse.co.uk/rns/HSS/hss-successfully-secures-refinancing-mpw0117e5dscodl.html That was all they could get at the time and it is in place until 2023 - the banks had them over a barrel.
The company needs another £25m of trading profit to cover the interest bill before it breaks into pre-tax profit. 'Annualised cost savings of £15m' for closing branches may provide half of this but that still leaves a gap to be closed. If it gets back to 2019 'profitability' EBITDA was £63m in 2019 vs £47m in 2020 so there is scope. In 2023 if all goes well - big if - the company may be able to negotiate less costly debt finance. Then it becomes a gearing play pure and simple; if it can beat the bank-sters it will eventually fly.
It was notable that nothing was said about the carrying cost of the debt in the Final Results statement. Present market cap is £150m so it needs profit attributable to shareholders of £15m to put it con PE of 10. Do-able? DYOR
25p coming soon
Looks like the market agrees with me .This business model works in retail why not in plant hire.They have stolen a march on competitors.
Very good results considering the current situation around the globe. Sp will keep rising slowly...
Tha market looks 6 months ahead.Hss figures last quarter are ahead of 2019 pre covid so this year could see very good profit growth.
At first glance it reads well with its spin of triumph over adversity.
But the true figures speak for themselves:
Fy Operating Profit 1.5 Million Stg Versus 16.8 Million Stg Year Ago
Fy Adjusted Ebitda Fell 26.4 Percent To 47 Million Stg
Fy Revenue Fell 17.7 Percent To 269.9 Million Stg
Fy Loss Per Share 2.03 Pence Versus 2.31 Pence Profit Year Ago
Some great figures in the RNS but the price has not reflected this yet !! In for the long haul.
Very strong update.