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LONDON (Alliance News) - HSS Hire Group PLC said Wednesday its full-year results had come in line with its expectations, with its pretax loss widening on higher depreciation charges and administration costs.
The tool and equipment hire company said revenue rose 10% to GBP312.3 million for the year ended December 26 from GBP284.6 million the year earlier, but its pretax loss widened to GBP13.8 million from GBP8.5 million, as both cost of sales and administrative expenses ramped up.
HSS Hire said the 17% rise in its cost of sales to GBP120.8 million from GBP103.0 million was largely due to higher depreciation costs relating to its larger hire fleet. Administrative costs also rose by 18% to GBP144.2 million, due to larger staff numbers and costs from the acquisitions of Apex Generators Ltd and All Seasons Hire Ltd during the year.
Adjusted earnings before interest, tax, depreciation and amortisation, which is operating profit with depreciation, amortisation and exceptional costs added back, was broadly flat at GBP71.0 million from GBP71.1 million, with the adjusted earnings before interest, tax, depreciation and amortisation margin falling to 22.7% from 25.0%.
HSS Hire said it made cost savings of GBP2.4 million in the last quarter of the year, and said it was targeting annualised cost savings of GBP10.0 million over 2016, in a bid to improve "cash generation and financial performance".
The company recommended a final dividend of 0.57 pence per share, taking its total dividend to 1.14p, in line with its progressive dividend policy. In 2015 no dividend was offered. HSS listed on the London Main Market in January 2015.
HSS Hire noted its revenue since year-end is ahead of the same period a year earlier, with the "more stable conditions experience in the four quarter of 2015 continuing into early 2016".
"We expect to reduce our capital expenditure, following two strong years of fleet investment and the opening of our new National Distribution and Engineering Centre in the first half of 2016. Together with the cost reduction programme, we expect these actions to improve our cash generation and financial performance," Chief Executive John Gill said.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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