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LONDON (Alliance News) - HSS Hire Group PLC Monday reported higher operating profit for its last financial year as revenue rose by a quarter thanks to strong demand for its hire fleet, although it swung to a pretax loss due to higher finance expenses.
The tool hire business also said 2015 has got off to a good start, and it's still looking for acquisition opportunities to add to its specialist hire business.
HSS Hire, which listed on the London Stock Exchange in early February, reported a pretax loss of GBP8.5 million for the year ended December 27, compared with a profit of GBP2.6 million in the 12 months to December 27, 2013. That was down to a GBP10.6 million increase in finance expenses, after it issued GBP200 million of senior secured notes in February to refinance existing borrowings, as well as an increase in its weighted average interest rate on borrowings to 7.19% from 7.02%.
Its revenue rose 26% to GBP384.6 million, from GBP226.7 million, although operating profit only rose 10% to GBP23.6 million, from GBP21.4 million, because its HSS OneCall rehire revenue grew strongly, meaning third-party supplier costs rose GBP14.3 million. Stock maintenance costs also rose, due in part to the increased size of the hire fleet.
Its organic revenue growth, which excludes the impact of acquisitions, was 18.7%.
Still, its closely-watched adjusted earnings before interest, tax, depreciation and amortisation, which is operating profit with depreciation, amortisation and exceptional costs added back, rose 27% to GBP71.1 million, from GBP56.2 million, with the adjusted Ebitda margin rising to 25.0% from 24.8%.
HSS said it had grown ahead of the market in both its businesses, had opened 23 new branches, successfully developed larger key accounts, and continued to invest in its fleet. It has already opened a further 13 new branches in the first quarter of 2015, putting it on track to open 50 in the whole of this financial year.
"2015 will see us continue to strengthen the business and create new ways to exceed our customers' expectations. While the forthcoming UK general election creates an element of short term uncertainty for our customers, HSS is in good shape and we look to the future with confidence," it said in an outlook statement.
HSS Hire shares were up 2.1% at 213.32 pence early Monday, above its initial public offering price of 210p.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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