HSS Hire upgrades FY earnings expectations, shares surge

(Sharecast News) - HSS Hire shares shot higher on Wednesday after the tool and equipment hire company upgraded its earnings expectations for 2021 as trading continues to improve.
Based on its performance in the second quarter, the group now expects 2021 earnings before interest, tax, depreciation and amortisation to be "slightly ahead" of market expectations, while earnings before interest, tax and amortisation will be "materially ahead".

HSS said second-quarter EBITDA and EBITA remained ahead of the comparable FY19 levels, with its "digitally-led, lower cost operating model delivering further margin expansion".

As trading continues to improve since the 2020 year-end results, second-quarter underlying revenues were at 102% of FY19 levels.

Chief executive Steve Ashmore said: "Our strong operating profit performance, ahead of 2019 levels, is testament to the effectiveness of our digital strategy. Our embedded technology platforms combined with our partnership with builders' merchants has allowed us to maintain national coverage while significantly lowering fixed costs and improving margins.

"Supported by very strong cash collection, we anticipate achieving our 2021 net debt leverage target of below 2x six months ahead of schedule. This strong performance has given us further confidence in our digital-focused model as we continue to build on our differentiated commercial proposition and capitalise on the market opportunities ahead of us."

At 0825 BST, the shares were up 13.8% at 21.40p.