RE: Cip merchants29 Mar 2021 20:11
CIP is pleased to announce its investment in HSS Hire Group plc (AIM:HSS) ("HSS"), a market leader in equipment hire in the UK and Ireland, quoted on AIM. The Company has acquired, in aggregate, 25,000,000 ordinary shares in HSS, representing approximately 3.6 per cent. of HSS's existing issued share capital, for a total consideration of approximately GBP3.9 million.
For its financial year ended 28 December 2019, HSS achieved revenue of GBP328.0 million, a gross profit of GBP178.3 million, an operating profit of GBP16.8 million and a net profit of GBP8.7 million. For its half year ended 27 June 2020, HSS reported revenue of GBP125.8 million (IFRS 16 basis), a gross profit of GBP62.2 million, an operating loss of GBP0.7 million and a loss before tax of GBP12.9 million, with such results having been adversely impacted by the COVID-19 pandemic and the government's subsequent lockdown measures which largely halted business operations during March and April 2020. As at 27 June 2020, HSS had net assets of GBP67.1 million.
The CIP Board notes the strong track record of the leadership team at HSS, which it believes took appropriate and decisive action in response to the COVID-19 outbreak thereby enabling HSS to navigate the complexities of the first half of 2020. The CIP Board further believes that the financial resources of HSS augmented by the significant capital raise completed at the end of 2020 and the implementation of a new operating model puts HSS in a position of strength vis-à-vis a very fragmented market with strong consumer demand, which is expected to increase further in the UK economy's recovery phase. For these reasons, whilst it is noted that HSS operates outside of the core target investment sectors stated within the Company's investing policy, HSS nevertheless meets a number of the Company's other key investment criteria in line with its investing policy and in the CIP Board's view represents a strong opportunity to create shareholder value in line with its strategic objectives.
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