RE: Shake out8 Feb 2021 12:56
Investor's Champion (now free to read) :-
"The other AIM new arrival in January was HSS Hire Group (LON:HSS), the provider of tool and equipment hire services, which moved to AIM from the Main Market.
Weighed down by substantial levels of debt, HSS has struggled over recent years and its arrival on AIM coincided with a £53m fund raise at 10 pence per share.
For its most recent half year ending 27 June, a very difficult period for many businesses, sales fell 22% to £126m, with the pre-tax loss £12.9m.
Net debt at 27 June 2020 of £236.8m, including the capitalisation of c. £81.8m of lease liabilities, highlights the issues. The fund raise will thankfully have brought this down and a January update confirmed liquidity headroom in excess of £100m at the year end.
HSS recently restructured its operating model to accelerate its digital strategy, which appears to be showing promise, with revenues in the final quarter of 2020 at 94% of 2019 levels. They intend making further investment in their technology platforms which will allow the business to reduce its physical footprint and operate a leaner branch structure, focused around fewer depots and key branches. To support this initiative, it is partnering with regional builders merchants to maintain national coverage at lower cost.
We hope HSS will go onto achieve the sort of success enjoyed by Volex (LON:VLX), whose shares have climbed more than 400% since moving to AIM from the Main Market in January 2018."
https://www.investorschampion.com/channel/portfolio/aim-new-arrival-swiftly-achieve-a-bonkers-valuation
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