Hss Hire Regulatory News (HSS)

HSS Hire Group Plc

Double digit growth, improved returns and dividend reinstated

HSS Hire Group plc ("HSS" or the "Group") today announces results for the 26 week period ended 2 July 2022

Like-for-like performance excludes the impact of the following non-recurring benefits in 2021: additional week's trading and COVID related income from a business interruption insurance claim and the Republic of Ireland wage subsidy scheme

Steve Ashmore, Chief Executive Officer, said:

"I am very pleased with our performance in the first half of 2022. Despite the volatile macroeconomic backdrop, we achieved double-digit revenue growth with our capital-light, technology-led business providing flexibility and the data to deliver for our customers while effectively managing prices to navigate inflationary pressures. The Board's decision to reinstate the dividend reflects the confidence it has in our long-term growth strategy.

We have continued to invest in our digital capabilities, achieving key milestones on our technology roadmap ahead of schedule, which will underpin the future growth of our two businesses: HSS ProService and HSS Operations. The roadmap includes the rollout of our new portal for larger customers - a self-service platform where all hire requirements can be efficiently managed in one place. Our first customer is already being onboarded with significant expansion to come in the next 12 months.

While mindful of the macroeconomic backdrop we are confident that full year EBITA will be in line with market expectations as our operating model continues to drive growth and further cement our position as a technology leader within the industry."

Notes

1) Results for H1 22 and H1 21 are on a continuing operations basis (excluding Laois Hire Limited and All Seasons Hire Limited sold in April 2021 and September 2021 respectively)

2) Like-for-like performance excludes the impact of the following in 2021: additional week's trading and non-recurring COVID related benefits associated with a business interruption insurance claim and the Republic of Ireland wage subsidy scheme

3) Adjusted EBITDA is defined as operating profit before depreciation, amortisation, and exceptional items. For this purpose depreciation includes the net book value of hire stock losses and write offs, and the net book value of other fixed asset disposals less the proceeds on those disposals

4) Adjusted EBITA defined as Adjusted EBITDA less depreciation

5) Adjusted Profit before tax defined as profit before tax excluding amortisation of brand and customer lists and exceptional items

6) ROCE is calculated as Adjusted EBITA for the 52 weeks to 2 July 2022 divided by the average of total assets less current liabilities (excluding intangible assets, cash and debt items) over the same period

7) Net debt leverage is calculated as closing net debt divided by adjusted EBITDA for the 52 weeks to 2 July 2022 (prior year 53 weeks to 3 July 2021).

8) Non-recurring credits include release of onerous property cost provisions, business interruption insurance claim and benefit under the Republic of Ireland wage subsidy scheme

9) Non-IFRS16 basis

10) Merchant locations open for comparable period in both H1 22 and H1 21

11) EcoVadis is one of the world's largest providers of business sustainability ratings, assessing over 90,000 companies worldwide

12) All dividends will be paid in cash and no scrip dividend, other dividend reinvestment plan or scheme or currency election will be offered to shareholders. Ex-dividend date of 6 October 2022

-Ends-

Disclaimer:

This announcement has been prepared solely to provide additional information to shareholders and meets the relevant requirements of the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority. This announcement should not be relied on by any other party or for any other purpose.

This announcement contains forward-looking statements relating to the business, financial performance and results of HSS Hire Group plc and the industry in which HSS Hire Group plc operates. These statements may be identified by words such as "expect", "believe", "estimate", "plan", "target", or "forecast" and similar expressions, or by their context. These statements are made on the basis of current knowledge and assumptions and involve risks and uncertainties. Various factors could cause actual future results, performance or events to differ materially from those described in these statements and neither HSS Hire Group plc nor any other person accepts any responsibility for the accuracy of the opinions expressed in this presentation or the underlying assumptions. No obligation is assumed to update any forward-looking statements.

Notes to editors

HSS Hire Group plc provides tool and equipment hire and related services in the UK and Ireland through a nationwide network of Group companies and third-party suppliers. It offers a one-stop shop for all equipment through a combination of its complementary rental and re-hire business to a diverse, predominantly B2B customer base serving a range of end markets and activities. Over 90% of its revenues come from business customers. HSS is listed on the AIM Market of the London Stock Exchange. For more information please see www.hsshiregroup.com.

For further information, please contact:

Chief Executive Officer's Report

The first six months of 2022 has seen the business continue to deliver increasingly impressive results. With strong like-for-like revenue growth on improved Adjusted EBITA margins, combined with further improvement in returns, our operating model is performing well.

Our business reorganisation was finalised with the incorporation of HSS ProService which we completed on 3rd July, creating a business focused on customer acquisition, sales enquiry conversion and leveraging our digital assets. Our technology roadmap is ahead of schedule, helping our asset-light, technology-focused ProService business deliver exciting results and putting us in a strong position for further profitable growth.

Technology Roadmap

In our FY21 results presentation we set out our technology roadmap for 2022 which involved four key milestones for our technology development. I am pleased to report that, following a period of successful development, we are ahead of plan:

1. Cash transactions through HSS Pro. HSS Pro is the interface colleagues use to fulfil enquiries which we rolled out for all account-based transactions in 2021. We have now added the necessary functionality to allow colleagues to fulfil enquiries for cash customers (including ID-checking and payment-processing). We have just started rolling this out and with significant improvements in the user journey, we forecast much better conversion rates and strengthening enquiry levels, mirroring our experience with the initial rollout of HSS Pro.

2. Extended rehire range available on hss.com. Our rehire revenues have for a long time grown ahead of the Group, despite limited visibility and no transactional functionality for these products on our website. We are now completing the development of our platform that will allow us to surface an extended range of products on our website and enable customers to complete a seamless end-to-end rehire transaction online. This tech is currently in test, and we expect to roll it out in Q4, driving up page views and conversion rates amongst trade and retail customers.

3. Enhance the ProService platform. This interface to our technology provides larger customers with the ability to efficiently manage and control their building services requirements on a single platform, including the procurement of equipment hire and other related services such as equipment sales, waste management, training and potentially more. We have commenced the rollout to one of the UK's top 20 construction companies, which will use this platform within its procurement team. We also have agreement with our number one strategic account to transfer their business to this platform in Q1 23. We are very excited about the prospect of offering this technology to many more key accounts next year, increasing our share of their wallets.

4. Further development of the supplier portal. Following enhancements to the supplier interface, we are now promoting reciprocal business from suppliers who can use the platform to source equipment for their customers that they cannot otherwise fulfil. This allows them to benefit from our network of suppliers, improving their own proposition and returns.

In summary, all four elements of our 2022 roadmap will be rolled out in the near term, leaving the HSS ProService business well poised for its next stage of growth.

Builders Merchant Network Expansion

In H1 2022 we increased the number of builders merchant locations from 53 to 60, and they now typically account for 15-20% of transactions raised in England and Wales. The 60 locations provide customers with a convenient location to collect equipment alongside their building materials, saving them time during their busy working day. We have 18 builders merchant partners all of whom have provided positive feedback on the mutually beneficial partnerships. We continue to benefit from access to the merchants' customer base and footfall, and the combination of our brand and service offering strengthens their overall customer proposition. This channel delivered 15% like-for-like growth in H1 22 and we continue to be delighted with the way in which these partnerships are maturing.

Incorporation of HSS ProService

In 2021 we began to reorganise our business into two divisions to bring new focus on how we acquire customers and then fulfil their requirements. We recently completed the legal separation of the two businesses. Our newly incorporated ProService business is an asset-light, technology-driven marketplace business with 27,000 customers and over 600 suppliers, all connected through our technology platform Brenda. The platform provides customers with access to the full market of hire equipment with, we believe, the broadest range of products and best availability in our industry. The platform provides suppliers with low-cost access to lots of customers, and the ability to drive utilisation and returns. We are very excited about the growth prospects for our ProService business, together with our HSS Operations business which is the primary supplier to it.

HSS Operations

In H1 2022 our HSS Operations business completed the rollout of route optimisation software (Satalia). This technology has been embedded into the operation of our transport teams in Customer Distribution Centres and is delivering improved efficiency as well as maintaining delivery performance at 99%. Average mileage per job has reduced by 12%, helping us to reduce scope one carbon emissions and to counter inflationary pressures. With the technology embedded we can begin the second phase of this project, which will be delivered in 2023 and result in an improved delivery time window proposition being available for customers at the point of order.

Our HSS Operations business continues to deliver strong performance metrics beyond transport efficiency. Accident frequency rates are materially lower than FY21, and these were already at historically low levels. Fleet utilisation remains high at 56%, supporting the Group's excellent ROCE. Click and collect adoption remains strong at 16%.

ESG Progress

In June 2022 we published our first ever ESG Impact report, which sets out our 2040 Net Zero plan, our ESG targets and the progress we are making. The report has been exceptionally well received by a broad selection of stakeholders, who are pleased to see the progress made and the ambitious plans we have set out. In August 2022, following an extensive evidence-based assessment by EcoVadis, we were awarded their 'Advanced' sustainability rating award. EcoVadis is the world's largest provider of business sustainability ratings, assessing over 90,000 companies worldwide, and we are delighted that they have placed us in the 91st percentile of businesses in our industry for ESG performance.

Market Outlook

Despite inflationary pressures and uncertainty created by the war in Ukraine, we have seen resilience across the broad range of end markets our business is exposed to. Whilst uncertainty remains, the construction output forecasts in the market continue to point to growth in 2023 and 2024. We are confident that should the outlook worsen, our flexible, low-cost business model and strong balance sheet puts us in the best possible position to outperform the sector.

In summary, during H1 2022 we finalised the reorganisation of our business, made great advances on our technology roadmap and delivered an impressive set of financial results. All this while operating safely, maintaining high levels of customer service and pursuing our ambitious ESG targets. I would like to thank all stakeholders and in particular our colleagues for their great work and its part in delivering these results.

Group Financial Performance

Results and commentary are presented on a continuing operations basis unless otherwise noted, reflecting the impact of the strategic disposals of Laois and All Seasons Hire in April and September 2021 respectively.

Revenue and segmental contribution

The H1 22 results are based on 26 weeks of trading whereas H1 21 was 27 weeks. Revenue growth metrics versus H1 21 have been adjusted to exclude the impact of this additional week as well as non-recurring COVID related benefits in H1 21 associated with a business interruption insurance claim and the Republic of Ireland wage subsidy scheme (with the adjusted metric shown in brackets).

Revenue in H1 22 was £159.9m, 9% (11%) higher than the previous period (H1 21: £146.3m), a solid trading performance delivered through effective strategy execution in a difficult macro-environment. The Group has managed well-documented inflationary pressures through continued price management.

Turning to segmental performance, Rental and related revenues were £99.3m in H1 22 (H1 21: £92.9m), 7% (9%) higher than in H1 21, and with a high level of utilisation at 56% despite a larger fleet. Contribution is £64.9m (H1 21: £64.8m). Margin decreased to 65.3% (H1 21: 69.7%) with continued strong price management offset by the increased cost of fuel impacting revenue mix to the detriment of margin.

Services revenue has increased by 13% (16%) to £60.6m (H1 21: £53.4m). Contribution increased to £9.1m (H1 21: £7.7m). Margins have increased by 0.6pp at 15.1% (H1 21: 14.5%) with the overall performance driven by improved customer experience (via ongoing technology enhancements and broadening the third party rehire supply chain) and record profit levels in the Training business.

Costs

In October 2020 the Group implemented a new digitally led operating model, reducing the fixed cost base by £15m. During H1 21 significant financial benefit was achieved due to the early surrender of property leases (£7.4m) which resulted in the release of related provisions and liabilities. These non-recurring items mask the ongoing benefit from the new operating model and the disciplined cost control that has been maintained since then.

Cost of sales increased to £81.3m during the period (H1 21: £71.0m) driven by the growth in the Services business but also as a result of the increase in resale fuel prices noted in the segmental commentary above.

Distribution costs increased by £2.1m to £14.4m (H1 21: £12.4m). Costs have been tightly managed but have increased due to the combined impact of higher road fuel prices and a volume driven uplift in activity, as well as additional payments made to colleagues in H1 22 to support them through the cost-of-living challenge.

Administrative expenses increased by £8.1m to £53.2m (H1 21: £45.1m) however the prior year benefited by £7.5m from property liability releases following surrender of a significant number of non-trading stores and the current year includes £0.7m of exceptional expenses principally related to the Group's restructure (see below) all of which have been treated as exceptional. Excluding these items, costs are broadly flat despite one-off payments being made to colleagues as part of the cost-of-living support noted above.

Net finance expenses

Net finance expenses have reduced by £7.6m, following the successful refinancing completed in November 2021, which saw the Group reducing its level of senior finance facility to £70m and achieving a significant reduction in the interest rate.

Other operating income

Other operating income of £0.3m relates to sub-let income on property space not required by the Group. In the prior year £1.6m was recognised with £1.2m received under a COVID-19 business interruption insurance claim, £0.2m release of provision held against Irish Temporary Wage Subsidy Scheme 2020 receipts and the balance being sublease rental income.

Exceptional items

Total exceptional items of £0.6m have been recognised in the period. Cost of £0.9m relates to completing the legal separation of the ProService and HSS Operations businesses into separate entities. The separation will create better visibility of results and allow increased focus on delivery within each business. The actual separation took place after the reporting date. Revisiting the discount rate on the Group's onerous contract provision resulted in a credit of £0.2m and £0.2m was released from provisions for closed stores. In the prior year, an exceptional credit of £7.4m was recognised, the result of efforts to negotiate and complete early surrenders on stores closed as part of the Group's acceleration of strategy announced in October 2020.

Profitability

Adjusted EBITDA of £32.9m in H1 22 is slightly higher than the prior period (H1 21: £32.8m), however as noted above, the prior year benefited from an additional week's trading as well as £1.6m of COVID related income and cost recovery. Adjusting for these items, EBITDA is 6% ahead of the prior year as the Group's lower cost operating model and investments in technology continue to deliver.

Adjusted EBITA increased from £13.1m in H1 21 to £13.6m in H1 22 with margin decreasing slightly from 9% in H1 21 to 8% in the current year. Adjusting for the additional week's trading and non-recurring COVID related income, EBITA margins increased by 0.5pp.

The result of the drivers noted above is that the Group recognised a much-improved Adjusted profit before tax of £8.4m versus £0.8m in the prior period. The Group has changed the definition of Adjusted profit before tax to include amortisation of software (refer to note 19). Profit from continuing operations before tax decreased slightly to £6.5m (H1 21: £6.8m) reflecting the significant impact of exceptional credits in the prior year.

The improved profitability led to the adjusted basic earnings per share increasing to 0.96p in H1 22 from 0.09p in the prior period. Basic earnings per share were 0.86p versus 0.96p in the prior period. The diluted basic earnings per share were only marginally lower at 0.84p versus 0.93p in H1 21, despite the prior period benefitting from the material non-recurring items already highlighted.

Profit from discontinued operations (H1 21)

To enable the Group to strengthen its balance sheet and focus on its strategic priority to Transform the Tool Hire Business, the Group made two strategic divestments during the year ended 1 January 2022:

Laois Hire Services Limited

Laois Hire Services Limited, the Irish large plant hire business, was sold to Briggs Equipment Ireland Limited on 7 April 2021. Proceeds of the disposal, net of transaction costs, were £10.0m generating a profit on disposal of £3.2m.

All Seasons Hire Limited

All Seasons Hire Limited, a cooling and heating provider, was sold to Cross Rental Services Limited with the transaction completing on 29 September 2021. Proceeds of the disposal, net of transaction costs, were £54.3m generating a profit on disposal of £38.0m. In the H1 21 comparator the All Seasons Hire result has been re-presented as profit from discontinued operations.

As part of these transactions, the Group entered into commercial agreements to cross-hire equipment to ensure the broadest possible distribution of, and customer access to, each party's existing fleet.

Return on Capital Employed

ROCE increased to 24% from 19% in the prior year, supported by strong performance in the capital-light Services business, targeted fleet investment using the Group's insight capability and growth through the digitally led low-cost operating model established in 2020. ROCE is calculated as Adjusted EBITA (last twelve months) divided by average capital employed, where capital employed is total assets except intangibles, derivatives and cash, less current liabilities excluding debt items.

Net debt

Net debt on 2 July 2022 was £103.2m, a reduction of £54.5m from the H1 21 (£157.8m). This has been driven by improved EBITDA, strong working capital management, proceeds from the disposal of Laois and ASH and a reduction in lease liabilities following property surrenders. Leverage has reduced to 1.5x from 2.0x (H1 21 as reported, FY 21: 1.5x).

The debt facilities consist of a £70.0m senior finance facility and an undrawn revolving credit and overdraft facility of £23.2m, both maturing in November 2025 but with an option to extend for a further 12 months. Including cash balances of £38.7m, the Group had access to £74.3m of combined liquidity at 2 July 2022.

Dividend

The Group has made great progress in delivering its strategy, including strengthening the balance sheet, which has resulted in increased profitability and cash generation while continuing to invest in the technology roadmap. The Board has therefore decided to implement a progressive dividend policy. An interim dividend of 0.17p per share was approved by the Board on 28 September and will be paid during November 2022.

Going concern

While encouraged by the resilience of the Group during a period of continued disruption, the Directors continue to model via a number of scenarios current macroeconomic factors such as increasing inflation and interest rates. At 28 September 2022 the Group had sufficient liquidity to operate within banking covenants for the next 12 months even under a 'reasonable worst case' scenario. The reasonable worst case scenario models lower than forecast market growth rates, increased inflationary pressures and an increase in debtor days.

After reviewing the above, considering current and future developments and principal risks and uncertainties, and making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence over a period of at least twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing these unaudited condensed consolidated financial statements.

Risks and uncertainties

The principal risks and uncertainties that could have a material impact upon the Group's performance over the remaining 26 weeks of the 2022 financial year have not changed significantly from those described in the Group's 2021 Annual Report and are summarised in note 18 of this interim report.

The main risk expected to affect the Group in the remaining 26 weeks of the 2022 financial year is macroeconomic conditions, which includes the impact of supply chain pressures, high inflation on energy costs and colleagues, and on demand from new and existing customers within the numerous and diverse market sectors which HSS serves.

By order of the Board

Steve Ashmore

Director

28 September 2022

HSS Hire Group plc 

Unaudited condensed consolidated income statement

The notes form part of these condensed consolidated financial statements.

HSS Hire Group plc 

Unaudited condensed consolidated statement of comprehensive income

The notes form part of these condensed consolidated financial statements.

Unaudited condensed consolidated statement of financial position

The notes form part of these condensed consolidated financial statements.

HSS Hire Group plc 

Unaudited condensed consolidated statement of changes in equity

The notes form part of these condensed consolidated financial statements.

Unaudited condensed consolidated statement of cash flows

The notes form part of these condensed consolidated financial statements.

Notes forming part of the unaudited condensed consolidated financial statements

1. General information

The Company is a public limited company, is quoted on the AIM market of the London Stock Exchange and is incorporated and domiciled in the United Kingdom. The address of the registered office is Building 2, Think Park, Mosley Road, Manchester M17 1FQ. These condensed consolidated financial statements comprise the Company and its subsidiaries (the 'Group') and cover the 26 week period ended 2 July 2022.

The Group is primarily involved in providing tool and equipment hire and related services in the United Kingdom and the Republic of Ireland.

The condensed consolidated financial statements were approved for issue by the Board on 28 September 2022.

The condensed consolidated financial statements do not constitute the Statutory Accounts within the meaning of Section 434 of the Companies Act 2006 and have not been subject to audit by the Group's auditor. Statutory Accounts for the year ended 1 January 2022 were approved by the Board on 27 April 2022 and delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.

2. Basis of preparation and significant accounting policies

The condensed consolidated financial statements for the 26 weeks ended 2 July 2022 have been prepared in accordance with IAS 34 Interim Financial Reporting. The condensed consolidated financial statements should be read in conjunction with the Group's Annual Report and Accounts for the year ended 1 January 2022, which were prepared in accordance with IFRS as adopted by the UK (IFRS).

Accounting policies are consistent with those in the Statutory Accounts for the year ended 1 January 2022.

Going concern

At 2 July 2022, the Group's financing arrangements consisted of a drawn senior finance facility of £70.0m, undrawn overdraft facilities of £6.0m, undrawn revolving credit facilities of £17.2m and finance lease lines to fund hire fleet capital expenditure, of which £12.4m had not been utilised. Both the senior finance facility and revolving credit facility are subject to net debt leverage and interest rate cover financial covenant tests each quarter. At the reporting date the Group had significant headroom against these covenants. Cash at 2 July 2022 was £38.7m.

While encouraged by the resilience of the Group during a period of continued disruption, the Directors continue to model via a number of scenarios current macroeconomic factors such as increasing inflation and interest rates. At 28 September 2022 the Group had sufficient liquidity to operate within banking covenants for the next 12 months even under a 'reasonable worst case' scenario. The reasonable worst case scenario models lower than forecast market growth rates, increased inflationary pressures and an increase in debtor days.

After reviewing the above, considering current and future developments and principal risks and uncertainties, and making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence over a period of at least twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing these unaudited condensed consolidated financial statements.

Prior period restatement

The group made two strategic divestitures during the year ended 1 January 2022 (see note 17). These met the IFRS 5 definition of discontinued operations and so the prior period figures included in the Consolidated Income Statement and the supporting notes have been re-presented to exclude amounts relating to discontinued operations.

Following a review of the Annual Report and Accounts for the year to 26 December 2020 by the FRC's Corporate Reporting Review Team, a change has been made to separately disclose the impairment loss on trade receivables of £1.3m on the face of the Consolidated Income Statement. Previously it was included within administrative expense. There is no impact on the profit for the period.

3. Segmental reporting

The Group's operations are segmented into the following reportable segments:

- Rental and related revenue; and

- Services.

Rental and related revenue comprises the rental income earned from owned tools and equipment, including powered access, power generation and HVAC assets, together with directly related revenue such as resale (fuel and other consumables), transport and other ancillary revenues. Services comprise the Group's HSS OneCall rehire business and HSS Training. HSS OneCall provides customers with a single point of contact for the hire of products that are not held within HSS' fleet and are obtained from approved third party partners; HSS Training provides customers with specialist safety training across a wide range of products and sectors.

Contribution is defined as segment operating profit before branch and selling costs, central costs, depreciation, amortisation and exceptional items.

All segment revenue, operating profit, assets and liabilities are attributable to the principal activity of the Group being the provision of tool and equipment hire and related services in, and to customers in, the United Kingdom and the Republic of Ireland. No single customer represented more than 10% of Group Revenue in the 26 week period ending 2 July 2022 (27 weeks ending 3 July 2021: one customer was 10% or more of Group Revenue).

4. Other operating income

During the period sub-let rental income of £0.3m (27 weeks ended 3 July 2021: £0.1m) was received on properties no longer used by the Group for trading purposes.

During the 27 weeks ended 3 July 2021 the Group recognised £0.2m of income received in 2020 as a result of earlier participation in the Republic of Ireland's COVID-19 Wage Subsidy Scheme. Recognition had been deferred pending confirmation of entitlement. During the 27 weeks ended 3 July 2021 the Group also received £1.2m from a COVID-19 business interruption insurance claim.

1. The notes supporting the income statement have been restated to disclose continuing operations (note 2).

5. Exceptional items

Items of income or expense have been shown as exceptional because of their size and nature or because they are outside the normal course of business. As a result, during the 26 weeks ended 2 July 2022 the Group has recognised exceptional items as follows:

During the 27 weeks ended 3 July 2021, the Group recognised exceptional items analysed as follows:

Costs related to onerous properties: branch and office closures (incurred in 2022 and 2021)

In the 26 weeks ended 2 July 2022 an exceptional credit of £0.2m has been recognised, this mainly relates to sublease income on vacant stores. In the 27 weeks ended 3 July 2021 an exceptional credit of £7.4m was recognised. This related to the release of lease liabilities and onerous non-rental property cost and dilapidation provisions on surrender of properties closed as part of the Group's acceleration of strategy announced in October 2020.

Cost relating to restructuring (incurred in 2022 only)

Following the changes made to its operating network in Q4 2020 and the roll-out of HSS Pro in Q1 2021, the Group commenced an exercise to legally separate the HSS Operations and Pro Service divisions into distinct entities. Fees incurred relating to the restructure of £0.9m have been recognised as exceptional. The legal separation was completed on 3 July 2022 although further costs are expected in relation to increasing the technological capability and efficiency of the Group.

Business divesture (incurred in 2021 only)

To enable the Group to focus on its strategic priority to Transform the Tool Hire Business, the disposal of Laois Hire Service Limited, the Irish large plant hire business, to Briggs Equipment Ireland Limited ("Briggs") completed on 7 April 2021. Proceeds of the disposal, net of transaction costs, were £10.0m generating a profit on disposal of £3.2m. As part of the transaction, HSS entered into a commercial agreement with Briggs for the cross hire of equipment to ensure the broadest possible distribution of, and customer access to, each party's existing fleet.

6. Depreciation and amortisation expense

1. The notes supporting the income statement have been restated to disclose continuing operations (note 2).

Amounts charged in respect of amortisation:

7. Finance income and expense

1. The notes supporting the income statement have been restated to disclose continuing operations (note 2).

8. Earnings per share

Basic earnings per share:

Basic earnings per share is calculated by dividing the result attributable to equity holders by the weighted average number of ordinary shares in issue for that period.

Diluted earnings per share: