HSS Hire FY losses widen, dividend scrapped

Tool and equipment rental company HSS Hire reported a wider full-year pre-tax loss following a year of "significant operational change and investment", amid difficulties in its core rental business.

For the year to the end of December, the reported loss before tax widened to £17.4m from £13.8m, while adjusted pre-tax profit was unchanged at £5.8m and revenue rose 9.6% to £342.4m.

The company said the loss reflects a year of investment in new distribution network structure, including non-finance exceptional costs of £17m.

The group opened 11 branches during the year in specific markets where it is under-represented and closed 18 in locations which were underperforming or not cost-efficient to serve. HSS said its "right-sizing" programme to offset the operating costs of the new distribution network will continue this year, with a further 37 underperforming branches to be closed in the first half.

HSS said it has decided not to pay a final dividend in respect of 2016, as it focuses on reducing net debt.

Chief executive John Gill said: "2016 was a year of significant operational change and investment for the group. The result is an enhanced operating platform that will enable us to deliver superior fleet availability to customers right across our network, creating the foundation for future sustainable profit growth.

"While we made good progress in key accounts, specialist rental and our fast-growing services business during the year, this was not matched by revenue growth in our core rental business and re-establishing momentum in this area is our primary focus in 2017 and beyond."

At 1103 BST, the shares were down 7% to 62.45p.