HSS Hire Group PLC Q1 17 Trading Update (0672G)
24 May 2017 - 4:01PM
UK Regulatory
TIDMHSS
RNS Number : 0672G
HSS Hire Group PLC
24 May 2017
24 May 2017
HSS Hire Group plc
Q1 17 Trading Update
Q1 in line with management expectations; encouraging early signs
from sales initiatives in Q2
HSS Hire Group plc ("HSS" or the "Group") announces an update on
the performance of the Group for the 13 week period ended 1 April
2017.
In line with its reporting obligations to holders of its Senior
Secured Notes, the Group's wholly-owned subsidiary Hero
Acquisitions Limited has today provided an update to noteholders on
its performance for the same period. Details for the results call
for Hero Acquisitions Limited can be found at the end of this
announcement.
Financial Headlines Q1 17(1) Q1 16 Change
(Unaudited) (13 weeks) (14 weeks)
---------------------- ----------- ----------- ---------
Revenue GBP80.2m GBP84.3m (4.9%)
---------------------- ----------- ----------- ---------
Adjusted EBITA(2) (GBP4.5m) GBP4.9m (GBP9.4m)
---------------------- ----------- ----------- ---------
Adjusted EBITA margin (5.6%) 5.8% (11.4pp)
---------------------- ----------- ----------- ---------
Net debt GBP226.3m GBP234.0m GBP7.7m
---------------------- ----------- ----------- ---------
1) Reflects one less trading week in Q1 17 and the closure of 55
branches through Q4 16 and Q1 17
2) Adjusted EBITA defined as Operating profit with amortisation
and exceptional costs added back
Headlines
* Q1 performance in line with Management's expectations
* Underlying revenue flat year on year; Continued
growth in Services
* Revenue flat on comparable 13 week basis after impact
of branch closures
* Double digit growth in both Services and Key Accounts
* Adjusted EBITA impacted by revenue mix and temporary
parallel running costs
* Margins reflect higher growth from lower contribution
Services business in Q1 17
* Parallel running costs incurred through Q1 17 will
reduce now operating model changes complete
* Net debt reduced year on year and in line with
expectations
* Net debt reduced to GBP226.3m from GBP234.0m (Q1 16)
* Continued improvement in working capital management
* Cash and facility headroom of more than GBP30m at end
of Q1
* Continued progress with evolution of operating model
* Increasing fulfilment rates are leading to enhanced
fleet availability being achieved across the Group
* NPS increased to 47, top third TNS NPS Benchmark
* LTM utilisation maintained at 50% (Core) and in mid
70%'s (Specialist)
Current Trading and Outlook
* Sales initiatives, commenced in March, delivering
positive year on year rental and related revenue
growth, with underlying revenue in the first 7 weeks
of Q2 marginally ahead of the prior year
* Actively reinvigorating relationships with SMEs;
contract count growth driven to double digits post
initiative launch, compared to low single digit
growth in comparable prior periods
* Industrialising sales initiatives and approach for
further large markets across UK
* New operating model delivering higher fulfilment
rates resulting in improved fleet availability as
expected
* Cost initiatives to deliver annualised cost savings
of GBP11 - 13m, compared to Q1 run rate, now being
implemented
Alan Peterson, Chairman of HSS Hire said:
"Our Q1 performance is in line with management expectations as
set out at the FY16 results in early April, with revenue flat
year-on-year on a comparable 13 week basis and EBITA impacted by
growth in our Services business and temporary parallel running
costs.
"We are now firmly focused on re-establishing revenue growth by
leveraging our new operating model to deliver market-leading
availability to our customers in our branch and Customer
Distribution Centre network. During March we implemented new sales
initiatives, focused on core markets, to reinvigorate revenue
growth in our core Rental business, particularly among our smaller
and medium-sized customers. Whilst we are still in the initial
phases, we have seen some encouraging signs in the markets in the
early weeks of the second quarter.
"We remain focused on driving efficiency across our network and
increasing cash generation through the business. This is reflected
in the cost initiatives announced today.
"We are also pleased to have announced the appointment of Steve
Ashmore as the Group's Chief Executive Officer, with Steve joining
us on 1 June 2017. Steve brings considerable leadership experience
in a range of industries complementary to HSS including building
products supply, logistics and distribution, which will be
invaluable as we target the continued profitable growth of the
Group."
HSS Hire Group plc will announce its interim results for the 26
week period ended 1 July 2017 on 30 August 2017.
Update call for Hero Acquisitions Limited for holders of Senior
Secured Notes
As required by the reporting obligations for the Senior Secured
Notes, a conference call discussing the results of Hero
Acquisitions Limited (a wholly owned subsidiary of HSS Hire Group
plc) will be held for noteholders at 1400 BST today.
To obtain dial-in details for the call, holders should contact
Citigate Dewe Rogerson at ellen.wilton@citigatedr.co.uk. The
accompanying presentation for the call will be made available at
www.hsshiregroup.com/investor-relations/senior-secured-notes.
For further information, please contact:
HSS Hire Group plc Tel: 020 7638 9571 (on 24 May 2017)
Paul Quested, Chief Financial Thereafter: 020 8260 3343
Officer
Robert Halls, Investor Relations
Manager
Citigate Dewe Rogerson Tel: 020 7638 9571
Kevin Smith
Nick Hayns
Note to editors
HSS Hire Group plc provides tool and equipment hire and related
services in the UK and Ireland through a nationwide network of over
280 locations. Focusing primarily on the maintain and operate
segments of the market, over 90% of its revenues come from business
customers. HSS is listed on the Main Market of the London Stock
Exchange. For more information please see www.hsshiregroup.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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