Losses as HSS Hire got worse in 2015 as its first year on the London Stock Exchange passed with a mess of profit warning and management overhaul, establishing the company as the worst performing IPO of the year.
The tool hire company was reported on Wednesday, 6 April that its pre-tax loss increased by 62% to £13.8m amid weak trading and tough competition in the sector.
The share price fell 3.17% to 84o, one of the largest one-day drops in five months.
HSS Hire has been a wild ride for investors since it floated in February 2015. During 14 months as a public company, it has issued two warning, said goodbye to its chief executive, and lost 65% of its market value.
Even as the UK construction industry experienced a boom, with housebuilders advancing strongly, equipment rental firms have struggled.
HSS’ rivals have also been afflicted with Speedy Hire losing 52% of its share value and Ashtead 33% since the start of 2015. Ashtead has been helped by the fact that most of its earnings are derived from the US, whereas HSS and Speedy Hire have been more exposed to the UK tool hire market, which HSS has previously described as “unpredictable” and “erratic.”
HSS’ share price has only briefly risen above the 210p IPO price. In November the company buoyed investors with a report of more stable trading, but on April, it warned again that competition remained intense in the sector.
The company said: “Revenue growth, and as a result of our operation gearing, earnings in our core business were impacted by softer than expected market conditions, price competition and lower than expected growth among our customers.”
Revenues rose 9.7% in 2015 to £312.4m, hwhich help the opening of 50 new local branches.
The company is seeking to address the issues that eroded its profits, and said: “Following the challenges of 2015, we are taking a highly disciplined approach to managing our growth, with a focus on cost and operational efficiency, on improving productivity and on delivering higher standards of customer service.”
