LONDON (Alliance News) - HSS Hire Group PLC on Wednesday said it anticipates its full year earnings will come in below market expectations following continued soft trading in the second half so far, compounding the widened pretax loss the group posted for the first half.
The tool and equipment hire company said its pretax loss for the half year to June 27 was GBP14.1 million, widened from the GBP11.1 million, even as lower financing costs in the half helped to mitigate some of the decline. The group said its adjusted earnings before interest, taxation, depreciation and amortisation were flat a GBP28.9 million in the half, dragged back by costs related to its February float in London and branch start-up costs.
The results are in line with the trading update the company issued in June, when HSS said its trading in April and May had been marginally weaker than its expectations due to some weakness in its key accounts business and poor demand for cooling equipment.
Revenue for HSS in the half was up by 12% to GBP146.4 million from GBP130.6 million, with organic growth coming in at 11%, and the group said it has continued to win market share against ongoing variable conditions in its markets.
The group expects to continue to grow its market share in the second half, but said that while trading improved in July, some further softness has been seen in August. It now anticipates its full year earnings to be below market expectations and said it is assessing further cost saving opportunities through a refinancing which would take place in 2016.
Its capital expenditure for the year will be lower than in 2014, in line with weaker demand, HSS said.
The company will pay a 0.57 pence per share interim dividend, its first since its February float.
"Trading continues to be unpredictable, and after a reasonable July, we have seen softer market conditions in August. This is obviously disappointing. As a result we are cautious on the outlook for the balance of the year and now expect full year earnings to be below current market expectations," said Chief Executive Chris Davies.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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Hss Hire (HSS)