HSS brings forward investment as revenue growth continues
By Murray Pollok02 November 2010
HSS Hire Service Group has brought forward its 2011 fleet investment programme because of continued growth of its business.
The company invested £12.3 million in the first nine months of the year and will spend an extra £2 million this year using funds taken from 2011 budgets. Chris Davies, HSS chief executive said the company planned to further increase spending further, with investment in all product sectors.
The company's revenues for the quarter to 2 October 2010 were up 14% to £44.6 million and profits before interest, tax, depreciation and amortisation (EBITDA) increased 31% to £12.1 million for the three months.
"The company continues to make very good progress in challenging conditions. This has been achieved by focusing on customers, colleagues, costs and cash", said Mr Davies. "Although we remain cautious on the outlook for the rest of the year and into next, our progress has prompted us to bring forward investment in the business from next year into this."
Caution remains, however, because of the uncertainty over the wider impact of government spending cuts which will see department budgets cut by 25% or more.
Mr Davies told IRN; "Behind the numbers there are real cuts to real jobs. People are expecting a knock on impact from that." However, he said HSS had an opportunity to market its ability to save costs for its customers; "In difficult times companies are looking to control their costs...That's our job."
He added that HSS was less reliant on new infrastructure constructon than other rental companies, with HSS focusing on the maintenance and operation of existing facilities.
Meanwhile, HSS's business in Ireland - including both Northern Ireland and the Republic of Ireland - actually grew year-on-year in the first nine months of the year. Mr Davies said growth had been "strong" and paid tribute to a "terrific team" in Ireland. The company operates both HSS-style rentals in Ireland and also heavy equipment - Mr Davies said that even this heavier equipment had performed ahead of expectations.
During the quarter, the company launched its estimated time of arrival (ETA) service as an add-on to its LiveHire system, which is now being used by 6000 customers.
HSS said it also used the quarter to continue its focus on key accounts, winning a five year multi-million pound rental contract with Thames Water.
However, it has lost a major contract with Network Rail. Although still working with Network Rail on an existing non-rail contract, the customer has now combined its non-rail and rail rental contracts and awarded the package to a competitor.
HSS said there would be no material impact as no single customer accounts for more than 3% of revenues.