HSS Hire Group PLC – HSS – Final Results

HSS Hire Group PLC – HSS – Final Results

HSS Hire Group plc (“HSS” or the “Group”) today announces results for the year ended 26 December 2020

 

Financial Highlights1

FY20

(IFRS 16 basis)

FY20

(pre-IFRS16 basis)

FY196

(pre-IFRS16 basis)

Change

(pre-IFRS 16)

 

Revenue

£269.9m

£269.9m

£328.0m

(17.7)%

Adjusted EBITDA2

£69.4m

£47.0m

£63.9m

(26.4)%

Adjusted EBITDA margin

25.7%

17.4%

19.5%

(2.1)pp

Adjusted EBITA3

£19.8m

£16.7m

£26.5m

£(9.8)m

Adjusted EBITA margin

7.3%

6.2%

8.1%

(1.9)pp

ROCE4

10.7%

15.2%

20.8%

(5.6)pp

Net debt leverage5

2.8x

2.6x

2.8x

0.2x

Other extracts

Operating profit / (loss)

£1.5m

£(3.5)m

£16.8m

£(20.3)m

Loss before tax

£(23.6)m

£(24.3)m

£(5.8)m

£(18.5)m

Basic loss per share

(12.02)p

(12.40)p

(3.66)p

(8.74)p

 

 

·      Resilient performance through COVID-19  with strong trading in Q4

o  Progressive revenue growth over H2 FY20, trading revenues in Q4 at 94% of 2019 levels

o  Positive EBITDA maintained throughout FY20, Q4 ahead of prior year

o  Decisive actions taken maintained healthy EBITDA margins and ROCE

 

·      Strengthened balance sheet, reduced leverage

o  Net debt (pre-IFRS16) materially reduced to £120.4m (FY19: £179.5m)

o  Leverage reduced to 2.56x (pre-IFRS 16)

o  Capital raise realised £52.6m gross proceeds

o  Strong working capital management, overdue debt at lowest level in over 5 years

 

·      Accelerated strategy implementation to better serve our customers and suppliers

o  Transformed our national operating model, delivering £15m annualised net cost savings and improved operational efficiency

o  Expanded low cost builders merchant network, currently 31 locations and growing

o  Continued technology investment including enhancements to HSS.com, 22% of transactions online in Q4

o  OneCall automated platform expanded to cover our full range of products and services, improving the customer experience with a faster and more efficient ordering process

 

·      Strong start to FY21 

o  Q1 FY21 EBITDA (pre-IFRS 16) ahead of both FY20 and FY19

o  Revenue continues to improve, Q1 FY21 like for like7 at around FY19 levels

o  Leverage (pre-IFRS 16) further reduced to 2.1x as at 3rd April 2021, targeting FY21 exit rate below 2.0x

o  Reached agreement to surrender 95% of the 134 closed branches, minimal ongoing liability

o  Sale of Laois completed April 2021 for €11.2 million, reinvestment  into additional capex for core Tool Hire business

o  Strategy delivering, well positioned to capitalise on market opportunities.

 

Steve Ashmore, Chief Executive Officer, said:

“HSS has delivered a resilient performance in a year of unprecedented disruption. The onset of the pandemic had a significant impact across our markets but decisive action to preserve cash and adapt our business supported a strong recovery in the second half of the year with EBITDA ahead of 2019 levels in the final quarter.

During the course of the year, we took the decision to accelerate the implementation of our strategy. By increasing our focus on digital platforms, closing 134 of our branches, and partnering with builders merchants, we have been able to maintain national coverage while significantly reducing fixed costs. We are grateful for the overwhelming shareholder support for our strategy and in October successfully completed a £53m capital raise, further strengthening our balance sheet.

This significant progress has been possible due to the hard work and dedication of our colleagues who have shown outstanding commitment during a uniquely challenging year. Our people are the heart of our business and our most important asset and I would like to thank them for their hard work.

We have had an encouraging start to 2021, with EBITDA in the first quarter ahead of 2019 and 2020 levels. We are well positioned to capitalise on market opportunities as we continue to build on our differentiated commercial proposition to create the most advanced, customer-centric offer in the tool hire marketplace.”

 

Notes

1)     Results for FY20 and FY19 are for continuing operations and exclude the UK Platforms business which was sold in January 2019

2)     Adjusted EBITDA is defined as operating profit before depreciation, amortisation, and exceptional items. For this purpose depreciation includes the net book value of hire stock losses and write offs, and the net book value of other fixed asset disposals less the proceeds on those disposals

3)     Adjusted EBITA defined as Adjusted EBITDA less depreciation

4)     ROCE calculated as Adjusted EBITA for the 12 months to 26 December 2020 divided by the average of total assets less current liabilities (excluding intangible assets, cash and debt items) over the same period

5)     Net debt leverage is calculated as closing net debt divided by adjusted EBITDA for last 12 months (LTM). 

6)     In adopting IFRS16 the Group has applied the cumulative catch-up (“modified”) transition method. On this basis FY19 has not been restated to reflect the standard

7)     Like for like excludes impact of loss of Services volume associated with FY19 announced change to one managed service contract and impact of additional week’s trading in Q1 FY21

HSS Hire Group plc (“HSS” or the “Group”) today announces results for the year ended 26 December 2020

 

Financial Highlights1

FY20

(IFRS 16 basis)

FY20

(pre-IFRS16 basis)

FY196

(pre-IFRS16 basis)

Change

(pre-IFRS 16)

 

Revenue

£269.9m

£269.9m

£328.0m

(17.7)%

Adjusted EBITDA2

£69.4m

£47.0m

£63.9m

(26.4)%

Adjusted EBITDA margin

25.7%

17.4%

19.5%

(2.1)pp

Adjusted EBITA3

£19.8m

£16.7m

£26.5m

£(9.8)m

Adjusted EBITA margin

7.3%

6.2%

8.1%

(1.9)pp

ROCE4

10.7%

15.2%

20.8%

(5.6)pp

Net debt leverage5

2.8x

2.6x

2.8x

0.2x

Other extracts

Operating profit / (loss)

£1.5m

£(3.5)m

£16.8m

£(20.3)m

Loss before tax

£(23.6)m

£(24.3)m

£(5.8)m

£(18.5)m

Basic loss per share

(12.02)p

(12.40)p

(3.66)p

(8.74)p

 

 

·      Resilient performance through COVID-19  with strong trading in Q4

o  Progressive revenue growth over H2 FY20, trading revenues in Q4 at 94% of 2019 levels

o  Positive EBITDA maintained throughout FY20, Q4 ahead of prior year

o  Decisive actions taken maintained healthy EBITDA margins and ROCE

 

·      Strengthened balance sheet, reduced leverage

o  Net debt (pre-IFRS16) materially reduced to £120.4m (FY19: £179.5m)

o  Leverage reduced to 2.56x (pre-IFRS 16)

o  Capital raise realised £52.6m gross proceeds

o  Strong working capital management, overdue debt at lowest level in over 5 years

 

·      Accelerated strategy implementation to better serve our customers and suppliers

o  Transformed our national operating model, delivering £15m annualised net cost savings and improved operational efficiency

o  Expanded low cost builders merchant network, currently 31 locations and growing

o  Continued technology investment including enhancements to HSS.com, 22% of transactions online in Q4

o  OneCall automated platform expanded to cover our full range of products and services, improving the customer experience with a faster and more efficient ordering process

 

·      Strong start to FY21 

o  Q1 FY21 EBITDA (pre-IFRS 16) ahead of both FY20 and FY19

o  Revenue continues to improve, Q1 FY21 like for like7 at around FY19 levels

o  Leverage (pre-IFRS 16) further reduced to 2.1x as at 3rd April 2021, targeting FY21 exit rate below 2.0x

o  Reached agreement to surrender 95% of the 134 closed branches, minimal ongoing liability

o  Sale of Laois completed April 2021 for €11.2 million, reinvestment  into additional capex for core Tool Hire business

o  Strategy delivering, well positioned to capitalise on market opportunities.

 

Steve Ashmore, Chief Executive Officer, said:

“HSS has delivered a resilient performance in a year of unprecedented disruption. The onset of the pandemic had a significant impact across our markets but decisive action to preserve cash and adapt our business supported a strong recovery in the second half of the year with EBITDA ahead of 2019 levels in the final quarter.

During the course of the year, we took the decision to accelerate the implementation of our strategy. By increasing our focus on digital platforms, closing 134 of our branches, and partnering with builders merchants, we have been able to maintain national coverage while significantly reducing fixed costs. We are grateful for the overwhelming shareholder support for our strategy and in October successfully completed a £53m capital raise, further strengthening our balance sheet.

This significant progress has been possible due to the hard work and dedication of our colleagues who have shown outstanding commitment during a uniquely challenging year. Our people are the heart of our business and our most important asset and I would like to thank them for their hard work.

We have had an encouraging start to 2021, with EBITDA in the first quarter ahead of 2019 and 2020 levels. We are well positioned to capitalise on market opportunities as we continue to build on our differentiated commercial proposition to create the most advanced, customer-centric offer in the tool hire marketplace.”

 

Notes

1)     Results for FY20 and FY19 are for continuing operations and exclude the UK Platforms business which was sold in January 2019

2)     Adjusted EBITDA is defined as operating profit before depreciation, amortisation, and exceptional items. For this purpose depreciation includes the net book value of hire stock losses and write offs, and the net book value of other fixed asset disposals less the proceeds on those disposals

3)     Adjusted EBITA defined as Adjusted EBITDA less depreciation

4)     ROCE calculated as Adjusted EBITA for the 12 months to 26 December 2020 divided by the average of total assets less current liabilities (excluding intangible assets, cash and debt items) over the same period

5)     Net debt leverage is calculated as closing net debt divided by adjusted EBITDA for last 12 months (LTM). 

6)     In adopting IFRS16 the Group has applied the cumulative catch-up (“modified”) transition method. On this basis FY19 has not been restated to reflect the standard

7)     Like for like excludes impact of loss of Services volume associated with FY19 announced change to one managed service contract and impact of additional week’s trading in Q1 FY21

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