HSS Q3 results up 29.4 per cent
Hire firm HSS has posted positive results for this year’s third quarter, reporting earnings before interest, taxes, depreciation, and amortisation of £29.8 million.
Compared to Q3 2009 earnings of £23 million, this represents a 29.4 per cent increase.
HSS CEO Chris Davies says that cumulatively, revenues are up 13 per cent on last year. “The first three quarters of the year have been encouraging. Q1 was up 11 per cent year on year in revenue terms; Q2 was up 15 per cent and Q3 up 14 per cent,” he says. “Our EBITDA figures are also consistent, but Q3 was slightly more profitable at 31 per cent up year on year compared to Q2 at 29 per cent up.”
The firm has attributed the positive results to the fact that its customer base is quite broad. “It also helps that HSS enjoys a healthy customer mix and is not dependent on ground up construction – many of our key accounts and customers are in the build, maintain and operate segments,” he says.
CapEx brought forward
As a result of the positive reports, HSS has now brought forward some of the funds originally allocated for spending in 2011. Mr Davies says that £2m which was to form part of the company’s capital expenditure next year has been added to 2010’s investments, meaning the firm has had a CapEx of £12.3m for the first nine months of the year.
“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,” Mr Davis tells CN. Investment also appears to be directed towards equipment for maintenance. “We’ve invested across our core range, and particularly in lighting, powered access and non-powered access.” He adds that the firm will continue to invest in 2011.
Mr Davies also says that ‘key accounts’ will be an important part of the company’s growth over the next year. “HSS has a range of customers across many sectors, from facilities management to manufacturers, contractors to specialist trades and utilities. Our strategic focus on key accounts means that they now count for more than a quarter of our revenues,” he says.
One of these key accounts includes Thames Water, which is currently in the process of working through the AMP5 framework. HSS’s contract with the utility provider will last five years and is for an undisclosed sum, although Mr Davies says that the deal is a “multi-million pound” contract. HSS says the deal offsets the loss of the company’s Network Rail contract, which expires in Q2 2011. The firm reports the impact from the loss of this deal (a result of contract consolidation by Network Rail) will be minimal, as no single customer accounts for more than 3 per cent of HSS revenues.