HSS warns on profit after efficiency plan delays

Aaron Morby 1 year ago
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Tool and equipment hirer HSS has warned that its group-wide streamlining plan will now not be fully completed until the first quarter of 2017.

The group this morning warned the delayed business improvement plan would impact on expected profits but said it performance would still be ahead of next year.

John Gill, chief executive officer of HSS, said: “Given the scale and complexity of this transformational operational change within the group, we have taken the decision to extend the implementation into Q1 17.

“While we are seeing some impact on performance in FY16, the board remains confident that the initiatives being pursued will position the business to drive improved shareholder returns in what remains a competitive and fragmented marketplace.

“Looking ahead to 2017 we will continue the optimisation of our network across both distribution centres and local branches to deliver the benefits of our new operating platform, delivering an enhanced customer proposition, with a primary focus to drive EBITA margin growth.”

A key part of the business plan was building a New National Distribution and Engineering Centre, which is now open and servicing all branches in England and Wales. Branches in Scotland will benefit from the NDEC by spring next year.

Gill said HSS had closed 18 underperforming branches in October and four distribution centres since the Summer.

In the first nine months of the year revenue was ahead 11%, driven mainly by it services business but also a 2% uplift in rental revenue.

Net debt has increased slightly to £240.4m, reflecting increased exceptional costs

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