HSS set for profits hit on delayed overhaul

TOOL group HSS Hire today warned that earnings will be drilled lower by a hitch in its branch overhaul.

The yellow-and-blue tool-hire firm is trying to make equipment delivery smoother and quicker for DIY and big building clients by setting up an 190,000-square-foot central distribution centre near Oxford.

The business had hoped to have everything done by Christmas but the changes, which involve moving engineering staff and other functions from branches into the central hub, have taken longer than hoped and the roll-out will continue into next year.

“Given the scale and complexity of this change within the group, we have taken the decision to extend the implementation into the first quarter of 2017,” chief executive John Gill said.

The delay means costs will be higher, denting earnings. HSS said they will be below City expectations of between £23 million and £25 million, but above last year’s £20.4 million.

HSS has struggled since it listed last year and is still 56% off its listing price of 210p because the power-tool rental sector has been squeezed.

Otherwise HSS is bullish: revenues for the nine months to end-September rose nearly 11% to £256 million, and adjusted earnings were 5.8% higher at £14.6 million.