HSS Hire Group PLC Sale of Power Generator Businesses

RNS Number : 9026F

HSS Hire Group PLC

07 March 2024

 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement

 

7 March 2024

HSS Hire Group Plc

Sale of Power Generator Businesses

 

HSS Hire Group Plc ("HSS" or "the Group") announces that it has entered into an unconditional agreement to sell ABird Limited and APEX Generators Limited (together, "Power"), the Group's power solution providers, to CES Global ("CES") for an enterprise value of £23.25 million (the "Disposal"), subject to customary transaction adjustments. The cash proceeds from the Disposal will further strengthen the Group's balance sheet.

Following the Disposal, net debt on a non-IFRS16, pro-forma basis as at 30 December 2023 will reduce to approximately £37 million. The combination of a stronger balance sheet and a more streamlined business will enable greater focus on the Group's transformational strategy to become a leading marketplace for equipment services through a technology-driven, lower-cost operating model.

As part of this transaction, HSS has entered into a commercial agreement with CES for the cross-hire of power generators and related services to ensure the broadest possible distribution of, and customer access to, both parties' existing fleets. This follows the successful implementation of similar commercial agreements following the disposal of the Group's Aerial Work Platform business to Nationwide Platforms Limited in 2019 and heating, ventilation and air-conditioning business to Cross Rental Services in 2021.

Power represented £34 million of Group revenues and £6 million of Group operating profit for the year ended 31 December 2022. Around £20 million of this revenue was through the Group's marketplace business which will continue to be provided under the commercial agreement.

HSS confirms that trading for 2023 was in line with market expectations with year-on-year revenue growth of 5%. Whilst we have continued to see some demand softness in certain customer segments, implementation of the Group's marketplace proposition is progressing well with self-service platform adoption accelerating with around 650 customers now having transacted on the platform. The Board remain confident that this transformational strategy positions the Group well to take full advantage of the market when it recovers. HSS will report 2023 full year results during May 2024.

 

Steve Ashmore, Chief Executive, commented:

"Over the past three years, HSS has undergone a radical transformation, evolving to become a modern, agile marketplace business. Today's announcement will increase our focus on driving our strategy forward and delivering value for all our stakeholders.

Power has made an important contribution to the Group and I would like to thank the team for their commitment over the years. I am very pleased that they will be joining CES, who recognise the business's value and will help it reach its full potential. HSS will continue to work with Power to provide our UK customers with all of their power solution hire requirements."

 

 

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Notes to editors

 

About HSS Hire

 

HSS Hire Group plc provides tool and equipment hire and related services in the UK and Ireland through a nationwide network of Group companies and third-party suppliers. It offers a one-stop shop for all equipment through its marketplace technology platform to a diverse, predominantly B2B, customer base serving a range of end markets and activities. Over 90% of its revenues come from business customers. HSS is listed on the AIM Market of the London Stock Exchange. For more information please see www.hsshiregroup.com.

 

About ABird and APEX

ABird and APEX ("Power") are leading UK providers of power solutions. Power specialises in designing both short and long terms generator solutions ranging from 20KVa to 1260KVa, underpinned by remote fleet management technology that provides complete visibility of all hire equipment for customers across a wide range of end markets. ABird and APEX were acquired in 2012 and 2014 respectively for a combined cash consideration of £10.5m. As at 31 December 2022 Power had total gross assets of £23.1m and made a profit before tax of £3.9m for the year ended 31 December 2022. Taking account of the customary transaction adjustments, cash consideration for the Disposal is expected to be £20 million.

 

About CES Global

CES Global ("CES") is a renowned leader providing temporary power and HVAC solutions for large-scale events and industrial applications. CES has a strong reputation built over 35 years based on performance excellence, quality, reliability and innovation. With this commitment to innovation, CES has recently expanded its offering to include Wi-Fi, CCTV, interactive site mapping and sustainable power solutions. Further, CES continues its footprint expansion to service customers' needs in Europe and beyond.

 

 

 

For further information, please contact:

 

HSS Hire Group plc	Tel: [phone] (on 7 March 2024)
Steve Ashmore, Chief Executive Officer	Thereafter, please email: [e-mail]
Paul Quested, Chief Financial Officer
Phil Golding, Head of Group Finance

 

Teneo
Tom Davies Charles Armitstead	Tel: [phone] Tel: [phone]
Numis Securities (Nominated Adviser and Broker)	Tel: [phone]
Stuart Skinner George Price

 

Disclaimer:

 

This announcement contains forward-looking statements relating to the business, financial performance and results of HSS Hire Group plc and the industry in which HSS Hire Group plc operates. These statements may be identified by words such as "expect", "believe", "estimate", "plan", "target", or "forecast" and similar expressions, or by their context. These statements are made on the basis of current knowledge and assumptions and involve risks and uncertainties. Various factors could cause actual future results, performance or events to differ materially from those described in these statements and neither HSS Hire Group plc nor any other person accepts any responsibility for the accuracy of the opinions expressed in this presentation or the underlying assumptions. No obligation is assumed to update any forward-looking statements.

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