Hss Hire Share Discussion Threads

[dealy] 08/12/2020 08:11

70m market cap after 50m just went in. That implies the business that existed just a few weeks ago was only worth 20m. That of course is ridiculous

[gregpeck7] 08/12/2020 08:01

Recovery should start now.

[baddeal] 07/12/2020 12:19

EC I get your point but ebitda is useful because it is a measure of the operating cashflow before capex. Ebitda should be used but must be looked at in conjunction with capex and arguably this is more valuable than looking at depreciation which is open to interpretations of asset life, residual values etc Eg this year the level of capex spend will, have been reduced significantly (probably by c75%) as demand fell off. So to look at likely impact on leverage you do need to consider ebitda. Business like HSS can afford to reduce capex in a down turn but will then need to build it back up as demand for their fleet recovers. It is too simplistic to say ignore ebitda as otherwise you can't see the cash generation picture.HSS main challenge is that pricing in the market is poor and service cost high so generating an adequate return on the capital invested is proving very difficult, arguably this was less of an issue when they were growing strongly a few years back but is now a real issue when they are seeing demand weakness. Imho of course

[dealy] 07/12/2020 12:12

I said Ebita without the D !!!!!

[effortless cool] 07/12/2020 11:53

dealy,

You need to stop banging on about EBITDA. HSS is an equipment hire business. The equipment that it hires wears out and/or becomes outdated and needs to be replaced on a regular basis. The depreciation charge in its results is the allowance for this reinvestment cycle.

Looking at figures that exclude depreciation for this type of business is utterly meaningless. If you don't understand that, then you probably shouldn't be managing your own money.

[gregpeck7] 07/12/2020 11:45

Yep I used them for my new patio project. No issues at all

[my retirement fund] 07/12/2020 11:01

I'd love to invest here but it's not prudent since the same bad managers are still sitting at their desks in their dirty black leather seats.

[bennya] 07/12/2020 10:10

Agreed, Ive seen it many times recently and always get nervous at such discounts to share price I actually like the HSS business model and they seem to be making some sensible moves. I even used some of their hire equipment over lockdown and the service, product and price were excellent so left me with a good impression. Looking for a steady recovery now

[dealy] 07/12/2020 09:58

this is a warning though for anybody holding shares that might need more equity. The shares just seem to always fall to the placing level (or below) no matter how restricted the availability of shares at the placing price. Exception recently being Rolls Royce

[bennya] 07/12/2020 09:35

I always thought that 10p placing price was a problem, but now I think this is a good entry, im in...

[smithless] 07/12/2020 09:15

Spot on dealy. Many II can't hold AIM shares, thus the disconnect today. Picked a few up today. Either its a recovery story or Tosca will buy out at 10p or above

[dealy] 07/12/2020 09:09

maybe the move to AIM has created some forced selling. it will pass. company is in much better shape now

[buywell3] 07/12/2020 08:59

So this hire malarkey model is a bust then is it

[diku] 07/12/2020 08:56

That was a pump and dump...500m to 180m...

[dealy] 07/12/2020 08:43

To think this had a 500m enterprise value 5 yeas ago. Now just 180m.

[dealy] 07/12/2020 08:36

the 10p shares weren't really available to non-holders apart from £5m's worth on Friday.The market cap is now just 20m higher than the money that was raised last week

[pictureframe] 07/12/2020 08:29

Good opportunity to take my first tranche. Buying in at almost the same price as the institutions has served me well before. Not a guaranteed winner but has not taken part in the Covid rally at all so expecting some recovery on the floor being g 10p

[dealy] 07/12/2020 08:23

company had 26 m in Ebita in 2019. Competition reducing, need is there , presence is strong, Balance sheet improving

[pugugly] 07/12/2020 08:16

Mr Market still very unhappy - Could the recent funding just be a temporary patch on a sinking boat?

[dealy] 07/12/2020 08:15

wasn't expecting this. Great opportunity to get the same deal as the big shareholders

[baddeal] 06/12/2020 23:00

Existing facility has a while to run and getting out of that would be yet another cash drain so I think it would be quite some time before they could contemplate benefitting from lower rates.Tosca et al should take it private re gear using a senior bank structure and then sell on.. imho of course!

[dealy] 06/12/2020 21:35

not in the future it won't. 4% is plenty with rates at zero

[baddeal] 06/12/2020 20:50

100m of debt with their facility costs a lot more than £4m pa

[dealy] 05/12/2020 10:14

sorry have to correct this. Ebita was 26m lasy year. So that means Net profit could be close to 20m when things stabilise and assuming much lower interest costs. So 3p EPS definitely achievable as a base

[dealy] 05/12/2020 09:20

The company had about 17m of Ebita (no D for depreciation) in 2019 which probably represents the base case for next year.Interest expense should be much lower from now on due to a) 72m less debt due to placing and debt reduction efforts and b) more stable balance sheet allows better financing terms.Do it should be possible to bring interest expense down to 4m.Tax should be low due to previous losses.So net profit should be about 12m as a base case. If digital improvements and a strong economy take hold they should be able to have 20m net profit on a sustainable basis. That is 3p EPS. Multiple of 15 gives 45p.I think that is the target within 18 months