REG - HSS Hire Group PLC - Sale of Power Generator Businesses

HSS HireAnnouncement

07/03/2024 07:00

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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."

 

 

-Ends-

 

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
(http://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: 07557 491 860 (on 7 March 2024)
 Steve Ashmore, Chief Executive Officer  Thereafter, please email: Investors@hss.com
 Paul Quested, Chief Financial Officer
 Phil Golding, Head of Group Finance

 

 Teneo
 Tom Davies                                                                                                         Tel: 07557 491 860

 Charles Armitstead                                                                                                 Tel: 07703 330 269
 Numis Securities (Nominated Adviser and Broker)                                                                    Tel: 020 7260 1000
 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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