Tool hire firm hammered by 4th profit alert

SHARES in stricken construction hire firm HSS fell yesterday as investors bailed out after another profits warning.

It now expects profits of between £8m and £11m in the second half of the year which puts HSS on course for profits of as little as £700,000 for the full year after it made losses of £7.3m in the first half.

The City was hoping for a haul of up to £18m this year and the warning sent shares down 11.7pc, or 6.5p, to 49p.

HSS is now worth just £83.4m having seen its value fall 77pc since shares listed on the stock market at 210p each in 2015.

Analysts suggested the company – which hires tools and building equipment to tradesmen and DIY enthusiasts – may benefit from a merger with arch-rival Speedy Hire.

Neil Wilson, senior market analyst at ETX Capital, said: ‘Losses are growing too quickly. The conditions are challenging and investors are losing patience. So is it time to consider reviving talks for a merger with Speedy Hire? An opportunistic bid could work, particularly with the market cap of HSS temptingly low.’

HSS bosses insisted their turnaround effort was working.

The listing of HSS in February 2015 netted executives a £10.5m bonanza when they sold shares. But the share price slump is likely to raise questions over the wisdom of its stock market float,. Since going public, HSS has issued three profit warnings and lost two chief executives while market expectations have been repeatedly revised downwards.

HSS blamed the latest figures on brutal cost cuts – it has axed 68 underperforming branches in the last year, aiming to make annual savings of £13m.

It is battling to pay off its debts, at £230.6m despite an £8.2m fall in the previous year.