HSS Hire heatedly denied a recent report in the U.K. press that said the rental company was in danger of breaching its banking covenants next month and was looking into alternatives. The company said it is renegotiating covenant ratios with its bankers but denied it is in financial difficulties.
To counteract the reports, HSS Hire, which is privately owned by private equity, took what it called “the unprecedented step” of publishing its first-half results. HSS finance director John Gill said HSS’ sales dropped 20 percent in the first quarter of 2009, compared with a 30 percent decline by U.K.’s largest rental company Speedy Hire. He added that HSS declined 8 percent in the second quarter, compared to a 10-percent drop by Speedy. A-Plant, owned by Ashtead Plc, reported a 28-percent sales decline in the three months ended April 30, while HSS said its sales dropped 17 percent during the same period.
Gill said HSS posted EBITDA of £15.3 million for the first six months of 2009 with a positive cash flow of £2.1 million and a cash balance of £10 million, £1.5 million more than the same time in 2008.
HSS chief executive Chris Davies said that contrary to the reports of breaching its covenants, the company’s EBITDA for the first half of the year is more than double its debt service requirements. He added that HSS recently opened a branch in St. Helens, its 12th opening of the year, and plans new branches in Oxford and Brighton soon.