HSS Hire Group plc is a leading provider of tool and equipment hire and related services in the United Kingdom and Ireland with a key focus on delivering safety, value, availability and support to its customers. The Group concentrates on the maintain and operate segments of the tool and equipment hire market, as the Directors believe that these segments offer greater opportunities for the Group to generate higher and more stable returns on assets as opposed to providing large plant and heavy machinery geared to construction activities in the more cyclical new build segment. The Group complements its offering of tool and equipment hire with a range of value-added, specialist services that have been developed in response to customer demand and specifically oriented to the maintain and operate segments. The Directors believe that the combination of these products and services helps to differentiate the Group from its competitors, embed the Group more deeply with its customers and establish a one-stop-shop in order to capture a greater share of its customers' potential spending. The Directors believe that the Group is the second largest provider of tool and equipment hire and related services in the United Kingdom based on revenues and the second largest provider of temporary power generation in the United Kingdom based on fleet size. The Group is also the second largest provider of powered access equipment in the United Kingdom based on fleet size as reported by Cranes & Access magazine.

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HSS Hire Group posted an adjusted pre-tax loss of £14.2m for the 26 weeks to 1 July compared with a profit of £2.2m a year ago.

Revenue fell by 3.4% to £160.5m and adjusted EBITDA was down 46.7% at £17.1m.

The group said that as expected, H1 profitability was hit by substantial operating model changes.

The group's reported pre-tax losses rose to £30.1m from £7.8m last time.

The group has not declared an interim dividend - 0.57p was paid a year ago.

Chief executive Steve Ashmore said: "While significant operational change was achieved during H1 17, both Rental revenue growth and the cost base were temporarily impacted leading to reduced profitability.

"We are facing into these challenges by taking decisive action to reinvigorate Rental revenue growth through the implementation of new sales initiatives and by rolling-out cost actions that will deliver annualised cost savings of c. £13m, a number of which are enabled by the recent investment in our centralised engineering and distribution capability.

"As a result of these actions the Group returned to profitability in June with revenue in growth for the first 8 weeks of Q3 17 and this momentum will result in a stronger H2 relative to H1 performance leading to a healthier exit rate as we head into 2018.

"Whilst the rate of recovery in our Rental revenues has been positive, it has been materially slower than originally targeted leading to lower than expected profitability over this period.

"On this basis we expect H2 Adjusted EBITA profit to be in the range of £8m to £11m.

"The new leadership team is currently conducting a thorough review of the Group's strategy to gain profitable share in what remains an attractive and fragmented market.

"We will update the market on the outcome of this process during Q4 17."

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HSS reaffirmed that full year performance was in line with guidance given in August, with second half fiscal year adjusted EBITA expected between £8m and £11m.

HSS highlighted progress toward efforts to reduce costs by £10m to £14m annually - £7m to £10m relates to changes in the supply chain model - as it reached an agreement with Unipart to make changes to the company's supply chain enabling the realisation of cost benefits at the higher end of this range.

The company said it expects to take a £40m hit, including an impairment of related assets of £7m, following testing and repair of all fast-moving products in the first half of 2018.

This is expected to reduce net cash by £2m to 3m in 2018, followed by net cash inflows of £7m to £8m annually over the following seven years.

HSS confirmed that it agreed with its lenders to extend the £80m revolving credit facility, which will now mature in July 2019.

Steve Ashmore, Chief Executive Officer of HSS Hire Group plc said: 'We continue to make good progress in implementing our strategy and today's announcement is a significant milestone in delivering further cost savings in our supply chain.'

'With clear implementation plans and highly engaged teams, who have responded positively to the proposed changes, we are confident in achieving savings towards the top end of our targeted range. This operational progress, combined with the extension of our bank facilities and positive Q4 performance, creates a strong platform to build upon in 2018 and beyond.'