HSS Hire Group has said that infrastructure business Amey has decided to appoint a different supplier for its equipment rental services, causing its share price to plummet
HSS Hire Group, the tools and equipment hire company, saw its share price plummet by 10% on Wednesday after it announced that a major client, infrastructure business Amey, had decided to switch to a different supplier for its equipment rental services.
The contract with Amey accounted for approximately 7% of HSS’s revenues and a tenth of its adjusted earnings in 2023. The two companies have had an agreement for nearly nine years, which is due to end by the close of this year.
This news has left shareholders questioning how HSS will compensate for the loss in income once the contract concludes. The London-listed firm, which rents and sells items such as building supplies and gardening tools, plans to update investors on its trading performance at its annual general meeting later this month.
Its earnings fell over the last financial year, with adjusted pre-tax profit almost halving compared to the previous year when it hit a record high. The company has previously highlighted a challenging market, particularly for its rental business, attributing this partly to seasonal weakness in demand for certain products.
However, it believes this situation is likely to be temporary and has started to see signs of recovery in the market. HSS shares were down 10% on Wednesday morning.
