23rd January 2015
The flotation of tool hire company HSS Hire gives investors the chance to buy into a business ‘with strong market positions’, The Share Centre has said.
The company, which operates from 265 stores around the country, said yesterday that it would list shares between 210p and 262p each, giving it a flotation value of up to £406 million.
HSS is Britain’s second biggest tool hire company after Ashtead, which is listed on the FTSE 250.
Ian Forrest, investment research analyst at The Share Centre, said the wide range of services means the company is less impacted by cyclical changes in construction markets.
‘The market debut of HSS Hire will give investors the opportunity to buy shares in a business that has strong market positions in a range of sectors such as tool hire, temporary power generation, and powered access equipment…the company focuses on the business-to-business market rather than selling directly to private individuals,’ he said.
‘Its strategy is centred on what is known as the ‘maintain and operate’ segment, which includes a wide range of services such as refurbishment, facilities, management, transportation and cleaning. As a result, the company believes its earnings are more stable than others in the same sector that concentrate on more cyclical areas like new build and construction markets.’
The company reported sales of £271.6 million in the 12 months to September 2014 and it has grown its market share in recent years. However, it still only controls 4.7% of the market and the small and medium-size operates that control 48% of the market will be its target.