HSS Hire primed for big money float

Britain's services sector isn't just accountants and financial advisors. There's an army of companies supplying a wide range of support services to large corporations. Think recruitment agencies, delivery firms, and the big outsourcers like Serco, G4S and Capita. The latter many investors will already know well - it is share registrar to almost half the UK's listed companies.

In a matter of weeks there could be another services provider available to investors, one a world away from the slick shirts and smart suits of the interview room.

HSS Hire is the second largest provider of tool and equipment hire and related services in the country based on revenues. It's also the second largest supplier both of temporary power generation based on fleet size, and of powered access equipment. If all goes to plan it will list on the stockmarket in February.

The company has been around for over half a century, and between 2011 and 27 September 2014, group revenue grew at a compound annual growth rate (CAGR) of 17% and adjusted cash profit grew at a CAGR of 19%. It made £67 million last year on revenue of £271.6 million.

Most of that money is made from equipment hire, but HSS also offers a range of value-added services through its HSS OneCall, Reintec, TecServ and HSS Training businesses.

The share offer is made up of news shares and existing shareholders selling down their stakes, and is open to both institutional and retail investors. If it gets the float away, the business will raise about £103 million - mainly to pay down debt, reinvest in the company and cover IPO fees - and be valued at around £600 million.

"HSS has outperformed the UK tool and equipment hire market in recent years," says chief executive Chris Davies. "By focusing on the more attractive and less cyclical 'maintain' and 'operate' segments of the market and building a sophisticated distribution network that has enabled a step change in availability and utilisation, we have established a track record of delivering industry leading growth and returns on assets."

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.