HSS has made a significant strategic move by investing £26 million to acquire a private equity hire unit, marking a transformative shift for the company. This acquisition encompasses a nominal £1 deal for a loss-making hire and builders’ merchant service comprising 130 depots. The investment aims to fund the separation and restructuring of this unit.
Transition to Digital Marketplace
This acquisition signals HSS’s departure from its traditional asset-heavy business model. The firm is now focusing on its innovative ProService digital platform, which connects suppliers with customers efficiently. To further bolster its position in this market, HSS announced a £35 million strategic partnership with Speedy Hire.
Details of the Strategic Partnership
- Speedy Hire will serve as the principal equipment supplier to the ProService marketplace for a minimum of five years, with an opportunity to extend this to eight years.
- Speedy will acquire nearly 10% of the newly renamed ProService Building Services Marketplace plc.
- Approximately £35 million worth of hire assets, including equipment and depot leases, will be transferred to Speedy.
- Around 300 employees from the HSS hire service will transition to Speedy Hire, while 100 employees from Speedy will join ProService to manage operations.
Executive Chairman Steve Ashmore remarked that this agreement represents a pivotal moment for HSS, allowing it to focus on an asset-light operational model. This shift is anticipated to create substantial value for both shareholders and customers, positioning the company for sustainable growth.
Results and Future Outlook
The restructuring process at HSS is robust, having previously divested power businesses and its Irish operations. Following the separation of the UK hire segment, HSS will emerge as a dedicated digital marketplace. This platform will connect contractors with a diverse range of tools, materials, training, and building services, employing its proprietary “Brenda” technology.
The partnership with Speedy is expected to enhance profit margins and overall earnings by adopting a more efficient supply model, replacing internal systems previously reliant on HSS’s hire service.
Financial Performance
HSS reported a pre-tax loss of £130 million for the 15 months ending March 2025, largely affected by a £114 million impairment charge related to the hire service division. While turnover increased to £379 million from £312 million, comparable sales fell by 5% to £298 million due to contract losses and market challenges.
Completion of all transactions is anticipated by December 31, 2025, pending approvals from shareholders and the Competition and Markets Authority (CMA).
