HSS has reported a pre-tax loss of £85.2m on revenue of £335.8m for 2017 as the company commenced a shake-up of operations aimed at reducing costs.
The plant hire company closed 55 branches and cut almost 250 jobs during the year as part of a long-term cost-cutting exercise.
This contributed £18.9m of impairments and provisions to its results for the year to 30 December 2017.
HSS chief executive Steve Ashmore, who joined the company last June, said the closures would reduce annual costs by £13m. He plans to find another £11m in savings in 2018.
A £40.7m exceptional one-off cost was booked in 2017 after HSS agreed to change the terms of Unipart’s contract to manage HSS’s distribution network.
The new agreement with the logistics consultant will see HSS bring most of its network management and maintenance back in house.
Mr Ashmore said: “Overall 2017 was a difficult year for HSS, mainly due to the impact of operational changes made in 2016.
“We have addressed this by focusing on the core rental business and reducing our cost base, and I am pleased with how the business responded in the second half of the year.”
The company spent £1.2m on a strategic review that was completed in December.
It also lost £4.9m on the sale of its Reintec and Tecserve cleaning equipment business, having deemed these to be non-core operations.
Mr Ashmore said: “The strategic review has been a massive step forward for us and gives us a real understanding of our business.
“We have a clear map forward, with steps identified to deliver significant change in performance within HSS.”
The firm’s services business, which provides training and supports the specifying and installation of equipment, performed ahead of the company’s expectations in 2017, with revenue increasing 10.6 per cent to £88m.
By contrast, revenue for its rental business dropped 5.8 per cent to £247.8m, with disruptions to product availability in the first half of the year cited as dragging down income.
Overall group revenue fell 2 per cent from £342.4m in 2016 to £335.8m last year.
HSS’s adjusted earnings before interest, tax, depreciation and amortisation, which also exclude exceptional items, was £48.9m.
The company said profitability had improved in the second half of 2017 and that this stronger performance had continued into 2018.
Mr Ashmore said: “Looking ahead, the positive trading momentum has continued into the first quarter.
“This strong start to 2018 and good progress made on our strategic priorities gives me growing confidence the business can deliver on its full potential.”