HSS Hire's share price plummeted over 25 per cent this morning after the firm issued a disappointing trading update for the first six months of the year.
The tool hire firm said weakness in customer activity hit "a number of sectors", but said it expects first-half earnings before interest, tax, depreciation, amortisation and exceptional items to be in line "with the comparative period in 2014" which rose 34 per cent to £28.9m.
Shares in the company were down 26 per cent in early trading, from Friday's closing price of 182.75p per share to 134.90p per share.
Why it's interesting
Since becoming one of the first main market listings of 2015 back in February, HSS Hire has had difficulty winning over investors. After an underwhelming debut on the London Stock Exchange caused it to fall four per cent below its IPO price of 210p per share, the company's stock has continued to fall a further 31.9 per cent.
The group's market capacity has shrunk by about £100m in that time, with shares only trading above its IPO price for brief periods.
HSS Hire has made a number of acquisitions during the first half of the year, buying heating and air conditioning hire firm All Seasons Hire for £11.3m last month. HSS Hire said the new business would support growth in the second half of the year.
However, investors appeared unappeased by the firm's assurances that customer activity has begun to return to "more normalised levels" and order books are "building into the second half of the year".
What HSS Hire said
The group's trading performance through the second quarter was marginally below expectations, primarily impacted by weakness in key accounts customer activity across a number of sectors particularly in April and May, as well as reduced demand for cooling equipment during the period. In June, we have seen customer activity begin to return to more normalised levels, with order books building into the second half of the year.
Investors are yet to be won over by HSS Hire during its first few months as a public company, and its recent specialist acquisitions have not yet changed that fact.