HSS Hire Group saw its share price plummet by 10% on Wednesday after it disclosed that a key client had chosen to switch to a different supplier for its equipment rental services.
The contract with Amey represented approximately 7% of HSS's revenues and a tenth of its adjusted earnings in 2023, according to the company. The two firms have maintained an agreement for nearly nine years, and it was set to conclude at the end of this year.
This revelation unsettled shareholders, prompting queries about how HSS will compensate for the loss in revenue once the contract terminates.
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The Trafford Park firm, which rents and sells items such as building supplies and gardening tools, plans to provide an update on its trading performance at its annual general meeting later this month.
The company's earnings declined over the most recent financial year, with adjusted pre-tax profit almost halving compared to the previous year, when it had reached a record high.
HSS has previously noted a challenging market, particularly for its rental business, attributing this partly to seasonal fluctuations in demand for certain products. However, the firm said this situation was likely temporary and that signs of market recovery are beginning to emerge.
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