Listed tool hire group HSS has experienced a significant setback following the loss of their major client, Amey.
- Amey has chosen to terminate its longstanding contract with HSS, potentially disrupting HSS’s revenue streams.
- The contract, worth approximately £25 million annually, significantly contributed to HSS’s profits.
- Amey employees will also lose their 40% staff discount on HSS products.
- The decision follows a competitive retendering process, marking the end of a nine-year partnership.
In a critical development for HSS, the tool hire company has announced to its shareholders that it will no longer serve as the tool supplier for Amey. Amey’s decision to terminate the contract with HSS marks the end of a significant business relationship that has lasted nine years.
The contract, which has been identified as one of the most lucrative for HSS, was reportedly generating around £25 million per annum in revenues, equating to approximately 7% of the company’s total revenue. This contract was not only financially substantial but also strategically important, as it accounted for 10% of adjusted Ebita in the previous fiscal year.
Amey had previously agreed to a two-year extension of this contract, which was set to expire in December 2024. However, the decision to retender and ultimately select a different supplier reflects evolving business strategies and priorities. Amey’s shift represents a notable change in direction, emphasizing their pursuit of alternative solutions.
For Amey employees, this change entails losing a 40% discount on HSS product catalogues, a benefit that has been in place for them over the years.
This decision comes after competitive retendering, highlighting the dynamic and competitive nature of the market that companies like HSS operate within. The implications of this loss are far-reaching, impacting revenue and employee benefits alike.
This pivotal change signals a challenging period ahead for HSS as it adjusts to the financial and operational impacts of losing such a substantial client.
