Tools and equipment hire group HSS has seen its share price tumble by a tenth on Wednesday after revealing that a major client was walking away from a contract.
HSS Hire Group told shareholders that infrastructure business Amey had decided to switch to a different supplier for its equipment rental services.
The deal with Amey had accounted for about 7% of HSS’s revenues and a tenth of its adjusted earnings in 2023, the firm said.
The two businesses had held an agreement for nearly nine years, with it set to end by the end of this year.
The announcement came as a blow to shareholders, raising questions over how HSS will fill the gap in its income after the contract ends.
The London-listed company, which rents and sells equipment such as building supplies and gardening tools, is set to update investors on its trading performance at its annual general meeting later this month.
Its earnings dropped over the latest financial year with adjusted pre-tax profit nearly halving compared with the previous year, when it had reached a record high.
It has previously flagged a challenging market particularly for its rental business, which the firm said was partly caused by seasonal weakness in the demand for certain products.
But it said this was likely to be temporary and it had started to see signs of recovery in the market.
Shares in HSS were down 10% on Wednesday morning.