©Nick Ansell/PA Wire

A drop in HSS Hire Group shares on Wednesday took the tool hire group’s slide since its market listing last year to 63 per cent, after it said it remained mired in losses in the first half.

HSS has had a tough time since it floated at the start of 2015. It was the worst-performing initial public offering in the UK last year and suffered a steep £14.1m pre-tax loss.

But its first-half earnings for this year showed shown some signs of improvement, as HSS on Wednesday reported a pre-tax loss of £9.8m in the 27 weeks to July 2.

The UK construction industry has boomed during the past few years, with housebuilders advancing strongly, but equipment rental groups have struggled. Their problems have been largely self-inflicted, however, rather than being prompted by challenges to the sector.

HSS has been a turbulent ride for investors since it floated in February last year. During its first 14 months as a public company, it issued two profit warnings, parted with its chief executive and lost 65 per cent of its market value.

But following a strategy shake-up, the company’s revenues rose 13.5 per cent to £166.2m during the first half, which it attributed in part to success in convincing customers to use it as a one-stop shop, boosting training revenues in particular.

“Customers are increasingly seeing HSS as a single-source provider of tools, equipment and related services and our trading growth reflects this,” said John Gill, chief executive.

However, Alexander Mees, an analyst at JPMorgan, raised concerns that depending on lower-margin services for revenue growth would put pressure on the company’s profitability.

HSS shares closed more than 8 per cent lower at 78p in London.

“The post-EU referendum risk to growth from a general slowdown in UK economic activity is not something we can ignore,” Mr Mees said, pointing to a further slide in HSS shares.

HSS is set to open a “national distribution and engineering centre”, which it says will help it “ramp up for nationwide coverage”.

But this has been a costly undertaking, driving its net debt up £20.6m to £238.7m, and associated financing costs contributed to the near £10m loss.

Hedgefund Toscafund, which is one of the largest shareholders in both HSS and Speedy Hire, has pushed for a merger between the two companies, but it has failed to materialise.

In an open letter this month, Toscafund said that this was because Speedy Hire executive chairman Jan Åstrand was “aware that there was unlikely to be a role for [him] in the combined business”.

Speedy Hire has also struggled over the past few years, parting with two chief executives, suffering a share price slump and is now engaged in a war of words with Toscafund, which wants to remove Mr Åstrand from the company.