After launching its fleet hire business Tru Fleet in July 2022, Aussie construction and energy company SSH Group (ASX: SSH) is reaping the awards. Tru Fleet has reported a 121% EBITDA return on capital contribution, amounting to $1.57 million.

Over the year, Tru Fleet reported a strong EBITDA growth of 57.6%, and during H2 FY23, Tru Fleet delivered an EBIT of 23.15% to revenue, marking a notable 240% increase on H1 FY23. As at the end of June 2023, the Company had $12.8 million in fleet assets, and it witnessed a 236% asset value growth between June 2022 and June 2023. 

Tru Fleet is a specialised fleet-vehicle rental company that was established to cater to the growing demand in the vehicle and transport equipment rental market in Western Australia. It focuses on providing mine-specification and civil-specification light-vehicle rentals to the Australian resource, civil, and construction sectors.

In H1 FY23, Tru Fleet effectively managed the initial start-up expenses while expanding its services and offerings. This led to notable improvements in the Company’s financial performance during H2 FY23, and SSH expects this positive trend to carry forward into FY24.

On the operational end, SSH set up a new operating facility established in the Pilbara, Western Australia. It deployed cars across Western Australia, New South Wales and Queensland. Plus, its fleet assets diversified into the Light Truck Market to service customer requirements.

The second half gave Tru Fleet a leg up, which saw a minor EBIT loss of 6.85% in H1 FY23. In the second half, the numbers picked up significantly, with EBIT increasing by 240% and EBITDA seeing a 50% increase. 

SSH Group Ltd oversees a collection of interrelated businesses that operate in the Australian construction, resources, and energy market sectors. The Company’s strategy involves both building and acquiring businesses, focusing on those with the potential for substantial returns on investment and scalability.

The Tru Fleet win is not the only one that the Company has witnessed over the past year. SSH acquired the Karratha Machinery Hire business in May 2022, and since then, it has raked in an EBITDA of $3.1 million, a 20.7% return on the acquisition price. It reported a 53.3% EBITDA to revenue over the 12-month period.

Overall, in Q3 FY23, the SSH Group saw a 48% EBITDA growth on Q2 FY23. That said, its cash flow stood at $1.5 million cash on hand, a decline from $3.2 million as of September 2022. During Q3, the Company generated $9 million in revenue from its operations, lower than the previous quarter’s $10.3 million. SSH attributed this decrease and the one in the prior quarter to the ongoing expansion of the Company’s equipment hire business.

In a bid to cut costs, SSH completed the consolidation of its office spaces in Belmont, WA, by exiting two office leases, and it undertook layoffs in the second quarter. Additionally, it established a smaller corporate head office in West Perth. This move resulted in reduced ongoing operating expenditure.

The Company’s cash balance has been seeing small but consistent declines through the year, but hopefully its recent acquisitions and Tru Fleet’s significant EBITDA return signal a positive turn for SSH.