Shares in tool rental group HSS Hire plunged 19pc in early trade after it said sales had been “materially slower” than targeted and warned its profits would be lower than expected in the second half of the year.

HSS said revenues in the six months to July 1 had fallen by 3.4pc to £160.5m, while pre-tax losses widened to £30.1m compared to £7.8m in the first half of last year.

It said profits had been hit by “substantial operating model changes”.

Steve Ashmore, who took up the post of chief executive in June, said: “Whilst the rate of recovery in our rental revenues has been positive, it has been materially slower than originally targeted, leading to lower than expected profitability over this period.”

HSS said adjusted earnings before interest, taxes, and amortisation for the second half of the year would now be in the range of £8m to £11m.

He added that the company, which provides equipment to consumers and businesses, was taking “decisive action” to reinvigorate revenues through “new sales initiatives”.

The company has struggled since it listed on the London Stock Exchange in early 2015. It issued two profit warnings later that year and last year reported full-year losses of £17.4m, down from £13.8m in 2015.

Shares have fallen around 30pc this year as it was affected by the wider slowdown in the construction industry following the vote to leave the European Union.

Mr Ashmore insisted the market remained “attractive and fragmented”, and said the company was in the middle of a thorough review of its strategy.