000739 - Tool Hire Top Ten 23/1/09 19:11 Page 1
TOOL HIRE
TOP TEN 2009
NOTHING IS CERTAIN -
EXCEPT UNCERTAINTY
Catherine Stratton, author of the highly respected Plant Hire Investment Reports,
presents her 8th annual review of the UK’s Top Ten tool and equipment hirers.
‘
There is every expectation of further horror stories to come on both consolidation
the international and the domestic sub-prime lending fronts. front with
In addition, the government’s finances are growing weaker. All the only modest
indications are that this year is going to be a very difficult year for the acquisitions.
UK economy - with forecasters saying it could be the worst since We must now
1993. Tool and equipment hire cannot remain completely immune anticipate
from the overall economy, but it should be better positioned than many that a decline
other markets to withstand any recessionary trends.
’
in the market
over the
This was the concluding paragraph from the 2008 Tool Hire Top Ten. next year
Little did we realise just how bad the financial crisis would get last will lead
year and how its tentacles would grip every aspect of the economy. to further
The tool hire industry remained quite buoyant for the early part of the consolidation
year, but since last autumn, the downturn in private construction has as healthy
been felt by contractors and hirers alike. There is every sign that, companies acquire their weaker brethren and as some withdraw from
along with the UK economy in general, the hire market is now facing the market, either by choice or through administration and liquidation.
one of its most difficult years ever.
This year’s Top Ten Tool Hirers look very similar to 2008, with the
Last autumn, companies that had geared to the continual expansion exception that fast growing Hirebase, a division of Grafton Group’s
of their markets had to radically adjust their business models to Buildbase operation, has entered the ranks in ninth position and
accommodate rapidly shrinking demand. Hence, we are now seeing Martin Plant Hire has dropped out of the Top Ten. The most recent
depot closures and re-organisation by the largest companies in our financial data we have for Martin is the accounts for the year ended
Top Ten report. The picture is a constantly changing one; when 31 March 2007, which show the company’s revenues at £9.8m.
discussing this report with a director of one leading hirer, we were
told that the company was “doing alright today, but we don’t know
THE SIZE OF THE TOOL HIRE INDUSTRY
about tomorrow.” This comment seems to sum up the degree of As we have stressed in previous Top Ten reports, our perennial
uncertainty felt by all involved in hire, and, undoubtedly, in most other difficulty in trying to estimate the size of the UK tool and equipment
industries as well. market is one of definition. The tool hire industry has changed
considerably in recent years as companies have widened both their
After 2007’s product ranges and customer base. The momentum away from shop
significant changes locations to larger out-of-town centres appears to be accelerating and
in the structure of is likely to be given further impetus by the current downturn as hirers
the tool hire market seek to reduce overheads.
with Speedy’s
acquisition of We base our calculation of the current value of the tool and
Hewden Tools and equipment hire market on our estimated current revenues of the top
the sale of HSS to ten players and their market share. We introduced this concept a few
Archie Norman’s years ago because the pace of growth and consolidation in the
Aurigo, 2008 market meant that figures taken from historic accounts were much
produced no outdated. In Table 1A we estimate the annual revenues of the Top Ten
surprises on the largest companies based on our assessment on their growth since
17
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