This page contains a Flash digital edition of a book.
TOOL HIRE TOP TEN 2011


MARKET STABILITY BRINGS RELIEF


Catherine Stratton, author of the much acclaimed Plant Hire Investment Reports, presents her 10th annual review of the UK’s Top Ten tool and equipment hirers.


After plunging demand over a period of about 18 months in 2008/2009, hirers have greeted the more stable market conditions of 2010 with some relief. True, demand remains low compared with boom years, but now hirers sense that it has ‘bottomed out’. Any substantial rise in demand seems some way off as 2011 looks like being another difficult year for the UK economy. Nevertheless one of the most negative aspects of hire - the surplus of equipment over demand since the downturn - has been considerably alleviated, perhaps even almost eradicated in some product lines. This has been achieved by a combination of the swift action taken by some hirers to dispose of surplus equipment, by the withdrawal (forced or voluntary) of others from the market and, perhaps most importantly, by very restricted investment in new equipment.


The lack of re-investment is beginning to present a challenge to the industry. It is more than two years since the capital expenditure tap was turned off and, given the lifecycle of tools, equipment and compact plant, many hirers must begin to replace equipment if they are to maintain a viable ‘fit for purpose’ fleet. How can they justify re-investment when hire rates remain so competitive? We believe this to now be the major challenge for hirers, and of such importance that we have devoted most of this issue’s Forum to this topic.


It is now ten years since we began this annual Tool Hire Top Ten analysis. Much has changed over the decade and much has stayed the same - particularly the problem of uneconomic rates. Speedy has consolidated its No.1 position, although the fortunes of HSS have revived and it, and others both inside and outside the Top Ten, have begun to chip away at Speedy’s market share.


Throughout the ten years, we have battled with very limited statistical information, particularly in relation to the tool hire operations of builders’ merchants where there are no publicly available accounts (with the exception of Brandon during the time it was under Wolseley’s ownership). In these cases, and in the case of companies such as A-Plant and GAP, where plant and tool hire operations are integrated, we have to rely on information provided by the companies themselves. Readers should also bear in mind that there tends to be a higher element of ‘sales’ as opposed to ‘hire’ in the revenues of the merchant-owned operations and that their ‘outlets’ are usually found within large sites selling their group’s product range.


25


Table IA: Estimated Current Revenue (based on interim results where applicable) Est. Current Rev. (£m) Est. Market share (%) 270.0 165.0 71.0 66.0 53.0 51.6 31.0 25.0 25.0 11.4


1. Speedy 2. HSS


3. Brandon 4. Jewson 5. TP Hire


6. Hire Station


7. A-Plant Tool Hire 8. GAP Group 9. Hirebase


10. Supply UK Hire Shops TOP TEN TOTAL ALL OTHERS


TOTAL MARKET


769.0 769.0


1538.0


17.5 10.5 5.0 4.0 3.5 3.5 2.0 1.5 1.5 1.0


50.0 50.0


100.0


Table IB: Historic Annual Revenue (based on most recent available annual accounts, where available) Revenue (£m) 290.0 147.4 70.0* 63.0 50.2 48.3 30.0 23.0 22.9 10.5


1. Speedy 2. HSS


3. Brandon 4. Jewson


5. Hire Station 6. TP Hire


7. A-Plant Tool Hire 8. GAP Group Tools 9. Hirebase


10. Supply UK Hire Shops TOTAL


755.3


% Change -27.0 -11.3 -19.5 +10.5 -10.2 +22.6 -14.3 -17.9 +14.5 -11.8 -18.7


*The figure for Brandon is taken from accounts for the year ended 31 July 2009; because of the sale of the company at the end of August 2010, the new owners chose to extend its accounting period to 31 December 2010, so that the next accounts to be filed will cover 17 months. Thereafter Brandon will prepare accounts on a calendar year basis.


MERCHANT-OWNED HIRERS SHOW SIGNIFICANT GROWTH


Turning to this year’s tables, a striking feature of Table 1B, which shows historic revenue figures, is that the builders’ merchant-owned operations all show significant growth (with the exception of Brandon, as the accounts used are for a period when it was owned by Wolseley and also when the recession was hitting hard), whereas all the other hirers show a decline in revenue. Differences in accounting periods may be part of the reason; another is, perhaps, that the recession has made builders’ merchants encourage their customer


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76