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TOOL HIRE TOP TEN 2011 continued


base to avail themselves of the full range of services on offer. Whether this means that they are gaining customers from other hirers or they are converting new customers to ‘hire’ is difficult to assess. It is probably a combination of the two. Converting new customers to ‘hire’, however, should be an aim for all hirers; the economic case for hire, as opposed to purchase, is at its strongest during periods of recession and uncertain demand.


This year we have made a minor adjustment to Speedy’s revenue figure. Speedy has now changed its reporting procedures with the consolidation of all its hire subsidiaries into UK & Ireland Asset Services.We have traditionally excluded revenue from its portable accommodation business Speedy Space but, because of the consolidation, its most recent accounts (to 31 March 2010) are based on a trading period to 31 August 2009. In calculating our figure for Speedy’s tool hire operations, we have deducted an annualised figure for Speedy Space revenue, and we have also made a minor adjustment to take account of revenue coming from the larger equipment within Speedy Power.


By their very nature all figures taken from company accounts are historic and often will not reflect the current reality (although they are often highly indicative of it); Table 1A endeavours to ‘update’ figures, so as to give a better picture of the industry as we move into 2011. Where possible we base our estimates on evidence such as half year figures; where these are not available, we use what we perceive to be trends. Unfortunately, it is a very imperfect science, but we do take some comfort from the fact that last year our total for estimated revenues from the Top Ten was £760m and the total for their historic revenues in this year’s Table 1A is £755.3m, a margin of error of less than 1%.


THE SIZE OF THE TOOL HIRE MARKET


We now turn to the vexed question of the size of the tool hire market. It should be stressed that we are looking not just at pure ‘tools’ as the vast majority of companies in tool hire are also hiring out small plant and some non-mechanical items.We are trying to establish the size of that wider market. Last year we believed that there was sufficient evidence that, overall, the Top Ten had seen some erosion of its market share (partly as a result of several of the larger companies rationalising their depot networks to align themselves more closely to the declining market).


We would suggest that, while individual companies within the Top Ten have improved their market share over the past year, the overall market share of the Top Ten is similar to last year at around 50%. On the basis of our estimated figures in Table 1A, this would suggest an overall market value of £1,538m. This is approximately 1% up on last year’s figure, which was when the market was at its lowest point. A key factor to performance in 2011 will be how quickly the momentum of last autumn can be resumed as work gets under way


26


again after the Christmas and New Year break.


Challenges remain for 2011, particularly in relation to cuts in Government expenditure at both national and local levels, but the tool hire industry has now adjusted to the prospects of restricted demand in the foreseeable future. While there will inevitably be some casualties, overall most companies have reduced debt levels and overheads and are better placed to cope with a period of restricted growth.


Table II: Operating Profit 1. HSS 2. Brandon 3. Hire Station


4. Supply UK Hire Shops 5. GAP Group Tools 6. Speedy


A-Plant Tool Hire Hirebase


Operating Profit/(Loss) (£m) 7.3


% Change on previous year -44.3


4.9 Recovery from loss 3.2 0.7 0.5


Not available Not available


Jewson Not available TP Hire


Not available -50.0


No change -16.7


(8.6) Loss in previous year N/A N/A N/A N/A


Table III: Gross Book Value of Hire Equipment Gross Book Value (£m) 350.0 130.4 61.7 45.0 42.0 35.7 33.0 7.9


1. Speedy 2. HSS


3. Brandon


4. GAP Group Tools 5. Hire Station 6. Jewson


7. A-Plant Tool Hire


8. Supply UK Hire Shops Hirebase TP Hire


Table IV: Number of outlets


Number +/- Change % Change of outlets


1. TP Hire (inc. 130 satellites) 319 2. Speedy 3. HSS


4. Jewson 5. Brandon


6. Hire Station 7. A-Plant


8. GAP Group Tools 9. Hirebase


315 231 216 175 102


on year on prev. year -7


-55 +1 -7


-25 +2


10. Supply UK Hire Shops 23


+1 +3


-2.1


-17.4 +0.4 -3.1


-12.5 +2.0


95 Unchanged Unchanged 59 Unchanged Unchanged 55


+1.8 +15.0


Not available Not available


% Change -10.7 +1.4 -3.6


-11.8 -2.8


+10.2 -5.7


+12.8 N/A N/A


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