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TOOL HIRE TOP TEN 2011 continued


house Rutland Partners. The general decline in the fortunes of hire was reflected in


the sale price of £43m compared with the £71.9m which Wolseley paid in March 2006. The management and their private equity partners have, however, bought the No.3 tool hire company in the UK. One of the reasons why Brandon was sold in 2006 was the then management was struggling to develop the company into a national operation. The integration of Wolseley’s Hire Centers with Brandon achieved that, and it must be a cause of some satisfaction to Tim Smith and his colleagues that they have a strong national network of 175 depots, compared with 143 four years ago.


Tim Smith believes that Brandon’s new independence will make it easier to secure co-operative arrangements with other companies. He says that Brandon will now resume a growth tack and has capital expenditure available to do this. The company is looking to expand its ‘offering’ as well as its depot network. Tim reports that pricing pressure has eased somewhat, but he points out that where hirers have long term supply contracts, they will not see the benefit of rising hire rates. Brandon has not tied itself into such contracts to the same extent as some of its competitors (large customers account for less than 10% of Brandon’s revenues) and this gives it more flexibility. It did, of course, have a supply contract with ROK, but Tim Smith is confident that Brandon’s strength in the south west of England will enable it to make good the loss of business resulting from the contractor’s demise. Like others, Brandon is now attempting to push hire rates with its 2011 catalogue showing increased rates across the board.


For Tim Smith, the stability of the hire market over recent months has been all-important, enabling the new owners to plan the company’s future with more certainty. He also feels that the fact that the market place was stable rather than ‘rising’ helped Rutland to offer such a comparatively modest price for Brandon. It may be that Rutland has timed its investment into the hire market well.


JEWSON HIRE Director of Tool Hire


Head Office


Telephone Number Website


Hire activities


Geographical coverage Status


HIRE STATION LTD Managing Director


Head Office


Telephone Number Website


Hire activities


Geographical coverage Status


COMMENT


At the end of November Hire Station’s parent company Vp announced its interim results for the half year ended 30 September 2010; overall the Group revenues of £71.1m were unchanged on the same period of 2009, with profits before tax and amortisation down 12% at £8.6m. Hire Station improved its revenues by over 2% to £26.2m but its operating profits fell by 15.6% to £1.7m.


One impressive feature of the results was the reduction in borrowings by £8m to £40m, to take the Group’s gearing levels down to 35%. This should put the company in a good position when it spots any possible opportunities on the acquisition front. Overall this was regarded as a good performance by Vp which has built up a portfolio of niche hire businesses, of which Hire Station is the largest in terms of revenues and the third largest in terms of operating profit in these latest results. All of Vp’s businesses were profitable in the period. With its strengthened balance sheet, Vp has felt confident to resume capital expenditure; overall it spent (gross) £9.7m in the six months, and Hire Station accounted for £3.7m of this, almost double what the tool hirer spent in the same period a year before.


Richard Pedersen


Merchant House, Binley Business Park, Coventry, CV3 2TT 02476 438400


www.jewson.co.uk Tools and equipment National


Division of Jewson, a subsidiary of Groupe Sainte-Gobain, a public company listed on the Paris Bourse


29


Like some of his competitors, John Singleton has noticed a gathering momentum to his business during 2010; he singles out October and November as being particularly strong months with good growth across the business. Some of the more specialist activities within Hire Station have performed very well, with ESS Safeforce achieving record revenue levels in November. One noteworthy achievement was the securing by Hire Station and fellow subsidiary Torrent Trackside of five year supply contracts with Network Rail.


Hire Station has kept its depot network intact over the last year; it has cut its overheads and improved management control by standardising procedures in depots, but the past year has seen no reduction in


John Singleton


Field Farm Road, Long Eaton, Nottingham, NG10 3FZ


0845 604 5337 www.hirestation.co.uk


General tool hire, lifting and safety equipment, specialist fusion and pipe fitting equipment National


Subsidiary of Vp plc, a public company, listed on the London Stock Exchange


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