the UK. Like his competitors, the Hirebase Director sees the problems of rising prices and singles out the inflation in the cost of new equipment. He points out that this will lead to many hirers holding on even longer to equipment, which has not been replaced because of the economic downturn and sees this as bringing a competitive advantage to companies like Hirebase with relatively young fleets.
Grafton currently has 238 builders’ merchants locations and 215 plumbers’ merchants locations in the UK, making it the fourth largest such business. It is based in Dublin and is the largest operation of its kind in Ireland with more than 100 branches, and where it also owns Sam Hire.
GAP GROUP LTD Joint Managing Directors
Head Office
Telephone Number Website
Hire activities
Geographical coverage Status
COMMENT
Douglas Anderson affirms that GAP’s revenues have now almost returned to pre-recession levels through the achievement of higher utilisation levels, but he concedes, at the expense of hire rates and margins. The company has, however, either begun to charge, or increased its charges, for ‘add-ons’ such as transport, fuel and damage costs, which the GAP Joint MD says is now also common practice amongst its competitors.
Douglas Anderson sees the hire market as “remaining difficult” but GAP has continued expanding its non-mechanical plant operations. It now has 12 lifting depots. GAP is developing this specialist activity, initially through separate teams within its plant and tools depots, and then establishing them as standalone operations. The lifting business is growing fast, but is still relatively small within the Group. Douglas Anderson is, however, confident, that it will become more significant.
Looking at trends within hire, Douglas Anderson says the larger contractors are continuing to seek to reduce their numbers of suppliers and to reduce their in-house plant fleets. He cites the example of one of the UK’s largest construction companies having recently disposed of its cabin fleet to a hirer and is now selling its plant as it comes off site with the view to retaining only highly specialist items of equipment.
70% of GAP’s business is now derived from national contractors and Douglas Anderson says that the Group is putting in two or three tenders a week for national contracts. Like several of his larger, higher profile competitors, he believes that this is the best way to secure the longer term prosperity of his company.
37
SUPPLY UK HIRE SHOPS Managing Director
Head Office
Telephone Number Website
Hire activities Geographical coverage
Richard Coffey
A8 Riverside, Embankment Business Park, Heaton Mersey, Stockport SK4 3GN 0161 442 7722
www.supplyuk.co.uk
Tools and equipment, survey and laser, lifting equipment, disaster recovery
Northern England, Midlands, South Wales and South East England but with depots due to open shortly in Scotland, the North East, East Anglia.
Douglas and Iain Anderson
40 Carrick Street, Glasgow G2 8DA 0141 225 4600
www.gap-group.co.uk
Non-operated plant and tools National
Private company owned by the Anderson family
In 2011 Supply UK experienced sales growth of around 10%, but profitability has improved by about 50%, reflecting gross profit from sales, together with overhead containment and continued improvement. In 2011 the focus on specialist site facilities for utility companies such as United Utilities and South Staffordshire Water was retained and the company has also secured a contract with Peel Ports.
Richard Coffey describes 2011 as “a bit of a teaser.” The first quarter saw strong trading results, but the company detected “a few unnerving signs” of a fall in confidence in traditional areas of its business. This has spurred it to sustain and intensify its efforts to diversify, efforts which are now bearing fruit. Richard Coffey says that, in the year ahead, this will be manifested in the establishment of new divisional partners and revenue streams for Supply UK.
Although Supply UK began a planned course of geographical expansion in 2008, Richard Coffey says that this has been tempered by the economic conditions and he describes his company as having “a bullish clarity” about the way it will develop with its capital investment increasingly directed towards new markets and products.
During 2011, Supply UK won a number of key contracts, including a three year rolling asset management contract with Lendlease. This year Supply UK will form a new venture - Vectora Europe Ltd - in partnership with the Brazil and US-based software and technology group Vector, which has core operations in oil and gas and utilities industries. Richard Coffey predicts that, within two years, Supply UK will develop a “quite different business mix, which will deliver much stronger cash generation and make us more resilient to market conditions.“
Richard Coffey concludes, “the tough challenges for 2012 will remain undiminished with expansion constantly being hindered by the capital markets, but, despite the uncertainty, we all live with each day, we believe that our business is stronger than ever.”
• Status COMMENT Private company
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