TOOL HIRE TOP TEN 2013
HIRE OUTPERFORMS UK ECONOMY
Catherine Stratton presents her 12th annual review of the UK’s Top Ten tool and equipment hirers.
2012 was another disappointing year for the UK economy with little or no overall growth; against this backdrop, the indications are that the tool and equipment hire market is still growing. There appears to have been little significant change amongst our industry’s Top Ten, with the exception of the change of ownership at HSS, which was discussed in our November/December issue.
For the Top Ten hirers, the name of game appears to be one of retaining existing customers and attracting new ones by widening and deepening equipment and service offerings. Over the past year, Brandon’s purchase of Phoenix Survey and, more recently, HSS’ acquisition of Abird Generator Hire are examples of ‘buying in’ additional expertise and products. Elsewhere, new product lines have been launched such as the new Confined Space Monitoring Systems introduced by the ESS division of Hire Station.
Hire Station was also involved in one of the rare acquisitions of 2012. In July, it bought Balfour Beatty’s survey and safety equipment business and, as has become customary when buying the hire interests of a contractor, the companies entered into a supply agreement. A month later, in a similar deal, A-Plant acquired the mechanical plant and tools unit of Kier Plant. With the overall outlook for construction remaining bleak, it would seem probable that we will see more examples of contractors divesting of peripheral plant interests.
Overall there have certainly been no dramatic changes within the market. The Top Ten appear to have now reduced their depot networks to a size that is commensurate with the current market, and it is more a matter of gently ‘tweaking’ the system, rather than any radical changes. After a particularly torrid time, No.1 hirer Speedy is now showing signs of recovering its profitability and beginning to reap benefits from its period of retrenchment and re-organisation.
Like Speedy, other companies such as HSS and Brandon have re-configured depot networks to meet the needs of their customers and to improve operational efficiency. Over recent years, the focus for the Tool Hire Top Ten has moved from putting the maximum number of pins on the map to a much more strategic approach to depot locations.
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The hire activities of builders’ merchants - TP Hire, Jewson Hire and Hirebase - have taken a different approach as they seize the opportunity to make use of the wide range of locations within their parent companies. They are able to expand their equipment offerings into their respective builders’ merchants at a much lower cost than that of opening ‘standalone’ hire outlets and they are achieving good growth through penetrating the customer base of their own groups.
This is the 12th annual review of Tool Hire Top Ten and, over the years, we have used a number of statistical tables to identify the qualifying companies and we have made some modifications when we have felt them merited.We are the first to admit that the methodology is not perfect because the definition of tool and equipment hire is somewhat opaque.We continue to adhere to our customary definition of the tools and equipment that have now become an accepted and integral part of the Top Ten hirers’ fleets. While most of these companies have developed specialist offerings within their fleets, they are not specialist hirers in the same way as companies such as Aggreko or Nationwide Platforms are.
In compiling the statistical data, we are confronted by a number of perennial problems: 1. As we mentioned earlier, three of the Top Ten are owned by builders’ merchants and operate within their locations. Thus they are not ‘standalone’ businesses and do not produce publicly available accounts. Both TP Hire and Hirebase have supplied us with limited data; Jewson Hire, sadly, has declined to give us information and we have made our own estimates. 2. A-Plant and GAP operate combined plant and tool hire businesses and they have provided us with the relevant data. 3. We have reduced the published revenue figure for Speedy to adjust for the income from its larger power generation equipment. 4. By their very nature, figures based on company accounts are historic; they also cover different accounting periods viz.: 31 March 2012 for Speedy, Hire Station and GAP; 31 December 2011 for HSS and Brandon; 30 April 2012 for A-Plant and Supply UK. Each year we attempt to up-date the revenue figures with our estimates of Current Revenue as detailed in Table 1A.
This year we have introduced another statistical table; Table III shows Revenue as a percentage of Gross Book Value of Equipment. This is
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