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TOOL HIRE TOP TEN 2013 continued


BRANDON HIRE GROUP LTD


Group Managing Director Tim Smith Head Office


Telephone Number Website


Hire activities


Geographical coverage Status


COMMENT


Brandon’s change of ownership just over two years ago led to a period of adjustment as the company asserted its independence of builders’ merchant Wolseley. The modest growth in revenues in 2011 was a good performance against a background where the company had to re-establish its own management systems after four years of reporting to Wolseley, to make significant changes to its depot network and to find new business after the demise of its then largest customer in late 2010.


Brandon’s 2011 balance sheet was enhanced by £5.4m because of the termination of licensing agreements with Wolseley for sites under shared occupancy. This explains the fall in the depot numbers in Table IV; the additional cash also assisted Brandon in its acquisition of Phoenix Survey for just over £5m. This purchase added another specialist product range to Brandon’s portfolio.


At the time of the acquisition, Phoenix was generating annual revenues of £5m. In addition, Brandon generated sufficient free cash to make an early repayment of £5m to its private equity investor, Rutland, as well as achieving its scheduled bank debt reduction.


Brandon remains at No.3 position and has developed a contrasting strategy to that of its two larger competitors, mainly leaving them, and others, to pursue long term supply contracts with major contractors and other national undertakings, and focusing mainly on SMEs. This is proving to be a good market for Brandon, as the continuing lack of economic growth and confidence has meant that home owners and commercial enterprises have been forced to make do, mend and, where necessary, extend; as is usual in such times, the small builder has been, and continues to be, the major beneficiary.


Tim Smith says that the company has opened three further Phoenix outlets, in addition to five new tool hire branches in 2012, some of which represent consolidations of a number of small outlets in one area. For example, the company has a new branch in Gatwick that represents the consolidation of five local sites. Brandon is not seeing revenues decline by such moves, but it is reducing overheads, and thus enhancing cash flow and profitability. Tim Smith stresses


26


Feeder Road, Bristol, BS2 0TQ 01179 971 9119


www.brandonhire.co.uk


Hire of general tool and small plant, lifting equipment, piping equipment, survey and safety equipment, toilets, training National


Private company with private equity funding


that he perceives cash generation to be of a primary importance for his company in the current uncertain economic conditions.


In the forthcoming year, Tim Smith indicates that Brandon will be looking to extend further its existing specialist operations of lifting, pipe equipment and toilet hire by introducing them into more branches. Brandon has also been building up its ‘alliances’ with hirers who specialise in equipment outside Brandon’s remit. Tim Smith aims to strengthen such alliances, whereby the companies engage in crosshire to meet the requirements of their customers more fully and Brandon is seeking to establish more such agreements with specialists in other forms of equipment hire.


Looking at the prospects for the coming year, Tim Smith says, “I don’t expect to see much growth in the UK economy in 2013, which means we will need to stay focused on what we’re good at and keep a close eye on costs. But more importantly, we will continue to look at how we can deliver a better, local service to our customers at branch level. I believe that the steps we’ve taken help us stand out from the crowd. Sometimes it’s important to look outside your own industry to see what good service looks like, which is exactly what we’ve done. We will make it easier for people to trade with us, become even more flexible and reward customers for their business. The Phoenix investment has been a great success and, with a strong relationship with Rutland, we will continue to invest in the business.”


JEWSON HIRE Director of Tool Hire


Head Office


Telephone Number Website


Hire activities


Geographical coverage Status


Richard Pedersen


Merchant House, Birley Business Park, Coventry, CV2 2TT 02476 438400


www.jewson.co.uk/tool-hire Tools and equipment National


Division of Jewson, which has over 600 branches across UK. Jewson is part of Saint- Gobain Building Distribution UK and Ireland.


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