CITY NEWS
WIDENING GAP
Catherine Stratton comments on Speedy’s trading update, and assesses the latest financial performance of the UK’s largest family-owned hirer, GAP Group.
Ahead of the release of its half year results, to 30 September, Speedy issued its trading update, which indicated that, in the UK and Ireland, revenues fell by 2.1% over the six months. The International division made good progress with a 28.5% rise in first half revenues. The domestic market, accounting for well over 90% of Speedy’s revenues, remains the engine of the group’s business, and it is unsurprising that the shares have shown weakness since the statement was issued in mid-October.
Speedy indicates that it has not seen ‘any material improvement in construction work’ in the UK and Ireland, suggesting that this is the reason for the continuing fall in its revenues. There have, however, been recent indications of economic recovery increasing in
momentum, with both third quarter growth and construction up.
This month our attention has been
The Anderson clan - Iain, Karen, Mark and Douglas.
drawn to the financial performance of the UK’s largest family-owned hire company, GAP Group. Its latest accounts for the year ended 31 March 2013 highlight the company’s year-on-year growth of 14% to take turnover to a record £97.6m, with pre-tax profits advancing by 35%. Even more encouraging is Joint MD Douglas Anderson’s forecast for this year as he anticipates that GAP is sustaining its expansion at a similar rate to take its turnover passed the £110m level.
Revolving credit facility
Post-recession, much has been said of the lack of bank finance for private companies, so it is also very encouraging to note that, to finance its expansion plans, GAP’s bankers agreed to a three year, up to £70m, asset-based revolving credit facility. GAP has confronted the challenges of the post-recession period head on, continuing to expand its depot network, and also introducing specialist lifting and non-mechanical equipment into its portfolio. Today, it has 60 plant and tool depots, a total of 25 lifting depots, of which 14 are
12
‘standalone’, with the remainder operating in plant and tool locations, and 11 non-mechanical outlets, of which six are ‘standalone’. A new plant depot is opening in Bournemouth shortly and, by the end of the year, GAP will also have opened its seventh depot in the London area at Waltham Cross, in the former Leach Lewis Plant facility.
Douglas Anderson attributes this considerable improvement to the way the company has always had a tight management structure, with Douglas and his brother Iain, as Joint MDs, both keeping in close contact with their depot network, and able to tighten their running of the business throughout the recession
without cutting back on that network structure. Now that the general economy is returning to growth, they are well positioned to reap the benefit.
Douglas says that trading has become ‘a lot busier since March.’ He believes
that confidence is returning and clients are gradually releasing more contracts. The mounting evidence of economic recovery should further strengthen this process.
For any successful family business, there is also the question of succession. Douglas fully recognises the need to reassure employees (and, indeed, customers) that the Anderson family have a long term commitment to this now valuable and attractive business. Douglas and Iain Anderson succeeded their father, Gordon Anderson, and now a third generation of the Anderson family is coming to the fore with Douglas’ son Mark, a qualified lawyer and accountant who, after five years with the company, is now GAP’s Commercial Director. Meanwhile, his cousin, and Douglas and Iain’s niece, Karen Greenshields, who joined the company three years ago, having previously worked for GE Capital on mergers and acquisitions, is now Manager of GAP’s 12 southern lifting depots. All the indications are that the Anderson clan can look forward to owning and running the UK’s largest family-owned hirer for many years to come.
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