SPECIAL REPORT continued
Hewden’s crane hire fleet is now being auctioned off.
John Jennings was outraged that Hewden ‘publicly advertised a deal exhorting users to send back kit they already have on hire from you and me and, instead, hire similar kit from Hewden, which offers a rate match, free delivery and the first week’s hire free!
‘This wheeze has, at a stroke, knocked Hewden off the pedestal it once occupied as the UK’s leading hirer, and the company has squandered the right to be regarded as a moral leader. At a time when we look to our larger counterparts for a steady and responsible approach to doing business and retaining the hard earned reputation of our industry in the eyes of clients and authority, Hewden’s present management act like a gang of car boot traders.’
I was told in that 2014 interview that fleet investment was £51m, although, surprisingly, £25m of this was invested in 450 Cat telescopic handlers. A year later, in January 2015, due, you would surmise, to the fall in revenue to £105m and a pre-tax loss of £16.6m, another new senior management team was installed. Their strategy was seemingly to overhaul the previous management team’s plans, and so another internal review of the business took place.
Invest heavily for quicker return
This latest - and last - new senior team then started to invest heavily in equipment they believed would give Hewden a quicker return on its investment. They also invested in new product groups, rather than its traditional earthmoving plant fleets, which had been over- invested by previous management and were under-performing.
In a flurry of activity early last year, Hewden acquired Interlift, a regional lifting gear and materials handling hire and sales company, as well as the rental arm of hybrid generator manufacturer, Firefly. At last year’s Executive Hire Show, it announced that it had bought 50 JCB skid steer loaders, and added 120 SDMO units to re-generate its power fleet. To support its fledgling Events Division, Hewden invested £2m on a range of non-mechanical equipment including fencing panels, crowd control barriers and ground protection mats. Last autumn, it also expanded its lighting tower fleet with the addition of what is believed to be over 500 new machines.
Swamped with Cat kit
Having swamped Hewden’s hire fleet with Cat kit during its stewardship, Finning sold Hewden in May 2010 to another North American owner, private equity company, Sun Capital Partners, for £110.2m. Having completed the sale, Finning’s President commented, ‘owning a large, short term rental business operating separately from our UK dealership does not align with our strategic objectives.’ Sharp as a tack, Catherine Stratton, our former City News analyst, retorted, ‘Many wondered why Finning thought it would ever do so.’ She also added, ‘many doubt that Hewden will ever reclaim the exceptionally high status it once enjoyed.’
And so it proved. When I interviewed the next senior management team in January 2014, the under-performing depot network had been rationalised from 58 to 33 outlets, 21 of which were plant depots, four were accommodation sites, while the additional eight locations were industrial sites. The post-Finning management also had to address the over-supply of Caterpillar equipment. One of my abiding memories of the Great Speedy Sale in March 2009 was the sheer number of Cat mini excavators being auctioned. Having bought Hewden’s tool hire operation two years earlier, Speedy obviously decided that plenty of Cat kit had to be disposed of, and Hewden soon followed suit.
19
This strategy, however, did not work quickly enough to turn Hewden’s fortunes around. Industry rumours, which had been circulating for weeks, were confirmed in late October when national newspapers reported that the company needed to re-finance £190m of borrowings, which were about to expire. In its response, Hewden seemed to blame its dire position on a construction slowdown following the Brexit referendum, which seems more like a convenient excuse than a credible reason.
Apart from the access machines acquired by A-Plant, much of Hewden’s plant fleet being auctioned is still in warranty.
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