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Profile: A-Plant “All time high” Robert Aplin talks to the senior management team at A-Plant that has re-built and re-shaped the company in the last three years. In mid-March 2003 there was an announcement that Ashtead Group plc was about to default on its senior bank loan facility. It subsequently deferred its interest payments, cancelled its interim dividend and postponed payment of its loan stock interest. As a result, Ashtead saw its shares fall to a new low of 2.25p; at the end of April 2003, it owed £622m. Customers, suppliers and investors lost confidence in the company and its future seemed precarious to say the least. Whilst much of its revenue, and accompanying problems, derived from its American operations, UK subsidiary A-Plant was badly hit by these difficulties, which precipitated a sharp decline in customer confidence. This forced the company to set about re-structuring its operations. Financial results to April 2004 showed a gradual recovery in the UK as A-Plant continued to battle through and restore its credibility. On the announcement of its results to April 2005, its profitability was largely re-built as the company reported a near trebling of operating profits to £11.7m on a virtually unchanged turnover of £156m. In its most recent year to April 2006, A-Plant generated turnover of £160.7m and operating profits increased by 22% to £13.9m. An analysis of this turnover reveals that A-Plant’s Specialist division contributes £65m; main plant adds another £60m and its tool and equipment activity, Tool Hire Shops, accounts for £35m of the total turnover. Incidentally, the company’s basic distinction between plant and tools is that tools are petrol engine or electrically powered and plant is diesel-powered. A-Plant currently operates 70 Specialist outlets, 58 standalone tool hire operations, 52 combined plant and tools and 18 standalone plant outlets. The senior management team now responsible for transforming A-Plant’s fortunes comprises Chief Executive Officer Sat Dhaiwal, Finance Director Tony Durant, Marketing Director Asif Latief, Steve Shaughnessy, who is Managing Director of its Specialist Products Division, Paul Fereday, Managing Director for the combined Plant and Tools business, and Gary Thompson, UK Sales Director. Foundations in place Sat Dhaiwal, states “we now have spent the last three years evaluating the markets and the products we want to be in, and the foundations are now in place. We now have a platform to drive the business forward, there is a huge buzz about the place and our opportunities are endless. The senior management team is as strong as it has ever been and we all have the same focus. “In the last quarter of our financial year to April this year, we moved forward significantly with turnover improving 8% and the target is double digit growth this year. Consolidation within the contracting market will benefit us because contractors are increasingly looking for national suppliers with the latest products. They want a ‘one-stop’ solution for hire, service and after-care. As contracting groups get larger, it is not practical to increase their number of suppliers and they will consolidate their supplier base. “The key component of our growth strategy is to double our market share in the next three years both by acquisition and greenfield development. We now have the sales support team in place to help us deliver this. This territory-based sales team has the necessary product knowledge to solve customers’ equipment needs and resolve their problems. We have removed the burden of time reporting for salesmen as a customer support team now undertakes this function, thus ensuring salesman have more selling time. Apprentice support programme “Our commitment to attracting quality people is such that we have 65 apprentices this year - double that of last year - at various stages of the NVQ process and a further 63 are being recruited by September. We are in the final stages of implementing a new apprentice support programme. Under this all new apprentices and their parents are welcomed to A-Plant at special receptions and induction days organised by the company. Each apprentice is appointed a mentor to offer support and guidance throughout the apprenticeship scheme and a Personal Development Plan is created for them. “We have Training and Development programmes for every employee, delivering an average four training days per person per year. The company trains employees on over 100 courses, including technical training, Health & Safety and management and skills-based training. Much of this takes place at our National Training Centre in Manchester. “We believe that this is the first purpose-built facility of its kind in the industry. Our investment in employee training is worth over £1m per year. Our human resources team and training function has provided training that has dramatically reduced staff turnover by over 50% and added the equivalent of over £500,000 to the bottom line.” Highest-ever investment In this current financial year, A-Plant has committed its highest-ever investment in new equipment to support the management team’s ambitious growth plans. Planned capital expenditure over the next 12 months will be over £80m in new equipment during the last financial year. The first wave of the new investment comprised over £37m worth of orders delivered in the first quarter to July. This first tranche of investment has added new products in virtually every type of activity operated by A-Plant. It includes a £500,000 order for tracking devices from Enigma Vehicle Systems, a specialist in security and safety systems for commercial vehicles, plant and equipment. The orders cover the purchase, installation and monitoring for the new security system called Enigma Skyline to provide increased security for new machines purchased from JCB, Ingersoll-Rand, GenSet and Terex, in separate orders worth from £2m-£5m each. A-Plant believes that the ability to track and monitor equipment using the Enigma system will help to reduce costs for both the company and its customers. A-Plant has even found time to be involved in a new product development project with Bradley Doublelock and McNicholas plc to produce a new plant trailer system, launched at SED. The Sentinel plant trailer and load management system is said to represent the biggest step forward in the towing industry in over 40 years. The project was conceived in 2004 after McNicholas approached Bradley to build a trailer which would be capable of overcoming the problems associated with conventional trailers, such as premature pin wear and front axle overload due to a mismatch in towing heights between towing vehicles and plant trailers. According to Sat Dhaiwal, “as McNicholas’ long-term plant supply partner, we were invited to contribute using our vast experience of trailer operation and repair. We have just placed our first order for Sentinel trailers to be used on construction contracts being carried out by McNicholas.” Whilst the investment in A-Plant’s plant fleet is substantial, it has not neglected Tool Hire Shops’ needs. Expenditure on tools and equipment purchases from Belle, Macdonald, Hilti, Makita, Hilta, SPE and Wacker have a combined value in excess of £5m this year to date. Sat states that “we are committed to developing Tool Hire Shops within our plant depot network and we are looking to expand the operation to over 100 outlets.” Specialist Products Division Expansion in the Specialist Products Division is reflected by a £1.5m order for accommodation units from Ultra, another £1.5m order for trailer-mounted platforms from Niftylift, as well as JLG powered access equipment worth over £5.5m. In addition, over £1.2m has been spent on traffic products from Pike and SPW; new Acrow edge protection equipment worth over £500,000 from K-Guard; and welders worth around £1m from ITW Miller and Arc-Gen. Of the six Specialist Products Divisions, Powered Access operates a fleet of over 1,500 units from telescopic booms and scissor lifts to personnel lifts and trailer-mounted platforms. This business has recently expanded its Height Safety Training business with the opening of two new training centres in Gatwick and Staines in Middlesex. A-Plant states that it is now sixth in the International Powered Access Federation (IPAF) performance league out of a total of 95 accredited centres, in terms of licenses awarded to customers. A-Plant Accommodation operates from 14 locations and has a fleet in excess of 16,000 units from portable toilets and security stores to modular buildings and welfare units. According to Steve Shaughnessy, the most significant development in this activity is the move out of timber products into steel. The Acrow division supplies formwork, falsework, groundworks equipment and trench shoring. Steve adds “based on the growth projection, we plan to split this business out into a separate division.” A-Plant’s Power Generation and Rentarc welding operation is “moving more into the industrial market and is working on several retail and institutional projects like hospitals and communications providers.” The Traffic Systems division is described as “one of the largest hirers of portable traffic signals in the UK. Along with Acrow, it is probably our fastest-growing activity.” With six locations, the Rail division is the smallest of the Specialist Divisions. “Whilst most of its products are not dissimilar to tool hire, the operation itself is significantly different because we offer a 24/7 call out facility. In addition, all its equipment is delivered to site by Personal Track Safety (PTS) trained staff. The prospects for the Rail division are good, especially in the south east of England with network development in time for the Olympics.” “First depot of the future” A-Plant has also just opened what it describes as “our first depot of the future” in Chesterfield. It has traded in the area for over 10 years and operates two additional depots in the town, offering both plant and tools and Acrow products. Over the last seven months, the company has overseen a major building project whereby its old premises have been demolished and a new 5,000ft2 building, workshop and yard area has been created. Paul Fereday contends, “the new flagship depot incorporates the latest IT, environmental, interior design and architectural features to allow the facilities to be adapted in the future to suit customers’ requirements. Significant features of the design and build include the use of structured cabling to allow for any future IT requirements to be accommodated and the installation of IT terminals to allow major contractors to work directly from the depot. New flexi-faced illuminated signage has been installed, as has energy efficient lighting and a mezzanine floor to optimise the use of space.” A-Plant’s recovery has also been recognised with a number of awards in recent months. In addition to winning the Excellence in Training Award at the HAE’s Hire Awards of Excellence 2006, Group Chief Executive George Burnett was named Hire Person of the Year. In addition, at the National Business Awards North West Regional Finals 2006, A-Plant won both the Customer Focus Award and the HSE Health and Safety Award. Sat Dhaiwal is understandably “delighted to have won these Awards which are rigorously judged by pre-eminent business experts. Over the last 12 months, we have made fantastic progress in creating a ‘Customer First Culture’ and we have really focused on extending our Health and Safety responsibilities to customers, suppliers and employees by introducing an extensive site safety pack, which has been applauded throughout the industry. It is excellent that the advances we have made have been recognised.” A-Plant deserves great credit for hauling itself out of the mire it was dropped in three years ago. Sat Dhaiwal contends that the company is “at an all-time high, even going back to the early 1990s” and it is hard to argue with him. With question marks still hanging over at least two of the other Top Ten hirers, it is important for a healthy industry that A-Plant competes strongly again at the head of the market. We applaud its efforts in getting back on a growth path and wish the company continued success in the years to come. • Executive Hire News › Archives › September 2006 › Profile: A-Plant › "All time high"
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