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City News: Off to a good start Catherine Stratton reports on the positive start to the year made by leading hirers. Hire company shares have continued to generate the momentum of the opening days of 2007. February saw new ‘highs’ for Aggreko, Andrews Sykes, Speedy and Vp as our table shows. By contrast, the 2006 results of the UK’s largest plant hire operation, Hewden Stuart, might be called at best indifferent. The figures are, of course, incorporated within those of its Canadian based parent, Finning International. Overall, the Caterpillar dealer enjoyed a very strong year, which was described by its President and Chief Executive Officer, Doug Whitehead, as “outstanding”. For the Group as a whole, EBIT (earnings before interest and taxation) rose 39.8% to C$387.8m (£168.6 m). Hewden’s revenues of C$628.7m (£273m) were 1.3% up in sterling terms; the increase was the result of hire asset sales, while hire revenues reduced. The company ascribes the latter to “lower utilisation rates” and “its inability to achieve price realisation due to a competitive market in the UK”. Hewden’s EBIT of C$44.2m (£19.2m) was a decline of 6.3% in sterling terms. Hewden continues to go through various re-structuring processes. Most recently, changes have been implemented in the crane division. Of course, there have been suggestions that the company might be preparing to divest of its tool hire operations but the statement accompanying the results gives no indication of such a possibility, although it does say that “Hewden’s business model is being evolved through an assessment of products, network and structure to ensure that it continues to meet the needs of its customers”. The company expects this on-going assessment, together with the implementation of its new information technology system later this year, to be “key elements in meeting customers’ needs, increasing asset utilisation and reducing operating costs.” Last year, Hewden’s operating costs were reduced by C$17m (£7.4m) and the business reports that its head count fell by 3%. Readers may remember that when we considered Speedy’s interim results in last December’s City News, we suggested that the company was well on track to overtake Hewden as the largest hirer in the UK. This looks almost inevitable now as Speedy’s annual turnover must currently be running at more than £300m. It has recently been announced that Speedy has been shortlisted for two of the prestigious PLC Awards. Chief Executive Steve Corcoran is one of four candidates for the title of Entrepreneur of the Year, and the Group as a whole is in contention for the Best Investor Communications Award. The results will be announced at the PLC Awards Dinner to be held at the Grosvenor House Hotel on 8 March. Finally, the London Stock Market has been awash with rumours concerning Brandon’s parent company, Wolseley. First there was the story that Saint Gobain was contemplating a bid for the plumbing and building materials group; then came the suggestion that Wolseley might be looking to acquire the supply business of US giant Home Depot. Soon afterwards it was suggested that venture capitalist, Cinven, was investigating the possibility of a buy-out of Wolseley; this was subsequently denied by Cinven. • Executive Hire News › Archives › March 2007 › City News › Off to a good start
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