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City News: Hire Station impresses Catherine Stratton reviews the latest financial results from Hire Station and A-Plant. Vp’s annual results showed strong performances from most of its businesses with one of the most impressive coming from Hire Station. All parts of Hire Station delivered strong growth in revenues and, with costs being relatively stable, operating margins exceeded 10%, a near 50% rise on last year. Over two thirds of the growth was organic, coming from both the core tool hire operations and the specialist activities within Hire Station. The tool hire depot network has grown through greenfield site openings in Hull, Exeter and Skipton, and through the addition of three locations in Scotland from the ET Hire acquisition. A small number of greenfield site openings are planned in the current year. Vp Group Managing Director Neil Stothard says that Hire Station’s specialist businesses ESS Safeforce (which opened four new training centres in the year), MEP and Climate Hire have all performed very well. MEP has also added new locations and is now trading out of Heathrow, Manchester and Port Laoise in Ireland, as well as its original depot in Glasgow. The company says that the pipefitting market in both the UK and Ireland is growing strongly as customers move away from traditional threading methods, which will continue to fuel demand for MEP’s more modern alternatives. Hire Station’s air-conditioning and heating business, Climate Hire & Sales, was boosted by last summer’s flooding in Yorkshire and the West Country. There
have
been
rumours
circulating
for
some
weeks
about
the
imminent
disposal
of
Ashtead
Technology
to
Phoenix
Equity
Partners.
It
has
now
been
confirmed
that
Phoenix
is
backing
a
management-led
buyout
of
the
company;
the
consideration
is
£95.6m
cash.
The
proceeds
will
be
used
to
reduce
Group
debt.
Because
of
the
US
involvement
(Phoenix
is
American)
the
deal
was
announced
‘after
hours’
to
the
London
Stock
Exchange,
and
just
hours
before
Ashtead
posted
its
annual
results
which,
as
our
tables
show,
recorded
strong
growth
in
both
the
US
and
the
UK.
The
price
looks
a
good
one
for
Ashtead;
the
shares
had
closed
at
71.75p
on
the
day
of
the
announcement,
giving
the
company
a
market
capitalisation
of
£375.25m.
Thus
the
Technology
business,
which
contributed
4%
to
the
Group’s
2008
EBITDA
has
been
sold
for
the
equivalent
of
25%
of
Ashtead’s
Stock
Market
value.
Programmed investment has seen the average age of A-Plant’s fleet fall to 23 months from 29 months a year ago; physical utilisation has improved by 2% to 71%. In addition, the initiative commenced in April 2007 to move to fewer, larger locations is clearly helping to promote efficiencies and thus leading to better returns. The final quarter of the year (i.e. from February to April) saw A-Plant gaining further momentum with physical utilisation rising to 74% on a fleet that was on average 12% larger, giving A-Plant a strong platform and confidence in the prospects for its new financial year. • Executive Hire News › Archives › July 2008 › City News › Hire Station impresses
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