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Market Report: Garden & Grounds Care

Larger playing field

With growing demand for the hire of grounds care equipment, there are more opportunities for other hire companies to enter this market. Alan Guthrie reports.

Reliable service and rapid response are key ingredients in any successful hire business, and the grounds care hire segment illustrates this clearly. Just a few years ago, the market was dominated by nationally focused business like Swan Plant Services and SGM Hire, chiefly supplying local authorities with mowers and other equipment, typically for periods of one to three years. Competition led to increasing pressure on hire rates and eventually both companies went into administration. This created doubts in some customers’ minds about the very concept of grounds care equipment hire.

However, since both companies emerged from administration (as Swan Plant and SGM UK), they have re-focused their operations and are positive in outlook. “The business now has a fleet that matches the scale of its activities,” says Ian Hogg, Managing Director of Swan, whose three depots are at Hunscote in Warwickshire, Sunderland, and the Warrington head office. “People see more stability now in the market and a significant number of large contracts are coming up for renewal soon. A lot of flexibility is required: some local authorities want us to both supply and maintain the equipment, while others have their own workshops. We can adapt accordingly.

Credit squeeze

“Grounds care hire remains strong. Despite the wet weather earlier in the year, the grass has grown rapidly and councils have to maintain it. The current credit squeeze is creating further interest, since budgets for outright purchase are reduced. Some manufacturers’ dealers hire out equipment, but only on an ad hoc basis, and they can obviously only supply certain brands of machinery.”

Similarly, Steven McInroy, Managing Director of SGM UK, says “There are substantial pressures on our customers at this time, which are working in our favour, and we are beginning to see the benefits. Capital budgets are being increasingly squeezed and in the current economic climate we cannot see this getting any easier. Additionally, many local authorities are finding it extremely difficult to run a cost-effective maintenance operation for seasonal equipment within these current constraints, and our spot hire figures at the end of May were 42% up on last year. Another pointer is the way that a number of dealers are extending into the hire business.”

SGM, which has nine depots throughout Britain, recently won an order worth more than £1m for Hayter triple mowers and other equipment for Ringway, which operates the contract to maintain parks for Rotherham Metropolitan Borough Council. An existing arrangement has been renewed for a further three years, involving the supply of all-new machinery.

For Leighton Buzzard-based Browns Groundcare Hire, the market continues to expand steadily. “Business month-on-month is growing compared to last year,” says Hire Manager Andy Lathwell. “Surprisingly, some people still do not realise that specialist equipment such as top-dressers and overseeders are available from hirers like ourselves. Many golf courses, private schools and landscape contractors have had to reduce their machinery budgets, and hire is an affordable way of procuring equipment to maintain facilities to the high standards required.”

As we reported in March, Swan and Browns were the founder members of the Groundcare Rental Alliance, which aims to create a national network of hirers working to recognised standards. The intention is to make equipment more easily available to larger contractors working throughout the country. Andy Lathwell says there has been interest, such as from independent garden machinery dealers, although some had not appreciated the financial resources required - half a dozen ride-on triple mowers, for example, can cost a six-figure sum. Nevertheless, interest is expected to grow as more people realise the opportunities that exist.

Indeed, Simon Reynolds, Hire Director of Golf & Turf Equipment in Wokingham (which also has a separate machinery dealership and is part of the Lincolnshire-based Burdens Group, operating agricultural and grounds care machinery dealerships) says, “business is booming. After two years of considerable fleet expansion, we expected some consolidation, but I had to re-budget in February and we have invested a further £150,000 in additional equipment.

“We are picking up business that previously the national hirers would have had. Occasionally, we deliver to places as far away as Kent and the Isle of Wight, and our northern hire division in Lincolnshire can supply Glasgow and Wales. Customers will pay the transport costs to hire the equipment they need and it is obvious that they appreciate our responsiveness.

Investing in people

“We will not supply a machine that we cannot support in the field, and as we expand, we invest in people. We have just taken on two dedicated technicians for hire fleet maintenance, as our volume of business meant there was too much work for the staff in the workshop of our dealership.” Recent purchases include new 90hp John Deere tractors to power large attachments, Indespension trailers, BLEC’s Sandmaster compaction reliever, the Verti-Top synthetic turf renovator from Charterhouse Machinery, and Avant Tecno multi-tool carriers.

Acacia Groundcare Equipment Rental, based in West Sussex, is also serving customers over a very wide area. “We essentially cover the south east, including Sussex, Hampshire, Surrey, Kent and London Boroughs,” says Director Dale Hudson. “The market is buoyant for long and short term hire and we have steadily increased our fleet since officially opening for business eight months ago. We have added more Ransomes HR 3300T out-front rotary mowers, New Holland compact tractors and Stihl blowers and hedge trimmers.

”We have won business with national grounds care contractors on the strength of our customer relationships, based on efficient delivery, collection and backup. It really is a case of ‘people buying from people’ and we offer a real alternative to outright purchase. Looking ahead to autumn, we offer GreenMech chippers and the Hire Supply Company’s Compac post hole borers, and we have added a Ransomes Cushman utility vehicle with a core collector for efficient greens maintenance. Our service staff will service customers’ own equipment over the winter, helping iron out the seasonal peaks and troughs associated with grounds care hire.”

Opportunities for other companies

The fact that hirers are serving customers over such a wide area shows the demand that exists, and the opportunities for other companies. That is certainly the view of Murray Webster, Managing Director of Webster Power Tools of Wishaw, which continues to expand its hire business. “We are pro-actively targeting grounds care as a major market. We have just taken on a marketing graduate, three days a week for two months under a scheme called Shell Step devised by the oil company, specifically to devise ways of reaching these customers effectively, such as golf courses and landscape contractors. I would like to think that, eventually, we could service virtually the whole of Scotland; already we occasionally supply equipment as far north as Inverness.” The company’s expanding fleet includes Kubota and Takeuchi mini excavators, Bomag rollers, Hinowa tracked compact dumpers, Groundsman Industries aerators, Timberwolf chippers and Stihl equipment.

Other hirers could be similarly pro-active and compete on the larger playing field that now exists in grounds care hire. As Swan’s Ian Hogg says “there is definitely room for other local and regional hirers to enter the market, given the level of demand we experience, which is why we helped devise the Groundcare Rental Alliance.” All the other hirers EHN spoke to expressed similar views about the market potential. The simple fact remains that, whatever may happen in financial markets, the grass will keep growing and will always need to be maintained to the highest standards.

Executive Hire NewsArchivesAugust 2008Market Report › Larger playing field

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