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Two channels to market
"We are not holding back"
Taking our industry's pulse
Market Report: Power Tools & Accessories
More from Makita
All in this together
Some sound results
Keep hire rates sensible
Executive Hire News › Archives › July 2009 › Executive Report : Taking our industry's pulse
Executive Report : Taking our industry's pulse
Following on from last month, EHN talks to a further cross-section of hirers about how they are faring in the current economic situation.
John Cranston, Partner, Bathgate Hire Centre, West Lothian
"Small builders and tradesmen remain busy. They may have less depth to their forward order books, but they are still hiring from us. It is the larger contractors who are hardest hit in markets like house building. However, I think the sharp decline has stopped and I forecast a slight increase until the winter slowdown, picking up again in spring next year.
We noticed a definite increase in business from cash customers hiring gardening equipment like tillers and strimmers during the summery weather in May. We have also picked up new accounts from some medium-sized contractors dissatisfied with service levels from some national hirer groups.
We continue to invest sensibly in the fleet, recently having added a Makita thickness planer which has proved popular, as well as Honda four-stroke brushcutters and Efco rotavators and mowers."
Mark Hatton, Hire Manager, Tool-Time, Bishop Auckland
"Like other hirers, we have been quieter since the downturn last year. Most of the decline is in long-term hire of equipment for larger construction projects like house building. However, some contractors are beginning to tell us that they are quoting for work now and, while you don’t want to be over-optimistic, this suggests contracts will eventually be placed and demand for equipment will begin to pick up.
Smaller builders are still hiring, particularly items like mini excavators for conservatories and extensions. Compaction plates are also popular, but just at the moment we’re not supplying anything like the number of mixers we normally would, suggesting that smaller tradesmen who already own basic tools and machinery are winning work and hiring the more specialised equipment as required."
Paul Lavery, MD, Balloo Hire Centres, Northern Ireland
"We are performing well and have diversified our business to the point that construction and civil engineering contractors represent only about 50% of our revenue base. These markets have been hit hard by the downturn and I don’t see any real signs of recovery appearing there until the banks get their acts together and start lending again.
Over the last nine months we have invested approximately £500,000 alone on MacGen generators for our new power division, and have also added CompAir compressors and GenSet welders to serve customers in non-construction markets. This is proving quite successful.
All four of our depots, which are located in Bangor, Belfast, Ballyclare and Lisburn, are doing good business and we continue to invest in our fleet. As EHN reported last month, we have added to our Takeuchi mini excavator fleet, and we have recently bought more Terex dumpers and Pike traffic lights. We plan to buy some Bobcat skid steer loaders in the near future. While some companies are downsizing, we have been working hard at growing our business."
Andy Johnson, MD, Miniquip Tool Hire, Garstang, Lancashire
"Serving a diverse customer base, we have lots of eggs in different baskets and that is helping us weather the downturn, although you still have to be cautious. However, I would say that business for us is no quieter, and we know of many small builders who have a lot of forward orders for home improvements and similar projects. Farmers are hiring pressure washers and industrial vacuums in order to clean yards and buildings, as they are inspected more regularly following the foot and mouth disease outbreak several years ago. There are also a lot of large houses in our area with big gardens, providing steady demand for equipment like aerators and strimmers.
I think a lot of people are using the economic downturn as an excuse to cover their own shortcomings. Also, a lot of our customers say they prefer dealing with a local independent hirer because they feel their business is valued and they know they will get good service."
Joe Hayes, MD, Marchstream Tool Hire, Denton
"We found January, February and March to be very tough trading months, but there was a marked improvement since. We have built up a loyal customer base and we strive to offer the best kit, service and support.
As well as tools, equipment and compact plant, we specialise in welding and threading products. This broadens our appeal to a wider industrial customer base and generates additional revenue opportunities for us. When I visited the Executive Hire Show, I was particularly interested in looking at compact battery powered access platforms like those from Youngman and Pop-Up, and I plan to add equipment like this to the fleet in the future."
Carl Banks, MD, P.E.T Hire Centre, Crewe
"Overall, business levels in our Tool Hire and Scaffolding operations are down, but we are still busy. You have to remember that hirers have enjoyed three or four years of exceptional market growth, so a downturn was inevitable. What we do find is that customers who previously might have taken equipment on long term hire are now bringing tools back after a few days, then re-hiring them as they need them - which certainly keeps our service staff busy!
We are actually expanding, with the imminent launch of P.E.T Rail. We are currently awaiting accreditation to the Achilles procurement register, which will enable rail contractors to place account business with us. We are adding specialist equipment to the fleet, and we will also be able to supply existing items from power tools and welders, to lighting and access platforms. It’s appropriate that the operation will be based at Crewe, a historic railway town. There are plans for a major new station to be built here in the next few years. We could also add P.E.T Rail depots around the country to serve contractors on a national basis.
I enjoyed my visit to the Executive Hire Show this year, and we must have spent approximately £60,000 there including an R150 Easylift tracked platform from Powerlift UK, and we signed up to the Redweb Security plant theft prevention system. More recently we have bought a compact Hinowa Lightlift tracked machine that offers a 23m platform height yet is less than 1m wide."
Duncan Macdonald, Partner, Bright Acres Tool Hire, Suffolk
"Our business celebrates its 25th anniversary this year, and over that time we have built a solid customer base. Both our depots in Stowmarket and Ipswich are performing steadily. We serve small builders, tradesmen and large local manufacturers as well as DIY cash customers. We tend not to deal with large contractors, so we are less affected by the house building downturn.
Our Kubota and Volvo mini excavators are doing particularly well for work involved with home extensions and landscaping projects. We know there is a lot of business to be had from the sheer number of planning applications being made. We subscribe to a listing service and every fortnight we mailshot applicants to tell them what they can hire from us, and this generates a good response. Just like during the downturn in the 1990s, homeowners are improving and extending their properties rather than moving. We are in a largely rural area and many houses have large gardens. Machines like our Timberwolf TW 13/75G chipper are popular, as are our Barreto rotavators from The Hire Supply Company, which are easy to use and virtually indestructible."
Ryan and Darren Miles, Co-Directors, Miles Hire, Swansea
"The past 12 months have certainly been challenging, but since the start of May business has picked up. We have 15 Kubota mini excavators of various sizes up to 3 tonne and they are in steady demand from DIY customers who are levelling ground for garden makeovers or preparing for foundations for conservatories.
They are doing as much work as they can themselves before calling in builders to construct extensions and the like, to reduce their costs. Similarly, many small builders are telling us they have six or more weeks’ work ahead of them: six months ago they were doing well if they had five days’ worth.
We are emphasising the positives, not the negatives, and we are adapting accordingly. We have added a shop area so that hire customers can buy their consumables from us, like Norton blades, Tornado fixings and Toolpak accessories. Previously, our business was almost solely hire. We continue to add to the hire fleet as necessary, a recent purchase being a Hilti DCH 300 electric disc cutter for dustless, fume-free work. And if a supplier offers us a good deal, we’ll always be interested."
Derek Coleman, MD, and Bryn Gaw, Manager, Cotswold Tool & Plant Hire, Chipping Norton, Oxfordshire
"We honestly can’t complain about the level of business at the moment. Overall it might be a bit quieter, but some days we have two of our six staff out on the road constantly delivering and collecting equipment. People are upgrading their homes with patios and extensions, while country estates near us are renovating cottages as holiday lettings. Our customer base also includes quarry managers, farmers, small builders and tradesmen.
Demand is steady for items across the board, from Youngman Boss towers and Makita power tools, to our Cormidi tracked dumpers.
We also have 18 mini excavators up to 3 tonne, which are always popular. It all comes down to offering good products and excellent service. We have a dedicated team and we will not let people down. We quote accurate delivery times and we’ll get equipment to people on a Sunday in an emergency."
Paul Fairhall, Director, and Steve Uragallo, Owner of LTS Powered Access, Beckton, with Youngman’s Peter Terrell
"No two days are the same at the moment. One day it’s quiet and the next the phone rings off the hook, with everyone wanting kit instantly. Overall, however, there is a lot of work going on. London never sleeps. The number of flats and houses being built may have fallen, but existing buildings have to be maintained. The amount of shop, supermarket and office refits and refurbishments also brings regular business, and turnover remains steady.
LTS Powered Access was formed four years ago as a sister company to London Tower Service, which supplies aluminium towers, podium steps and the like. We have 224 powered machines in the LTS fleet, chiefly comprising scissor lifts and boom lifts. We recently added four Youngman Boss X3 compact battery powered scissor lifts, with four more scheduled for delivery later this month. We already have 30 Pop-Up platforms, but the Boss X3 gives a greater working height of 4.55m.
Several national hirers regularly crosshire from us because we have such a large fleet, and being so close to the centre of London we can make several delivery drops quickly. We are flexible and offer good service. For example, much of our business comes from contractors working at night on the Underground, and equipment has to be delivered at 12am and collected at 4am."
Martin Sturgess, The Island Hire Centre, Newport, Isle of Wight
"Like on the mainland, the construction market on the island is very slow and a lot of sites have been mothballed. However, we have been established for 31 years and have an extensive list of regular customers such as small builders and tradesmen. We are on first name terms with them and understand what they need. We also do well selling power tools and we are a Hitachi main distributor.
Garden and grounds care machines have proved popular. Although last summer was wet, it was mild and the grass kept growing, creating demand for the Hayter lawnmowers that we sell and hire, as well as stump grinders from The Hire Supply Company and Hitachi long-reach pole saws. We attended the Executive Hire Show this year and in 2008, and it is important to keep informed about the latest equipment and potential new suppliers. Last year we made contact with Abnix, who we later commissioned to design our web site.
Looking ahead, the economic situation may have reached a plateau. An estate agent friend says he is valuing properties at prices higher than 12 months ago and that enquiries are picking up. The country as a whole just needs something that gives people confidence."
Peter Cockram, MD, HS Hire & Sales, Teignmouth
"Business is patchy, busy one day and quiet the next. However, our customers chiefly comprise small builders and tradesmen, who still have work on. We also serve non-construction markets such as managers of events and local shows, so we don’t have our eggs in one basket. Overall, I am remaining positive and when the upturn comes I believe we will all be stronger. The current difficulties will highlight the good hirers and suppliers, and ‘cowboy’ tradesmen will move to industries other than construction. The closed sites must eventually re-open and equipment will be needed.
We also operate a builders merchant activity here, offering bagged materials and the like. We compete with two other, larger merchants on the same estate, but we often win business because we can deliver to site within an hour, while they have to quote for the next day. It’s all a question of good service. I’m also being careful to replace old machines or equipment that we might sell from the hire fleet. I recently replaced two of our Bobcat mini excavators with similar models. It is important to keep the fleet in good condition because when the recovery gets under way, customers will demand reliable equipment."