Coates Hire reports ‘strong sales’ from Force acquisition
24 November 2015
Seven Group, the investment company which owns Australian rental company Coates Hire, has issued a brief market update outlining its current strategy in wake of Coates’ acquisition of Force Corp.
The company said Coates was leveraging market opportunities, with the Force deal delivering “strong sales”. It added that the acquisition had “optimised access equipment cap-ex for the next three years”.
However, according to a presentation given by Seven Group managing director and CEO Ryan Stokes, the general strategy for Coates was a focus on performance improvements.
“Coates Hire continues to streamline its fleet according to customer demand while remaining focused on safety and operational performance improvements. The company is the clear market leader in the rental services sector,” Mr Stokes said.
“There is a focus to deepen the customer relationships to ensure that Coates builds its leading market share, increasing the ‘share of wallet’. We are seeing positive results with infrastructure projects in New South Wales, while not completely offsetting the slowdown in resource projects; we are pleased with some of the early results.”
Mr Stokes added that Coates would continue to refine its cost base and optimise its branch network to ensure its competitiveness across its markets.
“Deleveraging will remain a priority with disciplined fleet investment and divestment. At the same time, Coates is opportunistically acquiring distressed complementary assets to efficiently increase revenue opportunities and cash flow.”
During the 2015 financial year, Coates reduced its employee headcount by 68 and consolidated some operating sites. Seven Group said that Coates had achieved a 30% improvement in equipment availability over the last 18 months through its strategy of unlocking the benefits of scale.
Seven Group said Coates’ average daily sales were beginning to see the benefits of the amended strategy.