Continued tough market for Hewden
By Patrick Hill13 August 2008
Canada's Finning International said that "increasingly challenging market conditions" in the UK rental business will continue to affect the performance of its Hewden subsidiary.
Second quarter rental revenue in Finning's UK Group, which includes Hewden, was CAD$95.8 million. That figure was a 15.7% fall from $113.6 million in the same period last year. Revenue for the first half of this year was $189.5 million, down from $227.1 million during the first half of 2007 by 16.6%. The company said the decline was due to lower utilisation rates at the rental business.
Rental revenue for the whole company, which operates Cat Rental Stores in Canada and in South America, for the second quarter was $176.1 million, down 9.8% from $195.2 million in the same quarter last year. The $176.1 million, of which Canada delivered $65.0 million and South America $15.3 million, was 11.5% of total company revenues of $1.531 billion.
Finning said, "Various initiatives and efforts are underway to improve results from this business unit [Hewden]." The company had named Doug Sprout, formerly finance director, Finning Group UK, as executive director of Finning Group UK in July. As such, he leads Hewden, having replaced Brian Sherlock, who left the company on 4 July.
In its earnings report the company said, "At Hewden, senior executive management changes are expected to place renewed focus on operational improvements. It is expected to take several quarters for these improvements to become visible in operating results."
Foreign exchange transactions, according to the Vancouver, B.C-based company, continued to have "significant negative impact" on financial performance due to the stronger Canadian dollar relative to the US dollar and UK pound sterling.