Failures to come warns UK plant hire investment report

Catherine Stratton, author of the respected Plant Hire Investment Report, said the UK plant hire sector was facing one year or more of further decline in demand and that a rising level of business failures was the likely result.

Mrs Stratton, writing in the just-published Plant Hire report for 2008/9, said plant hire companies in the country were continuing to borrow heavily in early 2008 as demand levels remained high; "They now have to come to terms with their depleted marketplace and we have seen several of the major companies grappling with depot closures, fleet disposals and redundancies.

"Companies like Speedy, Ashtead and Hewden have been quick to take action and this should help them in the longer term. For some it is too late; we have seen several smaller companies entering into administration and with no sign of any let up on the economic front, we must expect more casualties." Mrs Stratton said failures were most likely among smaller/medium sized companies.

Four of the 75 companies featured in the plant hire report have entered administration in the past year - Access Rentals (acquired by Haulotte Group), Hampshire Plant Hire (now trading as Hampshire Plant & Access), Kent Sweepers (still in administration) and WD Bennett's Plat & Services (now Bennett's Cranes Ltd).

Mrs Stratton writes that several of the companies in administration were sold very quickly under pre-packaged deals; "We are concerned by the growing number of these administrations and by the consequent high level of bad debts hitting unsecured creditors, quite a few of whom are also hirers who have re-hired equipment to these companies."

The Plant Hire report provides a wealth of financial information about the UK plant hire sector, including lists of the 75 largest plant holdings, the 74 largest plant hire customers, and a table of the largest 100 UK plant hire companies based on fleet holdings.

Also included are several lists looking at the profitability of rental companies. For example, analysis of 71 of the top 75 companies shows that the average revenue per employee is £118.4 million (€138 million).

The highest revenues per employee are reported for Premier Oilfield Services (£604000/employee), followed by Aggreko (£294 million/employee), Seatronics (£283000/employee) and Fork Rent (£275500/employee).

The report costs £499 (€584) and can be ordered from the following website: www.phir.co.uk.