Hewden expects strong fleet investment to continue
15 October 2014
UK-based rental company Hewden plans to invest £60 million (€75 million) in its fleet in 2014, and CEO Kevin Parkes said he expected this investment momentum to continue in the coming years.
Mr Parkes told IRN, “We invested less than £10 million (€12.5 million) a year ago, but about 95% of our latest investment is fleet replacement capital expenditure.
“So year-on-year the fleet is actually smaller than it was last year, but utilisation is much higher. We may have sold a particular type of asset and replaced it with a newer version – so we have dramatically reduced the age profile of our equipment.
“Clearly we didn’t invest heavily in 2012 and 2013 so we’ve got a lot of catching up to do, this will continue in2015 and 2016.”
Mr Parkes said the UK rental market was looking more healthy this year, adding, “It’s an encouraging market for me, not a run-away market like it was pre-recession. Housing drives everything, and this sector is well and truly recovering.”
Core Fleet success
Hewden launched its Core Fleet Guarantee initiative last summer – a scheme under which it offers next-day delivery on its most popular products – and Mr Parkes said this was having a clear impact on business.
“We have completed over 55000 deliveries so far under the scheme, with a fixed price delivery charge. Our units on hire to local customers are up 20% year-on-year, and we’re finding that under 1% of the time the customer does not get the product on the day we said we’d deliver it.
“Also the amount customers spend every day is increasing as well – signal that the market is improving. Currently about 40% of our revenues are represented by Core Fleet now – we added cranes and site accommodation to the initiative this summer.”
Hewden also launched a Capital Core project this year, offering equipment rental to contractors working on London’s largest projects.
Mr Parkes said London was “by far and away” the busiest geography the company had in the country at the moment.
“We want to win our fair share of this market,” he said. “For our depots that were further afield on outskirts of London it was becoming increasingly difficult for them to deal with orders from large central London sites making special request for high tech, low emissions equipment.
“Invariably we were sourcing from a variety of depots from around the London area, having to move machines around far more than was useful. So we created a London hub depot – all the equipment in there is already to the standard required, meeting the latest safety, emissions standards etc. This means we can be more nimble and focussed.”
Mr Parkes said currently around 20% of Hewden’s core revenues (the core fleet revenues that represent 40% of the overall business) came from in and around the London area.
“We’d like to see that double over next 12 months – London is the centre of all things construction at the moment,” he added.