Hewden reports 14.7% revenue decline in 2012
By Murray Pollok26 July 2013
UK rental company Hewden reported a 14.7% decline in revenues to £101.9 million (€118.3 million) for the year to 31 December 2012.
The company made total losses of £10.3 million (€12.0 million), which included a one-off charge of £4.5 million (€5.2 million) relating to the implementation costs of its new ERP software system and restructuring costs.
Hewden said the decline in revenues was mainly in the construction sector but added that it grew its market share in other sectors.
The lower sales prompted the company to review its cost base and accelerate the consolidation and restructuring of its depot network – it now operates 37 locations. The company is moving to a hub and spoke structure for its depots.
The company’s depot staffing reduced as a result, with an average of 518 depot staff during the year compared to 642 in 2011. However, Hewden continues to expand its sales resources, employing an average of 135 sales staff last year as against 101 in 2011.
In its annual accounts filed in July, the company said the business had the resources to continue operating for the foreseeable future and that cash flow projections up to December 2014 showed it was capable of meeting its banking covenants.
Hewden said the new Microsoft Dynamics ERP system would help the company’s growth strategy going forward; had introduced new ways of working; was providing real time information; and provided a solid platform for an improved customer experience.
The results illustrate the difficult operating environment in the UK construction sector, with construction output falling by around 8% last year and 19% in the five years since the start of 2008. The sector is forecast to decline this year, although by a much smaller amount.
In March this year the company introduced guaranteed next day delivery of its 30 most popular products. An initiative aimed at expanding its business among small and medium sized customers and regional players.