Interview: Eve Trakway's Rick Barnett on renting temporary roadways.
By Murray Pollok22 December 2008
Eve Trakway rents temporary roadways and other products to the events and industrial markets. Murray Pollok talked to managing director Rick Barnett about the company’s plans to expand rapidly over the next three years.
You would think that a wet summer would benefit a company that rents out temporary roads and walkways. In fact, Rick Barnett, managing director of Eve Trakway in the UK, says it brings complications; "We're very busy in the summer anyway. The weather doesn't help us - the issue is that customers want to hold equipment for longer or want more equipment. In the peak season we want to be able to move equipment quickly and make sure it is cleaned properly for the next job. It was a difficult summer - it stretched us to a point."
Hopefully there will be fewer difficulties next year as the company will invest in boosting its rental fleet to cope with what it now anticipates will be another wet summer; "We are assuming that after three summers in a row it will be wet again next year", he says.
The fleet expansion will be just part of a growth strategy that was given added impetus earlier this year when Eve Trakway obtained additional funding from private equity firm LDC. This will allow the company to spend around £1 million on growing its existing fleet of temporary roadways, walkways, fencing, barriers, bridges, stairways and grandstands, as well as pursue acquisitions on related products.
Acquisitions will play a central role. For example, the company has just bought Salisbury-based Fluid Event Interiors, a £1 million (€1.2 million) revenue company that specialises in flooring and interior ‘dressing' of temporary structures used in events, including sound and thermal insulation systems.
"We're pursuing four other acquisitions and hope that two will be completed before next summer", says Mr Barnett.
He is quick to say that Eve Trakway is not aiming at being a ‘one-stop-shop' - a concept he now prefers to avoid. Instead, he wants to offer a wider range of products "that customers expect us to deliver", with a focus on non-powered, "lightly-serviced" items. This would exclude such event perennials as portable toilets, and even temporary structures, marquees and tents; "The UK has lots of good tent companies, it would be pretty foolhardy to take that on. But we want to service the industry, hence the linings acquisition."
He will not be drawn on what other products he wants to add, but does allow that there is room for the company to offer more temporary grandstands - the company currently offers around 5000 seats.
Any further acquisitions will help the company achieve its goal of growing turnover by 60% over the next three years, a rate of expansion that will maintain its recent performance, with a 27% increase in sales to £16.5 million (€20.5 million) last year following the management buy-out in 2006 from Babcock plc.
Of course, the dramatic financial events of the past few months will have an impact. Speaking to IRN at the UK's major events show, the Showman's Show in Newbury held in late October, Mr Barnett says the company is 5% ahead of its growth target this year.
However, "We're wary of what next year is going to bring", he says, "Most industrial customers - major infrastructure projects - are unlikely to drift away in a recession. And in events, the major shows like Glastonbury [where Eve Trakway supplies the massive perimeter fence] will go ahead. [But] it will be interesting to see how the smaller events go - that's a business that we like: they are the acorns, and some will grow to become major events." Small events like these represent less than 20% of the company's business.
It is the diversity of customers that will help the company weather the downturn. Around half of turnover could be defined as ‘events' - from pitch coverings for music concerts to fences for agricultural shows - with the other half ‘industrial', including temporary roadways for the railways, construction, water, power and telecoms industries.
Continued investment in maintaining and renewing the UK's infrastructure networks will help Trakway. "There is still a big demand form the UK infrastructure market; pipelines, power network repairs - that's not going to go away", he says, although adding that a slowdown next year would not be a surprise.
There have also been trends in the events market that have benefited the company, in particular the growth in big music concerts staged at sports stadiums, where Eke Trakway provides temporary coverings for the playing surface.
That sector has been growing at 20% annually for the past three years and now represents something like a fifth of its total business. "I'm rubbish at predictions", says Mr Barnett, "In 2003, I was sceptical about plastic flooring - I though the market for big venues and bands was going down - but our growth in that sector is massive." He is expecting it to cool off a little next year - with a single figure increase - but the company will still invest in more pitch coverings.
One benefit of these projects is that the coverings are rented out all over Europe, even though Eve Trakway has offices only in the UK. Mr Barnett says the aim is to work through partnerships rather than to expand outside the UK. "We're not passionate about going into Europe", he says, "we're passionate about growing the business in the UK."
It has partners in Germany (former sister company EPS), Ireland (Allspace), France (Envhyro) and also in Spain with a toilet rental company.
These are sufficient to give it an outlet to the European market, and that's the way it will stay. "We've found it works better with agencies, rather than competing with indigenous suppliers", says Mr Barnett, "They know the market, they speak the language - it's less arrogant."
It will also look for alliances in its home market. For example, it has just entered into a rental partnership with Select Plant, the massive rental division of contractor Laing O'Rourke. The alliance will give Eve Trakway access to lighting tower and generators that are popular events rental products, and provides Select with an inroad to events.
The importance of events obviously gives the business a pronounced seasonal nature, with the busy period between May and September. "We want to see utilisation above 70% across the year", says Mr Barnett, "It's higher than that in summer, and we use the lower demand in winter to refurbish the equipment."
It's a season that has lengthened over the years. Mr Barnett remembers a time when it was pretty much from June to August. The other change, of course, is the weather: Eve Trakway will be ready for more rain next summer.
=== BOX STORY ===
The 2012 Olympic Games in London must be the UK's most hotly contested rental project, with hundreds of millions of euros worth of contracts likely to be issued in the coming four years.
Events rental companies are among those to be at the head of the queue, with temporary grandstands, fencing, walkways and floor coverings all on the organiser's rental hit list.
However, Eve Trakway's Rick Barnett sounds a note of caution; "Where is all the equipment going to go when the games are finished?" he says. He cites some items where tender documents indicate a demand that is three or four times the size of his own total fleet, which is one of the largest of its kind in the UK.
"The challenge will be to find people to do it, the volume required", he says, "We can't just say goodbye to our existing customers. If there is work to be done, we'd like to do some of it - and consider buying equipment - but we don't want to see 1000s of metres of fencing dumped on the market after 2012. They [the organisers] don't want that ether - they are not supposed to damage the economy."