Speedy confident despite UK economic fragility
By Murray Pollok19 August 2011
Speedy Hire said it remained confident that its rental business was on course to benefit from substantial investment in industries such as power, water and telecommunications, despite the continued fragility of the UK economy.
David Graham, the managing director of Speedy's UK Asset Services division, speaking at a briefing of the trade press in London, said the company was more optimistic that it had been for years. "Our feet hit the bottom of the ground a year ago...you can start managing the business when your feet are on the ground and they have been for a year."
"I think this year will end even stronger than it has started", he said.
Mr Graham pointed to planned investments in the UK's utilities sector and in markets such as the decommissioning of nuclear facilities.
Speedy is benefitting from major projects: construction work on the London Olympics is nearing completion but Mr Graham confirmed that the London Crossrail project will be just as important for the company.
Such is Speedy's confidence in its own forecasting systems that it is considering selling its forecasts to professional industry watchers.
Speedy said its six month forecasting system - developed in-house by its marketing group - was proving so accurate that it was seriously considering selling the data to a "professional commentator". Speedy's marketing director, Steve McIntyre, said; "We are definitely looking at the possibility of selling the data."
If that is a departure from the norm for most rental companies, Speedy has also been differentiating itself from pure tool hire by offering wider services than simply the provision of equipment. Mr McIntyre said advisory and training service were becoming an important part of the business, although he said hire would remain the core business. He said he could see a time when advisory services represented as much as 25% of group turnover.
These services remain closely linked to the provision of rental equipment; "On the Olympics project we were training thousands of people every month, and that was linked to equipment they are using", said David Graham, "We aren't just a hire company any more, and we haven't been for several years."
Speedy continues to look at potential new markets outside of the UK. Steve McIntyre said the Middle East business was progressing well, and added that Speedy staff had now returned to the massive Festival City project in Cairo where work had stopped following the Arab Spring uprisings. Speedy is providing rental services to Carillion on the project.
Meanwhile, David Graham said Speedy continued to invest in ‘green' equipment, with fuel savings or reduced CO2 emissions machines becoming more important to its customers. "The goal of our ‘One Plan' [for sustainable business practices] is to source 100% of kit from green available equipment. Wherever there is a green option available we will choose that."
Mr Graham cited as an example its contract with TowerLight to buy several hundred of its VB9 lighting towers. These towers use less fuel than conventional models and have light sensors to turn the tower on and off automatically, saving fuel and labour. Speedy said it had "bought the production capacity" for the VB9 for the immediate future.
Speedy also shed some more light on the changing contractual practices now playing a part in the UK's rental sector. The focus on creating close relationships with large contractors remains, but wider framework contracts with the ultimate client - such as a utility company - are also now being discussed. Under these contracts, all contractors working on a client's projects have to use Speedy as their rental supplier.
Mr Graham said these kinds of contracts were more common in the utilities sector than in construction, although he said Speedy had recently signed a three year contract with Tesco under which contractors working on Tesco projects will need to use Speedy.
Steve McIntyre said; "I can see going forward there will be more and more of this kind of thing, but also involving the main contractor".