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EP_19.jpg March/April 2005
Cover Story
Interview
Major Project
Solarcentury
Speedy Hire
Besix
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HIRE EXPECTATIONS
Speedy Hire is a rapidly expanding operator, supplying tools and equipment to the British construction industry.

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Speedy Hire, an established company with a reputation for excellence, is a national leader in terms of tool hire and has a wide array of different divisions that support its core business. With this solid base to build upon, the company is continually looking for opportunities to grow and expand its operations, either organically or through acquisitions. These additions subsequently become separate divisions of the company, operating autonomously from the main business, but supporting the incessant growth that Speedy Hire has been experiencing since its conception.

Founded in 1977 as Livesy Hire, a subsidiary of the Allen Group, the company has since undergone a sustained period of prosperity, becoming a separate entity and creating its own niche in the market. For the last eight years, Speedy has enjoyed a compound growth in turnover of more than 20 per cent per year and is set to continue the trend again this year. Indeed, the 11 months from March 2005 to February 2006 has yielded a 22 per cent increase when compared to the same period the preceding year.

Employing approximately 3200 people, Speedy has 310 sites strategically positioned throughout the UK and Ireland. Adding some 30 greenfield sites every year, the tool and equipment hire company is always looking to increase its market presence. This is part of Speedy’s company expansion programme, which combines organic growth with regular acquisitions.

Mike McGrath, commercial director at Speedy, details how the company is focusing on growth: “It’s a combination of factors really, we have already taken some very successful steps to boost our relationships with contractor customers, usually through the acquisition of their in-house hire businesses. We then enter into exclusive supply and service arrangements to meet the customers’ hire requirements. That has been one strand of the programme, the second being to complete any gaps that we may have in the tool network with a selection of either greenfield sites or acquisitions in areas where we think there is an opportunity for us. Speedy’s third major focal issue is to continue growing its equipment businesses, which have been strong so far and are giving us the largest areas of growth in the current market.”

There are currently five equipment divisions within the Speed organisation: Space, Survey, Lifting, Power and Pumps. Speedy Space is a division that specialises in the provision of portable accommodation and cabins for use on construction sites; Speedy Survey supplies equipment for the survey of sites; Speedy Lifting deals with heavy lifting and manual handling items and Speedy Power supplies portable generators for on-site power.

Speedy Pumps is the most recent addition to group, having originally been a part of Speedy Power. “Power started out life as a minor operation in the core tools business,” explains Mike. “We had been supplying small power generation equipment for several years from the main organisation before we made it a separate entity in 2002. From that derived the pumps business. We have been carrying pumps in our catalogue for at least five or six years, but in the last few months we launched Speedy Pumps its own company. This is a continuation of our strategy of identifying niche areas that have their origins within the tool hire business and then expanding on them.”

With its strategy of combining organic and acquisition-based expansion, Speedy, which focuses on achieving sustained growth, is able to constantly build on the structure that it has in place. He adds: “One of our big growth stories this year has been the performance of our Scottish business and we have had a real push to develop that. In response to this we have just opened several sites in Ireland - one in Dublin and one in Belfast - and we’re hoping to achieve similar success there. We are also looking at significant opportunities for growth in our other equipment businesses. Space, in which we have had three big acquisitions in the last eight months, is a key area for us at the moment. Furthermore, Power, which acquired Rentair’s onshore business about 18 months ago, and Lifting are areas where we see a lot of potential for growth.”

Speedy Hire’s equipment businesses, which undergo regular and continuous development, contribute greatly to the company’s revenue. However, as Mike explains, it is important to stress that these businesses support Speedy’s core tool hire capabilities: “We don’t want anyone to get the idea that we aren’t focusing on tools,” says Mike. “Tools are what we specialise in, but increasingly we are seeing a lot of opportunity in the equipment businesses. The fact that they were only started in the last four years means that they are the key focus in terms of growth, plus they have all been very successful recently.”

In order to develop the services it offers, Speedy has been carrying out an acquisition programme whereby it purchases its customers’ in-house operations and then supplies the services back to them. This gives companies the opportunity to streamline their operations and outsource parts of the equipment work to Speedy. “We enjoy very good relationships with most of our major contractors and this is a strategy for helping with that,” he comments. “We have concluded four deals in this way over the last four months, and we have gained several new facilities to add to the recent growth of the equipment divisions. We have been working on this for the last two or three years with a great deal of success.”

Mike goes on to detail some of the most recent deals that Speedy has made: “In June 2005 we bought a number of the hire operations that were a part of the major construction group Gleeson, and then agreed a supply and services contract back to them. Then, in the closing months of last year, we completed a similar deal with Mowlem, which reinforced our relationship with them.”

By targeting deals like this, Speedy sees increased benefits on a number of levels. As well as aiding company growth, the links with customers and contractors have been further improved. “You’ve got to keep very close to your customers and listen to what their requirements are,” adds Mike. “The acquisitions of their in-house hire businesses have been a direct result of those continuing conversations. We have a good working relationship with these people and this is a way of improving that; it’s good for us and it’s good for them.”

He continues: “There is a huge amount of legislation in the industry in terms of health and safety. Most recently there have been efforts towards improving conditions on sites. Hand-arm vibration regulations and working at height legislation are becoming prominent issues within the construction industry. We have taken such regulations onboard, sourced the best possible products, and ensured our tools and equipment meet the requirements of the legislation and are safe to use. As a result, we have become good at taking those issues, which are headaches for our client, and dealing with them. We are working closely with our customers to help them manage those risks, and that lends itself to an outsourced model, where they transfer their fleet and employees over to us from their internal hire business. So, we take on the people and kit, remove the hassle that goes with co-ordinating it, and then supply the service back to them.”

As construction companies have become increasingly constrained by government legislation in recent times, this health and safety focus has been a major selling point for Speedy. The work that the hire firm has done towards meeting the new standards has earned it praise from the HSE. Indeed, health and safety issues are even taken around the country in ‘roadshows’, which make every member of staff aware of the changing regulations and safety issues.

Aside from working at height and hand-arm vibration, there has also been a concerted effort to improve the safety features and efficiency of the vehicles that Speedy operates: “We have a fleet of just over 1000 commercial vehicles, mostly flatbed trucks, that we buy from Ford,” says Mike. “We have been working with Ford on a number of areas, especially on improving the safety features onboard. We have worked hard with our suppliers to improve the way that equipment is secured in transit and it is now easier and safer to load and unload. With new A-frames and tail-lifts, we have made the vans safer and easier to operate.”

Constantly updating the vehicles means that Speedy can make its operations efficient. There have been dramatic savings in terms of fuel consumption, largely due to the new technology that has been developed and installed in Ford’s trucks recently. The total saving has been approximately 300 litres of diesel per vehicle, per annum – an improvement of nearly seven per cent.

The tool and hire sector is currently experiencing a period of consolidation. Therefore, Speedy is looking to take advantage of the larger organisations outsourcing their tool and equipment hire needs. Moreover, Speedy’s expansion programme has proven so successful that it was actually recognised by The Times with the national award for growth strategy. As a result, Mike is confident this will continue to be the focus for Speedy going forward: “This shows that our efforts to achieve a balanced expansion, through both acquisitions and organic growth have been effective and appreciated. We haven’t finished this process yet and we’re going to continue in the same vein, especially after having our work over recent years recognised with this award.”  CT-E

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