14.08.2007

Hewden still slow

Finning UK, parent of Hewden, the crane, access and equipment rental company, has reported first half revenues of C$667 million (£313 million), an increase of nearly 13 percent, in Canadian dollars. In sterling the improvement was a more modest three percent.

While sales of equipment and other services at Finning, the CAT dealer, the company once again highlights equipment rental business in UK, largely Hewden, as continuing to struggle in a tough, competitive market.

Revenues from rental in the UK were C$227 million (£107 million) compared to C$199.5 million in the first half of 2006, an increase of 14 percent. Both numbers exclude the tool hire business, sold to Speedy and now included in the accounts as a discontinued operation. Much of this increase relates to the strong pound converting in to more dollars.

Gross profit for Finning UK increased by 5.4 percent in Sterling terms, with all divisions performing well except for Hewden, where the company says it experienced lower rental utilisation levels, and “an inability to achieve price
realisation targets.”

This is due, says Finning, “to a competitive market in the U.K. as well as management being deployed in various initiatives to generate future benefits.”

Finning UK Earnings before Interest and Tax for the six months was C$34.2 million (£16 million), an increase of 50 percent on last year.

Significant ‘Other expenses’ incurred in the first half of 2007 were primarily project costs at Hewden relating to “various initiatives underway to assess products, distribution network, and structure as well as efficiencies to ensure Hewden continues to meet its customers’ needs.”

On July 2, a new information technology system was successfully implemented for Hewden’s ongoing rental operations. Finning says: “The new system is expected to support simplification and standardisation of business processes and also provide enhanced management and customer information to improve performance.”