06.05.2008

Finning UK up 12.7%

Finning UK, which owns Hewden the crane, access and telehandler rental business, has increased its first quarter revenues by 12.7 percent to C$330.4 million (£166 million), thanks to strong sales of CAT machines and power generation equipment.

Rental division Hewden continues to struggle and saw like for like revenues slip marginally in local currency, due says the company, to two fewer working days in the first quarter of 2008 and weaker utilisation.

Hewden also confirmed that it is closing its administration offices in Tannochside, near Glasgow, as it centralises its operations with Finning UK in Cannock, Staffordshire. It will though retain a Hewden focused operational support team presence in Manchester.

The first quarter 2008 also included a significant sale of used equipment, with used sales almost doubling to C$40 million (£20 million) and a C$15 million (£7.55 million) sale of Hewden properties, up from almost zero last year.

Operating profit, in local currency was up in absolute terms, but fell as a percentage of revenue, partially due to a revenue mix shift towards used equipment sales

Operating profits were C$29.1 million (£14.65 million) up 80 percent compared with the first quarter 2007. However if the gain on the property sales is removed along with restructuring costs, profits were up just 7.1 percent compared to the first quarter 2007.

Hewden integration costs ran to C$ 500,000 (£250,000) in the first quarter of 2008, with a further C$10 million (£5.03 million) due to be spent during the remainder of 2008 and early 2009. The integration is intended to promote efficiencies and reduce costs with annual savings projected at between C$5 to C$7 million (£2.5 and £3.5 million).

Globally Finning boosted revenues by 3.9 percent to C$1.43 billion while pre tax profits fell almost five percent to C$89.9 due almost entirely to the strength of the Canadian dollar depressing foreign currency results.