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Fortune favours the brave
Page 24
Page 25
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How big a part does luck play in creating and maintaining a successful business? Brian Weatherley
talks to truck and trailer rental giant Hill Hire to find out.
Napoleon Bonaparte. on being regaled with the virtues of an unnamed new general. is said to have waved his hand impatiently and muttered:"That's all very well —but is he lucky?"
Given the choice between great generals and lucky ones, Boney preferred the latter. And today, it's a sentiment which Hill Hire's sales and marketing director Tim Josse (pictured far left) is happy to support_ Indeed, in his Powerpoint presentation to CM.after listing the truck andtrailerrentalcompany'scredoof teamwork, hard work, focus and direction, up pops the 'L' word. "I never fail to point that out in my slide show — you have to have an appreciation of luck," says Josse wryly.
Hill on the rise Yet good fort unc alone cannot explain Hill Hire's rise and rise, This is, after all, the company that spectacularly lost its way, not to say its lunch, when in 1990 it went into receivership to the tune of 112m. It was rescued by a management buy-in/buy-out team (of which Josse is the sole remaining director from the original four) the same year.
Having picked itself up, dusted itself off and floated in 1994, the concern was bought by the Bank of Scotland in 1999 for £74m. Was that luck? Possibly — there's a historic link, if nothing e In 1990, BoS were our bankers,"saysJosse. "In 1998, the board sat down and agreed that we couldn't carry on funding ourselves. If there had been a downturn in the business, we would have been overexposed.
"We wanted a financially secure company — we didn't want to be bought by just anybody." It was fortuitous, then, that BoS came knocking on the door. B ut Josse describes it more as: "An opportunistic coming-together." And according to Hill Hire's operations director Adam Fairbotharn (pictured near left):"They're happy with what we do."
About the only thing BoS appears to have asked from Hill Hire is that it grows its business, which currently looks like turning over some £84m in 2003 compared with /76m in 2002. Talk of a £100m turnover in 2004 is not out of place. either. Last year. Hill Hire returned £9.1m in profits. Commenting on that, together with the required growth in revenue, Josse says: "They want to see commensurate profit growth. too — and all things being equal. we'll do it."
With some 12,500 trailers out of a combined truck/trailer fleet of 16,000 vehicles,Hil I Hire is sitting comfortably in third place in the trailer rental market, placed behind TIP and Transamerica. So comfortably, indeed, that you can't help wondering whether it's planning a move up the leader board. No so,Josse insists: "It isn't our mission to be number one. Our mission is lobe profitable, rather than big. But the nature of trailer rental is that it's volume-driven, because rates have fallen.Where you'd once get £140 for a dark blue curtainsider, the average rate is now £85— so we've no choice."
What could also drive that ascent is Hill Hire's continuinginvestment in new equipment,andthe pull-through effect that has on trailer rental and contract-hire buyers. Since 2002,it's bought more than 400 new reefers of which 35% are already on long-term contracts. (It also entered what Josse calls the "frigid" market with 18 and 26-tonne trucks).
On bread-and-butter dry freight trailers, it recently struck a two-year supply deal with SDC to deliver 790 examples this year and 500 in 2004. -We sat down with all the major trailer makers and asked them to quote their best price. SDC did a very good job," notes Josse.
It's clearly taken more than good fortune to build up Hill Hire's current customer portfolio which includes all the big names in own account and hire-or-reward haulage, Yet smaller operators are still very much in the mix. -Provided they've got a credit account and an 0-licence which we can see — and are subject to credit approval," Josse points out. However, bigger operators have bigger demands to the point at which Hill Hire now provides'implants'— rental team members who can either be based at Hill Hire or at their premises. "Customers are extremely demanding,reckons Josse. "You have to deliver a very rapid response."And be versatile, as Hill Hire's recently launched Intellirent package exemplifies. Put simply, it allows for early contract-hire cancellation without losing an arm or a leg. "Customers want a more flexible approach," maintains Josse. "It's especially important for smaller businesses which haven't got a full-time FD to go through all the paperwork."
Universal appeal
Right now. Hill Hire's trailer fleet is running around 90% utilisation, with its truck fleet operating at 92%. In truck rental alone, the obvious rivals are TLS and BRS.However,being able to offer any thing from a big panel van to a* artic and trailer inevitably means that t of a one-stop-shop comes into the col tion. Although Josse adds:"If anyone ca up with a better cliché than that, let me k He is adamant. though, that 'one-stop become 'one-size-fits-all':"We don't war carried away with driver hire, warehou truckstops! We're being asked to do that time, but we're too busy doing our owr We'll have organic growth, so we can ta share of the market."
By the end of next year, that organic could well see the Hill Hire fleet nudging or more vehicles. If it does, it won't simp matter of luck. •