Ryder retains UK divisions
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by Brian Weatherley IN Ryder is to hold on to its UK contract hire and truck rental divisions after failing to get an offer close to the £250m it wanted for the operation.
Eight months after putting them up for sale, Ryder Chairman Tony Burns says the US-owned company will now retain and develop the two businesses, although existing customers may end up paying higher rates on their contracts.
While Ryder attracted a number of suitors from the operating and finance sides of the industry, Burns admits: "We couldn't find a buyer to pay the price we wanted. We had assets of S400m (£250m) and we expected not to take a loss—and they came short."
Following an analysis of its rates, Burns says Ryder needs to make more money back from its business. "We've said to our customers with low margins that we'd like to renegotiate with them," he adds, "and we've improved margins already." Ryder has also earmarked £200m for a capital replacement programme.
CM understands that one potential bidder was concerned about Ryder's longterm financial risks on its vehicle fleet. However, Burns insists: "We feel very comfortable with our exposure on residuals—we feel better now over the next two to three years than we did in 1998."
Ryder wants to win more business among own-account operators—but not hauliers. "We don't want to be a trucker," says Burns. The company also wants to expand its UK business by acquisition, but there are no plans to break into trailer rental. "TIP can have that."
7 See next week's CM for a News Analysis on the abortive Ryder sale.