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TIP to invade Europe
Page 14
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• A year after its stock exchange share placing, trailer rental group TIP has increased its capital base from 283 million to £150 million, held its debtto-equity ratio at a conservative 150% and has acquired three new companies.
Celebrating the company's first birthday last week, chairman Jim Cleary said that TIP is still hungry for growth and acquisitions will continue. "We will never, ever, go into warehousing, transport or distribution, but we are going to go on expanding," he says.
"TIP prefers to stay in the rental and short-term hire market. That's where the money is. We will continue to look for companies in the leasing and rental business. They might rent out mobile homes, for in stance, or be in plant hire," Profit margins are higher in the equipment rental business, says Cleary, "but it is a sector which can be hit hard by cyclical downturns. We know about that, though, and we can live with it."
Cleary sees enormous growth on the Continent for TIP, especially in France, where former US-parent Gelco forced a cut-back. "We dropped down to 200 trailers in France from 2,000 two years ago," says Cleary, "but we're opening it up again." TIP has about 600 trailers on the road in France at the moment and is confident that this will jump to 1,500 by the end of 1989.
The company has opened new depots in France and is looking for more in the South.
Cleary says that the French operation will continue to use French-built equipment.
Germany is developing fast, although TIP has only had a presence there since its management buyout, and Spain beckons. "Spain looks like it is going to be a wonderful market, but there is nothing there for us for at least the next couple of years," says Cleary, wary of the country's lack of a rental infrastructure.
He will also target his newly acquired CSL truck rental fleet on the Continent, where the market is not so crowded as it is in Britain, and where TIP already has 33 well established sales depots. He predicts that CSL's truck rental fleet will have mushroomed from 200 today to 2,000 by 1992.