TIP separates in shake-up
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• TIP Europe has reorganised its business to separate trailer rental and non-trailer interests. The resulting boardroom shake-up sees Jim Cleary ousted from his role as chairman while Tony Rieger, formerly chief executive overseeing all sectors of TIP Europe business, takes charge of the trailer rental division.
The restructuring is seen as a move to bolster City confidence as Jim Davis, formerly a director and now appointed as non-executive chairman, announced this week that halfyear profits would be low. But he promises tough action will be taken, saying the new board will "make decisions rapidly and get things right".
Ray Hill is now in charge of TIP's non-trailer business, which includes modular accommodation and equipment sales, with Rieger, Hill and finance director David CaHear reporting to Davis.
Davis blames the expected drop in profits on the stagnant UK trailer rental market, which he said had been particularly bad for the past three months. Borrowings had been reduced since the year end and would continue to be cut, he said. On the reasons for Cleary's change of role, Davis reported the reshuffle was necessary because the company had grown and "changed in nature over the years". The company needs the weight of Davis' presence as a well-known City figure, adds Rieger.
Cleary has been executive chairman since October 1987 and with the company for 21 years, when he opened the first UK office for then USowned TIP. He will remain with the company, however, as a non-executive director.
Rieger says a further 5% cut to TIP's UK trailer rental fleet is on the cards. The last reduction of the fleet cut it to 10,000 units. He will be looking closely at the fleet mix and a possible shift of resource away from UK retail business towards the Continental fleet.
TIP's rental fleet grew 90% in the past two years — but an average 30% of the UK fleet was idle throughout 1989/90. Vehicle purchases bumped up interest payments, to £13.8m in 1989/90.