SMALL plant and tool hirer GAP Group plans to open up a series of specialist divisions once it has achieved nationwide depot coverage in the next few years.
GAP is confident that it is close to completing its national network, after reaching 55 depots with five new openings this year, according to joint managing director Douglas Anderson.
He said: 'With around 65 depots the country will be well covered and at that point will look at specialist divisions like the rest of the competition.
'These would operate out of 6-8 greenfield locations offering equipment like portable accommodation and powered access.'
But the size of this year's depot opening programme will not be repeated since it put a dent in last year's prof its, he said.
The results for year ending March 31 2005 show GAP lifted turnover by 18 per cent to £69 million, but pre-tax profits grew by only 8 per cent to £8 million Mr Anderson said: 'The profits were disappointing given the turnover growth. The cost of depot openings mean your prof its take a pounding and we won't be doing the same number again this year.'
He added that the market was also being hit by low margins. 'We are on the f loor with prices. The smaller clients are as good as the larger ones in getting the prices down and although we have good buying power, we do not have a huge price advantage.
'We are not getting 30 per cent discounts from manufacturers, it is only 5-10 per cent less than the competition.'
He hit out at competitor GE Capital Equipment Services, which he blamed for undercutting the competition.
He said: 'They are leaving too much on the table and they are losing shed loads of money as a result. They are bidding low because they can afford to, but I cannot see how their model can work.'
In the last two calendar years, GE Capital Equipment posted pre-tax losses of £5.9 million and £5.5 million on turnover of £43 million and £45 million respectively. The firm's 2005 accounts showed it owed £93 million to other group undertakings.