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Tool hirers basking in the sunshine

FINANCE City Site

SUNNY days have arrived for the tool hire specialists. A trading statement from Speedy Hire last week pointed to a 15 per cent increase in total turnover in the current financial year and profitability in line with expectations.

Business is brisk across all the company's regions and given the current strength of new orders, Speedy chief executive John Brown believes the firm's prospects are secure at least until the second half of next year.Only about 1 per cent of the firm's sales come from house building.

With around 18 per cent of the tool hire market - believed to be worth between £700 and £1.2 billion - Speedy is easily the market leader in the UK, ahead of its major rivals HSS and Hewden.

All these firms have benefited from contractors' growing preference for hiring plant and equipment rather than owning it, a trend which has been reinforced by the rising volume of health and safety legislation.

Speedy, which has 286 branches, and the other majors, are also able to offer a national spread of outlets to customers who want to deal with a single supplier.

For traditional heavy plant hirers, it has been a different story in recent years as margins have come under pressure, partly through chronic over-capacity.

But today, the fortunes of the more broadly focused quoted hirers are also improving, although less dramatically.Vp recently reported a 19 per cent increase in pre-tax profits, although its tool hire offering, Hire Station, disappointed.

After a turbulent year, Ashtead's recent results showed that its A-Plant hire operation had a much improved fourth quarter.The business should benefit from its recent switch from geographic regions to three productfocused divisions - main plant, specialist and tool hire.

Elsewhere, Lavendon, the international powered access hirer, said earlier this month that its first-half revenues were broadly in line with last year against a background of difficult trading in its main markets.