Brighter horizons for plant hire, says survey

Plant hire prospects are finally starting to improve, according to a new survey into the market. But despite the improvements, 54% of companies surveyed are still experiencing financial difficulties.

The report, Plant Hire 1995*, compiled by Plimsoll Publishing, reveals that of the 1,888 companies questioned, the average pre-tax profit margin for them between June 1993 and 1994 was 4% - a 3% increase on figures issued six months earlier.

During the same period, the average increase in sales was 12%. Companies with a turnover of less than œ2 million recorded a 10% increase in sales, while companies with a turnover in excess of œ14 million recorded sales growth of 14%.

Some 30% of companies featured in the report are rated as strong or good - this represents a 5% increase on earlier figures. Hewden Stuart, Sheriff Plant Hire, Central Plant Northern and Seddons (Plant and Engineers) are among companies listed as being best placed to take an aggressive stance in the market in 1995.

Despite the positive increase in sales, the publisher warns that many of the companies experiencing financial difficulties are still in danger of collapse unless they restructure or look for new sources of finance.

Of the 74 companies that have been liquidated or gone into administration in the last two years, 59 had been placed on Plimsoll's at risk category.

Although the number of companies still at risk remains high, it is significantly less than a year ago when 63% of companies surveyed looked set to fail.

Companies are classified by analysis of performance over the last four financial years.

Areas examined include sales growth, trading stability, profitability, working capital and gearing.

* Available from 27 March from Plimsoll Publishing (price œ295). Tel: 01642 230977