Ace Hire purchase signals growth strategy for GAP

GAP Group, the Glasgow based plant hire company, is undergoing a period of rapid expansion. Its aim is to keep a competitive edge in a market witnessing marked rationalisation

In addition to œ5 million spent on new equipment in 1996, and the opening of eight greenfield sites in a two year period, the Scottish hirer - which comprises Anderson Plant and Henderson Plant - last week stepped forward and bought Isle of Man-based Ace Hire and Sales for œ500,000.

The Manx acquisition adds a further four depots to the company's existing 25 and represents its first foray into equipment sales.

Until now 80 per cent of GAP's business has been targeted at tool hire. Ace Hire and Sales, bought from Northants firm Mawsley Machinery, not only hires out small tools and non-operated plant, but it also acts as a distributor for Pel-Job, Thwaites, Baromix, Atlas Copco and Hilti.

The group's finance director, Andrew Stewart, revealed: "The operation will increase the group's profitability." But Stewart denied that the deal would significantly enhance purchase terms with these manufacturers.

In its latest set of results for the year ending 31 March 1996 the company reported a pre-tax profit of œ1.3 million on turnover of œ12.2 million.

Mawsley Machinery's finance director, Jane Sheldon, explained why the company had chosen to pull out of the Isle of Man: "Not only does it enable us to focus on our core business of distribution, but it also enables us to inject capital into our new business of manufacturing mining machinery."

GAP's dramatic growth is likely to lead to the opening of another three sites and at least one more acquisition.

Stewart was optimistic about GAP's future growth: "The level of rationalisation in the plant hire sector at the moment means there will be fewer major plant hirers in the future. We will be one of them, but to achieve this we need to expand. Major customers now expect national coverage."

The purchase coincides with the appointment of non-executive chairman Nick Kuenssberg, who is also a non-executive chairman of Scottish Power and Standard Life.