Nolan takes HSS to double-digit growth

HSS Hire's growth rate is outstripping the rate of expansion of the construction industry's hire sector by 10%, said Paul Nolan, the group's chief executive.

Since taking over in January 2004, he has "totally rebuilt HSS from bottom to top" and has achieved double-digit growth. One hundred branches have closed, typically the result of migrating three-into-one and of a policy of establishing larger Premier hub centres. The group's 12 stand-alone workshops have been closed. "They were remote," said Nolan. "The skilled fitters were moved into the Premier Centres. It's stopped a lot of in-transit movements and the teams are more motivated as they're not stuck out on their own in a cathedral. Also, our turnround times have improved dramatically." HSS has a war-chest for acquisitions and has one person working full-time looking for suitable buys. His most recent success was the acquisition of Laois Hire.

HSS was considering buying Brandon Hire, a competitor, before plumbing and heating group Wolseley stepped in with a bid. HSS had a problem of overlap with Brandon, with many Brandon hire centres having been opened recently within a few hundred metres of HSS. "It has 149 centres and we have 300 and there was a lot of duplication," said Nolan. "We'd probably have had to close 60."

Nolan thought there was little risk of Wolseley now embarking on a price war. "I wouldn't think it could afford to discount," he said. "Rather, it will be looking for a strong performance. We knew roughly where everybody was sniffing, in terms of the bids being offered for Brandon, and we decided that by spending just 20% of that amount on new tools we could take a similar step in our expansion without the risk of any possible integration issues. "Yes, a big acquisition is possible, although what I'm basically after is acquiring a lot of little hire groups. We are active and have rejected quite a few recently."

HSS launched an internet sales site five months ago. "I'd wanted it to be there as far back as September 2004," said Nolan. "Importantly though, it's now growing and accounts for 0.5% of our hires."

[Contract Journal, 1 June 2006, p12]