Profile: Travis Perkins' Richard Dey

With a new hire counter opening every week, Travis Perkins is looking to double its hire business turnover within the next four years. Colin Sowman asks Richard Dey, group hire director, how he will make it happen.

Travis Perkins’ results don’t detail the hire business, so how big is it?

Turnover is about £45m, which is broken down to £30m from hire and £15m from sales. We have hire counters in 185 of the 1,146 locations in the Travis Perkins group of companies. These are split between 170 in Travis Perkins branches and 15 keyline branches. We are expanding the business and opening one new hire counter every week. As some individuals work for both the hire and merchant sides of the business it is difficult to put an exact number on the hire staff, but it something like 400 people.

What range of products do you have on the shelf or in the depot?

Anything you can tow behind a Transit: 1.5t excavators and small dumpers down to breakers and drills. We wouldn’t think of expanding the range to anything heavier as there isn’t the space. But we cross-hire heavier machines for customers and there is potential to go heavier – say up to 3t – at stand-alone hire outlets.

So what is your background?

I’ve been in the hire business for 28 years. Before joining Travis Perkins I was with A-Plant and before that Wolseley, so I have experience with dedicated hire companies and the merchants.

What was the biggest difference you experienced when you joined Travis Perkins?

The lack of reports. There is enough information to run the business, but there is no culture of copying people in on emails to let them know how busy you are.

What was your brief when you joined and how would you sum up your management style?

When I joined in February 2006, the hire business had an annual turnover of  £22m. My job is to double that in four years, and as it has already risen to £30m, we are well on our way. My management philosophy is to get the best people that you possibly can, agree objectives and let them get on with it – I don’t want to micro-manage people.

How are you intending to expand the business?

We have an enormous customer base with more than 250,000 accounts. But only 13% take tools and plant from us and that spend is very low. If we can serve our customers’ needs better, we have potential to expand the business. We are not looking to take on the A-Plants and Hewdens. We haven’t the capacity and infrastructure to take on the big, £2m/year, nationwide accounts.

What can you do?

Within three years I want every Travis Perkins customer to have access to our hire business. That’s not to say every branch has a hire desk but that each branch can fulfil a customer’s hire needs.

That may mean calling up the nearest branch that does have a hire desk or getting machinery delivered from a stand-alone depot.

Will all the growth be organic?

Not necessarily. We would consider buying a small hire company to use as stand-alone depots if the price and locations were right. Travis Perkins is well represented in the south but coverage is not as dense in the north.

What changes have you introduced?

We have revamped our staff induction, which is now more structured: for instance, a fitter will attend a number of courses in their first month with us before working unsupervised. This has dramatically reduced staff churn to about the 5% level for fitters. 
 
Hire is a very capital intensive business compared with a builders’ merchant, how is this viewed by Travis Perkins’ management?

The buy-in from management is superb and we have improved our utilisation year-on-year. It is about 75% on the larger items, and I’m happy with that. But we need to improve utilisation of small tools, which stands at between 35% and 40%. People will wait for a digger but not for a drill, but if small tool utilisation gets much more than 50% you run into availability problems.

So, basically, the product range you offer will remain static?

In the main yes, but we have recently introduced JCB’s Dumpster and are looking at other materials handling machines reflecting the sort of product sales we sell through the builders’ merchants.

What’s the deal with Toolstation and what benefits will it bring customers?

The decision to invest in Toolstation is part of the development of our multi-channel strategy. Customers expect products to be available through many different distribution channels and to be delivered direct to them or collected at a time and place  they choose. Part of this is the increasing demand for online services and we need to adapt to their needs and this new offering provides another channel for us to supply the products our customers need. 

Toolstation has a great pedigree and reputation as a direct tools retailer and we are looking forward to working with the team and to continue to expand together.

CV:

• 2006: Joined Travis Perkins as group hire director
• 2002-2006: A-Plant's Tool and Pland division, director
• 2000-2002: HireCenter, business development manager
• 1998-2000: Jewson Hire Point, operations director

Three things you didn't know about Richard Dey

• He was born in New York as his father was a director of IBM, but has spent most of his life in Norfolk.
• He enjoys reading about real-life crime.
• He nearly lost a leg in a freak cricketing accident after a blow from the ball caused an abscess on the bone below his left knee.