The equipment hire sector consists of a range of B2B and B2C segments catering for many different end use requirements, from construction and mining equipment through to consumer leisure rental items. Despite the wide variety of end segments, effective equipment rental businesses aim to optimise the trade-offs between achieving high yields and high utilisation of assets. More sophisticated equipment rental businesses therefore apply a range of approaches, including dynamic pricing, differentiated channel strategies, and digital marketing techniques to optimise fleet returns.
Given the typically very high capital requirements associated with equipment rental businesses, EBITDA is not a particularly useful indicator of company performance. Measures of return on capital, and an effective capital allocation decision-making process, are essential for long-term high performance. In addition, national equipment rental businesses must typically manage a network of branches, requiring effective branch portfolio management. Trade-offs between delegating decision-making to local branch managers vs adherence to national target yields must be balance carefully to ensure sufficient responsiveness to local conditions without excessive margin dilution.
Selected Client Examples
NZ Leading General Equipment Hire Business
Medium Term Strategy and Performance Improvement
Developed a strategy which underpinned a doubling in profitability over 3 years
Enabled a successful recapitalisation of the business and exit for some investors
Now firmly entrenched as leading player in NZ
Leading AU B2B Equipment Hire Business
Turnround Strategy Development and Execution
Developed a medium-term turnround strategy for the business, and provided initial execution support
Enabled a successful recapitalisation of the business, and eventual exit for key investors
ANZ Leisure Vehicle Rental Company
Commercial Due Diligence and Post-Acquisition Strategy
Provided commercial support for the acquisition of a complementary leisure vehicle rental business
Developed a post-acquisition integration plan and oversaw the successful launch of a re-branded product offer
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