15.01.2019

Hawk Plant Hire enters administration

Shropshire, UK-based telehandler rental company Hawk Plant Hire has called in the administrators due to cash flow issues, partly related to last year’s failure of major contracting group Carillion.

The company reported having a fleet if 385 telehandlers, making it the 11th largest in the UK, according to the latest Cranes & Access Top 30 telehandler rental companies Click here to access the latest Top 30 rental companies report in our library

The notice to appoint administrators Sam Woodward, Alex Williams and Hunter Kelly of EY restructuring, was filed yesterday, and they have taken over the financial running of the business while they seek a buyer or work out a recovery plan.

Hawk Plant Hire - which makes up around 80 percent of the group - reported revenues of £75.4 million for the year to the end of 2017, with a pre-tax loss of £734,000. It had total assets of £141.9 million against liabilities of £136.6 million. But current liabilities make up £98.8 million of this against current assets of £46.9 million! And this for the period before Carillion went into administration.

In spite of this no warning was given by the company or its auditors KPMG of the seriousness of the situation when the parent company Hawk Plant (UK) Ltd - which also includes Hawk Hire and a small sales operation - filed the group accounts less than three months ago. It posted revenues of £93.5 million with a pre-tax profit of £515,000. Its working capital situation however was similar to its largest operating business, being negative to the tune of £46.2 million.

The group employed around 420 staff, but 83 have been let go on appointment of the administrators. The business is owned by members of the senior management team along with Business Growth Fund.
Hawk runs a fleet of 385 telehandlers

Joint administrator Sam Woodward said: “The group’s cash flow has been impacted by a number of historical problematic contracts and a delay in the commencement of anticipated projects. Coupled with this, the group’s funding structure, with significant hire purchase and finance lease commitments put pressure on the cash flow at a time that asset utilisation was comparatively low.”

Comments

MS
This is what I'm saying all the time.

We have massive bubble in rental industry.
Even with economy o highest gear - some companies can't make money, and other are making pennies.

Fleets expanded in thousands on cheap finance options - just wait BOE increasing interest rates.

Hewden, Hawk - went bust in good times. Don't even want to imagine what will happen, when recession will hit the market.
And it will.
Soon.

15 Jan 2019

Jim Longstaff
This is a very disappointing start to 2019 and my sympathies to the Hawk staff who have lost their jobs.
However, this should be a wake-up call for the whole UK hire industry! There is too much equipment chasing too little business and the lack of quality in the industry from a sales perspective results in rates dropping to unsustainable levels.
For fear of repeating myself -Buying the equipment is the easy part. Getting it out on hire at a sustainable rate which also takes into consideration overhead recovery is the hard part. Maintaining it and getting paid is equally as hard, but for some reason the UK hire industry fails to heed these warnings.
As our Commercial Bank Manager recently told me "Turnover is for vanity, profit is for sanity, but cash-flow is no longer king... CASH-FLOW IS GOD"

15 Jan 2019
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