Client Overview

The client operates a vertically integrated wet and dry hire equipment business which services sophisticated clients in complex and high-risk industries, including Power Infrastructure, Telecommunications and Renewable Energy nationally. The business has 100+ machines available for hire which historically generated revenue of $40-45m with a net profit margin of c.22% and employs 120+ FTE. ​

Whilst the client has been profitable, revenue increased marginally over the past 5 years notwithstanding machines available for hire increasing from 65 to 100+ over the same period. The major shareholder was concerned about the lack of growth achieved by the business over this period given the material investments which were made in income generating assets. ​

​Engagement Scope​

Engaged to conduct a full scale operational and financial business review to identify performance improvement options and design a transformation plan and prepare a 36-month Strategic Plan for delivery by Management. The engagement was completed on-site, in consultation with key stakeholders and over a 3-month period.

Our Approach

Given the historical underperformance of the business, we focused our review on the following aspects:​

• Operational efficiency and performance of workshop which was responsible for repair, maintenance and compliance for all machinery​
• Liaise with Management to identify key staff, understand turnover risk and quantify turnover cost ​
• Assessment of operators training procedures, operator skillsets and development requirements for national workforce​
• Review of machinery mix and alignment of fleet to market demand, including forecast capex spend and requirements ​
• Market analysis to quantify opportunities and risks presented by competitors and market forces​
• Review of sales and marketing function, including customer engagement and branding ​
• Review of Corporate Governance procedures, including Delegation of Authority and reporting to stakeholders ​
• Systems review, including fleet management, safety, training, sales and finance ​

Transformation Initiatives​

Our review highlighted significant opportunities for the client to create sustainable value and improve return on its existing resources. A selection of the key transformation initiatives were: ​

• Creation of key operational metrics to promote workshop efficiency and reduce asset downtime, including targets for servicing hours, regulatory inspections and major equipment overhauls​
• Investment in the development of second workshop in South Australia to manage assets deployed in southern states to increase capacity, reduce transport cost and machinery downtime​
• Deployment of a CRM aligned to the business needs to manage its diverse customer relationships, as well as integrate a cost-effective marketing platform to reach all customers at least quarterly​
• Creation of customer engagement strategy aligned to revenue / hire hour tiers to focus sales and marketing resources to improve return on investment

Strategic Plan – FY24 to FY27​

We engaged with key stakeholders to prepare a Strategic Plan for the client for the FY24 to FY27 period which facilitated the timetabling and prioritisation of the Transformation Initiatives. Below is a summary of the key actionable components within the strategy: ​

• Definition of targets and metrics to monitor performance against key value drivers of the business on a financial and operational level​
• Detailed Sales strategy to focus resources: ​
  • by category, including dry hire, short-term wet hire and Long-Term wet hire​
  • by customer tier, defined as Top 30 customers (67%), Top 31-60 (15%), Top 61+​
  • customer engagement targets by tier, by sales representative ​
• Detailed Operational Strategy to:​
  • Increase workforce and skillset to facilitate increased utilisation ​
  • Increase workshop efficiency and reduce machinery downtime

Maximise Your Business’s Potential For Improvements

Is your business reaching its full potential? Our Restructuring and Recovery experts can help you identify and develop actionable plans to improve your business’s performance for lasting success. Get in touch today to explore how we can enhance your business needs.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.