Client Overview

The client operates a vertically integrated equipment hire business which services sophisticated clients in complex and high-risk industries, including Power Infrastructure, Telecommunications and Renewable Energy nationally. The business has 100+ assets available for hire which historically generated annual 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 with the declining return on assets and EBITDA underperformance on a potential business sale in the medium term.

​Engagement Scope​

Our Restructuring and Recovery team was engaged to conduct a high-level business review to identify key business and value drivers and collaborate with Management to prepare a 36-month Strategic Plan. The engagement was completed on-site, in consultation with key stakeholders and over a 4-week period.

Our Approach

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

• Identifying key drivers to historical revenue underperformance to budget ​​
• Market analysis to quantify opportunities and risks presented by competitors and market forces​​
• Assessment of operational efficiency of business units impacting direct and indirect costs ​​
• Review of customer engagement activities and strategies driving brand and relationships​​
• Assessment of asset mix to forecast demand by segment for the purposes of fleet medium term expansion ​
• Assessment of business unit capacity and scalability options within the portfolio

Key Findings and Outcomes​

We engaged with key stakeholders to prepare an actionable Strategic Plan for the FY24 to FY27 period which was focused on operational improvements to drive EBITDA growth. 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 existing 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 ​​
• Detailed Financial strategy to align fleet growth forecast to market demand

Drive Value with Expert Guidance

Is your business is not meeting its potential? Our Restructuring & Recovery team specialise in helping businesses identify improvement opportunities and develop strategies that drive value. Get in touch today to find out how we can support your goals.

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