SUMMARY OF REPORT CONTENTS

The UK Plant Hire market is a mature sector, with relatively stable trading conditions in recent years which has resulted in some restructuring of the industry. Within our market definition, the UK Plant Hire market is estimated to be worth some £2.37 billion in 2003.

Following depressed conditions in the early 1990’s, many sectors of plant hire experienced a period of positive growth between 1996 and 1999, with the mobile platform sector in particular performing strongly, fuelled by expanding rental demand reflecting continuing trends to privatisation, outsourcing and increasing legislation with regard to working at height.

However, the period 1999-2002 marked a period of relative overcapacity and low hire rates in a number of sectors, particularly in mobile elevating work platforms and mobile cranes, with the plant hire market demonstrating marginal growth in overall terms. In 2003, higher government spending sustained construction growth in the face of weakening infrastructure and private sector building output, although a softening of demand in the telecom, industrial maintenance and non-residential construction sectors impacted with varying effect upon certain plant hire sectors.

Earth-moving equipment is the largest product sector, estimated to account for 47% of the plant hire market. Lifting equipment, including materials handlers, cranes, and powered access accounts for an estimated 28%, while general construction, road making, compressors and generators, each account for around 5 -7% of the overall hire market value. In general terms, most sectors are stable, although portable accommodation hire is demonstrating significant growth, with other more specialist sub-sectors likely to become more active in the medium to long term – for example telehandlers, skid steer loaders, mini excavators.

Long term levels of buoyant activity are also forecast for road railers, and the ‘renewables’ sector, including offshore windfarms. The strong regional influence of investment programmes and local industry specialisation, including the location of forestry, aggregates extraction, windfarms and seasonal/climatic factors, should not be overlooked due to the varying impact of the product sectors on UK plant hire companies.

In addition to difficult trading conditions in many sectors, plant hire companies have also had to contend with shortages of qualified drivers and fitters, the rising cost of health and safety, substantial increases in insurance premiums, rises in national insurance contributions and fuel costs, etc. Reviews of business practices to develop operational efficiencies represent a significant avenue for increasing competitiveness and profitability against the backdrop of uncertain trading conditions and cost inflation with some leading plant hire companies tending to ‘centralise’ administrative functions, for example.

Despite growing industry concentration, the sector still remains relatively fragmented. Hewden Stuart/Finning are the market leaders with an estimated 15% share, followed by Ainscough and A-Plant, with shares in the 4% range, Lavendon at 3%, and Aggreko, Andrews Sykes and Longville Group with a 2% share.

In terms of the number of outlets, there are estimated to be in the region of 2000 - 2500 in the UK, depending on definition, with a marginal reduction forecast in the long term reflecting underlying trends to industry concentration, acquisitions, restructuring, etc.

In addition to continuing improvements in engine efficiencies, noise levels, emissions and pollution, product development includes innovative equipment targeted at increasing productivity and utilisation in specific machine types – for example, multi-purpose scraper tractors, combined materials handlers and work platforms, machine control systems, skid steer loaders, and an expanding range of machine attachments. The essential contribution to profitability of higher levels of productivity is likely to become even more significant as the plant hire industry experiences cost inflation and a rapidly escalating administrative burden arising from the need to comply with increasing legislative output.

In overall terms, future prospects for the plant hire industry are viewed as positive, motivated by anticipated long term growth in key sectors of construction – for example health, education and infrastructure. In addition, expansion into related sectors presents hire opportunities and synergies – for example, the broadening of the temperature control hire portfolio to include the growing boiler hire sector, providing hot water and steam on demand. Overall, our forecast is for annual growth rates of 2-3% for the plant hire market from 2004-2007, though there will be significant variations between product and end-use sectors.

Political factors are likely to provide a degree of motivation for the plant hire market with the active promotion of ‘green’ policies, recycling, etc., particularly in the waste reclaim and sorting sector.

List of Companies Mentioned

Finning International Inc, Hewden Stuart Plc, Finning International Inc, P.C. Harrington., Maxxiom, A-Plant (Ashtead), Ainscough Group, Andrews Sykes, Baldwins Industrial Services, Loadtite, Phillips Crane and Rigging, Baldwins, Industrial Services Inc, Aggreko Plc, Longville Group, Gap Group Ltd, Hydrex Group, AMPL, Pochin's Plc, Putzmeister's, GE Capital Equipment Services, GE Energy Rentals, Dudley Vale, Selwood Group, Jarvie Plant, Clive Barford, H.E. Services, Alpha Plant, Ascus, LCH Generators, BCL Rail Services, BCL Plant Hire., Philmor Rail, Nationwide Access, Skylift (Nationwide), Loxam, Universal Aerial Work Platforms, SGB, EPL Access, Aerials for Industry, Independent Access Supplies, Lex Harvey, SGB Group, Harsco Corporation, SGB Scafform, Mast climbers, The Turner Group, Turner Access, Upright, Aerial, Elliott Hire, Caledonian Safemaker, Hydrainer, Weldex, BP's System Vanellus, Global Telematics, Sennebogen, New Holland Construction's, Alpha Plant's, Caterpillar, Terex, Case, JCB, Volvo, Bell Equipment, Greyhound Plant Services, JCB, Thwaites, Hydrema, Ace Plant, McCormick, Harsco Track Technologies, Liebherr, Hitachi, Daewoo, Komatsu, Philmor Rail, Basket, Niftylift, Hydrex, Rail Services, Story Rail, Case, Daewoo, Caterpillar, Hitachi, Marubeni-Komatsu, Liebherr, Orenstein, Koppel, Kubota, Hyundai, Hydrema, Schaeff, (Terex), Moxy, Terex, Bobcat, Barford Construction, Benford, Bell Equipment, Thwaites, Takeuchi, Finning, Lex Harvey, Hyster, Linde, Hewden Stuart, UK Forks, Keybemo's, Ainscough, Liebherr, Manitowoc, Grove, Terex, Vanson Cranes, Kobelco, Sparrow Crane Hire, SLD/Longville, Andrews Sykes, Selwood, Hydrainer, Putzmeister, Ultranazz, Schwing, Liebherr, Godwin, Grindex, ITT Flygt, Ingersoll, Dresser, KSB, Powersceen, BL Pegson,Finlay, Hydrascreens, Metso Minerals, Bomag, Metso Minerals, Benford, Barford International, Hamm, Caterpillar, Metso Minerals, Wacker, Errut, Rammax, Ammann, Genie Industries, Generator, Power/SGB Rovacabin's, Atlas Copco, Compare, Ingersoll-Rand, Kaesar, F G Wilson Engineering, Caterpillar, TT Group, Cummins, Lister Petter, Brook Thompson, Genset, SIP, SDMO, Portakabin, Rollalong, Rovacabin, S. Wernick, Terrapin, Britspace, Wraith Accommodation, R.B. Farquhar, Garick, Caledonian Safemaker, De Longhi, Andrews Sykes, Carrier, Heatbusters, Acna, Youngman.