30.11.2015

Strong aerial lift revenues fail to help Western One

Revenues at Canadian sales and rental group Western One were almost halved in the third quarter, in spite of a good performance from its aerial lift and telehandler rental division.

Nine month revenues fell 31 percent to $197.1 million, while last year’s pre-tax profit of $12.1 million turned into a loss of $11.8 million due almost entirely to the company’s Britco modular space production operation. Rentals and other services improved almost 15 percent to $54,342.

In the third quarter revenues dropped 47 percent to $46.8 million, with a pre-tax pre loss of $9.4 million, compared to a profit of $229,000 in the same period last year.

The company blames in on lower manufacturing output and onsite work volume at the Britco operations, the modular construction and modular space rental business, it acquired in 2011. The aerial lift division, which includes telehandlers performed well with revenues rising 10.5 percent to $10.6 million, thanks to firm demand from the general construction sectors in major markets in Alberta and the film and TV production segment in British Columbia.

Chief executive Peter Blake said: “The ongoing macroeconomic headwinds continue to impact our ability to grow our businesses. Our management team remains focused on executing our business plans and strengthening the balance sheet through operating cash flow generation and debt reduction. Our business plans include pursuing emerging opportunities in the BC LNG and other commercial and industrial sectors, including permanent modular construction, through executing on project design and estimation and sales capabilities for Britco, and managing our rental fleet to maximise earnings and optimise return on investment for WIS.”

Vertikal Comment

It needs to be said that the company has performed very well since 2012 with substantial increases in revenues in 2013 and 2014. The problem is of course that costs increased at a similar pace and now that revenues have slipped back somewhat it is clear that the business is no longer sustainable at historical levels.

Modular space- site cabin rentals etc.. - is a funny business which seems to post periods of incredible growth and prosperity followed by an eerie quietness. It seems to be one that is best accompanied by an alternative product range such as aerial lifts with similar revenue streams - or left to a totally dedicated specialist?