UK rental company Extreme Powered Platforms was placed into administration on Friday, at the same time a new company – Extreme Hire Ltd - was formed which has now acquired the ongoing business, following a restructuring.
The new company will continue to trade as before, under the Extreme Hire banner operating from the facility in Hailsham, East Sussex. The original business was established in 2004 and kicked off its activities in 2005 with a fleet of electric slab scissor lifts. It now offers a full range of aerial work platforms from self propelled scissor lifts to booms and large spider lifts as well as push around lifts and truck mounts.
The company opened a second location in Shepperton, Surrey in 2014. In 2016 it added JLG telehandlers to its product range and opened a third location in Coventry. In its 2016/2017 accounts it reported assets of £2.8 million and a net worth of £543,000.
Both the old and the new companies are owned by Stuart Bond.
We have now received the following letter from Extreme - which we simply publish in full. The rest of the report remains unchanged.
"It was with a heavy heart that I made the decision to place Extreme Powered Platforms Ltd into administration on Friday 27th July. After initially starting the business in 2004 and putting in 100% commitment, hard work and financial investment, myself and the team were very proud of the reputation we quickly gained as a first class and safe service provider for our customers. After nearly 14 years of trading and having come through a major recession between 2007 and 2012, the business was going from strength to strength and last year, we had our best year of trading. In January 2018, as everyone knows, Carillion collapsed. We supplied one of their subsidiary companies and therefore, took a direct hit with the Carillion group collapse. What we didn’t know at the time, was many of our customers also supplied and worked for the Carillion Group."
"Sadly, many of these companies fell victims to the collapse and therefore, our cash flow took another pounding. To top off this situation, one of the national companies approached our best customer and beat our rates by 30%, resulting in us losing a customer and therefore, having a catastrophic effect on our cash flow, as this customer made up a quarter of our annual turnover."
"In a time where equipment and running costs etc. are all going up, sadly, the industry hire rates seem to be on a continuous, downward trend. Although many of our customers will pay the correct hire rate for our service levels, some companies will unfortunately go for the ‘stack them high, sell them cheap’ option. I am pleased to say that as we managed the administration situation with the appointed administrator, we were able to buy all of the assets and novate finance agreements across to our new company, Extreme Hire Ltd. I am also very pleased to of kept all of our team together, all of whom have been right behind me. It is my intention to do the decent thing by our suppliers and pay them up to date from Extreme Hire Ltd. I would also like to add, I have been blown away by the support from the industry. I have had very supportive and positive letters, emails, texts and phone calls from finance companies, manufacturers, customers, suppliers and most importantly, from other access company owners and managers. All of whom are prepared to help and support us, moving forward."
"Although our name has changed, it is our aim to continue to provide a first class service from all 3 of our locations. Thank you all for your ongoing support and patience."
It has been a while since we have seen mid sized privately owned access rental companies such as Extreme go through this process in the UK. While business volumes have been relatively strong, rental rates have continued to stagnate or ever slip in some cases, making the business very challenging and leaving no margin for error, this is especially true for companies that are heavily indebted with balloon type financing deals.
We should say quite clearly that we do not know if this is the case with Extreme, its problem, as with many companies appears to be more cash flow related and with major contracting companies like Carilion going failing, while owing hundreds of millions to suppliers and sub contractors, it will almost certainly have faced slow payments and some bad debts, and in this it will not be alone. It is perhaps time that rates started reflecting the rising costs and risks of giving credit to the construction sector?
While we have the official letter from Stuart bond on the restructuring, we have also requested further information and will update this item if there is anything to add.