Riwal UK final days
Riwal has started winding up its UK operations after 13 years in the country.
Many key staff ended their time with the company over the Christmas period, while a few others will be involved with closing down its operations.
The company announced that it was considering its options back in October and having done so started the process of closing down. Key members of the UK team have spoken highly of their time with business as they leave for careers elsewhere. Most of the equipment will be deployed to other parts of the Riwal network.
See: Riwal may quit UK
Riwal do generally close business that are excellently run.
Telling it how it is
Most hire companies that open subsidiaries in other countries keep ownership of the fleet in the mother/holding company, and basically crosshire the equipment to the subsidiaries. While from certain points of view this is prudent business, the reality is that the subsidiary will then likely always suffer from a weak balance sheet, and poor cashflows.
The value in a hire business is in owning the asset, and this is especially true for powered access where the rental rates are low, and the residual values are high. When the holding company takes its crosshire rate, and typically some management fees, there is nothing left in the subsidiary, and quite often, the crosshire rates are quite high relative to the local market rates, so the subsidiary always struggles, because it owns nothing, but owes everything.
For most hire companies, with only one or two subsidiaries, they allow the subsidiary struggle on, and provide a letter of comfort for the auditors. In Rival's case, with subsidiaries in many countries, they have more options to move the equipment to countries where the rental rates are less supressed, especially when there are long delivery times being quoted from suppliers, and especially when they still need to sell off some of their older stuff, and cash in on the good residuals for the holding company.
So, in summary, a prudent business decision for Riwal as a whole perhaps, and absolutely no reflection on on the staff at Riwal UK