19.02.2009

New records at Finning

Finning International, the Canadian based owner of UK crane, access and telehandler rental company Hewden has reported record annual and quarterly revenues for 2008, although profits fell steeply while a c$151 million goodwill write-off at Hewden sent profits tumbling by over 60 percent.

Total Finning group revenues for the year were up 5.8 percent to just under c$6 billion ($4.8 billion) while the fourth quarter revenues climbed eight percent.

UK revenues were down nine percent in Canadian dollars, for the year but in sterling terms were roughly flat. Hewden fared less well with revenues declining 20 percent in Canadian dollars to c$357 million - roughly £200 million.

Finning said: “Rental revenues at Hewden continue to be affected by lower utilisation. A reorganisation of this business unit is underway to improve its focus on delivering on its commitments to customers, reducing its overall cost structure, and improving the performance of its assets.”

Profits at Finning wee hit by lower overall margins and higher SG&A costs, the result was a fall in pre tax profits of over 20 percent. The company also conducted a review of its balance sheet and concluded that Hewden was now overvalued and as a result took a c$151 million goodwill impairment which reduced Pre tax profits to c$153 million – 60 percent down on 2007.

In the UK profits slipped 27 percent, although some of this is due to currency factors.

Vertikal Comment

It is hard to make anything of this set of results that has not already been said, generally the group result is excellent given the current economic climate. Hopefully the constant restructuring at Hewden will now take a break to let it all work. In which case we might have a better picture at the end of the first quarter.