29.04.2009

WD Bennett enters administration

UK tower crane rental company WD Bennett Plant and Services Ltd has been placed into administration following a difficult trading period and having lost a major accident lawsuit.

The Sharpness, Gloucestershire based company was ultimately owned by Edward and Karen Seager, although ownership is through a number of holding companies. The Bennetts ran a fleet of 121 tower cranes, according to the 2008 Cranes&Access Top Rental company survey.

The company suffered a fatal accident in early 2005, when one of its tower cranes collapsed in Worthing, while being dismantled, resulting in the death of two employees.

The company had been found guilty having pleaded not-guilty and was facing substantial fines and costs. On top of this it had recently completed a major renewal campaign since the accident in the belief that more stringent policies from the UK Health & Safety Executive and major contractors would put those running very old cranes out of business.

In three years it reduced the average age of its fleet from 15 years to four years, however as a number of high rise buildings were stopped and demand slowed, rates were cut and contractors have resorted in many cases to hiring cranes at the lowest price, often from fleets with older equipment.

The high debt levels and the impending penalties eventually became too much and yesterday evening the company called in the administrators. Edward Seager has set up a new company Bennetts Cranes Ltd and has purchased 18 cranes from the Administrator, along with the debtors and the goodwill. He has also purchased a further 24 cranes from various finance companies and will continue the Bennett business from the same premises with the same staff.

Vertikal Comment

We have typically been critical of business owners that have used the UK’s totally inadequate bankruptcy laws to put a business into administration and then open up the next day under a similar but different name.

However……… there have been a couple of cases recently where the owners have appeared to be ‘playing fair’ and not simply engineering the situation to steal from creditors or cover their incompetence.

We do not know yet who – apart from the finance companies and the legal system – has been left with bad debts from the Bennett failure, nor by how much. Seager always appeared to run a solid business, for most of the time, and clearly believed that UK tower crane companies that invested in new equipment and pushed the quality aspect would win-out in the post Worthing and Battersea era.

However when a rental company invests heavily in expansion or fleet renewal there is always a risk that they will be unlucky with the timing. It is a bit like musical chairs, you hope that the music will not stop before you have paid down the renewal/expansion ‘bubble’ in your fleet.

Should companies that follow a responsible safety and business ethics policy be the ones to fail in a sharp down-turn like this or should it be the companies that run decrepit old equipment, cut corners and lead a charmed life when it comes to prosecutions?

It is a question I find hard to answer, the law of the market says the ‘good guy’ goes down and yet……. Perhaps if the Major Contractors Group and the HSE had implemented a ruling that put draconian restrictions and high inspection costs on 10 or even 15 year old cranes, the situation would have been different. Sadly in spite of all the talk and posturing from most contractors, they still hire on price and cover their backsides with paperwork, even if that means taking cranes from some of the worst rogues in the business.

Having said all this Bennetts is up and running in a blink of an eye, with a fleet more attuned to the market and a manageable debt load, while some other excellent companies struggle on regardless. In Bennetts defence had it tried to follow this path the fines and penalties from the Worthing accident would certainly have put it under if the debt load hadn't done it first and so that option was simply not available.

One last word, there is a lesson here for all rental companies that are currently aging their fleets. If Bennetts had not allowed its fleet to age to 15 years, maybe …. it would have survived intact?