Glasgow plant, tool and equipment hire company GAP aims above £200m as its half-century nears

Chairman Danny O’Neil highlighted the fact that the rise in turnover had been achieved even though the year to March 2018 had three fewer trading days than the prior financial period.

Glasgow-based GAP’s pre-tax profits dipped to £16.7m in the year to March, from £17.1m in the prior 12 months. Joint managing director Douglas Anderson flagged the effect of the reduced number of trading days on profits, noting this factor did not cut the cost base.

Mr O’Neil highlighted a rise in GAP’s earnings before interest, tax, depreciation and amortisation (EBITDA) to £73.5m in the year to March 2018, from £69.8m in the prior 12 months.

He noted GAP’s continuing heavy investment. GAP invested a further £60m in its hire assets in the year to March 2018, and added £10.5m to its property portfolio.

Asked whether GAP expected to raise turnover in the current financial year to next March, joint managing director Iain Anderson replied: “We are budgeting to do over £200m this year. That would be a real milestone for us.”

Douglas Anderson revealed GAP was budgeting for a rise in profits this financial year, adding: “We are a little bit ahead.”

Iain Anderson highlighted particularly strong performances by GAP’s non-mechanical and lifting equipment divisions, which have been built up in recent years as the long-established plant and tool-hire company has pursued major diversification.

Douglas Anderson, whose son Mark sits on the company’s board and heads the plant and tool division, said: “In non-mech, we are heading down a road where, in many cases, there will be an element of design in what we provide.

"That lifts you right out of commoditisation. It is a bespoke solution to a unique situation that needs a bit of design.”

The non-mechanical division supplies crowd-control barriers, temporary fencing, road plate, and trenching and shoring equipment.

Douglas Anderson said: “If you go deeper than a metre, you need to shore the trench.”

Pre-fabricated “drag boxes” are used to shore trenches.

Iain Anderson meanwhile highlighted GAP ’s focus on serving lift companies, such as Otis, citing the testing of ropes as an example of such specialist activity.

GAP also has an events division. Iain Anderson noted GAP had supplied about 300 toilets for Runrig’s farewell concert earlier this month, below Stirling Castle.

He added that the company had also supplied pedestrian barriers and fences, and power lights for the concert, highlighting the spread of GAP’s business.

Douglas Anderson cited tough trading conditions in London.

Mr O’Neil noted that GAP, the fifth-biggest player in its sector in the UK by turnover, is often ranked third-top in terms of profit.

The company now has more than 135 locations. It has more than doubled its number of locations over the last seven years.

GAP continues to increase its workforce, and now employs 1,807 people. About one-quarter of the workforce is based in Scotland.

Chris Parr, who previously headed paper manufacturer Tullis Russell and joined GAP in May 2016 as financial director, noted the company expects to increase its workforce to around 1,900 by early summer next year. GAP had about 1,100 staff in spring 2014.

The company’s directors noted growth during the year to March 2018 in the re-hire business, through which the company sources kit that it does not own from partners to broaden the range that it can offer customers.

Mr Parr said re-hire activities had grown to account for 10.9% of turnover in the year to March 2018. It had made up 8.7% of turnover in the prior financial year.

GAP has increased its turnover and EBITDA consistently in recent years. It made EBITDA of £43.8m on turnover of £118.4m in the year to March 2014.

The company was founded by Douglas and Iain Anderson’s father, Gordon Anderson, in 1969. The brothers have been running the business since 1988.