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By Ian McConnell

PLANT, tool and equipment hire company GAP Group yesterday flagged the furlough scheme’s key role in enabling it to retain the vast bulk of its workforce amid the coronavirus crisis, but expressed sadness at having to implement around 130 redundancies.

The Glasgow-based family business, headed by brothers Douglas and Iain Anderson, flagged a sharp rebound in revenues since the depths of lockdown.

GAP has been able to retain around 1,660 staff, around 40 of whom are still on furlough.

Chris Parr, chief operating officer of GAP, revealed that revenues in September had been only 1.4 per cent lower than in the same month of last year, in spite of the effects of the pandemic. He noted that the year-on-year decline in revenues in April had been 34%.

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Mr Parr said profit in the new financial year to date was a “wee bit behind” the same period of last year. However, he noted that GAP had remained profitable in every month, in spite of the plunge in revenues caused by the lockdown measures to slow the spread of the Covid-19 coronavirus.

GAP’s latest accounts show the company made a pre-tax profit of £18.66 million in the year to March 31, down marginally from £18.71m in the prior 12 months. This is the third-highest profit in the company’s 51-year history.

The firm highlighted the major hit from the coronavirus pandemic and the UK’s move to full lockdown on trading in the final two weeks of the financial year. Turnover rose to £209.8m in the year to March, from £203m in the prior 12 months.

Mr Parr said: “We, like most businesses with a March year-end, had two weeks of heavy impact with Covid, which hit very quickly and very hard in those last two weeks.

“I think it would have been well ahead of last year had that not been the case, from a revenue and pre-tax [profit] perspective.”

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Asked about the position with the workforce, Mr Parr replied: “The majority of our staff are back from furlough. We have a very small quantity of about 40 people who are still on furlough – typically that is driven by their health issues.

“We made a small headcount reduction around the middle of last month. We had about 130 positions that we sadly had to make redundant. Sadly that is a [function] of the world we are living in.”

Highlighting the importance of the UK taxpayer-funded furlough support scheme in protecting jobs, Mr Parr added: “The job retention scheme was hugely helpful for us to buy us the time to keep the majority of the workforce.”

Iain Anderson, noting that revenues had rebounded more quickly than he would have expected in April, said: “Nobody likes making people redundant. We have to think of all the other boys and girls in the business. We have to look at the long-term future of the business and make sure their careers are secure.”

GAP’s managing director for Scotland and the north of England, Mark Anderson, who is Douglas’s son, noted that customers had continued to pay their bills during the downturn. He contrasted the general situation in the sector on this front with that in the last recession.

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He said: “One of the pleasant things was our customers continued to pay us, and we continued to pay our suppliers. In the [last] recession, there was lots of bad debts going round and no money around and no one helping each other out. So far, it has been very amicable.”

Iain Anderson flagged a slower recovery in revenues in Scotland. He noted the business in Scotland had taken a “couple of months longer” to get back to similar levels of revenue to last year.

He said: “In Scotland, the lockdown was a bit more severe. I think having 85 per cent of our business south of the Border made it a faster return to similar levels of revenue [to] last year. If we had only been in Scotland, it would have been a slower recovery back to last year’s numbers.”

Karen Greenshields, who is managing director of the lifting, survey and safety equipment division, flagged GAP’s focus on working with customers which had the firm’s equipment to put these hire arrangements on suspension for as long as possible when work was halted by lockdown.

Ms Greenshields, who is the daughter of Douglas and Iain Anderson’s sister Maureen Smith, added: “In Scotland, we continued the suspension situation for longer – probably for four weeks longer.”

Iain Anderson flagged GAP’s low exposure to housebuilding and the resilience of the business in terms of its focus on supporting the likes of utilities and roadworks. He said: “We do a lot with the highways authority, utilities companies. The roads have to be maintained. The services have to go into the ground and be maintained, if you have a burst pipe. I think we have a good spread of customers…in sectors that need to be maintained.”

Mr Parr noted GAP had invested more than £10m in its hire fleet in the last six months, and expressed hopes that demand would enable greater capital expenditure than this in the second half of the financial year. GAP, which in 2019 celebrated its 50th anniversary and has 146 locations, invested £65m in its last full financial year.

The firm has, since 2011, diversified significantly beyond its traditional plant and tool-hire business with the launch of several new divisions. The non-mechanical equipment division hires the likes of crowd-control barriers, and trenching and shoring products.

As well as setting up its division specialising in providing lifting, surveying and safety equipment, GAP has also launched a welfare division, with a hire offering ranging from portable toilets to liquid-waste tankers.

Ms Greenshields flagged plans to increase the number of tankers, which provide water refills and waste-removal for welfare units that are not plumbed into the mains, from 13 currently to about 100 over the next couple of years.

Mr Parr said GAP was “very proud” of the way the firm’s employees had adapted to the challenges presented by the coronavirus crisis.