UNITED KINGDOM — Hewden Stuart, the United Kingdom's largest rental company, is battling plunging profits amid intense competition and increasing salary pension costs, according to British press reports. Total pension cost to Hewden jumped to about U.S. $7 million, up from approximately $2 million in 2002.
Hewden Stuart, founded in 1968, was acquired by Canadian Caterpillar dealer Finning International in January 2001 for 322 million British pounds, about $590 million in current currency conversion rates.
Pre-tax profits dropped from approximately $74 million in 2002 to about $25 million in 2003, with volume flat at about $480 million.
In the company's annual report, Hewden directors said the decline occurred despite a 4-percent rise in construction activity.
“This strong [construction] performance has prompted equipment manufacturers from Europe and elsewhere, where economic prospects are slower, to ship their surplus equipment into the U.K.,” company officials said. “Consequently, the U.K. equipment rental market was very competitive in 2003 and is expected to remain so in 2004, characterized by overcapacity and downward pressure on prices.”