RERMAG

Rolls Forward

One of the top independents in the ultra-competitive Southern California markets, Rolls Scaffold & High Reach, No. 83, is maintaining strong debt to equity ratio, and improving dispatching and training programs, and big volume growth in 2006. RER recently spoke with CEO Michael Rolls.

RER: Were there any particular achievements by Rolls Scaffold and High Reach you feel particularly good about?

Michael Rolls: The successful implementation of our central dispatch system. And we improved the most in inter-department communications, which is the key to customer service.

Were any particular market areas or customer segments particularly strong in 2005?

Our company focus is in the commercial and industrial markets. These areas continue to show positive expansion with new construction or ongoing facility maintenance.

Your volume was strong in 2005. How about your margins?

Our company goals include positive revenue growth while maintaining a strong debt-to-equity ratio. This may have hampered growth but insured company value. We are very optimistic on revenue and profitability growth in 2006 with the momentum that was established during 2005.

Did any type of software or technology have an impact on your company in 2005?

In conjunction with our establishment of central dispatch we had system adjustments made for easier tracking of equipment by location. Updated point-of-service log information is now being generated for on-time status checks of all outgoing or incoming equipment.

Do you plan to open new branches or are you more focused on further penetration of the markets you're already in?

In 2005 we substantially upgraded our Long Beach facility that we acquired in 2004. We opened a start up in Riverside during 2005. In 2006 we are growing our customer base in the areas that we serve. We are exploring acquisitions. We are currently examining another start-up location that stays within the footprint of our service area.

Anything new from the equipment/fleet perspective?

Due to new equipment purchase lead times we mapped a strategy for 2006 that not only takes into account fleet growth but fleet turnover. Our goal is to maintain an average fleet age of 3 years or less and by year end we should exceed that goal. We are an aerial company that focuses primarily on scissorlifts, booms and forklifts. We see a lot of untapped potential available within these market segments.

Is Rolls dedicating resources for customer training?

We are continuing the expansion of employee training programs focusing on customer service for all areas of the company. This will help our employees forge a stronger bond in customer relationships.

Most people in the industry expect 2006 and 2007 to continue very strong? Do you feel the same?

We are confident that 2006 will bring revenue growth between 15 to 20 percent. We must continue to solidify rental rates while increasing other rates relative to new acquisition costs. We are optimistic about the first half of 2007 but that may be tempered somewhat if interest rates and fuel costs continue to climb upward.

It will be interesting to watch the rental company landscape evolve with multiple companies within the RER Top 10 being available for sale. The dynamics of those transactions could change the entire perception of the equipment rental industry.

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