Dunedin success story Hirequip to list on the NZSE
Dunedin success story Hirequip to list on the NZSE
Dunedin businessman Stuart McKinlay has driven leading nationwide hire services group Hirequip down an aggressive growth path since the 1970s.
Not bad for a Dunedinite who left school to become a builder, but only stayed in the trade for four years before hanging up his hammer. It’s ironic, too, that after having bought more than 17 businesses over the past 33 years he considers himself risk adverse when it comes to business.
Stuart thanks his father for giving him his start in business. His father, Peter, bought Dunedin Hire Service in 1969, a supplier to his construction company, and then made Stuart a partner and its fulltime operator and sole staff member.
“I was put in a business which I knew very little about it. I had to learn quickly and my father didn’t join me in the business for another five years because after he sold his construction firm to Fletchers Dad then stayed on for another five years with a management contract.”
“He (Peter) did join me in the business for four or five years (in the late 1970s) before retiring.”
From a small shop in Dunedin offering mainly DIY tools and light construction equipment the business grew. Stuart expanded from Dunedin in the early 1970s to build a presence in Cromwell and Alexandra – coinciding with plenty of activity on the Clyde Dam project.
“In the latter part of the 1970s and 1980s we expanded quickly taking advantage of demand for large machinery as projects gathered pace around the Clyde Dam.”
Mr McKinlay continued looking for opportunities and built up a new business in Queenstown after buying a yard there. The Hirequip name didn’t come to life until 1984 when Mr McKinlay bought four branches of McKay Hire, all of them in Christchurch. One of these was a Hirepool, a stand-alone branch not controlled by then group owner Fletchers.
With a growing number of branches Mr McKinlay took the opportunity to turn his company into one brand, hence Hirequip was born.
As the acquisitions continued the range of plant provided extended and Hirequip became renown not only for heavy industrial and commercial equipment hire, but also for party and function hire, and portable buildings and portable toilets, etc.
Branches in Invercargill, Blenheim, Nelson and Wanaka were added until 1996, making the company the leading hire services company in the South Island.
Mr McKinlay and his team have worked hard on improving sites, locations, and product ranges as well as upgrading equipment to maximise the growth opportunities.
Looking back he never envisaged such a vertical growth path, however, by the late 1990s he realised to keep growing a presence in the North Island was necessary. “The cost of shifting equipment across Cook Strait to bolster a start-up North Island operation was prohibitive.”
In 2000 Hirequip partnered with Australian investor, GS Private Equity, to acquire the North Island chain Projex Equipment Hire from Viking Pacific (formerly the Skellerup Group), providing Hirequip with a 20-branch presence in the North Island.
“We continue to make incremental progress bedding down that acquisition. It’s gone reasonably smoothly, but there is still some duplication that we are working on removing.”
“We’ve spent $20 million replacing and upgrading equipment. One of the reasons why they (Viking Pacific) sold is because they didn’t have the capital to inject into the business to smarten it up.”
Mr McKinlay says the integration of Projex into the Hirequip brand will take another 12 months before it is complete.
Mr McKinlay never had any aspirations to list Hirequip though he was happy when listed investment company Southern Capital came along last year to replace GS Private Equity Pty Ltd which sold its 50 percent stake for $17.35 million.
The latest transaction, which merges Hirequip and Southern Capital, gives Mr McKinlay and family a 26.7 percent stake.
The Hirequip name will take on extra prestige as Southern Capital is to ask its shareholders at an EGM for the thumbs up for the publicly listed company to be renamed Hirequip.
Mr McKinlay will have a seat on the Board and will continue to run the hire business on a daily basis from Dunedin. Joining Mr McKinlay on Southern Capital’s Board will be incumbent Hirequip chairman and fellow Dunedin businessman, Trevor Scott.
involved in the day-to-day stuff, that leaves Graeme
(Wong-Executive Chairman) and his executive team to get on
with development and acquisitions.”
“I’m just glad it’s worked out this way because it’s great to be able to be involved with the type of skills that are on offer at the Southern Capital office.”
“The next focus will be to develop the DIY business in the North Island while continuing to finetune the performance of the industrial and construction operations,” he says.
Mr McKinlay said the hire services sector was renowned for being highly capital intensive but one that delivered benefits to companies and individuals who used their equipment.
Hirequip employs about 320 staff throughout the country, has tens of thousands of products as well as assets in excess of $60 million.
Some of the company’s products include
excavators, front-end loaders, road rollers, trucks,
generators, compressors, DIY equipment, plus a party and
function division that provides marquees, toilets, crockery
and lighting equipment.