Lavendon Group is Europe's largest renter of mobile, powered work platforms - nicknamed 'cherry pickers' or 'magic carpets' - which lift people and their tools and materials to work safely at heights of up to 100 metres.
The group wanted to improve the performance of its German subsidiary, in line with its strategy to increase return on capital. In the prior two years, sales and profitability had declined at Gardemann Arbeitsbühnen GmbH, based in Alpen, near Duisburg.
Collinson Grant looked at ways in which the business could be restructured to match operational costs with likely revenues.
Our consultants analysed a lot of transactional and operational data and found there was potential to more than double operating profit at minimal risk. In particular, we found that by reducing the size of the fleet, the business could achieve a considerable increase in efficiency while putting only a tiny fraction of hire days outside the reach of its capacity.
We considered four scenarios with varying degrees of consolidation in depots and workshops and evaluated the effect they would have on the profit and loss account, return on capital, exceptional costs and labour relations.
The conclusion was that incremental change to the existing network of depots and workshops was the best course of action. Consolidation into a smaller number of hubs would have put revenue at risk and led to increased transport costs, without creating sufficient benefits to compensate.
We recommended that the business should take steps:
- to manage pricing and the use of discounts
- to 'sweat' the hire fleet and workshops more effectively
- to make organisational changes.
The staff was reduced by about 10 per cent, some of which was achieved by not filling posts. Redundancies were spread over several months to comply with German employment law and good practice in HR.
The project established that there was an opportunity to make considerable cost savings which would lead to an immediate increase in operating profit. Since the conclusion of our work, the business has reported good progress towards these targets.
Matthew Hickin, Managing Director of Gardemann, said:
"The Collinson Grant team demonstrated a high level of integrity during the project and consistently delivered high quality work at the agreed deadlines. They maintained a professional approach throughout and were able to communicate effectively with employees as well as presenting findings and recommendations confidently to the Board. Collinson Grant were hands-on, showed good operational awareness, and their practical proposals provided a foundation for operational and financial business improvement."