hire industry rationalisation, page-4

Danube,
AFR 15/3 article highlighted the very fact that construction sector activity has been outperforming the mining sector.

given that so many hire industry players have some exposure to the mining sector, its a fair point that you make.

however, patient long term sophisticated investors will understand that the hire industry sector is both capital intensive and very much at the mercy of cyclical conditions,commodity prices,govt and ppp spending.

future strategy plays eg. bolt acquisitions to help keep the growth momentum turning over,diversifying the earnings base and building a one stop shop company for all types of customers will help ease investor and most importantly insto concerns when the cycal turns down.

i would suggest that its in the interest of not only COA but all hire equipment sector market participants to conduct their own (internal) strategic reviews because when and if COA gets gobbled up or taken over and sold off in parts(s) then interest and spotlight on the sector of the asx listed hire equipment firms may return as the mkt looks for the next takeover or merger and where to extract maximum value

the hire equipment industry is mainly dominated by not less than 12 players

the catylyst for the next round of rationalisation which is way long overdue, could be a correction in commodity prices, coupled with a major crank up in interest rates but the extension of such (overdue)activity might be delayed somewhat due to the long list of govt infrastructure works already in the pipeline and whilst most infrastructure works are badly needed some may not see the light of day as some firms are encountering difficulties in obtaining both labour and capital equipment

the short term focus by some might see prices as a buying opportunity but the longer term focus for the real players will be on tieing up deals,jv's and partnerships to maximise market sector penetration and market share with the aim of becoming a dominant player and s&p asx100 listed entity.