Baring something out of the ordinary,nhr looks set to eclipse...

Baring something out of the ordinary,nhr looks set to eclipse the full year $872,000 npat made last year

For those not familiar with how this minnow has made it to now become a asx top 300 company curtosy of capital injection,capital rainigs and smart business acuisitions then heres a brief background on just where thay have come from

For more info go to www.nationalhire.com.au


National Hire - Today

As an evolving publicly listed company that has continually grown within the competitive rentals industry in Australia, National Hire possesses very important company documents, but the most crucial document in the office of Managing Director, Stephen Donnelley, is not an impressive share statement or lucrative contract; instead, it's a thick roll of butcher's paper with a series of scrawled points, statistics and tables; the fruits of a pivotal meeting of top managerial staff in 2000. This roughly hewn plan came at a time when National Hire's rapidly expanding operations had hit seemingly insurmountable odds in the form of a downturn, inflicted by Sydney's 'Olympic hangover' and exacerbated by the collapse of the company's public liability insurer, HIH. Even to a novice, this collection of lateral ideas and logical calculations seems like an innovative and determined approach to a hurdle that initially presented itself as potentially fatal for the company. It's easy to imagine the group of key management personnel looming over those sheets of paper, drafting, not only an escape route from their predicament, but a proactive doctrine, powering ongoing growth.

Stephen Donnelley stands above the notes from that historic meeting and frankly recollects the day National Hire overcame its greatest hurdle.

"You can either dwell on these things or fix them, so we set about the task of getting through the HIH debacle. We knew where we needed to be and we knew what we needed to do. We drilled into our own business, got to understand it a bit more and we articulated a plan among our senior management group. Since then, a number of those strategic plans have fallen into place."

National Hire now has two powerful allies in WesTrac and Caterpillar. This logical combination completes a triangle of associated businesses: WesTrac, a highly respected dealer; Cat, the world's leading innovator in the production of equipment; and National Hire, a growing entity in the rental market with experience dating back to 1962. While the subsequent shake-up has necessitated change, including re-branding, the positive influences of these alliances have begun to filter through the company. The most obvious is the investment of capital into the business. At the most crucial level - the 22 National Hire stores - this injection of capital is boosting National Hire's existing reputation for strong customer service by adding the crucial element: new and innovative equipment. In turn, this improved delivery to customers has contributed to the company's financial revival with a net profit of $872,000 for 2004 representing a $784,000 improvement over the last 12 months. Stephen Donnelley is clearly pleased with the company's new association with WesTrac and the business' ability to trade under the Cat brand:

“This marriage between WesTrac and ourselves has been going for 35 seconds, so ultimately we're still in the honeymoon period. All I can say is that all the people I have met are people with similar values to what we've got and I feel terribly comfortable with all of them. They have a couple of Caterpillar dealerships and they want to get on and grow their business. Then there's Caterpillar themselves which is a $20 billion business, and they want to grow. So here you have Caterpillar, a producer of very well respected machinery; WesTrac, a very well respected dealer of machinery; and we're the company who understands rental. To me, it's a pretty good fit."

At National Hire branches, confidence is already improving as new models join existing fleets. For a committed staff that previously emphasised unique service in order to impress customers, this influx of resources finally allows each division to deliver a comprehensive range that competently challenges the diversity offered by competitors


National Hire - History & Future Goals

While National Hire enjoys the beginnings of what promises to be a boom, Managing Director Stephen Donnelley has a constant reminder of the business' humble origins. His office is located at one of the original seven stores that combined to form National Hire in 1988.

Donnelley had started his own business in 1981 and as the industry went through one of its many consolidation phases, he was confronted by the same decisions facing many of his competitors: expand or sell out. Stephen Donnelley Hire resisted the lure of acquiring companies and the risks of expanding independently, choosing instead to form an alliance:

"Over-all, the industry may grow by five or six percent each year but in 1981 the dynamics were changing. People were looking to consolidate at that time, but we identified some people who we could do business with and chose those people rather than sell out. We would get together and we would stay in the industry. We put our three businesses together and we made it work."

On the 28th of September 1988, St George Rentals, Abbott Hire and the Stephen Donnelley Hire Group united as National Hire. With a combined experience dating back to 1962, the fledgling company observed trends, gauged the market and began a comprehensive restructure of its operations, making the transition from single-branch to multi-branch operations; an early version of the current system that incorporates five separate divisions. As National Hire expanded, the company attracted the personnel that would form the backbone of the business, including key staff now considered to be among the most influential personnel in the company. Meanwhile, as the company developed their new strategy, National Hire acquired the branches of competitors, further expanding the National Hire group.

In line with National Hire's continual desire for expansion, the looming Sydney Olympics created an urgent need to capitalise on the event's opportunities while recognising the dangers of over-committing capital. After growing the business steadily for a decade, National Hire had reached a crucial stage in its development.

"We were coming out of downturn and wanted to grow at the time of the construction phase of the Sydney Olympics but didn't want to get crunched,” admits Donnelley. “This is a capital-intensive industry. So we went to the public market and raised some capital. It was very successful. We used that capital to grow the business significantly."

Buoyed by the ability to deliver more to customers and enter new territories, National Hire seemed on track; but the downturn after Sydney’s Olympics combined with the HIH debacle, threatened the very survival of the company. This crucial time in the company’s history helped to forge a new approach and philosophy. The foundations of that philosophy were built on the confronting honesty of that time as Donnelley put his trust in valued key staff members who rallied to overcome all obstacles. If National Hire had previously emphasized the importance of personnel, the involvement of staff during the HIH debacle shaped an environment of trust that placed emphasis on management and division heads. Visit any of the division headquarters and you’ll experience a determined team of enthusiastic leaders, buoyed by the trust of the company’s management and doggedly pursuing targets, as Donnelley explains:

“They are the leaders, guiding the direction and growth of the business. This is a difficult business to grow in because it's capital intensive and cyclical. The only way we think you can do that is by having a quality of people who understand the dynamics of the industry; that have enough experience in the industry to anticipate what the competitors are doing and still have that loyalty with the customers. They are the people who are really laying down the touchstones for this business. They see what they want to achieve for the year in this business, then they'll measure it at the end of the year and see whether they have met their targets, or failed - and they beat themselves up pretty harshly because they're all competitive people. None of them like to fail. We're not internally competitive with one another but certainly, as a team, we're very competitive and rewards-driven about what we can deliver and achieve.”

This communal ‘can do’ attitude is consistent throughout the workings of the business, from the CEO to the individual stores, yielding results at a corporate level that filter through to the obvious benefits for customers: range, reliability and service. Focusing on the people who actually deal with customers may boost morale, but it’s no stunt. In fact, the company has always recognized this by naming all the staff members in the annual report each year.

"It makes you vulnerable because the competition or whoever it might be, can come and headhunt those people, but you back yourself if you put the people there and you try to develop that loyalty. Employees, in a balance sheet, really get nominated as being liabilities and you don't apply any great asset value to them. We try to, by nominating people in the annual report."

The empowering effect of this emphasis on personnel is obvious at every level of the business. The target-driven divisions are delivering results, built on a foundation of premium customer service and a recently improved range. To the customer, National Hire represents 'the best of both worlds': the personal service of a stand-alone entity combined with the range and networks of high profile competitors like Coates and Kennards. At a corporate level, new relationships with Westrac and Caterpillar are already producing dividends, expected to improve as customers discover the expanded range of National Hire stores. But don't expect National Hire to waver from its continual desire for expansion. The Hire industry is still fragmented with smaller businesses accounting for 47% of the market; room to move for a growing company like National Hire. From 1988 to 2004, the business has grown from a 7-branch operation to become a publicly listed company with an extensive network of 22 stores and significant market share. Relationships with powerful allies promise to continue that impressive growth.

National Hire’s metamorphosis represents a real Australian success story and although the company’s personable Managing Director remains humble, the impressive achievements of his team are obvious:

"To be able to grow National Hire in Queensland and Victoria, and to trade under the banner of The Cat Rental Store in New South Wales and the ACT with an expanded range of equipment, it's been an enormous evolution for the business. I think in 1988 it was a $9 million business and today it's closer to $40 million. Given the amount of capital you have to invest in the company, that's not too bad."