SHB Hire, 63rd on the Solent 250 list and winner of the 250 Owner Managed Business of the Year 2011 award, provides short and long-term hire of just about every possible vehicle. Father and son directors Mike and Paul Street spoke to Sue Hughes
Recognising an increased demand for commercial and 4×4 vehicle hire in the south, SHB Hire was launched in 1968. Forty four years later and operating on a national level, the SHB Group is now recognised throughout the industry as being a specialist in 4×4 vehicles, owning Europe’s largest 4×4 hire fleet and the UK’s largest hire fleet of HGV tippers and crane lorries.
Over the years the fleet has been expanded to include a wide variety of commercial vehicles including vans and other light commercials and an eclectic range of specialist vehicles from quad bikes to agricultural tractors, and council utility to traffic management vehicles; as well as lorries up to 44 tonnes, all of which can be customised to suit customers’ requirements.
Directors Mike and Paul Street, acknowledge that the success of the business is based on its strong customer service focus, as well as a large fleet which can be mobilised quickly. Flexible hire packages, variable contract lengths and customised vehicles are standard options with aftercare service provided through dedicated mobile engineers. After hiring, many customers are keen to purchase similar models, therefore 4×4 sales outlets have become another successful division.
As the recession affects customers’ spending, neither Mike nor Paul would want to predict the picture five years down the line, but are reassured as customers continue to hire, rather than buy. The average lifespan of a hire vehicle is three to four years but, due to the diverse vehicle types supplied, there is no set lifetime in SHB’s business. Some of their gritter lorries for instance, which have been much in demand during the early February cold snap, have been operating for up to 14 years.
If there are obstacles to growth this year, Mike has a two-fold response: ”The lack of available finance and the ever increasing cost of it – this coupled with a shortage of skilled mechanics. In recent years, the education system has totally ignored the skilled trades and getting suitable young people is difficult. We have a robust apprenticeship scheme and a very good record of keeping them when qualified, but as employers, we see a current lack of basic educational skills in all areas of the business.”
SHB Hire is acquiring more sites this year, a new one in East Anglia which will create further employment, and in London, a larger site as a replacement for its current branch. ”The business has grown organically,” Paul says, ”and we are always open to taking over other failing companies’ assets if they are a good fit for our business.
”We have no overseas plans,” he continues, ”but we entered a new market with chiller/fridge vehicles about 18 months ago, having acquired them with a good customer base from a local company which went into administration.”
One area SHB is looking into is developing more fleet management and brokerage solutions, but as Paul says: ”Compared with our competitors, we have the most diverse fleet in the UK and are recognised as a ’One-Stop-Shop’ for all types of vehicle hire. We have more than 1,000 live accounts at any one time and 40% of our turnover is from our top 20 customers.”
Raising the profile through business development managers, existing livery, word of mouth and emailing customers the company has built and expanded its business, rather than using conventional advertising or social media.
SHB’s asset finance is specific to vehicle hire stock. ”We have a very conservative depreciation policy on vehicles,” says Mike, ”which can make our published accounts asset base very understated.” When it comes to end-of-life disposal, there is a good overseas market as well as robust retail, trade-to-trade or auction outlets within the UK.
Employing more than 400 people, SHB is constantly seeking experienced employees and the East Anglia site will boost its workforce. Operating in an open manner, the structure includes senior and depot managers who are given clear and informed reports on the business, plus financial incentives. As auto-enrolment pension provision is now a factor, Mike says: ”You can’t give pay rises and put it in the pension pot. People want money in their pockets at the moment.”
Health and safety is a regulatory area which costs the company a fortune, but as Paul notes: ”We do win a lot of work based on it.” Both men dislike the ’compensation culture’ of accident insurance resulting in higher premiums for vehicle providers. In 1992, SHB Hire was the first vehicle hire company in the country to be awarded the BS5750 Certificate (now replaced by ISO 9001:2008) and 20 years later, it still holds this accreditation. 2012 will see it working towards gaining ISO14001 (Environmental Management System) and ISO18001 (Health & Safety Management System).
Looking at personal targets for 2012, Mike’s is ’to take more time off’. He collects old Land Rovers which means he will be involved with 4x4s long after any official retirement. Paul’s passion is music. He plays tenor horn in Woodfalls Band, the 2011 West of England Champions who reached the national finals at the Albert Hall: ”We need a new sponsor, as we have costs such as professional conductors, and I’d like to reach the finals again.”
To conclude, if they had a key message for the Government that would help business, Mike states: ”Get a grip. There’s a lot of talk, but no action. Everything planned is watered down; we need a reduction in red tape – and taxation could be greatly simplified.”
Mike & Paul Street
SHB Hire website