Baldwins Industrial Services issued a warning to the financial community on 15 September that its results for the year to 31 March 2001 would be “significantly below current market expectations”.
The company’s half-year results were published on 30 September, after Cranes Today went to press, but Baldwins said in advance that “the group’s operating profitability in recent months has been materially below expectation”.
Its share price fell 37% on the news, from 427.5p to 271p.
Baldwins’ main rivals in the UK mobile crane hire market – Initial GWS, Ainscough and Hewden Crane Hire – have all struggled this year. GWS’s mobile crane division is up for sale (its crawler division having already been sold to Weldex) while Hewden ousted its group chief executive, Alistair Napier, earlier in the year.
Just four months ago Baldwins was indicating that it remained comparatively immune from the difficulties of making money out of operating cranes in the UK. “We see a very good market in the UK,” sales director Grant Mitchell told Cranes Today (CT June2000, p27).
Last month, however, Baldwins said that UK revenues were running 10% below expectation, or broadly in line with 1999/2000 turnover.
“Because of the high fixed cost nature of Baldwins’ business, this is having a disproportionate impact on operating profits. In response, Baldwins has been moving equipment out of the UK, notably to the USA and Venezuela, where it is able to achieve better utilisation rates and margins. This has, however, been to the short term detriment of profits during the period that the cranes have been in transit. In the United States, where the group is establishing a network of depots and sales offices, sales are progressing toward plan but the costs incurred in creating this network mean that it is not yet profitable.” The company added that it remained confident of the long term potential of the US operation and said that utilisation levels of equipment in the UK were “beginning to show signs of recovering to more acceptable levels”.
