A GLASGOW-BASED vehicle leasing company has declared it is poised for a major leap in revenue after completing its first major acquisition.
Privately-owned Fleet Alliance is on course to lift turnover by around one-third to £10 million after completing a “seven-figure” deal to acquire a controlling stake in Neva Consultants, an Essex-based fleet management firm. And Fleet Alliance, which is based in the Skypark business complex, said it is open to doing further deals.
Managing director Martin Brown, who formed Fleet Alliance with Allen and Marjory Flynn in 2002, said: “We’d been looking for something loosely for about 12 to 18 months, thinking we could take another step. We’re confident we are in a good position in the market, economy permitting.
“The biggest aspect is that we have grown everything organically and debt-free. We still feel we have got organic growth, but we just felt that a step up would give us a bit more power and strength in the market, a better voice, a better position.
“There’s a fresh impetus, undoubtedly, and we are really looking forward to it.”
Mr Brown signalled that Fleet has the appetite to do further deals, noting that there is no shortage of targets to aim for in light of the leasing market becoming regulated by the Financial Conduct Authority (FCA). Complying with the regulation, which is aimed at consumer protection and covers everything from training to process documentation, takes significant investment and some smaller firms may not have the capacity or appetite to meet the requirements in time.
The regulation has arisen because firms such as Fleet have moved into providing services to consumers as well as businesses. Mr Brown said Fleet offers leases on cars of “any make and model” and commercial vehicles of up to 3.5 tonnes. Its customer base ranges from consumers to around 400 businesses, to which it provides outsourced fleet management solutions.
“I just sense that some business owners are maybe getting a little battle-weary,” Mr Brown said, mulling takeover targets.
“Whereas we have just embraced the regulation and tried to work with it. That’s one of the reasons that would give us the opportunity to look to expand further, if the right fit comes along.
“We’re certainly not sitting here saying we need something now, but I do think we will look to do it again in future.” Mr Brown added: “This is our first acquisition and genuinely we would like to think, all being well, that we may look to other opportunities in the future.
“There is quite a lot of scope in our market potentially – there’s been a lot of change.”
The Neva acquisition, which enhances the Scottish firm’s presence in the south of England, creates a new Fleet Alliance Group with around 100 employees, 30 of whom arrive from the English firm.
The business, which will have a combined fleet of more than 25,000 vehicles, will be headed by Mr Brown.
Neva directors Graham Prince and Nick Collinson will remain with the business with day-to-day responsibility for the Essex side of the operation, which will continue to operate under the Neva brand. Both have taken shareholdings in the enlarged group.
Mr Brown noted that broadening the firm’s geographical presence was not the only factor behind the acquisition because Fleet Alliance was already a UK operator before the deal. But he added that “it certainly helps when you have a south-east base as well.
Mr Brown said: “We do a lot in the Scottish market, but to grow we have had to go south of the Border too.”
Commenting on the wider outlook for the economy, Mr Brown said the fleet market is already feeling the fall-out from the UK’s imminent exit from the European Union.
In particular, he said, the margins for manufacturers selling into the market against the pound “have been dropping since Brexit undoubtedly.”
“And we have seen some price movement,” he added. “The market in terms of registrations has not been affected, but behind the scenes there has been a bit of a price creep. So Brexit has definitely had an impact.”
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