By Scott Wright
MV COMMERCIAL, the Scottish truck leasing and sales firm, has flagged a 20 per cent increase in revenue since centralising operations to a “super site” in Airdrie one year ago, as its managing director welcomed the certainty brought by the General Election result.
Managing director Steven Cairns hailed strong demand from the construction sector, boosted by major public infrastructure projects, as he declared the firm was on track to hike turnover considerably in its current financial year.
MV turned over
£72.8 million between December 2018 and October this year, compared with £61.4m for the same period the year before.
While official figures from the ONS have in recent months signalled a fall in construction output, Mr Cairns said demand for MV’s core products, such as tippers and lorry-mounted cranes, remains strong.
He said: “Construction as a whole throughout the UK is still quite buoyant. There are still major infrastructure projects which are both ongoing and starting. It is the specialist areas which are driving the main part of that.
“The fact we have these products in stock ready to go gives us a great advantage, because many of them can take several months to build. The fact we have got over
£20 million of stock sitting ready to go at any time is great for companies who have immediate demand and have to get the products into operation quickly.”
Mr Cairns noted that the “capital cost” in amassing stock at that level is significant, but said demand was currently was so strong that MV has the confidence to build and stock them, “knowing that companies are going to utilise them”.
A key strategy for the firm is to keep the keep the age of its fleet relatively young, with MV taking advantage of a strong market for nearly-new vehicles.
“It has built up a data base of more than 5,000 customers, including construction firms, to which it regularly sells used vehicles.
Mr Cairns said: “We’ve got 1,400 vehicles on hire. As part of that roll and build programme we will put vehicles in to replace existing hire vehicles. The typical age of our hire fleet is now 30 months. We are both putting in new kit to meet ongoing growth and demand, but we are also turning our existing fleet to keep it fresh and attractive.”
Mr Cairns added: “There is generally a big shortage of nearly-new kit for sale in the UK. We fill that void quite well.”
Underpinning MV’s growth is the continuing benefit the firm is receiving growth from the £3.8m it invested in a new Lanarkshire site 12 months ago, which he said has driven efficiencies to the benefit of the business and its clients. The growth has led MV to increase staff numbers to more than 180 from 150 a year ago, with the firm also continuing to bring in modern apprentices each year to help create a pipeline of future staff. It currently has
12 apprentices on its books and plans to take on a further five over the next year.
Mr Cairns said: “The move to Airdrie [and] everything it has delivered has been a big catalyst to push things on. It has been very positive for the company’s development. It has really delivered a raft of improvements and efficiencies which ultimately our customers benefit from.”
Meanwhile, asked how the result from Thursday’s General Election would affect the business sector, Mr Cairns said: “I personally think it is great that there is now a clear result.
“It allows the country to move on. Hopefully it is a positive thing for the economy and creates business confidence across the UK.”
On whether it gives MV more freedom to carry out its strategy, he added: “I think it can only enhance out plans.
“From our point of view, our order book has been really strong throughout and conditions continue to look favourable for the six to nine months, which is really positive. The Airdrie move has given us a really strong foundation to build on.”
Mr Cairns highlighted the growth of the firm’s asset finance division, MV Finance, which has so far funded £17m of sales this year. He said: “What we are seeing is that many companies are taking advantage of the Government’s annual investment allowance, which allows companies to claim 100 per cent tax relief on asset investment of up to £1m.”
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