Sometimes rebranding just involves a change of logo but A-Plant, Britain’s biggest plant and tool hire company, is going much further by changing its name to Sunbelt Rentals Ltd on 1st May 2020. Given the heritage in the brand, it is a risky move. Why Sunbelt? And why now?
There are generally four basic reasons why companies seek to re-name themselves or their products: to ditch a tarnished brand; to move into new markets; to consolidate a brand family; or to move with the times and stay current.
To offer some famous examples of each category: Windscale became Sellafield to repair its image; Apple Computers became just Apple when it moved into a wider sphere of consumer electronics; Marathon, Opal Fruits and Jif became, respectively Snickers, Starburst and Cif, to conform to a single global name; and, moving with the times, 20th Century Fox became 21st Century Fox.
So which of these offers the best explanation for why A-Plant has decided to change its name?
A-Plant is more properly known as Ashtead Plant Hire, but no one calls it that – not even the company itself. Ashtead is more than 70 years old and introduced the abbreviated A-Plant name 35 years ago.
A-Plant is arguably one of the best known brands in UK construction. And with annual revenues of around £475m from 191 locations, it is the country’s largest plant and tool hire chain. Although A-Plant’s most recent financial results showed a 32% dip in operating profit for the six months to 31st October 2019, it still made a reasonably healthy £30m at a 12% margin. So this is not a company in crisis with a tarnished image. The explanation for the name change must lie elsewhere.
The new name, Sunbelt Rentals, will mean nothing to UK customers but it’s actually the name of A-Plant’s much larger North American sister company. Ashtead Group, the parent company, acquired Sunbelt Rentals in 1990 at a time when most US contractors owned their own equipment and the USA, compared to the UK, was an immature market for equipment hire.
Over the past 30 years, Sunbelt has grown both organically and through acquisition, both riding and driving the growth of the rental market across the Atlantic. In the year to 31st January 2020, Sunbelt US generated annual revenues of £4.3bn from 835 locations. The much younger Sunbelt Canada business generated £241m from 77 locations. Sunbelt, therefore, is 10 times the size of A-Plant. Not only that, but it still has masses of scope for growth, having a market share of less than 10%.
In this context, one can see some rationale in Ashtead Group rebranding its ‘Marathon’ as ‘Snickers’.
Ashtead Group is a London Stock Exchange listed company with shareholders who will take their money elsewhere if the company does not continue to grow.
Continuing success in North America seems plenty to satisfy these investors, but if the A-Plant side does not keep growing and pulling its weight, one can conceive of Ashtead deciding to ditch the UK and following the money across the Atlantic. Adopting the Sunbelt name, it can be argued, widens A-Plant’s growth opportunities – which it needs.
Changing its name also eases the way for the UK company to move into new markets, either with new customers or in new territories, or even both. A-Plant is already about much more than construction plant, with a myriad of sub-brands serving specialist niches, from temporary traffic lights to portable cooling systems.
It is not just A-Plant that is disappearing; the sub-brands, many of which are quite recent acquisitions, are also becoming Sunbelt Rentals, with a suffix to indicate their specialism.
Names like Live Trakway, Lux, Rapid Climate Control, Mather+Stuart, Leada Acrow, Tool Hire Express, PSS Hire, Inlec, Evercal, Hoist It, Opti-cal Survey Equipment, FLG Services, Astra Attachment Solutions and GB Access are also all being ditched, to be replaced by such names as Sunbelt Rentals Engineered Access, Sunbelt Rentals Traffic Management, Sunbelt Rentals Survey and Sunbelt Rentals Lifting, etc.
The core business that we know as A-Plant becomes, more specifically, Sunbelt Rentals Plant & Tool.
“Our rebranding to Sunbelt Rentals is the culmination of work to unify our UK brands under one powerful banner,” says chief executive Andy Wright.
So A-Plant’s rebrand is not about ditching a tarnished brand but bringing together a variety of brands under a single new name, consolidating its brands. There is also an element of repositioning and staying current: ‘A-Plant’ is not a very 2020 name – iPlant maybe, but not A-Plant.
‘Plant’, after all, is peculiarly British construction jargon and it is said that some of the subsidiaries were not keen to be closely associated with the world of plant. Outside of the industry, plants are flora, not machines; and non-native English speakers are also likely to find it unfamiliar.
The neutrality of the name Sunbelt Rentals may help A-Plant grow its business elsewhere, in the events and hospitality sector, for example. It may also seem a better name to take to mainland Europe, if it decides at some point there are better growth opportunities there, although there is no such plan currently.
Of course, the single brand could just as easily have been Ashtead; that Sunbelt has been chosen instead suggests a fresh start in the UK.
Rebranding for a company like A-Plant is a peculiarly costly exercise. Its name is stamped on thousands of pieces of machinery and hung above the door of 191 company stores. Some 4,000 employees who wear corporate clothing need to be re-tailored; 1,500 commercial vehicles need repainting. The fleet will change colour gradually as new machines arrive; decals on existing machines will be switched only as practicable. Stores will take up to four months to transition to new signage.
And then there are the internal and back office systems. Will all existing customers have to set up new accounts and purchase orders?
A-Plant’s rebranding has been a recurring discussion at the company for several years; putting the Ashtead name back to the fore had also been considered. But the decision to make the change comes only after a new leadership team got its feet under the table.
‘Project Unify’ was launched in May 2019, the same month that Ashtead Group chief executive Geoff Drabble (a Brit) retired after 10 years in the job and was succeeded by Sunbelt Rentals chief executive Brendan Horgan (an American).
One of Horgan’s first moves was to replace A-Plant’s chief executive, Richard Thomas, who had only been in post for a year. Thomas had joined A-Plant as finance director in November 2011 when he was just 33. He then became managing director of its Specialist Products Division in 2015 and in 2017 he was announced as the chosen successor of long-serving Sat Dhaiwal as chief executive. He stepped up in July 2018 when Dhaiwal retired.
Other A-Plant senior managers were on the move too. Marketing director Asif Latief took the opportunity to head up Dutch hire group Boels’ new UK operations.
Richard Thomas’ replacement at A-Plant is Andy Wright, formerly of Lavendon and Speedy. He joined as chief operating officer in February 2019 and was confirmed as CEO just a week before the rebrand was announced.
Within the company, change was in the air. So the rebrand can also fairly be seen as a new start by a new leadership team wanting to pull the disparate elements of A-Plant in the same direction.
Certainly Horgan is keen to put his stamp on the UK market, where he regards A-Plant as underperforming. In December 2019, announcing the half-year financials, he said: “We are refocusing A-Plant on leveraging its platform to deliver long-term sustainable results, while generating strong cash flow.”
We still may be none the wiser quite what that sentence actually means but the subtext is starting to crystallise.
There are downside risks for A-Plant in changing its name. One is that it may lose business because the market doesn’t recognise the name Sunbelt and turns to a name that it does know, like Speedy or Brandon. Ashtead is spending heavily on Sunbelt brand promotion in the UK to mitigate against this risk.
Another downside is that by spending millions on changing A-Plant to Sunbelt, it reduces its sale value should Ashtead ever look to quit the UK to focus on faster growing territories. Similarly, A-Plant’s niche divisions, such Leada Acrow or Live Trakway, cease to be discrete assets available for disposal if they ever cease to be central to the strategy.
For Ashtead Group, any ‘leverage’ obtained from the Sunbelt name in the UK must therefore be at least as great as the potential sale value of A-Plant if the exercise is to have been worthwhile.
On this basis, it demonstrates irrefutably Ashtead’s commitment to the UK market and hence to its employees. That’s got to be worth something.
UK construction industry branding case studies
In 1991 Tilbury merged with RM Douglas to create Tilbury Douglas. Tilbury had grown from running Thames barges into dredging and contracting; Douglas was a West Midlands building and civil engineering contractor that also had a formwork and scaffolding business, RMD. This became RMD Kwikform on the later acquisition of GKN Kwikform.
At the end of 2000 Tilbury Douglas bought Building & Property, a building maintenance business that had previously been part of the government’s Property Services Agency.
This was the start of the company’s shift from high-risk, cyclical construction to support services, such as cleaning schools and hospitals, where revenues seemed assured from a client – the state – that would never fail.
To mark this reinvention and convince investors that this was a different business from the one they thought they knew, a new name was required, hence Interserve.
The architect of Interserve was Adrian Ringrose, a politics graduate with zero construction experience, who joined the company in 2000 and within three years was chief executive aged just 35, a position he hung on to for the next 14 years.
Throughout this time, RMD Kwikform was retained as a discreet operating division, operating worldwide under its own brand name. This proved a shrewd move as when Interserve ran into financial trouble, it had a valuable asset that could easily be sold.
Thus in 2016, when the construction business was losing money by trying to build things it didn’t know how to build – specifically waste-to-energy plants – Interserve put RMD Kwikform up for sale to raise cash.
But although it was by now firmly a non-core business, RMD was making annual profits of more than £40m on £200m turnover – a 20% margin.
The core business of facilities management was making only 5% on its £2bn turnover. In the end, no buyer would find RMD Kwikform quite as valuable as Interserve, and no sale was made.
Nevertheless, RMD Kwikform’s medium-term future still looks more likely to be outside the Interserve group than inside of it.
Verdict: Although the company (and its strategy) eventually failed, the rebrand achieved what it set out to achieve, and retaining the sub-brand was smart.
Founded by Daniel Palmer-Jones as “Scaffolding Great Britain (SGB)” in 1919, SGB immediately launched a product called the ‘Universal Coupler’ which is still widely used in today’s scaffolding industry. Right from the start, SGB proved to be an innovative supplier to the construction trade. SGB is one of the industry’s best known and well-respected names within the access services field.
Contractor John Mowlem acquired SGB Group in 1986 and floated it in 1997, keeping 51% ownership, which it then sold to US group Harsco in 2000. Harsco then took it private again.
In 2010 SGB became Harsco Infrastructure.
In 2013 Harsco sold SGB to a US venture capital fund, which put it together with Brand Energy & Infrastructure Services (latterly BrandSafway). A year later it reintroduced the SGB brand.
When BrandSafway acquired Lyndon Scaffolding in 2019, it merged it with SGB to create the somewhat clunky new brand of “Lyndon SGB by BrandSafway”.
Verdict: Wasn’t broke; didn’t need fixing.
Renew Holdings as a brand was born in 2006 but the company can trace its origins back to 1786 and the founding of YJ Lovell.
After some buccaneering growth, the wheels came off in the 1990s and following some financial restructuring it re-emerged in 2001 as one of several niche construction companies within the newly formed Montpellier Group, controlled by a Swedish investor.
Montpellier seemed like a fresh start for the tarnished Lovell brand. But after losing money in 2004 there was another strategy rethink and in 2006 the company was reborn for a second time, this time as Renew.
The directors explained at the time: “The board believes that the new name will symbolise the changes that have already been made and will better reflect its specialist areas of activity.”
As with A-Plant, the new name coincided with the arrival of a new chief executive, Brian May (no, not that one).
However, Renew is very much a holding company brand; in the market place it relies much more on the sub-brands of its autonomous operating divisions that are acquired and vested according to what’s making money. Thus Renew has divisions such as Walter Lilly & Co, VHE, Seymour, Shepley Engineers, Amco Giffen (Amco was acquired in 2011; Giffen in 2016), QTS (2018) and Carnell (2020).
Disposals include the house-building division, Allenbuild, sold in 2014 after a strategy shift, and the gas mains replacement business Forefront Group, which was sold for a loss in 2018.
Renew still owns a subsidiary company called YJL Construction Ltd, and files accounts for it every year, but it doesn’t actually seem to have built anything for at least the past 15 years.
Verdict: A success – while Renew may not resonate with the industry’s consciousness, it has grown the value of its sub-brands by retaining them.
In November 2018 North Midland Construction and its process engineering sister company Nomenca consolidated under the single brand NMCN. That’s what the company is now officially called at Companies House, but it prefers to style itself, modishly, as nmcn.
“Operating under multiple brands caused confusion amongst our stakeholders and also hampered internal collaboration across our business units,” the company says.
It adds: “Our rebrand has received fantastic feedback from the market in addition to the demonstrable success in traditional digital metrics.”
Verdict: Since the company’s activities stretch far beyond the north midlands, a rebrand was warranted and NMCN is a small step from NMC, by which the construction business was commonly known. Aesthetically, the affectation of lower-case lettering ruins it, however.
When Bovis Homes acquired Galliford Try’s housebuilding businesses, Linden Homes and Galliford Try Partnerships, in January 2020, it adopted a new name for the group plc. Bovis Homes Group plc became Vistry Group plc, retaining Bovis Homes, Linden Homes and the newly named Vistry Partnerships as sub-brands.
Verdict: As the acquired businesses more than double Bovis’ £1.1bn annual revenues, it makes sense to retain the brands under an all-new holding brand, representing an all-new start. For Bovis chief exec Greg Fitzgerald, who had previously spent nearly 10 years running Galliford Try, this was a no-brainer.
This article was first published in the April 2020 issue of The Construction Index Magazine