Wednesday, March 28, 2018

Third Largest UK Light Commercial Vehicle Hire Group Goes Into Administration

TOM Failure Will Hit Road Haulage Freight Sector
Shipping News Feature
UK – TOM Vehicle Rental, which had until recently appeared to be one of the success stories in the field of truck, van and car hire, has gone into administration just 15 months after being taken over by an equity group. Two years ago TOM was considered a major success story in the commercial vehicle hire field with many road haulage outfits as customers. In 2016 the group featured in the Sunday Times Fast Track Top 100 and Top 250 lists and founder Jim Rafferty was lauded as one of the country's leading entrepreneurs.

The same year Equity firm Equistone Partners bought the 25% shares of Coralinn and GMG Asset Management in the Airdrie headquartered light commercial vehicle hire company in a buyout deal which saw Rafferty maintain shares in the business. Terms of the deal for TOM, which employs circa 450 staff in 15 UK depots, to manage a business with a reported 16,000+ vehicles, were not revealed.

The company assets were boosted just last year with the acquisition of the Transflex Vehicle Rental business making TOM the third largest business of its type in Britain. Now, with the failure of a bid to find further investment, administrators EY have now been called in to oversee the future of the group. EY issued a statement observing that the changing habits of hirers had affected turnover and continuing:

"The group had faced challenging trading conditions in recent months. Considerable efforts had been made to restructure its operations and, when that proved too difficult, the owners marketed it for sale. Unfortunately, no suitable interested parties emerged from the sale process, due to the scale of the losses and the investment required to turn the business around. Due to the group’s lack of liquidity and increasing pressure from creditors, the directors had no option but to seek the appointment of administrators.

“Despite the best efforts to save the group, it could not continue to operate as a going concern and administrators were appointed. The administrators and fleet funders are contacting customers as a matter of urgency to ensure that the necessary arrangements are in place for them to experience as little disruption to service as possible.”

To fully understand the way TOM has changed so dramatically in the past three years one has only to read some of the testimonials which staff at that time wrote praising the meteoric rise of the brand, together with a prediction of even more success in the future.