Standing out from the crow

19th April 2007, Page 30

19th April 2007

Page 30

Page 31

Page 30, 19th April 2007 — Standing out from the crow

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:lose Asset Finance has a CV finance book approaching E1 10m, but it's not about to rest

Dn its laurels. Andy Salter catches up with

group deputy MD Roger Stone.

Speak to anyone in commercial vehicle finance and ask what makes them different from any other player in the narket and they will all, in our experience, come ip with the same responses."We understand the narket" is a the stock answer; "we appreciate mr customers' issues and are able to react o their needs" is another; "we have the best )eople" is the final one. It's no surprise then that Zoger Stone should come up with a very similar esponse: "The people in Close Asset Finance lo trucking. It's unambiguous what they do, here's no confusion, they do trucks," he says.

Given the company's track record — 12% Tar-on-year growth for the first seven months A 2007, £100m in funded CV business during !006 and a plan for further growth — it must be loing something right.The fact the team is very ndustty-focused no doubt helps,but we believe he association with the industry goes a bit leeper than just understanding the market.

The culture of the organisation appears to )e very much in tune with the road transport ector, particularly at the small to medium-sized feet end, where the risk of failure goes with the erritory and being able to duck and dive is a prerequisite.The sales team prefers fleece tops and polo shirts to pinstripe suits, and many of the people at the coalface have come from a transport background.

"We spend a lot of time building the relationship with our customers, talking the talk and ensuring we fully understand the problems they are facing," says Stone. "That allows us to react better to their needs and appreciate their requirements when it comes to funding."

Market commitment Close Asset has been prepared to play in this area of the market, where others have looked for the high-volume corporate deals, and the team has no doubt got the battle scars to prove it, "Furthermore," says Stone, "we've never taken our ball home when the going has been rough. Let's face it, company failures are high, but we are fully committed to this sector."

With the underlying demand for road transport services set to remain strong, Close Asset's strategy would seem to be a good one and the company is now looking to broaden its portfolio from the traditional small to mediumsized operator:"Traditionally, we've been at the smaller end of the business," says Stone,"this is our bread and butter. While we're certainly not looking to change that, we are now looking at the opportunities which may exist in developing an offer for the bigger fleets.

"This need has come from customer demand as there are quite a few companies that started with us and have then become much bigger. They've often said it's a pity they can't continue to do business with us. I think we're now of a sufficient size where we are prepared to take on volume business at a lower margin:' 'This move into the bigger fleets is just one of a number of initiatives Stone is reviewing in order to generate significant revenue growth. "There are three ways for any company to grow in my opinion," he says. We can grow organically, we can develop into new markets or we can acquire."

Close Asset is active on all three fronts: organic growth has been the main growth strategy for the past 20 years; the move into new markets has been signalled with the launch of Close Equine, a new offer for the horsebox business, in February: and the company has been on the acquisition trail with the purchase of Hullbased Kingston Asset Finance and its £60m book of business two years ago.

There's plenty more activity planned with the waste and recycling business highlighted as one target and a move into contract hire a distinct possibility. These two moves into new markets might be brought about by acquisition as Stone is in regular negotiations with prospective businesses. There was one under consideration at the time of our interview, "We've valued their business, it's just a matter of whether they think we've valued it at the right price," says Stone. "Contract hire is very much a fledgling business for us and I don't want to give the impression we're charging into this sector, but once again our customers are asking us for a competitive contract-hire offering. If we can find a compatible business which has the same culture and thinking about the sector as us then we'll look to acquire that company."

To reinforce the fact that Close Asset is serious about acquisition, Stone explains the company has a director focused full-time on scouring the market for new acquisition targets around the niches of the sector.

Many assets As well as the acute understanding of the market, Close Asset has a number of other propositions that make it stand out from the crowd. For example, it's equally at home funding in the used market as it is in the new — about 60% of its business comes from funding used kit. It has its own workshops and fitters to recondition second-hand trucks before they are put back out to the market. "Clearly we prefer it if we can help companies trade through any difficulties," says Stone, -but in the event of a business failure, the truck comes back to the workshops in Chichester and the business asset is recycled for a new customer.

"There is a high level of risk involved in road transport, but it's our job to minimise that risk, both for ourselves and ultimately the customer. That's where the strength of the relationship really pays dividends, to understand the customer's business and ensure we can grow together." m