CCF Toolbox Presentation

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CCF Toolbox Presentation

• Hire/Buy/Rent
• 11 November 2005

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Considerations
Hire?
Rent?
Repairs and Maintenance?
Buy?
Cash flow?
Lease?
Finance?
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Hire/Buy/Rent

• Ownership
• Unless your utilisation is high enough, ownership
  costs and Return on Investment (ROI) may not
  stack up against Lease/Hire/Rent options
  available.
• Most Forgotten Ownership Issues/Costs
• Allocation of other costs
• Support vehicles and manpower
• Facility, tooling, spare parts
• Lost productivity due to RM downtime (age/old
  tec.)
• Using wrong machine for the job because you own
  it
• Risk of Job stoppages, weather, economic
  downturns

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Hire/Buy/Rent

• Conservation of Capital
• Hiring/Renting frees up capital for other
  potentially more profitable investments in your
  core business. (manpower, geographic expansion,
  engineering, technology, etc.)
• Cash Flow
• When hiring/renting, you only pay for the
  contracted time period, the commitment and
  payment ceases after that time, whereas
  lease/finance payments continue whether you have
  use for the asset or not.
• Return on Investment
• If your investment in equipment is not reaching
  return on investment targets compared to the rest
  of your business, it is worth the time to
  consider hiring/renting at least some of your
  equipment needs.

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Hire/Buy/Rent

• Borrowing Capacity
• Hiring/Renting can make borrowing for your
  business easier. The equipment does not appear as
  a liability on your balance sheet, increasing
  your capacity.
• Availability
• Hiring/Renting gives you the convenience of being
  able to source equipment quickly, conveniently
  and economically. What you need, when and where
  you need it.
• Product Support
• Hiring/Renting from a reputable supplier should
  mean you have 24/7 product support with field
  service and replacement capability.

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Hire/Buy/Rent

• Technology
• With a good supplier you should be getting the
  best mechanical, reliable, productive, as well as
  latest safety and ergonomic technology available.
• Maintenance Costs Facilities
• Hiring/Renting can also reduce or eliminate the
  need for costly assets such as workshops, service
  vehicles, manpower, spare parts, tooling, etc..
  
• Right Equipment for the Job
• Hiring/Renting enables you to better match the
  right machine for the specific task.
• Right size and specifications
• Specialised equipment - Articulated Dump Trucks,
  Long Reach Excavators, Integrated Tool Carriers,
  Telescopic Handlers, etc.

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Total Customer Service
Quality
Availability
Support

• Products
• The widest product range of Caterpillar and
  allied equipment.
• Equipment fully maintained for greater uptime and
  productivity
• Lowest fleet age profile in the industry
• Latest machine technology and operator
  ergonomics, improving safety and productivity

• 24 Hour Service, 7 days a week
• Locations across the country for your
  convenience, 100 locations and growing
• Maintained to stringent manufacturer specs to
  minimise downtime
• Utilisation monitoring (GPS)
• Logistical expertise and services
• Equipment Mgmt and Control
• Product link
• SOS (Scheduled Oil sampling)
• Customer Support Agreements

• Service
• Over 150 Field Service Vehicles
• Spare Parts
• Supported by over 150m spare parts inventory
  24hrs/7.
• Safety Quality Environmental
• Certified to ISO 9002
• Entire company into ISO 90012000

Heavy earthmoving equipment
Mining equipment
Road construction equipment
Access equipment
Portable buildings
Building construction equipment
Handyman equipment
Shutdown services
Fleet management services
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60 Month Operating Lease
Key Operating LeaseTerms - No ownership of
the asset - Tax benefits Rentals claimed as an
expense by lessee - GST is included in above
monthly payments - Committed to the lease term
- Heavy penalties to break the lease commitment
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60 Month Hire Purchase
Key Operating Hire Purchase Terms - No
ownership until final payment - Tax benefits are
retained by customer - GST is generally paid as
deposit and claimed in first quarter BAS -
Commitment to the full payment terms
Assumption notes - Interest rate used in
example is 7.8
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Utilisation

• Figures and graphs are based on 365 days for the
  cost/day.
• If you deduct Sundays and Holidays, a more
  realistic figure would be 300 work days in the
  year.
• So, when thinking about your utilisation, 66 of
  365 (240 work days) is really 80 utilisation of
  a 300 day work year.

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