The demise of Gulliver’s Truck Hire in December last year was triggered by an increasingly competitive market, falling demand for trucks and vans and “issues” with the firm’s three axle tractor units, according to the firm’s administrators.
The Bristol-based company, which operated a fleet of 3,800 commercial vehicles and employed 282 staff across seven sites, went into administration on 18 December last year, owing £16.9m to 680 creditors and £76m to 13 HP funders.
A report published this month by joint administrators David Pike and Mark Orton of KPMG reveals that the company’s troubles began in 2016.
It points to several key factors. These include “an increase in competition from both existing and new market entrants at the same time as a fall in demand across the market for trucks and vans.
“Further, the company experienced a number of issues with its three axle tractor units, adversely impacting rental utilisation and residual sale values,” the report adds.
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Despite selling some of the under-performing tractor units, cutting costs and attempting to improve sales, the company was forced to call in the administrators after receiving a final demand for £2m in VAT arrears from HMRC in November last year.
Since going into administration 266 of the 282 staff have been made redundant with the remaining 16 retained until 31 March this year to assist with the winding up of the company.
The administrators have so far raised over £32m from the sale of 1374 vehicles, according to the report.
A further 157 vehicles will be sold at auction at the firm’s Bristol headquarters, whilst a fleet of 459 Mercedes vehicles are currently being sold by Close Brothers.
The company’s five freehold properties at Bristol, Cardiff, Glasgow, Heathrow and Walsall are also up for sale and its two leasehold properties in Exeter and Gloucester vacated.
Joint administrator David Pike told MT: “Although it was not possible to find a purchaser for the business as a going concern, the joint administrators sought to maximise asset realisations for creditors by continuing to trade the business for a short period to complete a number of sales for packages of vehicles and their associate rental agreements.
"Based on the continued success of the administration, we hope to be able to return a substantial dividend to unsecured creditors.”
The dividend to unsecured creditors is estimated at between 30p and 60p in the pound, according to the report.
What new competition?
The sales director of a leading truck hire firm questioned the joint administrators’ assessment of the factors leading to Gulliver’s demise.
He told MT: “What new competition? I don’t know of any new competition in the market. I would put Gulliver’s problems down to the discounted rates it offered over the past two years.
"Once you are offering cheap rental rates it leaves you with no fat on the bones to absorb any challenge that might suddenly appear.”
Pointing to the administration of TOM Vehicle rental group in March last year he added: “It is not good for the industry when these companies collapse because it causes reputational damage and there are other hire firms in similar predicaments, there are too many cheap players in the marketplace.”
