Burnt Tree set for growth under new ownership

Just three months into his new job as vice president and MD of Enterprise Flex-E-Rent and Burnt Tree, MT meets Danny Glynn (pictured) at Enterprise Car Rentals’ swanky nearly-new European headquarters in Egham, Surrey. “Don’t touch the walls, the paint might still be wet,” he jokes.

Glynn is responsible for fulfilling Enterprise’s ambitious plans to grow its commercial vehicle contract hire and rental operations in the UK. He joined Enterprise in 2002 and in 2010 established Enterprise Flex-E-Rent, the company’s commercial vehicle rental division, which by 2014 had grown to a fleet of 11,500 vans. In 2014 Glynn led the acquisition of Burnt Tree, adding its 15,000 vans and 1,500 trucks; the combined business will leap to number four in the CV Informer rankings of commercial vehicle rental firms, though it still lags well behind Ryder, Dawsonrentals and CVL in terms of its truck fleet.

Integrate

Glynn's current job is to integrate Flex-E-Rent and Burnt Tree into a single entity, which will be based at Burnt Tree’s Shrewsbury head office. But he isn’t letting the grass grow under his feet - Enterprise has already announced a £20m expansion of Burnt Tree’s new Refrigerental temperature controlled truck fleet.

Enterprise is market leader in car rental in its home market the USA, and Glynn doesn’t rule out Flex-E-Rent/Burnt Tree following suit.

“Nowhere in the company's philosophy does it say we want to be number one,” he says. “But nowhere in the company's history, when we've entered market, we've not ended up being number one.

“It's accelerated growth. When we get to a certain level, we're not going to say, ‘right, Danny has done his job. Stop.’ We're going to continue.”

The acquisition of Burnt Tree was more than an opportunistic move to acquire a successful CV rental business at a time when an improving economy means profits are getting back to acceptable levels. Both Enterprise and Burnt Tree remained profitable throughout the last recession and the acquisition was part of the car rental giant’s strategy to offer the full range of products and services.

“I've definitely seen the Enterprise philosophy evolve since I've been with the business, which is 13 years,” Glynn says. “Car is still the core business at the moment and of the 1.5 million vehicles we own across the world the significant majority are cars.

“But the business realised that it had to move away from being a car rental provider, to a mobility provider, to offer as many options as possible. This was our opportunity to enter the truck market. So after the acquisition of Burnt Tree you can now rent anything from a car by the hour to a 44t tractor unit long-term.”

Burnt Tree was founded 30 years ago by Keith Ashworth and Bill Thomas and now operates from 21 locations. Of its truck fleet, 85% are rigids, mainly 7.5 tonners, and 15% are tractor units.

“In the five years since I established Flex-E-Rent, everyone was telling me that Burnt Tree were the strongest in terms of service and just being the best people to deal with,” says Glynn. “So 18 months ago I sat down with our UK MD Mike Nigro, and said ‘that's where our opportunity is, and the timing fits’. Flex-E-Rent was performing, and we were on the back of great growth.

“There have been challenges in that market, with people exiting that market during the tough times, and that was important for the business to see that it made sense on a long-term view.”

Good fit

Despite the difference in scale – Enterprise has a fleet of 65,000 vehicles and 370 branches in the UK - Glynn says there is a good fit between the two businesses.

“In terms of the culture, there's a lot of similarities between the two businesses,” he says. “Both are family owned and have been around for decades, 31 years for Burnt Tree and 57 at Enterprise. You can feel it when you go to a Rent-A-Car or a Burnt Tree branch - there's that pride in the heritage of the business.

“We didn't just buy 20 locations and 17,000 vehicles. We bought a huge amount of expertise and knowledge. It was the knowledge and the expertise that sat in the 400-plus employees that was the deciding factor in my eyes.”

Glynn expects the CV rental business to grow to 30 locations within five years as the fleet expands.

He is enthusiastic about Refrigerental, the temperature controlled rental fleet Burnt Tree established just two years ago by director Mark Howell, since when it has sponsored the Temperature Controlled Operator of the Year category at the Motor Transport Awards.

“We see Refrigerental as a big opportunity and the first big investment has gone in there,” says Glynn. “Refrigerated vehicles are something I looked at in the past. There are barriers to entry in that market. You need a level of expertise to sell into it and make sure you can support it.”

After a total investment of £40m Refrigerental now offers Euro-5 and Euro-6 trucks at 7.5t, 12t, 15t, 18t and 26t, and Glynn says its customers are drawn from a wide range of industries. “Whether it be florists or the bigger supermarkets, and everything in between, we see the opportunity,” he says. “Already under my stewardship, we've added different vehicles to make sure we cover all of the refrigerated markets.”

Blunham Dairy (pictured, above right) recently took eight vehicles - two Vauxhall Vivaro and five Mercedes-Benz Sprinters - fitted with Carrier Viento fridges from Refrigerental on a two-year contract to join its 25-strong fleet delivering milk to schools around Bedford.

Glynn accepts that refrigerated rental will be a seasonal business, with the pre-Christmas peak probably followed by a January trough in demand.

“We expect there'll be some element of that,” he says. “But in Rent-A-Car we're used to peaks and troughs. That shouldn't be something that will inhibit our growth.”

Trailers

Burnt Tree does not currently rent trailers, but this is something that Glynn does not rule out in future.

“We've got so much on the go at the moment with integration, and I think that we owe it to the two businesses to integrate what we have for now,” he says. “And then, we're a growth organisation, and if we see an opportunity to do something that will help us grow in the right ways, everything will be looked at. But the right thing in the near future is just to concentrate on growing the fleet as we have it today.”

Equally Glynn has no immediate plans to change Burnt Tree’s approach of doing most of its maintenance inhouse. “That's something that we look to support and grow,” he says. “In this acquisition, that was one of the driving factors for me. But we will continue to use our external vendors, we'll never move away from that. It’s a balance. If they need to utilise one of the many vendors that we have agreements with across the very significant fleet that Enterprise now owns in the UK, then so be it.”

One aspect that will change however is the number of manufacturers that will be represented in the CV fleet, after many years of Burnt Tree being a loyal Daf buyer.

“That's one of the things that will change,” Glynn says. “When you're our size, we realise that to get the vehicles we want, we need to buy from as many manufacturers as possible.

“We have a great relationship with Daf, so there would be no reason to endanger that, but it's fair to say that we will always look around. We buy from over 20 car manufacturers now. That's just in the UK.”

The Burnt Tree management team, led by CEO Richard Metcalfe, is staying on to work with Glynn on the integrated Flex-E-Rent/Burnt Tree business – no decisions has yet been made on the new name for the CV rental division, though Glynn says it will sit under “an Enterprise brand”.

When told that Glynn hasn’t been left holding the baby, he laughs. “I am. I've got a five week old son, so I am holding the baby!” he says. “I've had a really quiet three months. I've got a 22-month-old daughter and a five-week old son. We've relocated to Shrewsbury. The Burnt Tree deal was done on August 7, and the removal men turned up on August 11. It's been pretty busy lately, but I am trying to keep a grip of my enthusiasm.”

Enterprise fact file

• Founded by Jack Taylor in 1957 in St Louis, Missouri, USA

• Enterprise remains a family-owned company

• Part of Enterprise Holdings, which has a global fleet of more than 1.5 million cars and over 83,000 employees

• In the financial year to 31 July 2014, Enterprise Holdings had global revenues of $17.8bn (£12bn)

• It is ranked as the 15th largest privately held company in the United States by Forbes magazine