Dawsonrentals

Several weeks ago I blogged about an evening event at the House of Commons at which Dawsonrentals Bus & Coach marked 20 years in the bus and coach market. That wasn’t the occasion to sit down and talk to Dawsonrentals MD, Paul Sainthouse, about this significant milestone and the changes the company has seen over this period, but I’ve since been back to the hothouse atmosphere of the Milton Keynes headquarters to catch up on the story.

Dawsonrentals acquired its first stock coaches in 1994. They were a Volvo B10M Caetano Algarve and a batch of 15 Algarve 2s on a mixture of Dennis Javelin 245 and 290GX chassis, ‘because we didn’t know what would move,’ recalled Paul. Twenty years on Paul is still at the helm but those tentative first steps seem a very long time ago for a company that has grown beyond all recognition and has so far been responsible for placing over 5,000 vehicles with operators.

Surprisingly, some of those first Javelins are only just leaving the fleet, now fitted with 3+2 three-point belted seats. They’ve been some of the best coaches we’ve ever owned because they’re so durable,’ he commented, ‘some even went on CityZap international services for British Bus.’ That these vehicles have remained in the fleet for so long is remarkable, and unlikely to be repeated in the future. Paul explained, ‘we are working on the age profile of the fleet and disposing of buses earlier in their life cycles.’

Today’s market

‘We’re having a good run at things this year. Rentals are a good barometer of the industry and are indicative of a much more positive mood in the market place across all sectors and all operator types,’ said Paul. ‘People are hiring vehicles and they’re not coming back; we’ve had very few returns. Things must be improving. You can sense a certain relief in the market when you talk to people. They’re starting to invest again. Within the operating market place for the last five years we’ve seen a battening down of the hatches without any desire or ability to invest in the business. Operator’s ambitions are now starting to show and we recognise there’s a much more progressive mood within our general customer base.’

‘The London coach market this year is very busy. It’s virtually impossible to subcontract and that’s not something we’ve seen other than for the Olympics; it’s probably even tighter than then. If you can find someone in London they’ve been able to name their price. There’s good business and business that gives operators confidence coming through.’

‘In the bus market we are seeing signs of some growth and development. I think there’s pent up demand as a result of underinvestment over the years which is leading to additional demand. The requirement is for midi and predominantly mid life double deck products. It reflects a certain amount of DDA preparation and a more commercial approach when it comes to midi. They are looking to upgrade rather than run what they ran before; but DDA is the main driver.’

Paul continued, ‘DDA is a market where a lot of people are upgrading. As the balance of supply and demand is correcting itself, we are seeing a firming up of prices. It’s a small change, but it is reversing a decline, which is a good thing. For the last five years used vehicles have been disproportionately cheap. Yes, it’s good that an operator can get a bus for less than he could five years ago, but the depreciation has to be paid for somewhere. It makes the true cost of ownership unrealistic for a lot of people. Collectively as an industry we can’t afford the depreciation, especially when you take into account reduced revenue streams, BSOG, concessionary fares add in higher depreciation and the whole model doesn’t work, it isn’t affordable. There needs to be a balancing from everybody’s point of view.’

That positivity in the market is also good for Dawsonrentals is evidenced in the fact that fleet utilisation is up 15% against last year. Paul observed, ‘It’s going well. We can do so many different things that it isn’t just one area that is doing it for us. It’s across the board.’

Key role

With things going well across the board, it is a distinct contrast to the early days when the range offered was initially fairly limited, until the company had gained a feel for the market.

‘Our volume aspirations only started to come to fruition with midibus, a rapidly developing market with the advent of low floor. We tested the market with two Marshall and three Wright Crusader Dart SLFs. The Wrights all ended up with Pete’s Travel and stayed in the Midlands,’ he recalled. ‘There were a lot of new entrants to the market which provided us with the opportunity in the mid 1990s. Rental gave them the ability to trial things at a time when outright purchase was untenable.’

This convinces Paul that Dawsonrentals has made a big contribution to the development of the industry. He points out that, ‘at the first Bus Industry Awards in 1997 we were nominated for the Innovation Award because what we offered gave people an opportunity they hadn’t had before. Rental suited that. Low floor was coming through. A lot of businesses would never have grown if they hadn’t taken that first step through rental.’

He thinks Dawsonrentals position is a unique one. ‘We sit right in the middle of the bus and coach industry. We have so many aspects of our business that reach into different areas of this industry from being a key buyer of services from the industry – we spend millions every year on services with people who support the industry, not just on capital goods but on supply services, engineering services, bodywork, tyres and what have you – but also a big presence in the market and a big presence with operators.’

Growth

Remarkably, virtually the whole of the company’s growth within the market place has been self generated, the exception being the acquisition of LHE Asset Finance.

Originally trading solely from the group’s headquarters at Milton Keynes, the Bus & Coach operation now operates from five separate sites to provide customers with an accessible local contact point. Milton Keynes has become the base for the South, while the North is handled from the Rotherham facility on the Euroway Trading Estate in Hellaby. There is a separate London depot in Greenwich, in addition to which there is a holding and preparation facility at Cranfield that has absorbed the depot at Olney which was operational for some years. Completing the portfolio is the Lingfield base of the Ventura sales operation which is handily located for Gatwick Airport and was developed out of the LHE acquisition.

Stock

A walk round the yard at Milton Keynes showed the breadth of what Dawsonrentals offers customers. It was a marked contrast to my early visits to the site when there were only Dennis Dart SLFs and Javelin Algarves to be seen. Only around 30 vehicles were present, a very small percentage of the fleet, and a number of these were already scheduled to go to customers.

Among the service buses there was still a Dart SLF with Plaxton Pointer body, as well as newer Enviro200s and Enviro300s, a Scania OmniCity, a Plaxton Centro Volvo B7RLE, a 54-plate East Lancs Myllennium and an Optare Solo.

There were also a couple of Plaxton Primos. ‘We were one of the biggest customers,’ said Paul. ‘Once you get them running they’re all right.’

Double deck stock consisted of a number of 2002 Plaxton Premiere bodied Dennis Trident low floors, some already converted to single door and extensively refurbished, and some either awaiting or in the course of similar conversions. At £149 a week they are ‘cheap vehicles’ finding ready takers with 25 leaving the yard in the last fortnight, ‘probably to ten customers’, said Paul. They look the part with tidy single door conversions and reupholstered seats. Each one is gone through from end to end mechanically, electrically and bodily before going out on hire.

On the coach side, a sign of increasing confidence in the market is the decision to take a stock batch of Plaxton Leopard bodied Euro6 Volvo B8Rs. ‘It’s the first time in a while that we’ve been confident enough to take coach product for stock. We’ve taken ten and they’re going reasonably well. Seven are already placed and we’ll take more. I think this is more what coaches will be. The days of the big heavyweights are waning in favour of high capacity vehicles with lower running costs and higher residuals with better second life potential.’

A developing area is that of minibus where the accessible side has been a strong user of Dawsonrentals’ products for many years. This remains strong and in addition the wider minibus market has been embraced. Factory specification Ford Transit conversions providing 17 seats including the driver are popular. On a short term hire including maintenance and tyres these cost £200 a week to rent. There is also considerable demand for Volkswagen Transporters as eight seaters for feeder work. At the top end of the scale was a brand new EVM conversion of a Sprinter 516 with a large dropwell boot, deep glazing, full air conditioning and 16 Brusa leather seats.

Airports, with their fluctuating requirements, have always been keen users of the company’s services. Paul told me that, ‘airports have been phenomenally busy this year.’ Only one airport specification bus was present, a Sprinter 313CDi converted by CVI to give an eight seat interior with luggage racks and a low floor.

In a corner of the yard was a reminder that even those with their fingers on the pulse can get caught out sometimes. Paul wasn’t overly keen to talk about the articulated Citaros bought for operators to use on TfL contracts, saying only, ‘It was painful and dealt with. All those not on contracts have been sold.’

Bad experiences have not stunted Dawsonrentals’ willingness to try new things, though there is inevitably more caution now about taking on unproven products for which there is not an obvious subsequent life or disposal route. Paul showed me one of 20 or so Volkswagen T6 based camper vans that the group now offers on a rental basis, and he also had a silver Range Rover Sport on the books that had been taken in part exchange. ‘Yours for £15,000,’ he offered.

Export

Until recently, all rental business was UK or Irish based but that has recently changed with the supply of batches of both Wright bodied Volvo B7RLEs and Optare Solos to Malta. An Optare Solo has just been shipped to Australia on a fixed term rental deal, and a sale has been finalised in the Middle East with the customer taking Optare product. Of the Middle East deal, Paul said, ‘The UK domestically developed product was to a specification far in advance of anything else they could source as an alternative. We have a world leading design and manufacturing industry.’

Returning to the subject of the Irish market he commented, ‘We’ve got in excess of 100 vehicles there.’ Asked about forthcoming changes there he said, ‘There will be an opportunity from deregulation but it won’t be the same as in the UK. There won’t be the opportunity to develop rapidly; it will be a steady approach. There needs to be a degree of commercial opportunity to keep a balanced level of service and value for the Irish government and fare paying public.’

Hindsight

Looking back over the past two decades Paul notes a number of significant changes. ‘Vehicles are certainly more reliable than they have ever been, though not against a good starting point. People still tell you that the best vehicle they have ever run was a 1990 B10M,’ he said. ‘Customer expectations are greater than ever. That’s a social thing; we all expect more than we ever did.’

‘Customers now are wiser, I would suggest, in that they know what they should be doing and how they should be doing it, they’re more market aware and their experience shows through. We give less advice than we used to because they are already very knowledgeable.’
‘We’ve learned more as a business about what products suit our business model the best, and therefore our customers. In the last 20 years we’ve bought, leased or rented out just about every product that is supplied to the UK market and we’ve learned which to buy and which to avoid.’

‘We’ve also learned to look after people better and developed a quality of service that meets or exceeds customer expectations. We’ve invested a lot of time and money training personnel in vehicle quality and safety checking processes, in our preparation and handover procedures and in the way that we follow up with customers and keep up an ongoing dialogue with them.’

Paul reckons that the continuity within the team is a valuable asset. He commented, ‘One thing we do have is experienced and time served personnel. We completed our first transaction in June 1994 (to Browns Luxury Coaches of Redhill) and I’m still here, Fraser joined in January 1995 and most of the rest of the team are time served. Dawsonrentals Bus & Coach now employs upwards of 60 people.’

Last word

Concluding our conversation, Paul said, ‘20 years on, the reality is that we are proud of what we have achieved and pleased to be part of an industry it’s often a delight to work in. We’re pleased that we see people who we are pleased to see and who are pleased to see us, which is often not the way other industries are.’
‘With a full order book, a skip in our step and pride in what we’ve achieved, we’re looking forward to the next 20 years as part of the bus and coach industry.’
Next year there’ll be even more celebrations at Milton Keynes, as the Dawsongroup as a whole will celebrate its 80th year in business.