Main benefits of TR's vehicle sale and lease back
solution for ITM
- Released capital was used to successfully expand ITM with a new
branch opened in Havelock - and other branch opportunities are
being considered
- ITM has an easy and efficient arrangement for ongoing
fleet management and continues to lease more vehicles through TR
Group
ITM see builders, craftsmen, DIY and
home handymen right with high quality building supplies
and advice from over 90 stores throughout New Zealand.
Building Connexion Limited (trading as Takaka, Motueka,Nelson
and Havelock ITM Building Centres) carried out an extensive review
of the delivery fleet across their four stores located across
the top of the South Island.
"We looked at the capital outlay to plan upgrades to our
fleet", explained Managing Director, Philip Woolf. "This
was having to come from working capital and as we had grown
significantly the financial pressure was only going to
increase."
"To offset this we engaged the services of TR Group Limited to
buy back our existing fleet and lease back on a monthly basis",
said Mr Woolf. "The solution allowed us to know what our
costs are on a monthly basis and align this with budgets. When the
lease expires we are not then looking for capital to fund any
upgrade."
The ITM Challenge
Challenge (brief by ITM to TR Group)
- ITM wanted to free up capital tied up in depreciating assets
(vehicles)
- ITM wanted to utilise capital for other opportunities
- ITM was still seeking the benefits and flexibility of running
their own fleet
Solution (presented to ITM by TR
Group)
- TR Group prepared a 'Sale and Leaseback' arrangement for all
ITM trucks and fork lifts
- The TR 'Sales and Leaseback' arrangement would provide
certainty with guaranteed annual costs (per vehicle)
Outcome (for ITM)
- Released capital was used to successfully expand ITM with a new
branch opened in Havelock - and other branch opportunities are
being considered
- ITM has an easy and efficient arrangement for ongoing
fleet management and continues to lease more vehicles through TR
Group