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68-638: Ashtead Group Public Limited Company is a British industrial equipment rental company based in London , England. It is listed on the London Stock Exchange as a constituent of the FTSE 100 Index . Ashtead was founded in 1947, in the village of Ashtead , Surrey , as Ashtead Plant and Tool Hire. In 1986, it was first listed on the London Stock Exchange . In September 2018, Ashtead appointed Paul Walker as non-executive chairman of its board. In November 2018, it

136-430: A hedge is an investment designed to reduce the risk of adverse price movements in an asset. Typically, a hedge consists of taking a counter-position in a related financial instrument, such as a futures contract. The Forward Contract The forward contract is a non-standard contract to buy or sell an underlying asset between two independent parties at an agreed price and date. The Future Contract The futures contract

204-453: A loss when trading an asset or a liability due to a difference between the accounting value and the price effectively obtained in the trade. In other words, valuation risk is the uncertainty about the difference between the value reported in the balance sheet for an asset or a liability and the price that the entity could obtain if it effectively sold the asset or transferred the liability (the so-called "exit price"). Operational risk

272-410: A low-risk way of obtaining equipment when market conditions are uncertain and allows companies to enter new markets or sectors without burdensome investments in machinery – capital that would otherwise be tied up in equipment can be channelled into a company's core business. Oftentimes the decision to rent over financing or purchasing a piece of equipment will come down to a decision balanced in risk and

340-466: A portfolio by including a wide variety of equities, it will tend to exhibit the same risk and return characteristics as the market as a whole, which many investors see as an attractive prospect, so that index funds have been developed that invest in equities in proportion to the weighting they have in some well-known index such as the FTSE. However, history shows that even over substantial periods of time there

408-532: A range of forklifts are available. Modular space is an effective means of providing additional space on a customer's site, for short-term as well as long-term projects. The containers can be combined to build site offices and accommodation, sanitary facilities or storage space. In addition, a wide range of interior equipment or furnishings is available. Some rental companies offer special rental services for modular space, including preparing outlines and foundation plans, transport and installation services. Safety

476-411: A rental company is dependent on the nature of the product to be rented, the company profile, the profile of the customer and the type of equipment needed. Here are some key criteria: For specific equipment, it is useful to establish relationships with rental depots that have experience with the products required. If the customer knows what task they need the equipment for, the rental company will identify

544-513: A statistical model in finance is a risk factor distribution. Recent papers treat the factor distribution as unknown random variable and measuring risk of model misspecification. Jokhadze and Schmidt (2018) propose practical model risk measurement framework. They introduce superposed risk measures that incorporate model risk and enables consistent market and model risk management. Further, they provide axioms of model risk measures and define several practical examples of superposed model risk measures in

612-418: A stock it is possible to buy an option to sell that stock at a defined price at some point in the future. The combined portfolio of stock and option is now much less likely to move below a given value. As in diversification there is a cost, this time in buying the option for which there is a premium. Derivatives are used extensively to mitigate many types of risk. According to the article from Investopedia ,

680-422: A time-consuming task – sourcing the right equipment, negotiating with suppliers, and ensuring that the most modern and productive equipment is operated. Rental companies invest vast sums each year in maintaining modern fleets, providing access to the latest, most productive and safest equipment on the market. Flexibility : Rental companies give operational flexibility as well, with the option to rent equipment over

748-498: A variety of lighting systems, are also available. Powered access is an important sector in the rental market. For different works at great height, for example for roof or hall construction, industrial cleaning or installation works, customers can choose from a wide range of working platforms or building construction lifts. Furthermore, telehandlers can be rented for diverse transportation tasks on construction sites. The industrial and event sectors often demand efficient logistics, and

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816-691: A £35m hit from its collapse. The company operates internationally, servicing customers in Canada, the United States and the United Kingdom. Approximately 85% of its revenue is generated in the United States through the subsidiary Sunbelt Rentals, currently present in over 1,000 locations across the United States and Canada. The company's non-executive directors are Paul Walker, Angus Cockburn, Jill Easterbrook, Tanya Fratto, Reneta Ribeiro, Lucinda Riches and Lindsley Ruth. Sunbelt Rentals, formerly known as A-Plant,

884-418: Is a critical issue on every construction site, especially when construction works are carried out along busy roads or on highways. Therefore, rental companies offer various professional solutions for traffic safety . This is not limited to the provision and installation of beacons or traffic signs . As specific traffic safety regulations may apply depending on the country or region in which the construction site

952-436: Is a good idea to rent equipment via a rental platform depends on the type of equipment requested, on the customer's knowledge of the machine and on the location of the job site . On the one hand, rental platforms offer fast price comparisons, but on the other hand, they do not show the full spectrum of services offered by different rental companies that accompany the requested equipment. Financial risk Financial risk

1020-521: Is a specialized discipline within risk management. It constitutes the continuous-process of risk assessment, decision making, and implementation of risk controls, resulting in the acceptance, mitigation, or avoidance of the various operational risks. Non-financial risks summarize all other possible risks Financial risk, market risk, and even inflation risk can at least partially be moderated by forms of diversification . The returns from different assets are highly unlikely to be perfectly correlated and

1088-410: Is a standardized contract to buy or sell an underlying asset between two independent parties at an agreed price, quantity and date. Option contract The Option contract is a contract gives the buyer (the owner or holder of the option) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price prior to or on a specified date, depending on the form of

1156-825: Is a variation adopted from the Basel II regulations for banks: "The risk of a change in value caused by the fact that actual losses, incurred for inadequate or failed internal processes, people and systems, or from external events (including legal risk), differ from the expected losses". The scope of operational risk is then broad, and can also include other classes of risks, such as fraud , security , privacy protection , legal risks , physical (e.g. infrastructure shutdown) or environmental risks. Operational risks similarly may impact broadly, in that they can affect client satisfaction, reputation and shareholder value, all while increasing business volatility. Previously, in Basel I , operational risk

1224-414: Is a wide range of returns that an index fund may experience; so an index fund by itself is not "fully diversified". Greater diversification can be obtained by diversifying across asset classes; for instance a portfolio of many bonds and many equities can be constructed in order to further narrow the dispersion of possible portfolio outcomes. A key issue in diversification is the correlation between assets,

1292-504: Is accessible here . The equipment rental market goes well beyond construction machinery and can include rental equipment such as a dedicated server housed in a data center . In addition to the construction sector , the rental market supplies a wide range of customers and industries, including gardening and landscaping, municipal and forestry services, the event industry [like PA equipment, LED screens, Camera/videography equipment, etc], IT infrastructure , and private clients. Depending on

1360-508: Is any of various types of risk associated with financing , including financial transactions that include company loans in risk of default . Often it is understood to include only downside risk , meaning the potential for financial loss and uncertainty about its extent. Modern portfolio theory initiated by Harry Markowitz in 1952 under his thesis titled "Portfolio Selection" is the discipline and study which pertains to managing market and financial risk . In modern portfolio theory,

1428-405: Is considered the most critical type of losses as it represents the instability and unpredictability of true losses that may be encountered at a given timeframe. This is the risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss (or make the required profit). There are two types of liquidity risk: Valuation risk is the risk that an entity suffers

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1496-478: Is located, traffic safety requires an enormous planning effort and the knowhow of well-trained professionals. Thus, some rental companies have extended their rental services in this area and take care of the whole planning process, including obtaining official approval or preparing traffic regulation plans. Some rental companies offer a range of temporary construction solutions, such as formwork , panels used to hold concrete in place until it sets, and falsework, which

1564-675: Is often preferred. This can include equipment such as machines for road or railway construction and forestry or agricultural work. Customers can also rent a wide range of commonly used construction equipment, such as compressors , pumps and compaction machines , or even small machines. Rental companies offer a wide range of temporary power solutions, whether for site use, events, petrochemical applications, manufacturing needs, shutdowns or power failures. The product range available includes generators , load banks, transformers and mobile fuel tanks. Various climate control solutions, such as heating and cooling systems and heat exchangers , as well as

1632-428: Is potential that a borrower may default or miss on an obligation as stated in a contract between the financial institution and the borrower. Attaining good customer data is an essential factor for managing credit risk. Gathering the right information and building the right relationships with the selected customer base is crucial for business risk strategy. In order to identify potential issues and risks that may arise in

1700-562: Is present in over 185 locations throughout the United Kingdom, and has the following divisions: Equipment rental Equipment rental was first developed in Anglo-Saxon countries. It emerged in the UK after the First World War and has now become a multi-billion euro business providing a wide range of construction and industrial equipment for customers globally.The American Rental Association

1768-718: Is propping to hold a concrete structure until it sets. Groundworks may also be included in the product range. That is, equipment designed to hold holes in the ground open and allow operatives to work safely. Whether for woodwork, metalwork, construction or do-it-yourself projects, an extensive inventory of well-maintained smaller equipment and hand/power tools is available to tackle any job size or surface type. Smaller equipment can range from portable generators, concrete mixers and fan heaters to LED stand lights, wallpaper stripper and floor sanders . Tools can include power drills , power saws, electric rotary hammers, rock splitters and breakers, and portable cut-off saws.   The choice of

1836-503: Is the risk of losses caused by flawed or failed processes, policies, systems or events that disrupt business operations. Employee errors, criminal activity such as fraud, and physical events are among the factors that can trigger operational risk. The process to manage operational risk is known as operational risk management . The definition of operational risk, adopted by the European Solvency II Directive for insurers,

1904-411: Is the risk that interest rates or the implied volatility will change. The change in market rates and their impact on the profitability of a bank, lead to interest rate risk. Interest rate risk can affect the financial position of a bank and may create unfavorable financial results. The potential for the interest rate to change at any given time can have either positive or negative effects for the bank and

1972-694: Is the risk that stock prices in general (not related to a particular company or industry) or the implied volatility will change. When it comes to long-term investing, equities provide a return that will hopefully exceed the risk free rate of return The difference between return and the risk free rate is known as the equity risk premium. When investing in equity, it is said that higher risk provides higher returns. Hypothetically, an investor will be compensated for bearing more risk and thus will have more incentive to invest in riskier stock. A significant portion of high risk/ high return investments come from emerging markets that are perceived as volatile. Interest rate risk

2040-487: Is too much variation between the amount of risks producers and consumers of commodities face in order to have a helpful framework or guide. Financial risk measurement, pricing of financial instruments, and portfolio selection are all based on statistical models. If the model is wrong, risk numbers, prices, or optimal portfolios are wrong. Model risk quantifies the consequences of using the wrong models in risk measurement, pricing, or portfolio selection. The main element of

2108-612: The ARA (American Rental Association) , rental revenues in 2019 in the U.S were expected to be $ 55.7 billion, up 5 percent from 2018. Rental revenue in Canada was expected to grow 2.1 percent in 2019 to total nearly $ 5.5 billion The ERA (European Rental Association) annually publishes the ERA Market Report, based on a research carried out in 15 countries (Austria, Belgium, The Czech Republic, Denmark, Germany, Finland, France, Italy, The Netherlands, Norway, Poland, Spain, Sweden, Switzerland and

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2176-400: The financial risks of owning equipment fleets. By renting rather than owning, the user only pays for equipment when it is needed, and rental reduces the ongoing costs that come with equipment ownership, including maintenance, in-service inspections, repairs, transportation and storage. Rental allows companies to cope with peak workloads without having to invest in extra equipment. It represents

2244-550: The variance (or standard deviation ) of a portfolio is used as the definition of risk. According to Bender and Panz (2021), financial risks can be sorted into five different categories. In their study, they apply an algorithm-based framework and identify 193 single financial risk types, which are sorted into the five categories market risk , liquidity risk , credit risk , business risk and investment risk . The four standard market risk factors are equity risk, interest rate risk, currency risk, and commodity risk: Equity risk

2312-692: The UK and the Nordic Countries . The potential for growth is important in Southern, Central and Eastern Europe, where some countries saw a double-digit growth rate for rental in recent years. In 2017, the Global Rental Alliance (GRA) estimated the combined rental revenue among the GRA member associations (US, Canada, Europe and UK, Japan, Australia and New Zealand) to be US$ 91.5 billion for 2015. Based on research by

2380-639: The UK). In 2019, equipment rental companies and other companies providing rental services generated a total rental turnover of more than EUR 27.7 billion in these countries (EU-EFTA-UK), with the most recent estimates putting the number of rental companies in Europe at 17,280 and people employed in the industry at 133,480. There are several reason why companies choose to rent equipment instead of buying it: financial and economic, operational and environmental. Equipment rental helps companies reduce their fixed costs and minimises

2448-425: The amount of risk one is prepared to accept in pursuit of his objectives), determined by balancing the costs of improvement against the expected benefits. Wider trends such as globalization, the expansion of the internet and the rise of social media, as well as the increasing demands for greater corporate accountability worldwide, reinforce the need for proper risk management . Thus operational risk management (ORM)

2516-554: The basic indicator approach and the standardized approach for calculating operational risk capital . Contrary to other risks (e.g. credit risk , market risk , insurance risk ) operational risks are usually not willingly incurred nor are they revenue driven. Moreover, they are not diversifiable and cannot be laid off. This means that as long as people, systems, and processes remain imperfect, operational risk cannot be fully eliminated. Operational risk is, nonetheless, manageable as to keep losses within some level of risk tolerance (i.e.

2584-734: The benefits increasing with lower correlation. However this is not an observable quantity, since the future return on any asset can never be known with complete certainty. This was a serious issue in the late-2000s recession when assets that had previously had small or even negative correlations suddenly starting moving in the same direction causing severe financial stress to market participants who had believed that their diversification would protect them against any plausible market conditions, including funds that had been explicitly set up to avoid being affected in this way. Diversification has costs. Correlations must be identified and understood, and since they are not constant it may be necessary to rebalance

2652-456: The best equipment for the job. Besides equipment, it is important to define which accessories are required. Rental depots usually have a full range of accessories. If the only item required is an accessory , the widest range will be found with the specialists in the sector. The proximity of the rental depot provides economic and sustainability benefits because it reduces transport costs and the environmental footprint. When renting small equipment,

2720-828: The case of a short-term rental, the best rental fees should be searched for from depots offering flexible contractual conditions. Rental depots offering equipment with standard instructions for use should be the preferred choice. Rental depots should have well-trained staff who are able to explain the practical and safe use of the equipment and provide answers to technical questions. An increasing number of rental companies have stringent procedures in place with regard, for example, to waste management, energy saving, environmentally adapted fuels and oils, and reduction of chemicals. They usually publish their own Corporate Social Responsibility (CSR) policies on their website. These relate to all aspects of sustainability (economic, social and environmental). In recent years, new players have appeared in

2788-414: The circular economy are applied in the rental business: An independent research study on the carbon footprint of construction equipment has demonstrated that the rental business model stimulates the efficient use of equipment and that this efficient use lowers the total carbon footprint. Depending on specific user practice, this can lead to significant reductions, in the range of 30%. The researchers of

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2856-436: The consumer. If a bank gives out a 30-year mortgage at a rate of 4% and the interest rate rises to 6%, the bank loses and the consumer wins. This is an opportunity cost for the bank and a reason why the bank could be affected financially. Currency risk is the risk that foreign exchange rates or the implied volatility will change, which affects, for example, the value of an asset held in that currency. Currency fluctuations in

2924-410: The context of financial risk management and contingent claim pricing. Credit risk management is a profession that focuses on reducing and preventing losses by understanding and measuring the probability of those losses. Credit risk management is used by banks, credit lenders, and other financial institutions to mitigate losses primarily associated with nonpayment of loans. A credit risk occurs when there

2992-438: The correlation may sometimes be negative. For instance, an increase in the price of oil will often favour a company that produces it, but negatively impact the business of a firm such an airline whose variable costs are heavily based upon fuel. However, share prices are driven by many factors, such as the general health of the economy which will increase the correlation and reduce the benefit of diversification. If one constructs

3060-558: The credit event. Some factors impacting expected exposure include expected future events and the type of credit transaction. Expected Default is a risk calculated for the number of times a default will likely occur from the borrower. Expected Severity refers to the total cost incurred in the event a default occurs. This total loss includes loan principle and interests. Unlike Expected Loss, organizations have to hold capital for Unexpected Losses. Unexpected Losses represent losses where an organization will need to predict an average rate of loss. It

3128-600: The customer segment, specialised machinery and equipment are available. Furthermore, the equipment on rental offer is often complemented by additional services. A brief overview of the different categories of equipment that can be rented is detailed below. Construction machines on offer for rental range from small machines, such as mini-excavators and skid steer loaders , to heavy equipment, including hydraulic excavators and dumpers , which some rental companies offer with trained operators. When contractors need specialised equipment that they do not hold in their own fleet, renting

3196-405: The economic aspect is among the most decisive factors in the choice of a rental company. With larger equipment, the transportation cost and environmental impact becomes more important. The fleet inventory should guarantee the immediate availability of the equipment required, especially when the equipment is booked in advance. Dealing with a large depot allows customers to find, from a single source,

3264-407: The equipment rental market, namely online platforms. These companies offer digital solutions to the rental needs of customers, acting as an intermediary between customers and rental companies: The customer sends an inquiry to the platform, the platform checks the availability of the machine in its network and the customer receives an offer, either from the platform or from a rental company. Whether it

3332-413: The full range of services included in an offer, as well as the specifications of the equipment provided, which may be more or less expensive to run.Some rental companies may be more competitive in short-term rentals and others in long-term rentals. It is, therefore, necessary to compare individual fees precisely and thoroughly. Rental conditions lay out the policies applied by the rental depot and provide all

3400-434: The full range of services required during the contractual period. Especially in the initial phase of the relationship, it is important to talk personally with the depot manager and check the fleet. Rental depots must provide equipment that is fully compliant with legislative regulations and in good operating condition. Many rental companies rent equipment fitted with telematics solutions (especially large equipment). This enables

3468-405: The future, analyzing financial and nonfinancial information pertaining to the customer is critical. Risks such as that in business, industry of investment, and management risks are to be evaluated. Credit risk management evaluates the company's financial statements and analyzes the company's decision making when it comes to financial choices. Furthermore, credit risks management analyzes where and how

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3536-539: The hundreds of thousands of pieces of equipment, while others are specialized in a few specific products. They can supply the most comprehensive range of state-of-the-art equipment – with or without qualified operators – when and where customers need it. Maintenance, compliance with standards and regulations : Rental companies bear the responsibility for ensuring the equipment they rent out complies with applicable regulations, performing safety check before delivery. Routine maintenance and major repairs are typically handled by

3604-543: The imports and exports of an international firm. For example, if the euro depreciates against the dollar, the U.S. exporters take a loss while the U.S. importers gain. This is because it takes less dollars to buy a euro and vice versa, meaning the U.S. wants to buy goods and the EU is willing to sell them; it is too expensive for the EU to import from U.S. at this time. Commodity risk is the risk that commodity prices (e.g. corn, copper, crude oil) or implied volatility will change. There

3672-516: The industry is now growing quickly in other areas of the world, including the Middle East , Latin America , and Asia . The industry has moved from mostly family-owned small businesses to the creation of a number of international groups, some of which have an annual turnover over €1billion. Around 40 of the 100 largest equipment rental companies in the world are European. The majority of companies in

3740-418: The industry still have fewer than 5 employees. Concentration in the industry is expected to renew at a fast pace, following a pause in 2008–2009 as a consequence of the international credit crunch . The situation of the equipment rental industry in Europe varies from one country to another, with some markets being more mature. Equipment rental penetration is lower in Southern and Eastern Europe and highest in

3808-427: The information regarding the services ancillary to rental that are included in the rental rates and those that are excluded. Some of the services / issues rental conditions should address include: Rental depots should also guarantee continuity of service through the replacement of the equipment or through assistance services. For long-term rentals, the focus should be on rental depots offering attractive conditions. In

3876-502: The loan will be utilized and when the expected repayment of the loan is as well as the reason behind the company's need to borrow the loan. Expected Loss (EL) is a concept used for Credit Risk Management to measure the average potential rate of losses that a company accounts for over a specific period of time. The expected credit loss is formulated using the formula: Expected Loss = Expected Exposure X Expected Default X Expected Severity Expected Exposure refers to exposure expected during

3944-547: The long term usefulness of the equipment. Renting can be up to three times more expensive over financing, but comes with the benefits of lower risk and commitment. Where buying starts to make more sense is when there is a consistent and forecastable use case for the equipment. Renting again is much better suited to infrequent or one time uses. Capital Release : In times where they have to demonstrate high levels of profit compared to invested capital , contractors are increasingly eager to rent equipment, as it allows them to minimize

4012-425: The marketplace can have a drastic impact on an international firm's value because of the price effect on domestic and foreign goods, as well as the value of foreign currency denominate assets and liabilities. When a currency appreciates or depreciates, a firm can be at risk depending on where they are operating and what currency denominations they are holding. The fluctuation in currency markets can have effects on both

4080-457: The portfolio which incurs transaction costs due to buying and selling assets. There is also the risk that as an investor or fund manager diversifies, their ability to monitor and understand the assets may decline leading to the possibility of losses due to poor decisions or unforeseen correlations. Hedging is a method for reducing risk where a combination of assets are selected to offset the movements of each other. For instance, when investing in

4148-401: The rental company, saving the renter the expense of having a maintenance crew on staff. Safety checks are performed before each delivery. Outsourcing risk : The rental company is responsible for providing safe equipment on-site and shoulders any risk connected to the transportation of equipment (when this is carried out by the rental company). Procurement of equipment by a contractor : It is

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4216-489: The short, medium or long-term. Renting by definition operates in a circular business model and seen as part of the sharing economy and circular economy , it can contribute to environmental and societal sustainability. The European rental industry, through its representative association ERA, has published a Manifesto for the Promotion of the sustainable benefits of the rental concept. The Manifesto defines how principles of

4284-450: The size of their equipment fleet. Less immobilized capital allows for improved cost control , lower maintenance costs, and a reduction in transport fleets. Renting equipment with operators allows for optimizing staff costs. The ERA Total Cost of Ownership calculator can help in deciding whether to buy, rent or lease equipment from financial perspective. Range of recent equipment available : Some rental companies have inventories up to

4352-399: The study built a calculator to determine the carbon footprint of the use of construction equipment, based on various parameters. The parameters with the biggest influence on the carbon footprint of equipment are: ERA used this study to develop a free online tool to determine exact carbon footprint of construction equipment per hour of use of the equipment. The ERA Equipment CO 2 calculator

4420-409: The tracking of equipment, a detailed analysis of the way it is being used and a reduction of the maintenance costs, among other benefits. All rented equipment must be compliant with existing legislation on safety. Rental rates is the easiest parameter to compare. Special offers for weekend or long-term rentals can make a rental depot more attractive. Together with rental rates, it is important to assess

4488-458: Was negatively defined : namely that operational risk are all risks which are not market risk and not credit risk . Some banks have therefore also used the term operational risk synonymously with non-financial risks . In October 2014, the Basel Committee on Banking Supervision proposed a revision to its operational risk capital framework that sets out a new standardized approach to replace

4556-605: Was announced that Geoff Drabble would retire as CEO after twelve years on 1 May 2019, and would be succeeded by Brendan Horgan , the Group Chief Operations Officer and chief executive of Sunbelt Rentals, Ashtead's North American business. In June 2022, Sunbelt Rentals, Ashtead's main operating subsidiary, was announced as an investor in lithium-ion battery developer Britishvolt . After Britishvolt went into administration in January 2023, Ashtead later revealed it took

4624-475: Was founded as early as 1955, and the first waves of consolidation took place in the 1970s in North America, leading to the creation of companies with nationwide operations. Consolidation was slow in the 2000s but a buyout joined the two largest North American rental companies: United Rentals and RSC. Europe is catching up since the 1980s. In Europe alone there are over 17,000 equipment rental companies and

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