Fleet management services provider FMG is aiming to take advantage of further consolidation in the leasing and contract hire sector.

The company’s new executive chairman Andrew Cope told Fleet News he sees significant opportunities for the Huddersfield-headquartered business.

He said: “The business has a forward-thinking attitude, embracing new technology, which has huge positive implications for our customers and prospects.

“By building on the good work which has been done to establish FMG as a leader in the industry, I’m excited to have the chance to help grow the business further.”

Cope has secured a 15% stake in the company for an undisclosed sum, three months after HG Capital’s acquisition of Zenith (Fleet News, February 6).

The sale of Zenith saw Cope step down from his post as chairman, but remain an investor in the company and free to concentrate his efforts in a new venture.

FMG employs 300 people and provides incident management services to more than 200,000 vehicles. It has several leasing companies among its customer base, including Alphabet, LeasePlan and Leasedrive:

“That market over the past two to three years has become quite tough,” said John Catling, chief executive of FMG. “But what we’ve done is make incident management a process which adds value.”

FMG also operates in the roadside repair and recovery market and was recently awarded the National Vehicle Recovery Manager contract to deal with incidents on England’s strategic road network on behalf of the Highways Agency. The contract is worth £34.5 million over seven years.

In addition, it has recovery contracts with a number of police forces, including North Wales, Norfolk, Lancashire and Lincolnshire constabularies.

Catling told Fleet News it has the expertise to service a growing sector of the fleet market it describes as ‘mission critical’ van operations. He said: “We’re working with a number of leasing companies to see how we can provide a different level of service to that sector of the market.”

FMG, which had a turnover of £85m in 2012, is also looking at other markets where it believes it can utilise its expertise.

Catling said: “Over the years we’ve amassed a lot of data and developed several risk models and portals which identify and mitigate risk. We’re now working with a number of insurers to see how we can use this insight to help them.”

However, it is the growing consolidation in the fleet market where Cope believes FMG can build on recent successes.

He explained: “My gut feeling is there are a number of big players that won’t be there in a few years’ time. You will probably be looking at as few as 10 players, maybe even less, dominating the market.”

Cope said the impressive performance of contract hire and leasing companies through the recession has made the industry an attractive proposition for investors.

“That will drive forward that larger consolidation,” he said. “And, as these organisations get larger, to maintain their own standards and innovation, we feel that they will need to find trusted partners to deliver those services in a white label way, which we see as our role.”

Cope believes FMG is in a prime position to provide a range of fleet management services.

He said: “To be good at anything you have to have time and expertise, but the more complicated and bigger the organisation, the harder it is to maintain that expertise, innovation and drive. The more enlightened organisations are staying close to their customers at the front-end and leveraging their scale and investment capacity at the back-end, while finding partners who can provide improving services in each of those areas where those partners are open to market forces.

“We see ourselves as that back office partner. We’re not going to get into funding; we’re just going to be good at doing those large-scale, involved contracts.”

But are there areas of expertise that FMG has that could be strengthened by acquisition? “Yes, is the short answer,” said Cope. “Do we have potential acquisitions in mind? Yes we do, but timing is everything.”

More articles on: