SPECIAL FOCUS - Integr8 Group

Neal Fanaroff, CEO of Integr8 Rental
“Each month there
is a substantial
compounded
increase.”
the equipment at the end of life. “At the end of a
contract, depending on the deal, customers can
either return the equipment, or sign a new rental
period for any given time at a reduced rate, or they
can buy the goods at a reduced price,” he says.
WORDS Patrick Heske
joint-CEO Rob Sussman at the beginning of 2007 to
spin off the company as a separate entity to Integr8 IT.
“The Integr8 Group has several different
operating entities and all of them are run as totally
independent companies even though we have
common shareholders,” Fanaroff explains. “We
have been growing the business at a pretty rapid
but sustained rate, although we are still in a new
phase of development. We have also diversified our
offerings to various different areas of the office, such
as office furniture and health equipment,” he says.
Integr8 Rental’s customers today include many
JSE-listed company and multinationals. Fanaroff
believes that Integr8 Rental has certain advantages
and competitive edges over the rest of the asset
rental market, but with that, also disadvantages.
“One advantage that we do have is being associated
to the Integr8 Group; we are aligned to Integr8 IT, who
is a major player in the ICT industry. Through the whole
Integr8 Group, our procurement costs are a lot lower
than our competitors. This means we can do deals at
higher implied interest rates, and as a result, the actual
renting cost to our customers is a lot lower,” he says.
Fanaroff says Integr8’s rental model, unlike other
local rental models offered by local competitors,
often offers customers the option to purchase
Geared for growth
The company continues to grow and according to
Fanaroff, Integr8 Rentals debit order flow grew over
400 percent over the last year. “Going forward for the
next two to three years, I would be very surprised if this
compounded momentum doesn’t continue,” he says.
To cater for this growth for Integr8 Rentals, Fanarofff
says the company is in some exciting negotiations.
“The one option is to maintain a preferred
procurement and sourcing of equipment, and because
of our policy and buying power within the group,
we have got to be competitive. The second option
is by reducing our cost of capital growth as we are
growing. All of our excess revenue is plowed back
into the lending side of the business, which reduces
the cost of borrowing capital dramatically,” he says.
He also explains that because of its client base that
forms part of the overall Integr8 Group, a lot of new
business continues to come from within. “It’s a case of
turning technology-buying clients into rental clients
where it makes sense. We have to identify which clients
are the ones who should be on the rental model
and sell the idea to them. By doing that, the business
will grow with the clients that we have already as
well as the amount of business that we are doing
on a monthly basis with them,” Fanaroff concludes. B
Integr8 IT - special focus
AUGUST 2008 - 17