SPECIAL FOCUS - Integr8 Group

Neal Fanaroff, CEO of Integr8 Rental“Each month thereis a substantialcompoundedincrease.”the equipment at the end of life. “At the end of acontract, depending on the deal, customers caneither return the equipment, or sign a new rentalperiod for any given time at a reduced rate, or theycan buy the goods at a reduced price,” he says.WORDS Patrick Heskejoint-CEO Rob Sussman at the beginning of 2007 tospin off the company as a separate entity to Integr8 IT.“The Integr8 Group has several differentoperating entities and all of them are run as totallyindependent companies even though we havecommon shareholders,” Fanaroff explains. “Wehave been growing the business at a pretty rapidbut sustained rate, although we are still in a newphase of development. We have also diversified ourofferings to various different areas of the office, suchas office furniture and health equipment,” he says.Integr8 Rental’s customers today include manyJSE-listed company and multinationals. Fanaroffbelieves that Integr8 Rental has certain advantagesand competitive edges over the rest of the assetrental market, but with that, also disadvantages.“One advantage that we do have is being associatedto the Integr8 Group; we are aligned to Integr8 IT, whois a major player in the ICT industry. Through the wholeIntegr8 Group, our procurement costs are a lot lowerthan our competitors. This means we can do deals athigher implied interest rates, and as a result, the actualrenting cost to our customers is a lot lower,” he says.Fanaroff says Integr8’s rental model, unlike otherlocal rental models offered by local competitors,often offers customers the option to purchaseGeared for growthThe company continues to grow and according toFanaroff, Integr8 Rentals debit order flow grew over400 percent over the last year. “Going forward for thenext two to three years, I would be very surprised if thiscompounded momentum doesn’t continue,” he says.To cater for this growth for Integr8 Rentals, Fanarofffsays the company is in some exciting negotiations.“The one option is to maintain a preferredprocurement and sourcing of equipment, and becauseof our policy and buying power within the group,we have got to be competitive. The second optionis by reducing our cost of capital growth as we aregrowing. All of our excess revenue is plowed backinto the lending side of the business, which reducesthe cost of borrowing capital dramatically,” he says.He also explains that because of its client base thatforms part of the overall Integr8 Group, a lot of newbusiness continues to come from within. “It’s a case ofturning technology-buying clients into rental clientswhere it makes sense. We have to identify which clientsare the ones who should be on the rental modeland sell the idea to them. By doing that, the businesswill grow with the clients that we have already aswell as the amount of business that we are doingon a monthly basis with them,” Fanaroff concludes. BIntegr8 IT - special focusAUGUST 2008 - 17