Sunbelt Rentals last week announced revenues for the full-year ended April 30 of $1.08 billion, a 25-percent drop from $1.45 billion for full-year 2009. Fourth-quarter revenues dipped 3 percent to $259.0 million.
Ashtead Group, Sunbelt’s parent company, reported full-year revenues, which include U.K. rental company A-Plant, of £836.8 million (about U.S. $1.24 billion), down 25 percent from £1.073 billion (about U.S. $1.58 billion) in the prior year. The company reported £5 million (U.S. $7.4 million) profit for its fourth quarter ended April 30, on earnings of £210.1 million (U.S. $310.3 million), a 3-percent drop from £232.1 million (U.S. $342.8 million) in the year-ago period.
"Having taken decisive and prompt actions to prepare the business for the contraction in our end markets we have maintained healthy margins and strong cash generation whilst gaining market share,” said Geoff Drabble, CEO of Ashtead Group. “Although market conditions remain difficult we are pleased to have seen some early signs of improvement in Q4, particularly in the U.S.
“In the U.S. we continue to believe that we will see stabilization in markets in the current year with improving trends through 2011. In the U.K., whilst current markets are also stabilizing, uncertainty around the impact of public sector spending cuts makes the medium term less certain.”
Rental revenues for the full year declined 25 percent in Sunbelt to $989 million and by 21 percent in A-Plant to £152 million (U.S. $224.5 million) reflecting 10-percent less fleet on rent in both markets and average yield declines of 16 percent in Sunbelt and 12 percent in A-Plant. Fleet size remained broadly flat throughout the year in both businesses at $2.1 billion and £320 million (U.S. $472.7 million) respectively while physical utilization remained comparatively strong.
“The year's results reflect a full year's impact of the global recession, which produced a significant reduction in construction volumes in both our markets,” Drabble said. “Against this backdrop our relative performance has been strong in both markets where we have made clear market share gains whilst maintaining good EBITDA margins. These strong margins, together with tight control of capital expenditure, generated £191 million (U.S. $282.1 million) of cash in the year and £348 million (U.S. $514.0 million) from operations in the past two years, which has been applied to reduce net debt to £829 million (U.S. $1.22 billion).”
In preparation for the next phase of the cycle, the company has started a fleet reinvestment program, funded from operating cash flow.
“In the coming year, as we prepare for full recovery, we intend to increase our gross capital expenditure from £63 million (U.S. $93.1 million) in 2009/10 to around £225 million (U.S. $332.4 million),” Drabble said. “Currently our plans are for this reinvestment to be largely for fleet replacement as we look to broadly maintain the size of our rental fleets whilst holding or slightly reducing their average age. However, if markets continue to improve, we have the flexibility to make more of this expenditure available for fleet growth.”
Ashtead plc is based in Leatherhead, Surrey, U.K. Sunbelt Rentals, No. 3 on the RER 100, is based in Fort Mill, S.C.
