Supporting the Ashtead Group’s strong performance in the first quarter 2006, Sunbelt Rentals last week announced that in the quarter ending July 31, 2006, revenue grew 25.3 percent to $234 million, reflecting growth of approximately 7 percent in rental rates and a 17-percent increase in the average fleet size.
Sunbelt reported that utilization continues at high levels with a slight increase during the quarter from approximately 70 to 71 percent. Same-store growth was also strong, with an increase in revenues for the period of 21.3 percent.
These results reflect significant growth in the company’s key non-residential construction market, increasing market share, and the continuing shift from ownership to rental in the United States, the company said.
Sunbelt’s operating profit was up 48.6 percent in the first quarter from $38.4 million to $57.1 million, representing a margin of 24.4 percent (versus 20.6 percent in 2005). Last year’s acquisitions continue to perform well. Sunbelt also continued to replenish its fleet with new equipment to take advantage of the strong market conditions in the U.S. with $123.7 million invested in its rental fleet in the quarter (versus $64.8 million in 2005).
“Our strong growth in rental revenue and operating profit for the quarter reflects the strength of our operating model and our continuous drive to distinguish Sunbelt Rentals from the rest of the industry,” said Cliff Miller, president and CEO. “In addition, our acquisition of NationsRent has created a bigger and stronger company that will provide our customers with more choices than ever before.”
The NationsRent acquisition was completed on Aug. 31. Following the announcement of the acquisition in mid-July 2006, Sunbelt developed detailed plans for the integration of NationsRent. Prior to the closing, NationsRent’s managers and sales staff were briefed on Sunbelt’s operating methods, sales techniques and incentives. A new combined regional and district structure will be implemented this month. Execution of the detailed integration plan for the corporate office and business systems is well under way and on track for completion, the company said.
Ashtead Group, the British parent company of Sunbelt Rentals, said its fiscal first quarter pretax profit was 24.3 million pounds (about U.S. $46 million), double its figure from the previous year’s first quarter.
“In the quarter we doubled the profit from last year and we actually made more money than in the whole of 2005,” said chief executive George Burnett in a conference call.
Ashtead group revenue increased to 175.7 million pounds (about U.S. $333 million) in the first quarter, up from 145.9 million pounds (about U.S. $276 million) in the same period last year.
Based in Charlotte, N.C., Sunbelt Rentals is No. 4 on the RER100.