Ashtead PLC, which owns Fort Mill, S.C.-based Sunbelt Rentals as well as British rental company A-Plant, last week reported a 5-percent fiscal first-quarter revenue increase, rising from £246.2 million in last year’s fiscal first quarter to £259.5 million (about U.S. $458.9 million). Underlying operating profit increased 9 percent to £51.7 million (about U.S. $91.4 million), compared with £47.4 million in the year-ago quarter.
During the quarter, the company completed the sale of Ashtead Technology for £90 million, with the net proceeds being used to pay down debt.
Sunbelt Rentals’ fiscal first-quarter revenue was U.S. $403.4 million, a 3.8-percent increase compared with last year’s first-quarter total of $388.5 million. EBITDA for the quarter increased from $150.7 million in the year-ago period to $158.6 million this year, a 5.2-percent jump. Operating profit for Sunbelt during the period was $92 million, compared with $84.8 million for the same period last year, an 8.5-percent hike.
Sunbelt’s first-quarter revenue growth reflected a fleet that was 8-percent larger than the previous year, with physical utilization up 1 percent to an average 70 percent. Ashtead said rental rates declined in the U.S. and U.K. during the period.
Capital expenditure in the quarter for Sunbelt and A-Plant totaled £108.5 million (U.S. $191.7 million), compared to £124.2 million during the same period last year. £96.6 million was spent on the rental fleet (U.S. $170.8 million). The average age of the group’s rental fleet on July 31 was 31 months, compared to 29 months at the same time last year.
“In the U.S. we delivered revenue and profit growth as we benefited from improvements in operational performance,” said Ashtead chief executive Geoff Drabble. “We improved utilization on a larger fleet and continue to benefit from our broad geographic and market exposure. We performed well in the U.K., underpinned by our exposure to the larger non-residential projects. Despite the current economic uncertainty, our operating businesses continue to perform well and our financing costs continue to be lower than last year as we reduce debt. The Board anticipates the group continuing to trade in line with its expectations for the remainder of the year.”
Drabble said that although the downturn in housing and commercial construction is impacting the business, public sector infrastructure projects such as the London 2012 Olympics are providing opportunities. He added that the need for investment in infrastructure, schools, transportation, hospitals and other areas portend long-term opportunities.
“In the U.S., we delivered revenue and profit growth as we benefited from improvements in operational performance,” he added. “Utilization of both Sunbelt and A-Plant’s fleets remains high and one-third of the way through our second quarter, both businesses continue to have substantially more fleet on rent than this time last year, albeit at a lower yield.”
Sunbelt Rentals is No. 4 on the RER 100.