Sunbelt Rentals posted $328 million in rental revenue for the fiscal first quarter ended July 31, a 21-percent improvement from $271 million in the same period a year ago. Its growth comprised a 10-percent volume increase in fleet on rent, 7-percent higher yield and a first-time contribution from Empire Scaffold. In the U.K., A-Plant’s first-quarter rental revenue grew by 12 percent to £42 million (about U.S. $67.4 million) from £38 million in the first quarter of 2010. The improvement included 3-percent growth in average fleet on rent and a 5-percent yield improvement.
Ashtead revenue grew 21 percent to £268.6 million (U.S. $431.2 million) from £239.1 million in the same period of 2010, on higher used equipment sales revenue of £14 million (2010: £9 million) as the group increased capital expenditure and sold more used equipment.
“Our end construction markets continue to behave in line with our expectations and now appear to be broadly flattening after two years of significant decline,” said Geoff Drabble, Ashtead’s chief executive. “Against this backdrop, the 21-percent rental revenue and 67-percent profit growth achieved at Sunbelt show that we are clearly benefitting from the ongoing structural change in the U.S. rental market. Sunbelt has also now delivered 15 consecutive months of year-on-year rental revenue growth. These structural trends are likely to continue with further increases in rental penetration and Sunbelt’s market share expected.
“Together with our ongoing improvement in both yield and operational efficiency, these trends resulted in a very strong quarter with pre-tax profits of £34 million. August’s U.S. rental revenues continued this pattern with growth of 25 percent. As a result, the board now anticipates a full-year result substantially ahead of its previous expectations.”
Costs remained under close control with the reported growth in staff costs being due principally to the first time inclusion of Empire Holdings, a Gulf Coast scaffold specialist acquired by Sunbelt in January. Consequently, Sunbelt’s EBITDA increased by $34 million or 76 percent of the net $45 million increase in Q1 rental revenue as adjusted to exclude the $12 million first-time impact of Empire’s largely pass-through erection and dismantling labor recovery billings.
Sunbelt’s fleet size at July 31 of $2.3 billion is 9-percent larger than it was a year ago, and average first-quarter physical utilization was 72 percent, an improvement from 2010 first-quarter utilization of 69 percent.
Sunbelt Rentals, based in Fort Mill, S.C., is No. 3 on the RER 100. Ashtead Group is based in London.
