Sunbelt Rentals dropped 32 percent in its fiscal first quarter ended July 30. Revenues were $287.7 million, compared with $422 million for the same period in 2008. Rental revenues for Sunbelt decreased 29 percent to $268.1 million.
Overall Ashtead revenue from continuing operations dropped 19 percent year over year from £273.4 million last year to £221.6 million (about U.S. $367.5 million) in this year’s fiscal first quarter. U.K. revenues are from U.K. rental company A-Plant, owned by Ashtead.
Average fleet on rent decreased 12 percent year over year at Sunbelt and 17 percent at A-Plant. Pricing continued to be under pressure in both markets with yield declining 19 percent in Sunbelt and 10 percent in A-Plant, compared to the same period in 2008.
“As anticipated, market conditions remain difficult; however, the actions we have taken to cut costs and reduce fleet size have ensured that our margins have held up well,” said Ashtead chief executive Geoff Drabble. “Our continuing focus on developing stronger customer relationships and maintaining an infrastructure to provide excellent customer service throughout the cycle has been rewarded by clear market share gains.”
Drabble said he expected market conditions and trading levels to remain largely unchanged in the secondquarter. “Visibility for Q3 and Q4, our seasonally more challenging periods, is less clear both in terms of demand and the pricing environment,” he said.
However, Drabble was optimistic the company would meet market expectations, adding that “Ashtead is well placed both in terms of its continuing operational momentum and its financial strength to benefit when markets recover.”
Capital expenditure for the group in the quarter was £15.2 million (about U.S. $25.2 million), compared with £108.5 million in the previous year’s period. The company said it retains a significant ability to grow its fleet, which was 37 months on July 31, compared with 31 months on the same date in 2008.
This year, Sunbelt and A-Plant’s capital expenditure is again expected to be entirely for replacement rather than growth. “We currently anticipated spending this year around £100 million (about U.S. $165 million) gross and £75 million net of disposal proceeds. With short lead times and no forward commitments, we have the flexibility to adjust this as required to reflect market conditions,” the company said.
£56.5 million of net cash inflow was generated from operations in the quarter, a 58-percent year-over-year jump over £35.9 million the previous year. The gain was applied to reduce outstanding debt.
Based in Fort Mill, S.C., Sunbelt Rentals is No. 3 on the RER 100. Ashtead Group is based in London.
