Sunbelt Rentals U.S. posted $1,899.2 million in revenue for the fiscal first quarter of 2023 compared to $1,465.2 million in the fiscal first quarter of 2022, a 29.6-percent year-over-year increase. Sunbelt Canada posted U.S. $137.1 million compared to $121 million a year ago, a 13.3-percent hike. In the U.K., fiscal first quarter revenue was U.S. $222.7 million compared to $265.7 million a year ago, a 16.2-percent decline.
The entire company posted $2,259 million in fiscal first quarter revenue compared to $1,851.9 million a year ago, a 22-percent increase.
Rental revenue for Ashtead was $2.075 billion, compared to $1.669 billion a year ago, a 24.3-percent hike.
“The group has made a strong start to the financial year across all geographies with rental revenue up 26 percent at constant currency,” said Brendan Horgan, Ashtead chief executive. “This market outperformance across the business is only possible through the dedication of our team members who deliver for all our stakeholders every day, while ensuring our leading value of safety remains at the forefront of all we do.
“Our end markets remain strong, and we continue to execute well across all actionable components of our strategic growth plan, Sunbelt 3.0. In the quarter, we invested $699 million in capital across existing locations and greenfields and $337 million on 12 bolt-on acquisitions, adding a combined 33 locations in North America. This significant investment is enabling us to take advantage of the substantial structural growth opportunities that we see for the business as we deliver our strategic priorities to grow our general tool and specialty businesses and advance our clusters. We are achieving all this while maintaining a strong and flexible balance sheet with leverage near the bottom of our target range.
“Our business is performing well with clear momentum in supportive end markets. We are in a position of strength and have the experience to navigate the challenges and capitalize on the opportunities arising from the market circumstances we face, including supply chain constraints, inflation, labor scarcity and economic uncertainty, all factors which we are convinced are drivers of ongoing structural change. The business is performing strongly, with revenue and operating profit ahead of our previous expectations. This performance is offset by increasing interest costs and therefore, we expect adjusted profit before taxation for the year to be in line with our previous expectations and the board looks to the future with confidence.”
U.S. rental-only revenue jumps
In the U.S., rental only revenue was $1,389 million compared to $1,102 million in fiscal Q122, a 26-percent jump, demonstrating the benefits of Sunbelt’s strategy of growing its specialty businesses and broadening its end markets. Organic growth (same-store and greenfields) was 20 percent, while bolt-ons contributed 6 percent of rental-only revenue growth. In the quarter, Sunbelt’s general tool business grew 23 percent, while its specialty business jumped 38 percent. Rental-only revenue growth was driven by both volume and rate improvement in what continues to be a good rate environment. Rental revenue jumped 29 percent to $1,768 million.
The U.K. business generated rental only revenue of £104 million, a 5 percent increase compared to £99 million in the fiscal first quarter of 2021. After the cessation of free mass COVID testing in April 2022, revenue from the Department of Heath related to the demobilization of the testing site decreased. Excluding the impact of the work for the Department of Health, rental-only revenue increased 19 percent. Rental revenue increased 11 percent to £149 million, compared to £134 million in the year-ago quarter. Total revenue decreased 4 percent to £182 million from £190 million a year ago, reflecting the high level of ancillary and sales revenue associated with the work for the Department of Health.
Canada’s rental only revenue increased 18 percent to C$131 million, compared to C$111 million a year ago. Markets are robust and the original Canadian business is growing in a similar manner to the U.S. with strong volume growth and rate improvement, in a good rate environment. The lighting, grip and lens business continues to be affected by market uncertainty, with the threat earlier this year of strikes by production staff in Vancouver, resulting in productions being delayed or moved elsewhere. Rental revenue increased 20 percent to C$159 million, compared to C$132 million a year ago.
