Sunbelt Rentals posted $2,742.3 million in revenue for its 2015 fiscal year, compared to $2,188.5 million in fiscal 2014, a 25.3-percent increase. EBITDA was $1,293.2 million, compared to $987.6 million a year ago, a 30.9-percent leap. Operating profit jumped from $631.1 million in fiscal 2014 to $832.6 million, a 31.9-percent year-over-year surge.
Parent company Ashtead plc, also including A-Plant, one of the U.K.’s largest equipment rental companies, totaled £2,039 million (about U.S. $3.19 billion), compared to £1,635 million a year ago, a 24.7-percent hike.
“2014/15 was another very successful year for Ashtead,” said Geoff Drabble, Ashtead chief executive. “The consistent execution of our well-established strategy focused on organic growth supplemented by bolt-on acquisitions has delivered both excellent financial results and significantly enhanced our geographic footprint and the breadth of the markets we serve. Our financial performance speaks for itself with Sunbelt and A-Plant achieving rental revenue growth of 25 percent and 19 percent respectively. Underlying group pre-tax profit rose 35 percent to £490 million and we generated a strong return on investment of 19 percent.”
Drabble added that Ashtead invested £1 billion in the rental fleet and £236 million on bolt-on acquisitions during the year.
“We expect to again invest around £1 billion in capital expenditure in the coming year and we will continue to open greenfield locations and make bolt-on acquisitions to further broaden our market exposure,” Drabble said. “This growth will, as always, be undertaken responsibly and we will maintain our leverage at, or below, two times EBITDA. Our markets continue to provide both structural and cyclical opportunity. The business model established over recent years has a track record of exploiting these opportunities and we are supported by a strong balance sheet. Therefore, the board looks forward to the medium term with confidence.”
Ashtead said its markets were up about 7 percent last year and are forecast to grow about 8 percent in the upcoming fiscal year, and the company’s same-store growth of 17 percent demonstrates that it is growing its market share. The company said that specialty businesses accounted for 25 percent of Sunbelt’s revenue in 2014/15.
Rental-only revenue grew 27 percent, with a 24-percent hike in fleet on rent, and a net 2 percent improvement in yield. Improved yield reflects the combination of good rate growth, and the drag of greenfield and bolt-on activity. Average physical utilization for the year was 70 percent, compared to 71 percent in 2014.
Sunbelt’s strong revenue growth and focus on operational efficiency is driving improving margins resulting in its 47-percent EBITDA margin, as 58 percent of revenue growth dropped through to EBITDA. Stores open for more than one year posted 67 percent of revenue growth dropping through to EBITDA. Pre-tax return on investment in the 12 months to April 30 was 26 percent. Debt increased during the year as Ashtead invested in fleet, made an increased number of bolt-on acquisitions and increased working capital to support the growth in the business.
Based in Fort Mill, S.C., Sunbelt Rentals is No. 2 on the RER 100. Ashtead Group is headquartered in London.
