Sunbelt Rentals Revenue Jumps 29 Percent in Fiscal First Quarter
Sunbelt Rentals posted $820.8 million in revenue in its first fiscal quarter of 2015 ended July 31, compared to $638.4 million in the same period a year ago, a 28.6-percent hike. EBITDA also surged 25.5 percent from $311.1 million a year ago to $390.4 million in the recently concluded quarter. Operating profit also increased from $206.9 million in Q114 to $258.2 million in Q115.
Ashtead Group, including A-Plant, the London-based U.K. equipment company, posted rental revenue of £618.6 million (about U.S. $946.9 million), compared to £457.9 million a year ago, a 26-percent leap.
“The group delivered another strong quarter with underlying pre-tax profits of £161 million, up 23 percent at constant exchange rates on the prior year,” said Ashtead chief executive Geoff Drabble. "Group ROI was a very healthy 19 percent and the growth was achieved whilst reducing our leverage to 1.8 times EBITDA.
“The strength of the quarter reflects the benefits of another strong execution of a consistent strategy to diversify the markets we serve, both in terms of geography and sector. Sunbelt’s 23-percent rental revenue growth clearly demonstrates the overall health of our broader markets and the benefits of our more transactional business model. Particularly encouraging is that, after a weather-impacted spring, our seasonal improvement in demand was very strong, resulting in record levels of physical utilization in July on a fleet that was 26 percent larger. As a consequence, we confidently invested £349 million in capital expenditure in the period, opened 19 greenfield locations and made one small bolt-on acquisition. We are therefore very much on track to achieve our plans of mid-to-high-teens fleet growth in the U.S. and open 50 new locations in the full year.”
Drabble said with both divisions performing well, strong end markets and the company’s strategy working effectively, management expects continued results in line with expectations.
The company said its same-store growth rate was up 13 percent, thus growing market share since the markets were up about 7 percent. “In addition, bolt-ons and greenfields have contributed another 10 percent growth as we execute our long-term structural growth strategy of expanding our geographic footprint and our specialty businesses,” the company said.
With 23 percent in rental revenue growth, Sunbelt’s total revenue growth was the result of higher used equipment sales than last year in response to the downturn in oil and gas markets.
Ashtead announced that Sunbelt Rentals acquired the business and assets of C. Rowland Enterprises, which trades as Air Systems Sales & Rentals for about $2 million, with contingent consideration of up to $800,000 payable over the next year, depending on revenue meeting or exceeding certain thresholds. Air Systems is a climate control business in Oregon.
Also, on Aug. 28, Sunbelt acquired the business and assets of Dover Rent-all, a general equipment business in Dover, Del., for $2 million.
Sunbelt Rentals, No. 2 on the RER 100, is based in Fort Mill, S.C. Ashtead plc is headquartered in London.
