Sunbelt Rentals Grows Rental Revenue 13 Percent in Fiscal First Quarter

Sunbelt Rentals posted first quarter revenue of $853.1 million in its fiscal first quarter ended July 31, compared to $820.8 million in last year’s fiscal first quarter, a 3.9-percent increase. EBITDA was $428.9 million compared to $390.4 million in the year-ago quarter, a 9.9-percent leap. Operating profit grew 4 percent from $258.2 million a year ago to $268.9 million in the recently concluded quarter.

Sunbelt’s U.K-based sister company A-Plant posted £96.4 million (about U.S. $128.6 million), compared to £90 million a year ago, a 7.1-percent hike.

“The group delivered a strong quarter with rental revenue increasing 12 percent and underlying pre-tax profit of £184 million,” said Geoff Drabble, chief executive of parent company Ashtead Group. “The underlying performance of the business continues to benefit from a clear and consistent strategy of organic growth supplemented by bolt-on acquisitions. In the quarter, the reported results were positively impacted by weaker sterling, but this was broadly balanced by the impact of lower gains on fleet disposal as we reduced our replacement capital expenditure.

“The continued improvement in our margins is particularly encouraging, with Group EBITDA now a record 48 percent (compared to 46 percent in fiscal 2016). These healthy margins and our strong balance sheet provide flexibility to continue to invest in our long-term structural growth opportunity and enhance returns to shareholders.”

Drabble added that the company will continue to grow “responsibly”, adhering to the capital allocation priorities it has outlined. “We have therefore invested £328 million by way of capital expenditure and a further £64 million on bolt-on acquisitions," he said.

Sunbelt and A-Plant delivered 13 percent and 15 percent rental only revenue growth respectively. Reported revenue growth in the quarter was affected by fewer billing days than the prior year, which reduced reported rental only revenue growth by about 2 percent in Sunbelt.

Sunbelt’s rental only revenue in the quarter was $639 million, compared to $566 million in the first quarter a year ago. Same-store growth was $33 million, 6 percent growth. Bolt-ons and greenfields since May 1 2015 accounted for $40 million in revenue, 7 percent.

Sunbelt added 24 new stores in the quarter through greenfields and bolt-ons, more than half of which were specialty locations.

Based in Fort Mill, S.C., Sunbelt Rentals is No. 2 on the RER 100. Ashtead Group is headquartered in London.