Sunbelt Rentals Revenue Jumps 7.7 Percent in Fiscal First Half

Sunbelt Rentals posted $1,814.4 million ($1.814 billion) in the first half of fiscal 2016 compared to $1,685.1 million for the fiscal first half of 2015, a 7.7-percent revenue jump. EBITDA soared from $819.3 million in the first half of fiscal 2015 to $923.8 million this year, a 12.7-percent hike.

     In the fiscal first half ended Oct. 31, the whole Ashtead group, including U.K. rental company A-Plant, totaled £1,444.6 million (about U.S. $1,823.8 million) versus £1,128.6 million in H115, a 13-percent leap. For the second quarter, rental revenue increased 14 percent to £783.8 million.

     “The group delivered a strong quarter with reported rental revenue increasing 28 percent (13 percent at constant exchange rates) for the six months and underlying pre-tax profit of £426 million,” said Ashtead chief executive Geoff Drabble. “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 six months, the reported results were positively impacted by weaker sterling (£53m), but this was partially offset by the impact of lower gains on fleet disposals (£14m) as we reduced our replacement capital expenditure.

     “I am pleased with the continued improvement in our margins – Group EBITDA margin is now a record 49 percent (2015: 47 percent.) 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 said the company continues to grow responsibly, adhering to the capital allocation priorities it outlined. “We have therefore invested £683 million by way of capital expenditure and a further £142 million on bolt-on acquisitions,” Drabble added. “With the continuing opportunity for profitable growth, we have increased our full-year capital expenditure guidance. In addition, we spent £48 million under the share buyback program and increased the interim dividend by 19 percent. All of this was achieved whilst maintaining lever well within our stated range of 1.5 to 2 times net debt to EBITDA.”

     Drabble said both Sunbelt Rentals and A-Plant continue to perform at the upper end of expectations. “This, together with the benefit of significantly weaker sterling, means we expect full year results to be ahead of our expectations and the board continues to look to the medium term with confidence.”

     The company said Sunbelt Rentals added 42 new stores in the fiscal first half through greenfields and bolt-ons, half of which were specialty locations. Among the recent acquisitions not previously reported were Sunbelt’s purchase of certain business and assets of the Post Falls, Idaho branch of BlueLine Rental for about $4 million in cash; the business and assets of Rick’s Action Rental for about $400,000 in cash, a general rental company in Michigan; A-Plants purchase of Lion Trackhire Ltd. for about £22 million, a temporary access solutions company; and A-Plant’s purchase of Opti-cal Survey Equipment Ltd. for £11 million, a survey equipment business.

     Sunbelt also acquired certain business and assets of CanSource Direct and CSL Safety Training Ltd for about $5 million, an aerial work platform rental business in Alberta, Canada; and A-Plant acquired Tool and Engineering Services Ltd, a welding rental business, for about £1 million.

     Sunbelt Rentals is headquartered in Fort Mill, S.C.; A-Plant is based in London.