United Rentals is likely to spend about $450 million on replacement capital expenditures for replacement fleet this year, CEO Wayland Hicks toldRER in an exclusive interview last week. Hicks added that the company, which expects an improved economic climate in 2004, is likely to spend an additional $50 million to $100 million in growth capex this year, independent of any potential acquisitions.
In the process, Hicks said, United is likely to reduce its average fleet age from its current 41- to 42-month average age.
Hicks added that United views the possibility of making acquisitions as more likely in the coming year than in previous years.
“We’ll see a return to acquisitions,” Hicks said. “Part of our growth going forward will be driven by acquisitions, some will be organic.”
Hicks, however, refused to put any timetable on possible acquisitions. “Acquisitions happen when the stars line up right,” he said. “They happen when an opportunity presents itself and the financing makes sense and is available.”
Hicks said United is planning for a top-line growth of 3 to 7 percent in 2004, depending on how quickly the non-residential construction market recovers.
Hicks also said United will place more emphasis on growing its revenue from the sale of contractor supply items in its rental centers, with the sales staff playing a role in promoting supply items as well.
“I see [the sale of] contractor supplies as an adjunct to the rental business,” Hicks said. “People that buy them are the same people we rent equipment to. It gives them another service that calls for them to turn to us. And that market is an attractive growth opportunity for us. I expect to see that continue as we go on through the next several years.”
