Leatherhead, England — Ashtead Plc, United Kingdom-based parent company of Sunbelt Rentals and A-Plant, last month posted a 26-percent rise in fiscal first-quarter profits. The Leatherhead, Surrey, England-based company reported underlying pretax profit for the three months ended July 31 of £30.7 million (about U.S. $62.1 million), up 26.7 percent compared with £24.3 million a year ago. Revenue rose 44 percent to £252.5 million, compared with £175.7 million in the same period last year.
EBITDA rose from £64.7 million in the year-ago quarter to £94 million this year.
Ashtead derives about 85 percent of its business from the United States, primarily Sunbelt Rentals. Chief executive Geoff Drabble said he did not expect the company to make major acquisitions such as its $591 million purchase of NationsRent in the near future, but would continue to look for opportunities for smaller “bolt-on” acquisitions. Drabble added that all of the company's divisions are doing well, with strong expectations for the remainder of the fiscal year.
Sunbelt Rentals' first-quarter revenues grew 66 percent year over year from $234 million last year to $388.5 million this year. The company said Sunbelt's first-quarter performance matched its expectations, with integration cost savings and progress made in driving growth in dollar utilization at the acquired NationsRent stores. However, on a pro-forma basis, Sunbelt revenue dropped 4 percent.
“We are pleased to report a strong performance in the first quarter as we continue to benefit from good market conditions in all three division,” said Drabble. “In Sunbelt we again delivered significant growth in pro forma margins and profits reflecting the integration cost savings and the progress made in driving growth in dollar utilization at the acquired NationsRent stores. We were also pleased to have delivered sufficient earnings improvement in the combined business to bring underlying earnings per share, calculated on a much larger equity base, to last year's level in only the third full quarter following the acquisition.”
The company said continuing integration benefits at Sunbelt and long-term improvement in pro forma dollar utilization, in addition to strong performance in the A-Plant and Ashtead Technology divisions give the company a positive outlook. “Despite the recent uncertainty in global equity and debt markets, the key economic indicators for our primary markets, U.S. and U.K. non-residential construction, continue to indicate a favorable growth outlook,” added Drabble. “Current physical utilization is strong in both markets.”
In other company news, A-Plant announced its fleet utilization reached an all-time high of 72 percent. Marketing director Asif Latief said much of the productivity increase came through internal changes in the depot structure.
According to Latief, a new inter-depot charging system has overcome resistance to machines moving from one depot to another, and salespeople now represent the group as a whole rather than a single depot.
The utilization increase helped push Q1 revenue to £52 million (about U.S. $105.7 million), an increase of 19 percent in isolation, or up by 6 percent if last year's earnings at Lux Traffic are included. In the past year, utilization has increased by 2 percent, the rental fleet has grown by 4 percent, and rental rates remain broadly unchanged, the company said.
Operating profit for A-Plant leapt 45 percent to £7 million (U.S. $14.2 million) on a pro-forma basis (Lux's Q1 profit was £300,000 — U.S. $610,000 — in 2006) to give an operating margin of 13.5 percent — up from 9.8 percent.
Fort Mill, S.C.-based Sunbelt Rentals is No. 2 on the RER 100.
