Ashtead results shows “continued market outperformance”
03 September 2024
Ashtead Group, owner of Sunbelt Rentals in the US, Canada and the UK, has said its strategy of growing its specialty businesses and broadening end markets has seen it outperform the market.
In its financial results for Q1 of 2024, the company said its specialty segment grew by 17% for the second year running. By comparison, its general tools businesses grew by 3%.
Revenue for the group was $2.7 billion (€2.4 billion), up by 2% on 2023, while rental revenue was up by 7% to $2.5 billion (€2.2 billion) for the quarter.
In the US, rental only revenue was up by 7% to $1.7 billion, which it said was driven by both volume and rate improvements.
While previously impacted by the Writers Guild of America and Screen Actors Guild strikes, the settlement of the dispute helped the company to a 21% increase in rental revenues in Canada.
Meanwhile, its business in the UK generated rental only revenue of £124m (€147 million), up 3% on the prior year.
While overall CapEx was down on the same period in 2023, the company invested $855 million (€774 million) on fleet investment and depot expansion.
Continuing its goal of opening between 300 and 400 greenfield depots by the end of its Sunbelt 4.0 five year plan, the company added 33 locations in North America in Q1.
Two of these were through the acquisitions of generalist businesses RentalMax in the US and Canada-based Wave Equipment at a total cost of $53 million (€48 million).
In terms of fleet, it invested $717 million (€649 million) in the quarter, down from $999 million (€904 million) in 2023.
Ashtead’s chief executive Brendan Horgan said the company is “in a position of strength” and has the “operational flexibility” to capitalise on structural growth opportunities.
He said, “The investments in and expansion of the business over Sunbelt 3.0 and into Sunbelt 4.0 are enabling us to take advantage of the diverse opportunities that we see while maintaining a balance sheet that affords us considerable flexibility and optionality.”
He added that the increasing proportion of mega projects and the strength of its specialty businesses in North America has “more than offset the lower activity levels in local commercial construction markets.”
The company expects revenue growth for the 2024 financial year to be in the range of 5 to 8%, with Canada predicted to see the highest growth of between 15 to 19%.
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