H&E to maintain rate of depot openings in 2024

H&E Equipment in the US said it will maintain the rate of growth of its depot network this year, opening between 12 and 15 new sites following the 14 branches added in 2023.

At the same time the company will scale back its spending on fleet this year by around a third to between US$450 and $500 million, compared to the record spending of $737 million in 2023. It said the average fleet age of 39.7 months was among the youngest in the industry.

Brad Barber, chief executive officer of H&E, said the depot openings in 2023 gave it greater density in the Gulf Coast, Mid-Atlantic, Southeast and Midwest regions.

He said new branch growth remained a “fundamental component of our strategic plans” and could be augmented by acquisitions “that offer access to vibrant construction markets in the US, as demonstrated by our latest acquisition which closed in early 2024, adding one location each in Phoenix and Denver.”

On the lowering of capital expenditure on its fleet, Barber said; “We believe our record fleet expenditures in 2023 and young fleet age advantageously position the company to address the ongoing growth in construction markets and these factors should support steady improvement in physical utilization.”

Total revenues in the fourth quarter of 2023 grew by 9.3% year-on-year to $385.8 million, while rental revenues rose 14.5% to $316.9 million over the same period. EBITDA profits were up 6.5% at $185.2 million.

For the full year, total revenues set a record of just under $1.5 billion, 18.1% higher than 2022, and rental revenues grew 24.1%, exceeding $1.0 billion for the first time.

Barber said the outlook for the US rental industry was encouraging; “Commentary from our customers regarding pending construction opportunities in 2024 remains optimistic and supports a business climate characterized by stable to modestly higher non-residential and industrial activity.

“Construction starts are projected to grow on a year-over-year basis with the growth reinforced by mega projects and increased spending on infrastructure programs. Also, we remain confident that expanding rental penetration will be a meaningful catalyst for increased industry growth.”

H&E and the importance of US mega projects A strategic shift in 2021 has born fruit for this American rental firm now looking to capitalize on demand from the latest growth market