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Strong Rise in Q1 Profits for Sunbelt, Ashtead

Ashtead Plc, United Kingdom-based parent company of Sunbelt Rentals, last week 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 pounds, compared with 175.7 million pounds 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.”

Based in Fort Mill, S.C., Sunbelt Rentals is No. 2 on the RER 100.

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