Sunbelt Rentals posted $2.468 billion in rental revenue for the first nine months of fiscal 2016, compared to $2.047 billion for the first nine months of fiscal 2015, a 20.5-percent increase. Group revenue increased 25 percent to £1.880 billion (U.S. $2.672 billion) in the nine months compared to fiscal 2015’s total of £1.500 billion, with strong growth in Sunbelt Rentals and A-Plant in the United Kingdom. This revenue growth, combined with ongoing operational efficiency, generated underlying profit before tax of £482 million (2015: £379 million).
Strategy for parent company Ashtead plc remains unchanged with growth being driven by strong same-store growth supplemented by greenfield openings and bolt-on acquisitions. The principal driver of this performance is Sunbelt where rental revenue growth continues to benefit from cyclical and structural trends. Same-store revenue growth for Sunbelt Rentals was 12 percent, with an additional 8 percent added by bolt-ons and greenfield start-ups. Rental-only revenue in 2016 so far is $1.745 billion, a 20-percent year-over-year leap.
Rental revenue grew 14 percent for the group in the third quarter, from £462.9 in the third quarter of fiscal 2015 to £546.9 million this year.
“The group delivered another strong quarter resulting in underlying pre-tax profits of £482m for the nine months, up 20 percent at constant exchange rates on the prior year,” said Geoff Drabble, chief executive of Ashtead plc. “We continue to grow responsibly, generating strong returns and maintaining leverage within our stated objectives. Group ROI was a healthy 19 percent and our leverage reduced to 1.9 times EBITDA. Our continued success demonstrates both the strength of our strategy and the overall health of the markets we serve.
“Looking forward, while we are watchful of the broader economic environment, we continue to see encouraging growth opportunities and expect double digit fleet growth in the U.S. in 2016/17. As our fleet replacement expenditure naturally moderates, we enter a phase of the cycle where we anticipate both good earnings growth and significant cash generation. As a consequence our leverage will trend towards the lower end of our range of 1.5 to 2.0 times net debt to EBITDA which provides the Group with a high degree of flexibility and security. With both divisions performing well, strong end markets and our strategy clearly working, we expect full year results to be in line with our expectations and the Board looks forward to the medium term with confidence.”