RERMAG

Sunbelt Q3 Revenue Declines 33 Percent

Sunbelt Rentals rental revenue for the first nine months of its fiscal year ended Jan. 31, declined 28 percent compared with the same period a year ago, posting $759.6 million. Total revenue for the period was $821.3 million, compared with $1.184 billion for the same period a year ago, a 30.6-percent drop.

Nine-month revenue for the Ashtead Group, including U.K. rental company A-Plant, totaled £628.3 million (about $940.5 million).

Third-quarter revenue for the group was £187.3 million (about U.S. $280.3 million) about 33-percent down year over year. Third-quarter rental revenue for Sunbelt Rentals dropped 22 percent to U.S. $225.2 million and by 19 percent in A-Plant to £34.6 million.

Loss before taxation for Ashtead in the third quarter was £15.7 million, compared with a £9.5 million loss for the same period a year ago. For the nine-month period, Ashtead posted a £2.9 million profit before taxation, compared to £30 million for the same period a year ago.

“Whilst market conditions have remained difficult throughout the period, our operational performance has been good relative to both our UK and U.S. peers and we are clearly gaining market share,” said Geoff Drabble, Ashtead’s chief executive. “This outperformance, together with the preparatory actions we took a year ago to reduce costs and fleet size, has helped us to protect profitability and deliver continued strong cash generation. Our strong balance sheet will enable us to ensure that we have the appropriate infrastructure and fleet mix in place when cyclical recovery begins.”

Capital expenditure during the nine months was £35.1 million, compared with £234 million for the year-ago period, with £29.6 million spent on rental fleet replacements. The average age of the group’s rental fleet on Jan. 31 was 41 months, compared with 34 months on the same date in 2009.

“A range of lead indicators support the view that we are currently at or very near the bottom of the cycle in the U.S.,” the company said in its filing. “We also expect that the effect of U.S. stimulus-related work and a recovering residential construction market will be of increasing benefit from the second half of calendar 2010 until sustained general recovery in the U.S. economy brings an improvement in commercial construction, most likely towards the end of our 2010/11 fiscal year.”

Ashtead plc is based in Leatherhead, Surrey, U.K. Sunbelt Rentals, No. 3 on the RER 100, is based in Fort Mill, S.C.

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