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Sunbelt Rentals Posts 22.6-Percent Rental Revenue Jump in Fiscal 2022

June 16, 2022
Rental revenue for the fiscal fourth quarter was $1.875 billion compared to $1.522 billion in the fiscal fourth quarter a year ago, a 23.2-percent jump.

Sunbelt Rentals, including Sunbelt Rentals Canada and Sunbelt U.K., posted $2.078 billion in total revenue in the fiscal fourth quarter of 2022 ended April 30, compared to $1.759 billion in fiscal fourth quarter of 2021, an 18.1-percent increase. Rental revenue for the fiscal fourth quarter was $1.875 billion compared to $1.522 billion in the fiscal fourth quarter a year ago, a 23.2-percent jump.

For the full year of fiscal 2022, Sunbelt Rentals totaled $7.962 billion in total revenue, compared to $6.639 billion in fiscal 2021, a 19.9-percent hike. Rental revenue for the full year totaled $7.235 billion compared to $5.902 billion in fiscal 2021, a 22.6-percent leap.

EBITDA for the fourth quarter was $900 million, compared to $766 million in fiscal fourth quarter of 2021, a 17.5-percent increase. For the full year of fiscal 2022, EBITDA was $3.609 billion, compared to $3.037 billion in fiscal 2021, an 18.8-percent hike. Operating profit grew 21 percent in the fiscal fourth quarter and 30 percent for the full year.

Sunbelt added 123 new locations in North America. The company invested $2.4 billion of capital in the business compared to $947 million in fiscal 2021. Sunbelt spent $1.3 billion on 25 bolt-on acquisitions compared to $172 million on acquisitions the previous year.

In the United States, total revenue for the fiscal year was $6.477 billion compared to $5.417 the previous year, a 19.6-percent jump. Canada’s revenue was CDN $626 million, compared to $500.9 million in fiscal 2021, a 25-percent hike.

Record numbers

In the U.K., Sunbelt U.K. posted £725.7 million compared to £635.1 million, a 14.3-percent increase.

"I am delighted to be able to report a year of record performance for the group,” said chief executive Brendan Horgan. “We performed strongly across all geographies with rental revenue up 22 percent at constant currency (23 percent when compared with 2019-20). This market outperformance across the business is only possible through the dedication of our team members who deliver for all our stakeholders every day, while ensuring our leading value of safety remains at the forefront of all we do.

“Sunbelt 3.0 is embedded in the business, and we are making good progress across all actionable components. We invested $2.4 billion in capital across existing locations and greenfields, and $1.3 billion on 25 bolt-on acquisitions, adding a combined total of 123 locations in North America during the year. This significant investment is enabling us to take advantage of the substantial structural growth opportunity that we see for the business as we deliver our strategic priorities to grow general tool and amplify specialty. We are achieving all this while maintaining a strong and flexible balance sheet with leverage at the lower end of our target range.

Our business has demonstrated its ability over the last two years to perform in both good times and more challenging ones. The new financial year has started well, and the business has clear momentum. We are well positioned to navigate the challenges and capitalize on the opportunities arising from the market circumstances we face, including supply chain constraints, inflation, labor scarcity and economic uncertainty, all factors which we believe to be drivers of ongoing structural change. The board looks to the future with confidence."

“In the U.S., rental-only revenue of $4,782 million (2021: $3,976 million) was 20 percent higher than the prior year (and 18 percent higher than 2020), representing continued market outperformance and demonstrating the benefits of our strategy of growing our specialty businesses and broadening our end markets,” said the company in its earnings statement. “Organic growth (same store and greenfields) was around 16 percent, while bolt-ons contributed approximately 4 percent of rental-only revenue growth. In the year, our general tool business grew 17 percent, while our specialty businesses grew 28 percent following growth of 13 percent in 2020-21. While rental revenue growth has been driven by volume, with a larger fleet and improved utilization, it has benefitted from improved rates in what is a better rate environment than we have seen for a number of years. Our year-over-year rate of growth increased as we progressed through the year.   

“The UK business generated rental only revenue of £403 million, up 11 percent on the prior year (2021: £362 million). While our performance continued to benefit from our essential support to the Department of Health in its COVID-19 response efforts, our core business is performing strongly and is benefitting from the operational improvements in the business which are ongoing. Total revenue increased 14 percent to £726 million (2021: £635m) reflecting the higher level of ancillary and sales revenue associated with the work for the Department of Health, which accounted for about 30 percent of UK revenue in the 12 months.  Following the UK government's announcement that free mass COVID testing would stop from April 2022, we are demobilizing the test sites rapidly and expect a relatively low revenue contribution in 2022-23.

            “Canada's rental only revenue increased 26 percent to C$456 million (2021: C$363 million). While this rate of growth reflects the depressed comparatives last year, it is driven by the strong performance of the original Canadian business and our lighting, grip and lens business since lockdowns eased. That said, the lighting, grip and lens business was affected again by COVID induced production restrictions in the second half. Canada's total revenue was C$ 626 million (2021: C$501 million).”

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