Ashtead Plc, including Sunbelt Rentals in the United States, Canada and United Kingdom, posted $2.444 billion in revenues in the fourth quarter of fiscal 2023, compared to $2.078 billion in the fiscal fourth quarter of fiscal 2022, an increase of 19 percent when calculated at constant exchange rates applying current period exchange rates.
Rental revenue for the quarter totaled $2.126 billion, compared to $1.875 billion for the year-ago quarter, a 15-percent increase. EBITDA came out to $1.074 billion compared to $900 million a year ago, a 20-percent leap.
For the full fiscal year, Sunbelt posted $9.667 in total revenue compared to $7.962 billion in fiscal 2022, a 24-percent jump. Rental revenue totaled $8.698 billion, compared to $7.235 billion in the previous year, a 22-percent increase, while EBITDA totaled $4.412 billion compared to $3.609 billion in fiscal 2022, a 24-percent uptick.
Sunbelt invested $3.8 billion into the business, compared to $2.4 billion in fiscal 2022. $1.1 billion was spent on 50 bolt-on acquisitions, compared to fiscal 2022 when it spent $1.3 billion on bolt-on acquisitions. In North America, Sunbelt added 165 locations.
“I am delighted to report another year of strong performance across all geographies, with rental revenue growth of 22 percent for the year at constant currency, delivering record revenue and profitability for the group,” said Ashtead/Sunbelt chief executive Brendan Horgan. “This market outperformance 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. We are executing well against all actionable components of our strategic growth plan, in end markets which remain strong. We invested $3.8 billion in capital across existing locations and greenfields. This capital investment was funded from operating cash flow, highlighting the cash generative nature of our business across the cycle. In addition, we spent $1.1 billion on 50 bolt-on acquisitions which, when combined with greenfield openings, added 165 locations in North America. This significant investment is enabling us to take advantage of the substantial structural growth opportunities that we see for the business as we deliver our strategic priorities to grow our general tool and specialty businesses and advance our clusters.
“We are achieving all this while maintaining a strong and flexible balance sheet with leverage towards the lower end of our target range. We enter the final year of Sunbelt 3.0 with clear momentum in strong end markets, which are enhanced by the increasing number of mega projects and recent U.S. legislative acts. We are in a position of strength, with the operational flexibility and financial capacity to capitalize on the opportunities arising from these strong markets and ongoing structural change. The board looks to the future with confidence.”
Looking regionally, Sunbelt in the U.S. posted $8,222.4 million in the fiscal fourth quarter of 2023, compared to $6,447.0 million in the same period a year ago, a 27.2-percent hike. Canada also had a healthy increase, with $622.1 million compared to $499.0 million a year ago a 24.7-percent jump. In the U.K., however, revenues declined to $822.8 million, compared to $986.3 million a year ago, a 16.6-percent decline. EBITDA increased from $3,120.6 million in fiscal 2022 in the U.S., to $3,955.3 million in fiscal 2023, a 26.7-percent hike. In Canada, EBITDA increased year over year from $224.3 million to $253.5 million, a 13-percent increase. In the U.K. EBITDA declined from $291.7 million to $231 million, a 14-percent decrease.
U.S. rental-only revenue jumps 23 percent
In the U.S., rental only revenue of $5,879 million (2022: $4,782m) was 23-percent higher than the prior year, representing continued market outperformance and demonstrating the benefits of Sunbelt’s strategy of growing its specialty businesses and broadening its end markets. Organic growth (same-store and greenfields) was 18 percent, while bolt-ons since May 1, 2021 contributed 5 percent of rental only revenue growth. In the year, Sunbelt’s General Tool business grew 21 percent, while its Specialty businesses grew 29 percent.
Rental only revenue growth has been driven by both volume and rate improvement in what continues to be a good rate environment. Rental revenue increased 24% to $7,503m (2022: $6,042 million). U.S. total revenue, including new and used equipment, merchandise and consumable sales, increased 27 percent to $8,222 million (2022: $6,477 million).
The UK business generated rental only revenue of £429 million, up 6 percent compared to fiscal 2022 (£403 million). Excluding the impact of the work for the Department of Health, which ended during the first quarter of 2022-23, rental only revenue increased 22 percent. Bolt-ons since May 1, 2021 contributed 9 percent of this growth. Rental revenue increased 3 percent to £559 million (2022: £544 million) or 26 percent excluding the impact of the work for the Department of Health. Total revenue decreased 6 percent to £685 million (2022: £726 million) reflecting the high level of sales revenue associated with the work for the Department of Health, which overall accounted for only about 4 percent of revenue in the year, compared with approximately 30 percent of revenue last year.
Canada’s rental only revenue increased 20 percent to C$548 million, compared to C$456 million a year ago. Markets are robust and the major part of the Canadian business is growing in a similar manner to the U.S. with strong volume growth and rate improvement, in a good rate environment. The lighting, grip and lens rental business was affected by market uncertainty, with the threat earlier this financial year of strikes by production staff in Vancouver, resulting in productions being delayed or moved elsewhere. Rental revenue increased 22 percent to C$696m from C$569 million in 2022, while Canada’s total revenue was C$827 million compared to C$626 million a year ago.
