Sunbelt Rentals, including Sunbelt U.S., Canada and U.K., posted $2.696 billion in total revenue for the first quarter of fiscal 2023 ended July 31, 2023, compared to $2.259 billion in the fiscal first quarter of 2022, a 19.3-percent increase. Rental revenue was $2.376 billion compared to $2.975 billion, a 14.5-percent uptick. EBITDA was $1.229 billion compared to $1.039 billion in the year-ago quarter, an 18.3-percent boost.
In the United States, revenue totaled $2.311 billion compared to $1.889 billion a year ago, a 21.7-percent jump. In Canada, revenue was $159.7 million compared to $137.1 million a year ago, a 16.5-percent increase. In the U.K., $225 million compared to $222.7 million in fiscal Q122, essentially flat with a 1-percent increase.
In the U.S., rental only revenue was $1.615 billion compared to $1.389 billion last year, a 16.3-percent jump, demonstrating the benefits of Sunbelt’s strategy of growing its Specialty businesses and broadening its end markets. Organic growth (same-store and greenfields) was 13 percent, while bolt-ons since May 1 contributed 3 percent of rental-only revenue growth. In the quarter, General Tool grew 14 percent, while Specialty grew 17 percent. Rental-only revenue growth has been driven by both volume and rate improvement. Rental revenue increased percent from $1.768 billion to $2.048 billion. U.S. total revenue grew 22 percent because of a higher level of used equipment sales as Sunbelt took advantage of improved fleet deliveries and strong second-hand markets.
Canada’s rental only revenue increased from CDN $131 million in the year ago quarter to CDN $149 million, a 13.7-percent increase. Markets relating to the major part of the Canadian business are growing in a similar manner to the U.S. business, but the Writers Guild of America and Screen Actors Guild strikes are having a stronger impact on the performance of the Film and Television production rental business is proportionally higher. Rental revenue increased 15.1 percent from CDN $159 million to CDN $183 million.
The U.K. business generated rental only revenue of £120 million compared to £104 million in 2022, a 15.4-percent hike. Excluding the impact of the work for the Department of Health, which ended during the first quarter of 2022, rental only revenue increased 18 percent. Bolt-ons since May 1, 2022 contributed 7 percent of this growth.
Revenue rises in record quarter
“The Group delivered another record quarter with revenue up 19 percent, rental revenue growth of 14 percent and adjusted profit before tax increasing 11 percent, both at constant currency,” said Ashtead chief executive Brendan Horgan. “This strong performance is only possible through the dedication of our team members who deliver for all our stakeholders every day, while ensuring our leading valve 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 robust. In the quarter, we invested $1.1 billion in capital across existing locations and greenfields and $361 million on nine bolt-on acquisitions, adding a combined 40 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.”
Horgan added that the business has clear momentum with robust end markets in North America, supported in the U.S. by the increasing number of mega projects and recent legislative acts.
“We are in a position of strength with the operational flexibility and financial capacity to capitalize on the opportunities arising from these market conditions and ongoing structural change,” Horgan added. “Despite U.K. market conditions softening, we expect overall performance to be in line with our expectations and the Board looks to the future with confidence.”
Sunbelt U.S. is based in Fort Mill, S.C. Parent company Ashtead plc is headquartered in London.