Sunbelt Rentals last week announced record revenue growth of 18.9 percent for the six-month period ended Oct. 31, with total revenues of $406.8 million. Operating profits grew 53.7 percent to $96.4 million for the six-month period.
Sunbelt’s United Kingdom-based parent company Ashtead Group plc announced its first dividend payment in three years and said it would increase its capital expenditure program to nearly U.S. $40 million. Ashtead officials said the company is looking to invest at least $175 million in growth areas and that it is currently reviewing potential acquisition opportunities in North America. Ashtead officials said the company planned to grow Sunbelt’s fleet size as well as number of locations.
Sunbelt has made several major acquisitions in 2005, including branches of national chain RentX in several states and five-location Northridge Equipment Rentals, based in Northridge, Calif. It opened three new Greenfield locations and acquired an additional 15 branches in the first half of the fiscal year.
“Sunbelt achieved substantial first half growth by maintaining last year’s record levels of equipment utilization on a fleet that was on average 7 percent larger than a year ago, and by continuing to grow its market share,” said George Burnett, Ashtead chief executive.
In addition to the positive effect of Sunbelt’s $152 million investment in its rental fleet, significant increases in rental rates, which grew by about 10 percent, helped drive the strong performance. Revenue growth was broadly based, with improvements in all regions and all major product lines.
During its second quarter, Sunbelt was actively involved in the clean-up efforts across the Gulf Coast and Florida following hurricanes Katrina, Rita and Wilma. No Sunbelt locations suffered significant damage, nor were employees hurt, although many employees suffered personal property damage.
“In addition to the tireless efforts by our staff in Florida, Alabama and Texas, dozens of Sunbelt employees from other states have volunteered to work in the hurricane-damaged areas for weeks on end,” said regional vice president Russ Brown.
“A strong construction economy and relief efforts in Florida and the Gulf helped improve our performance in the first half,” said Sunbelt CEO Cliff Miller. “The recently announced acquisitions of Brookstone and Northridge Equipment Rentals in the Southwest and California have made an immediate impact in their markets and will contribute to our second half results. Finally our proven business model together with strong market conditions means we look forward with confidence in 2006.”
Ashtead enjoyed strong results internationally as well, including its A-plant in the United Kingdom and Ashtead Technology. Ashtead’s second quarter profit before exceptional items and tax increases grew from U.S. $23.7 million (based on current conversion rates) to $49.4 million, while first half profits before exceptional items and tax increases jumped from $32.4 million last year to $71.2 million.
Based in Charlotte, N.C., Sunbelt Rentals is No. 4 on the RER 100.