Sunbelt Q1 Numbers Up; Replacement Capex Triples

Ashtead Group’s revenue for the fiscal first quarter increased 7.9 percent from £221.6 million last year to £239.1 million (about U.S. $367.7 million) in the quarter ended July 31. EBITDA jumped 9.5 percent from £71.6 million to £78.4 million.

Sunbelt Rentals’ revenue was $297.3 million, up from $287.7 million the previous year, with EBITDA rising slightly from $98.9 in the first quarter to $100.8 million in this year’s first quarter, while Sunbelt’s operating profit rose 13.6 percent from $38.9 million to $44.2 million.

Sunbelt’s rental revenues grew 1 percent from $268 million in Q109 to $271 million in this year’s quarter. The total revenue number outpaced rental revenue because the company accelerated fleet replacement and sold a higher quantity of used equipment.

Average U.S. fleet on rent in the quarter grew 1 percent compared with the first quarter of last year.

In the U.K., A-Plant’s rental revenues declined 5 percent to £38 million, compared with £40 million last year.

“Whilst end markets remain fragile, our strong performance in fleet on rent reflects the impact of the responsible correction in fleet sizes throughout the rental industry and increased outsourcing by customers, a trend we expect to continue,” said Ashtead chief executive Geoff Drabble. “Gross capital expenditure totaled £51 million (£15 million for last year’s first quarter) as we began the fleet reinvestment program announced in June. Our investment remains flexible and directed towards replacement not growth as we focus on maintaining the momentum we have established in yield improvement in recent months.”

Drabble added that Ashtead executives continue to trust in the fundamental strength of demand and opportunities in end markets. “The business is delivering strong margins and gaining market share which, together with its financial strength, means that the board believes that Ashtead is particularly well placed to benefit as markets recover.”

Sunbelt Rentals, based in Fort Mill, S.C., is No. 3 on the RER 100. Parent company Ashtead is based in London.