Brad Barber, CEO of H&E Equipment Services told an investor’s conference call this week that non-residential construction is likely to continue to improve in 2021. “Activity on data centers, warehouses distribution, wind and solar farms, healthcare and other verticals are strong,” Barber said. “We expect industrial plants will also resume maintenance work, which was significantly postponed last year. The passing of a major infrastructure or highway bill would also be very positive for the industry. Lastly, both visibility and sentiment from our larger contract customers continued to improve.”
Barber said H&E is committed to accelerate its growth strategy this year and that the company is pursuing multiple ways to accomplish this goal.
“This includes significant increase in the number of warm starts in 2021,” he said. “Last year, we added four new locations. Our plan is to add eight to 10 new locations this year. We will spread these branches out across our footprint, primarily in our existing geographies where we believe we would like to increase our service density in stable and high-growth markets. Second, we will continue to explore additional growth opportunities from tuck-in acquisitions of general rental businesses. Entering the specialty rental business is also part of our focus. Any specialty acquisition or new location would be synergistic with our current lines of business and fleet mix. This includes opportunities in both inside and outside of our existing geographies.”
Barber said the company would begin branch openings in the second quarter and expected to grow fleet capex in the single-digit range in 2021 after reducing it last year. Elaborating on the company’s plans in regard to the specialty business, he said investment in that area would be relatively small compared to the company’s overall investment at this point. “But we’ve realized that certain segments of specialty can be a little bit more resilient, and they also overlap and allow additional revenue opportunities with some existing customers,” he noted.
Barber added that he expected some more work in the industrial sector, particularly shut-down turnaround-type maintenance work. “Most facilities postponed every bit of maintenance they possibly could to preserve cash, not knowing where we were going basically nine or 10 months ago,” he said. “As we sit here today, I believe that work is going to come back. There’s some level of pent-up maintenance demand. So, I think the industrial sector will be better. And should oil continue to head on the trajectory it has been on, that’s going to be a really nice opportunity for us and all of our competitors in the sector, particularly on the rental side of the business.”
For a more complete look at the fourth quarter and full year results of H&E Equipment Services, go to: https://www.rermag.com/rental-news/article/21155471/he-equipment-services-decreases-fourth-quarter-total-revenue-93-percent
