Photo by Sunbelt Rentals
Sunbelt Rentals Boom And Rock Music Fest '21

Sunbelt Rentals Raises Revenue 24.6 Percent in Fiscal Second Quarter

Dec. 10, 2022
Rental revenue for the quarter was $2.308 billion compared to $1.876 billion a year ago, a 23-percent hike.

Ashtead plc, parent company of Sunbelt rentals, posted $2.537 billion in revenue in its fiscal second quarter ended October 31, compared to $2.032 billion in the fiscal second quarter of 2021, a 24.6-percent increase. Rental revenue for the quarter was $2.308 billion compared to $1.876 billion a year ago, a 23-percent hike.

EBITDA for the fiscal second quarter of 2022 was $1.207 billion compared to $972 million for the fiscal second quarter of 2022, a 24.2-percent hike.

“The group’s strong performance across all geographies continues with rental revenue up 26 percent at constant currency,” said Ashtead plc 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.

“Our end markets remain strong and half-way through our strategic growth plan, Sunbelt 3.0, we are ahead of plan. In the period, we invested $1.7 billion in capital across existing locations and greenfields and $609 million on 27 bolt-on acquisitions, adding a combined 72 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 near the bottom of our target range.”

For the first six months of fiscal 2022, Ashtead reported total revenue of $4.796 billion, compared to $3.884 billion for the first six months of fiscal 2021, a 23.5-percent leap. Rental revenue for the six-month period was $4.383 billion compared to $3.545 billion in the year-ago period, a 23.6 percent jump. EBITDA was $2.246 billion compared to $1.832 billion a year ago, a 22.6-percent incline.

“Our business is performing well with clear momentum in robust end markets,” added Horgan. “We are in a position of strength and, with increased market clarity, have the operational flexibility to capitalize on the opportunities arising from the market and economic environment we face, including supply chain constraints, inflation and labor scarcity, all factors driving ongoing structural change. We now expect full year results ahead of our previous expectations and the board looks to the future with confidence.”

The results includes Sunbelt U.S., Sunbelt Canada and Sunbelt U.K. In the U.S., Sunbelt posted $4.069 billion in the fiscal first half, compared to $3.124 billion a year ago, a 30.2 percent year-over-year gain. Sunbelt Canada posted $297.1 million compared to $249.4 million a year ago, a 19.1 hike. Sunbelt U.K. reported $430.2 million compared to $510.5 million a year ago, a 15.7-percent decline.

Organic growth remains strong

Organic growth (same-store and greenfields) was 20 percent, while bolt-ons since May 1 contributed 6 percent of rental-only revenue growth.  In the first half, the general tool business grew 22 percent, while the specialty businesses grew 34 percent.  Rental only revenue growth has been driven by both volume and rate improvement in what continues to be a good rate environment. 

Canada's rental only revenue increased 20 percent to C$279 million (2021: C$233 million). 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.  As highlighted previously, the lighting, grip and lens business was affected by market uncertainty, with the threat earlier this year of strikes by production staff in Vancouver, resulting in productions being delayed or moved elsewhere.  

The U.K. business generated rental only revenue of £215 million, up 6 percent on the prior year (2021: £203 million). Following the cessation of free mass COVID testing in April 2022, revenue from the Department of Health, relating to the demobilization of the testing sites completed during the first quarter, was significantly lower than last year. Excluding the impact of the work for the Department of Health, rental only revenue increased 21 percent. Rental revenue increased 7 percent to £293 million (2021: £272 million). Total revenue decreased 2 percent to £361 million (2021: £368 million) reflecting the high level of ancillary and sales revenue associated with the work for the Department of Health, which accounted for about 8 percent of revenue in the half year.

Sunbelt Rentals, No. 2 on the RER 100, is based in Fort Mill, S.C. Ashtead plc is based in London.