Sunbelt Rentals, including the United States, Canada and United Kingdom, posted $2.658 billion in total revenue in its fiscal third quarter of 2024 ended Jan. 31, compared to $2.427 billion in fiscal third quarter of 2023, a 9.5 percent increase. Rental revenue was $2.356 billion compared to $2.189 billion a year ago, a 7.6-percent incline.
For the first nine months of the fiscal year, total revenue was $8.231 billion compared to $7.224 billion in the first nine months of fiscal 2023, a 13.9-percent increase. Rental revenue increased from $6.572 billion to $7.317 billion, an 11.3-percent climb.
In the U.S., total revenue for the nine months reached $7.072 billion ($7072.1 million), compared to $6.139 billion ($6,139.3 million) in the year-ago period, for a 15.2-percent increase.
“The group’s operating performance continues to be strong with revenue up 14 percent and rental revenue growth of 11 percent, both at constant currency,” said chief executive Brendan Horgan. “This performance 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.
“We are executing well against all actionable components of our strategic growth plan, in end markets which remain robust. In the period, we invested $3.5 billion in capital across existing locations and greenfields and $906 million on 26 bolt-on acquisitions, adding a combined 106 locations in North America. This 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.
Horgan pointed out that third quarter rental revenue growth in North America was affected by a lower level of emergency response activity related to natural disasters and the longer than anticipated actors’ and writers’ strikes. “Taking into account Q3 performance, we now expect Group rental revenue growth for the full year to be at the low end of our 11 – 13 percent range and full year results broadly in line with expectations.
“Our end markets in North America remain robust with healthy demand, 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 changes. Looking to 2024/25, our initial plan for gross capital expenditure is $3.0 – 3.3 billion (2023/24: c. $4.2 billion), of which U.S. rental capital expenditure is $2.0 – 2.3 billion (2023/24: c. $3.1 billion). This, in conjunction with scope for increased absorption of this year’s investment in rental fleet, is expected to drive mid-to-high single digit U.S. rental revenue growth with significant free cash flow generation.
“We look forward to launching our next strategic growth plan, Sunbelt 4.0, during our capital markets event in late April, which will detail our runway for further success. The board looks to the future with confidence.”
Rental only revenue still growing
In the U.S., rental only revenue for the nine-month period was $4.993 billion compared to $4.441 billion in the year-ago period, a 12.4-percent increase, demonstrating the benefits of Sunbelt’s strategy of growing its Specialty business and broadening its end markets. Organic growth (including same-store and greenfields) was 9 percent, of which bolt-ons since May 1, 2022 contributed 3 percent of rental-only revenue growth. In the nine-months period, Sunbelt’s specialty businesses grew 13 percent and general tool businesses grew 12 percent. Year-over-year growth in Specialty was affected in the third quarter especially because of strong hurricane, wildfire and winter storm-related revenue in the previous year, which was not repeated this year. Rental-only revenue growth has been driven by volume and rate improvement.
Canada’s rental only revenue increased 10 percent to C$457 million, compared to $417 million in the first nine-months of fiscal 2023. Markets relating to the major part of the Canadian business are growing in a similar manner to the U.S., however, the Writers Guild of America and Screen Actors Guild strikes had a significant effect on the Specialty Film & TV business, which is an important part of the Canadian business. Resumption of activity in January and February since the settlement has been slower than anticipated.
The U.K. business generated rental-only revenue of £350 million, a 9-percent year-over-year increase, with bolt-ons contributing 2 percent of the growth.
In the third quarter, rental revenue was $2,038.3 million in the U.S., $141.6 million in Canada, and $176.4 million in the U.K. For the nine-month period, rental revenue was $5,668.9 million in the U.S.; $396.8 million in Canada and $506.4 million in the U.K.
Sunbelt Rentals, No. 2 on the RER 100, is based in Fort Mill, S.C., with parent company Ashtead plc headquartered in London.
