Ashtead signals big increase in fleet spending
By Murray Pollok06 September 2022
Ashtead is aiming for gross spending on fleet of between US$2.79 billion and $2.99 billion in its current financial year, an increase of 38% to 50% over the previous year’s $2 billion.
The spending guidance came as Ashtead reported a 25% increase in revenues to $2.26 billion for the three months to 31 July, the first quarter of its financial year. EBITDA profits were up 22% to $1.04 billion, representing an EBITDA margin of 46%.
Ashtead’s US business, Sunbelt Rentals, saw a 30% increase in revenues to $1.9 billion, with an EBITDA profit margin of 48.2%. Sales in Canada were up 19% to C$176 million.
In the UK, Sunbelt Rentals UK reported a -4% fall in revenues to £182 million as its extensive rental contracts for government Covid testing centres came to and end.
Ashtead said the UK business posted a strong underlying performance, with rental-only revenues up 19% when the Covid work was excluded. It said there was strength in infrastructure, housing and industrial sectors.
In the US, Sunbelt continues to see strong growth of its specialty rental divisions which were 39% ahead of the same quarter in the previous year.
Ashtead’s chief executive, Brendan Horgan, said the company had made a strong start to the financial year and was outperforming the market; “Our end markets remain strong and we continue to execute well across all actionable components of our strategic growth plan, Sunbelt 3.0.”
During the quarter the company invested $337 million on 12 acquisitions, adding 33 locations in North America. This was in addition to $699 million investment on new fleet and greenfield openings.
“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.”
Horgan said the business had momentum; “We are in a position of strength and have the experience to navigate the challenges and capitalise on the opportunities arising from the market circumstances we face, including supply chain constraints, inflation, labour scarcity and economic uncertainty, all factors which we are convinced are drivers of ongoing structural change.”