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Ashtead’s half-year surge

7 December 2021

Ashtead’s half-year surge

Ashtead Group, the parent of Sunbelt Rentals which operates in the US, Canada and the UK, has shown that it has maintained its strong performance in its results for the half year and second quarter ended 31 October 2021.  

The group achieved a record first half performance with overall revenue up 18% and hire revenue up 20%. Hire revenue was also 14% higher compared with the first half of 2019-20. 

Ashtead's chief executive, Brendan Horgan, commented: “The benefit we derive from the diversity of our products, services and end markets, our investment in technology and ongoing structural change, enhanced by the environmental and social aspects of ESG (environmental, social and governance obligations), enables the Board to look to the future with confidence. 

“Notwithstanding the volatility that continues to arise from Covid, the fundamentals of our business are strong and we now expect full year performance to be ahead of our previous expectations." 

Those comments perhaps reflect the inherent strengths of hire itself, which serves diverse markets with a variety of equipment and services and can steer towards the positive sectors.

However, it requires careful management. Indeed, Brendan Horgan said: “This market outperformance across the business 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.”

The UK business generated rental-only revenue of £203m, up 18% on the prior year (2020: £172m). Total revenue increased 35% to £368m (2020: £273m) reflecting the higher level of ancillary and sales revenue associated with Sunbelt Rentals’ work supporting the Department of Health in its Covid-19 response efforts (pictured above), which accounted for approximately 32% of UK revenue in the half year. 

These factors contributed to an EBITDA margin of 31% (2020: 32%) and a segment profit of £54m (2020: £20m) at a margin of 15% (2020: 7%). 

Sunbelt is currently supporting approximately 500 testing sites, which is expected to continue through the winter before reducing significantly in Spring 2022. 

In the US, rental-only revenue of $2,342m (£1,764m) was 16% higher than the prior year’s $2,025m (£1,526m) figure and 9% higher than 2019. 

Interstingly, Ashtead says that fleet deliveries were slower than expected throughout the half year due to supply chain delays and consequently it has deferred certain fleet disposals to meet strong demand. As a result, the group's hire fleet at 31 October 2021 at cost was $12.8bn (£9.65m) and its average fleet age is now 40 months (2020: 39 months). 

Picture: Louis Rayner 

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