Record results for Sunbelt
14 June 2022
Full year results from Sunbelt Rentals’ parent Ashtead Group announced today show a record performance for the business. Revenue increased by 19 per cent to $2,078m for the period to April 30, up from $1,759m with rental revenue increasing by 22 per cent to $1,875m from $1,522m, and pre-tax profit was up by 26 per cent to $386 million from $306 million.
Ashtead uses the US dollar instead of sterling to present its group results for clarity, given that approximately 80 per cent of revenue and around 90 per cent of operating profit originate in the currency.
Turning to the UK, the business generated rental-only revenue of £403m, up 11% on the prior year (2021: £362m). Ashtead Group chief executive Brendan Horgan said that while Sunbelt in the UK had continued to benefit from supporting the Department of Health in its Covid-19 response efforts, “our core business is performing strongly and is benefitting from the operational improvements in the business which are ongoing.”
Total UK revenue increased 14 per cent to £726m (2021: £635m) reflecting the higher level of ancillary and sales revenue associated with the work for the Department of Health, which accounted for approximately 30 per cent of UK revenue in the 12 months.
Following the government's announcement that free mass Covid testing would stop from April 2022, Sunbelt is now demobilising the test sites rapidly and expects a relatively low revenue contribution in 2022/23. It will seek to redeploy the assets dedicated to these facilities elsewhere in the business.
During the last quarter of the period, Sunbelt in the UK generated rental-only revenue of £102m (2021: £97m), four per cent higher than the previous year, while total revenue decreased six per cent to £179m (2021: £191m) due principally to the test site closures. Excluding the impact of the Department of Health work, rental-only revenue was up 10 per cent over the prior year.
The average age of the Group's hire fleet at 30 April 2022 was 40 months (2021: 41 months) on a net book value basis. The US fleet had an average age of 41 months (2021: 41 months), while the figure for the UK fleet was 37 months (2021: 39 months) and the Canadian fleet 36 months (2021: 38 months).
The business added 123 locations in the US during the year.
Commenting on the Group’s performance, Brendan Horgan said: “We invested $2.4bn in capital across existing locations and greenfields and $1.3bn on 25 bolt-on acquisitions, adding a combined total of 123 locations in North America during the year. This significant investment is enabling us to take advantage of the substantial structural growth opportunity that we see for the business as we deliver our strategic priorities to grow general tool and amplify specialty.
“We are achieving all this while maintaining a strong and flexible balance sheet with leverage at the lower end of our target range.
“Our business has demonstrated its ability over the last two years to perform in both good times and more challenging ones. The new financial year has started well and the business has clear momentum. We are well positioned 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 believe to be drivers of ongoing structural change."
● Since the balance sheet date, Ashtead has completed five acquisitions, including Movietech in the UK, a lighting, grip and lens business serving the film and television industry, as reported on the blog.
