Sunbelt stays confident
6 September 2022
Interim results today from Ashtead Group, parent of Sunbelt Rentals, show that its UK business has faced the challenge of demobilising the Covid-19 testing centres it put in place during the pandemic.
The figures for the first quarter of the group’s trading year show another strong overall performance, with the business confident about future prospects despite the general economic headwinds.
Group revenue increased by 25 per cent compared to same period last year to $2,259 million while rental revenue grew by 26 per cent to $2,075 million. Group profit before tax was $527m, up by 28 per cent.
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, from its activities in the US and Canada.
Sunbelt’s UK activity has performed against a background of change and challenge as it demobilised the nationwide Covid-19 testing centres (pictured) that it put in place for the Department of Health. This wind-down began in April 2022 and was completed during the first quarter. The business will now look to redeploy those assets elsewhere in its operation.
During this transitionary period, the UK operation generated rental-only revenue of £104m, up 5 per cent on the prior year (2021: £99m). Excluding the impact of the demobilisation, rental-only revenue increased 19 per cent. Rental revenue overall increased 11 per cent to £149m (2021: £134m), with total revenue decreasing 4 per cent to £182m (2021: £190m), reflecting the high level of ancillary and sales revenue associated with the work for the Department of Health, which accounted for approximately 16 per cent of revenue in the quarter.
The group states that it continues to navigate supply chain challenges but, given strong demand and slower fleet deliveries than expected during the period, certain fleet disposals were deferred.
Ashtead's chief executive, Brendan Horgan, commented: "Our business is performing well with clear momentum in supportive end markets. 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.
“The business is performing strongly, with revenue and operating profit ahead of our previous expectations. This performance is offset by increasing interest costs and therefore, we expect adjusted profit before taxation for the year to be in line with our previous expectations and the Board looks to the future with confidence."
Photo: Louis Rayner, Sunbelt Rentals
