Continued climb at Sunbelt and A-Plant
By Euan Youdale10 December 2013
Ashtead Group revenue increased 25% to £850 million (US$1.4 billion) in the first half of its 2013 financial year with strong growth for both its companies; US-based Sunbelt Rentals and A-Plant in the UK.
As a result the company recorded a record underlying profit before tax of £212 million ($349 million) for the six months ending 31 October, up from £140 million ($230 million) during the same period in 2012.
Sunbelt continued to be the main driver of group performance. Rental revenue grew 23% to $998 million, driven by a 17% increase in fleet on rent and 6% improvement in yield. Sunbelt’s total revenue, including new and used equipment, merchandise and consumable sales, grew 21% to $1.1 billion as it sold less used equipment this year.
A-Plant performed well and, with the acquisition of Eve Trakway during the year, it delivered rental revenue of £124 million ($204 million), up 35% on the previous year. This reflected 23% more fleet on rent and a 10% improvement in yield.
“Yield has benefitted from a change in mix over the period which includes Eve’s peak period of events work,” said a the company. Rental revenue growth excluding Eve was 16%, reflecting 10% more fleet on rent and 5% yield improvement.
Sunbelt’s strong revenue growth also led to a record first half EBITDA margin of 46% as 61% of revenue growth dropped through to EBITDA. This contributed to an operating profit of $345 million. A-Plant’s EBITDA margin improved to 31% from 30% last year and operating profit increased to £17 million ($28 million), up from £7 million ($11.5 million).
As a result, statutory profit before tax was £208 million ($342 million), from £112 million ($184 million) in the same period in 2012.
Capital expenditure in the first half of the year was £451 million ($742 million) gross and £401 million ($660 million) net of disposal proceeds, compared to £341 million ($561 million) gross and £288 million ($474 million) net in 2012. “We maximised the benefit of new fleet investment during the seasonally stronger summer months,” said the spokesman.
As a result of this investment, the group’s rental fleet at 31 October 2013 at cost was £2.5 billion ($4.1 billion) with a reduced age of 29 months from 32 months in 2012.
Sunbelt’s fleet size was $3.3 billion, supporting strong fleet on rent growth of 17% year-on-year, said the company. Average first half physical utilisation was 73%, compared to 72% in 2012.
“Capital expenditure is under constant review, based on market conditions. As a result of the good market conditions, we now anticipate gross capital expenditure for the year of around £700 million and net payments after disposal proceeds of around £600 million,” added the spokesman.