Ashtead Group, which operates in the U.S. as Sunbelt Rentals, has reported another quarter of strong growth.
The company says equipment rental revenue grew 19 percent during the first quarter, ending July 31, over 1Q 2017 to £961 million ($1.25 billion). Total revenue grew 22 percent to £1.05 billion ($1.4 billion).
Ashtead CEO Geoff Drabble says the company has seen sustained strong demand in each of its markets as equipment customers demonstrate more and more reliance on rental machines.
“We continue to execute well on our strategy through a combination of organic growth and bolt-on acquisitions, investing £465m by way of capital expenditure and £145m on bolt-on acquisitions in the quarter,” he says.
Drabble says the company is enjoying the benefits of growing free cash flow, generated by the company’s strong margins and lower replacement capital expenditure. The result has been “significant operational and financial flexibility, enabling us to invest in the long-term structural growth opportunity.”
Ashtead’s total assets grew 11 percent during the quarter to £7.488 billion ($9.8 billion).
Strong results in U.S. as more locations open
In the U.S., Ashtead reports that its Sunbelt Rentals business continues to grow under the company’s long-term strategy of organic growth and bolt-ons through footprint expansion and specialty businesses.
The company reports that Sunbelt U.S. revenue was $1.167 billion for the first quarter, a 20-percent increase. Sunbelt U.S. operating profit grew 22 percent during the quarter to $386 million.
After opening 62 new U.S. locations in all of 2017, Ashtead reports that it opened another 30 stores in the first quarter alone, the majority of which were specialty stores.
During the quarter Sunbelt U.S. completed the following acquisitions:
- On July 17 Sunbelt US acquired the business and assets of Wistar Equipment, Inc. for a cash consideration of £18m ($23m). Wistar is an industrial power rental business in New Jersey.
- On July 20 Sunbelt US acquired the entire share capital of Blagrave No. 2 Limited, the parent company of Mabey, Inc. for a cash consideration of £68m ($90m). Mabey is a ground protection and ground works business operating down the east coast of the U.S.
During the quarter, Sunbelt U.S. assets grew 11.5 percent to £6.1 billion ($8 billion).