U.S. mega projects boost Sunbelt Rentals revenue forecast
By Larry Stewart and Murray PollokDecember 07, 2022
Sunbelt Rentals parent company, UK-based Ashtead Group, highlighted the rise of U.S. mega-projects and rental giants’ unique ability to serve them as it raised its expectation for rental revenue.
Rental revenues for the company’s UK operations are expected to finish the second half of the fiscal year flat. Momentum comes from Sunbelt, with the U.S. business expected to grow by 20% to 23% (up from 17% to 20%).
About 30% of all non-residential U.S. construction is made up of projects worth over $400 million in value, up from 13% between 2000 to 2009. Ashtead’s first-half results statement suggests such mega-projects are well suited to large rental companies with scale and breadth of product.
Group revenue jumped 26% from February to October, with EBITDA profits up 24%. Sales in the U.S. were 30% higher and up 25% in Canada.
Acquisitons build strength
Ashtead’s chief executive, Brendan Horgan, said his company’s investment in acquisitions “is enabling us to take advantage of the substantial structural growth opportunities that we see for the business.
Ashtead made 27 acquisitions at a cost of $609 million in the six months that ended in October. Most of the deals were in North America where it added 72 locations, more than half of those through acquisitions.
“We are achieving all this while maintaining a strong and flexible balance sheet,” Horgan said. “We are in a position of strength and, with increased market clarity, have the operational flexibility to capitalize on the opportunities arising from the market and economic environment we face, including supply chain constraints, inflation and labor scarcity, all factors driving ongoing structural change.”