Jun. 19, 2022
Sunbelt Rentals, Fort Mill, S.C., last week reported rental revenue of $6.04 billion for the fiscal year ending April 30, 2022, a 22 percent increase over last year. In its fiscal fourth quarter, the company’s rental revenue was $1.23 billion, up 23 percent. Sunbelt’s guidance for 2023 released last week calls for another 13 to 16 percent growth in rental revenue in the U.S.
Overall, Ashtead Group, the parent company of Sunbelt, reported total revenue of $7.96 billion in fiscal 2022, up 19 percent over last year, and rental revenue of $7.24 billion, up 22 percent, which includes results for Sunbelt in the U.S., Canada and the U.K. In its fiscal fourth quarter, Ashtead reported total revenue of $2.08 billion, up 19 percent, and rental revenue of $1.88 billion, up 24 percent.
“I am delighted to be able to report a year of record performance for the group. This market outperformance across the business is only possible through the dedication of our team members who deliver for all our stakeholders every day, while ensuring our leading value of safety remains at the forefront of all we do,” said Brendan Horgan, Ashtead Group’s CEO.
Of particular note, Sunbelt Rentals invested $2.4 billion in capital across existing locations and opened 88 greenfield branches over the past year while spending another $1.3 billion on 25 acquisitions with 35 total locations with a majority of those additional locations focused on specialty rental.
That means Sunbelt already has achieved more than 40 percent of its Sunbelt 3.0 goal of adding 298 locations between April 2021 and April 2024.
“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,” Horgan said.
“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 capitalize on the opportunities arising from the market circumstances we face, including supply chain constraints, inflation, labor scarcity and economic uncertainly, all factors which we believe to be drivers of ongoing structural change,” he said.
In a presentation to analysts on June 14, Sunbelt also showed its latest equipment rental revenue market share charts, illustrating that the company had a 4 percent market share in 2010, second behind United Rentals, Stamford, Conn., which had a 5 percent market share.
In 2022, Sunbelt estimates that United Rentals now has a 16 percent share compared to their 12 percent share, and predicts that in the future, two or three companies will have a combined market share of 50 percent.
Horgan, in speaking with analysts, also said the supply and demand equation for equipment rental remains favorable.
“This dynamic has led to record levels of utilization throughout the business. Further, our industry, like any other, is experiencing inflation, ranging from equipment to goods to services to wages. As I’ve said consistently throughout the year, when you combine the supply and demand circumstances, inflation realities and your business has a relentless focus on leading and delivering leading services to your customers, you should be able to increase rental rates. We continue to do just that. As we enter the new year, we’ve once again set internal targets in rental rate improvements,” he said.
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