01.02.2022

60% profit jump for United

US based United Rentals has reported a strong profit surge for the fourth quarter and full year.

Total revenues for the 12 months to the end of December were $9.72 billion, 14 percent up on the same period of 2020. A high percentage of the extra revenues dropped through to the bottom line, with pre-tax profits jumping 60 percent to $1.85 billion.

Fourth quarter revenues increased 22 percent to $2.78 billion, while pre-tax profits leapt 66 percent to $644 million.

Capital expenditure on new rental equipment over the year was $2 million short of $3 billion, compared to $996 million in 2020. The company also sold $968 million worth if used machines from the fleet leave the average age as of the end of December at 54 months. The total fleet numbered 780,000 units with a new machine value of $15.8 billion. Net debt increased $61 million to $9.54 billion, thanks to the capital expenditure, share buy backs and acquisitions.

2022 The company is forecasting revenues of $10.65 to $11.05 billion in 2022 and plans to spend roughly the same as it did this year.

The company statistics cannot fail to impress, at the end of the year United had 20,400 employees working from 1,345 locations, with 1,149 branches in the USA, 139 in Canada, 11 in Europe - in France, Germany, the UK, and the Netherlands, 28 branches in Australia and 18 in New Zealand.

Chief executive Matthew Flannery said: “Our strong fourth quarter, which included record revenue, adjusted EBITDA and operating earnings, completes a year of significant achievements and provides solid momentum as we enter the new year. Our team provided exceptional customer service, which supported better than expected organic growth in 2021, and successfully integrated over $1.4 billion of acquisitions while maintaining their focus on operating safely and managing costs.”

“Our 2022 guidance reflects the optimism of our customers, as well as our confidence in leveraging our competitive advantages over the longer term. Our larger, more diverse value proposition should both benefit the top line and strengthen our levers for delivering strong margins, cash generation and returns in this new upcycle.”

Vertikal Comment

The numbers here are impressive and show a strong bounce back from the peak Covid year 2020, so while the comparative period did throw up some strong percentages, United is well ahead of where it originally hoped to be in 2020 and probably relatively close to where it may well have forecast for 2021 if all had been normal - although there have been some substantial acquisitions along the way.

While the company spent around half a billion more on new rental equipment than it had planned, it barely managed to keep pace with fleet aging. On a simplistic basis it needs to be spending around $3.5 billion to maintain current fleet age and closer to $5 billion if it has any notion of returning to its old targets of 36 months. Having said this, the more recent acquisitions have brought in a range of products that may not be so age sensitive as aerial lifts and telehandlers.

All said and done it is a first class result from United, which still has plenty of upside growth potential without needing to get too adventurous geographically.