26.06.2007

Ashtead up 40%

The Ashtead Group, owners of A-Plant in the UK and Sunbelt in the North America has reported an increase of over 40 percent in its full year revenues to the end of April to £896 million.

Revenues were hit by a weaker dollar, at constant exchange rates the increase would have been over 48 percent.

A-Plant

A-Plant saw its revenues grow by 18 percent to £190 million while “underlying” operating profit jumped by 45 percent to £20 million. The Lux Traffic business will be added into A-Plant and would have taken revenues close to £200 million while marginally diluted profits.

Same store revenue growth for the year was 11 percent, reflecting a five percent increase in fleet size, a one percent increase in rental rates and a five percent improvement in utilisation to an average of 69 percent.

In April A-Plant began a programme that involves the restructuring of its operations to create fewer larger locations. The company says that these larger pools of equipment and staff will improve operational efficiency and enable A-Plant to meet the needs of its customers better.

Sunbelt

Sunbelt’s dollar revenues increased by 60 percent to 1.3 billion, the NationsRent acquisition added a further 230 million which took revenues up to $1.54 billion.

Sunbelt’s year was dominated by the NationsRent, deal at the end of August 2006. The company was able to integrate Nations 268 stores into the Sunbelt network within two months.


A new combined regional and district management structure has been introduced, overlapping profit centres merged and the two point-of-sale computer systems combined.

The Nations Rent head office was closed in January and Sunbelt relocated to new larger headquarters in Charlotte.

Ashtead claims to have made annual cost savings of around $48 million
Well ahead of its $37 million target.

Sunbelt claims that the pro-forma dollar utilisation of the combined fleet has already improved from 59 percent to 62 percent.

Exceptional costs relating to the NationsRent acquisition largely redundancies, retention bonuses and rebranding of the fleet and depots, totalled £31.5 million. There were also £68 million of exceptional financing costs.



Ashtead's chief executive, Geoff Drabble, said:

“The year saw substantial change and development across the Group. The NationsRent acquisition was a significant step forward in enhancing the Group's presence in the growing US rental market. I am pleased with the progress made to date which is reflected in a strong fourth quarter performance.”

“The major elements of the integration are behind us and the combined business can now focus on gaining further market share and continuing to improve dollar utilisation.”

“A-Plant also continued to improve its performance built upon double digit same store growth. The Board's recent decision to invest in an improved profit centre infrastructure better suited to our customers' needs in the UK in the coming year will underpin delivery of improved returns. “

“Looking forward, the markets in which we operate are strong and the drive to rental, due to both the financial and operational benefits for customers of outsourcing, will continue, particularly in the US.”

“Given the ongoing integration benefits from the acquired NationsRent business, together with the improving performance of both A-Plant and Ashtead Technology, we look forward to 2008 with confidence.”

“A-Plant's recent strong revenue and profit growth continued in the fourth quarter. Ongoing focus on revenue growth and operational efficiency supports our expectation of continuing improvement in its margins and return on investment.”