25.07.2024

Another solid quarter for United

US based United Rentals has reported first half profits rising twice as fast as revenues.

Total revenues for the six months to the end of June were $7.26 billion, six percent higher than at the same point last year, which in turn was almost 30 percent up on 2022, driven by the Ahern acquisition.
All of the revenue gains came from rental, with a bigger fleet and higher ‘productivity’ - a combination of rate and utilisation than United uses.
Pre-tax profit however jumped 12 percent to $1.53 billion.

Capital expenditure in the first half was $2.02 billion very marginally lower that at the same time last year.

Second quarter revenues improved 6.1 percent, to $3.77 billion, with a pre-tax profit of $835 million, up eight percent on the same quarter last year.

Full year outlookThe company has tweaked its full year forecast slightly increasing the lower end of its revenue range to $15.05 billion while reducing the top end of its expectations by a similar factor (just under one percent) to $15.35 billion which represent an increase of five to 7.5 percent over 2023, with a capital expenditure of $3.35 to $3.55 billion, the top end matching last year’s spend.

Chief executive Matt Flannery said: “We were pleased with our record second quarter results across revenue, adjusted EBITDA and EPS, as 2024 continues to play out as we expected. The integration of Yak remains on track. This acquisition builds upon our one stop shop strategy of providing customers a best in class rental experience through our general rentals and specialty offerings. The team’s steadfast focus on providing this unique value proposition to our customers, coupled with an unwavering focus on safety, operational excellence and innovation, remains the cornerstone of our strategy and enables us to drive long-term shareholder value.”

“As we enter the second half, we are confident that our consistent execution will enable us to deliver on our updated guidance, with the midpoint for both revenue and adjusted EBITDA reaffirmed, and our expectations for capex and free cash flow unchanged. We continue to see particular strength in large projects, and believe we are uniquely positioned to capitalize on these opportunities in addition to other long-term avenues of growth.”

Vertikal Comment

What can you say about such mind boggling numbers? United does seem to have developed a method that works, in spite of its size. The company is now estimating that it will break through the $20 billion of annual revenues by 2028, while reducing its debt burden. While it has made solid organic growth each year, it has relied on major acquisitions to achieve most of its growth, with a 15 percent share of the North American rental market it may find such acquisition become increasingly harder.

It is getting bolder overseas however, and now boast 88 locations outside of North America - 39 in Europe and 49 in Australia/New Zealand - having acquired seven new locations in June when it purchased Orange Hire in Australia. We understand that It is currently on the prowl for an access rental company down under. An easy solution in terms of branding would be Elphinstone owned United Forklift & Access Solutions which operates from 12 locations in Australia from its base in Perth.

It will also be interesting to compare these numbers with Sunbelt’s when they are released which relies on organic growth and smaller bolt on acquisitions.
Interesting times,