30.03.2008

Ahern up 20%

Ahern Rentals, the largest privately owned rental company in the USA with a fleet of 20,200 aerial lifts and telehandlers in addition to 13,000 general rental machines, has posted full year 2007 revenues of $342 million, an increase of 29 percent compared to 2006.

Rental revenues were up by 24 percent on the year with same location- like for like- revenues up by over 19 percent. The balance, totaling $11 million, came from nine new branches opened during the year.
The fleet value grew from $472 million to $639 million, with significant additions to the fleet as well as filling the new locations.

In spite of the substantial increase, pre tax profits dropped from $25.2 million to $21.9 million a fall of 13 percent. The reduction is due to an increase of $12 million in SG&A costs related to higher revenues and the nine new locations and a $10 million increase in interest costs due to higher borrowings to fund the fleet expansion.

Ahern says that rental rates increased by three percent during the year, while physical utilisation for the aerial lift/telehandler fleet dropped from 73 percent in 2006 to 70 percent in 2007.

Sales of used equipment from the rental fleet increased by 50 percent, reflecting the increased size of the fleet and a strong market for used equipment during the year. In spite of this the number of units sold through auctions increased by 75 percent compared to a 24 percent increase in sales via its depots.

Ahern says that it is placing an increased emphasis on selling equipment through auctions because “profit margins realised at auctions are comparable to sales through retail channels and it provides an effective means to dispose of older and under-utilised equipment.”

Sales of new equipment increased by 128 percent to over $15 million due to increased emphasis on equipment sales.

Ahern chief executive Don Ahern said: “All of our markets, particularly in the non-residential, have remained strong and the current level of activity remains quite high.”

He also added that he expects rental rates to remain flat in the near future with utilisation remaining at the 70 percent level.