Sunbelt Rentals continues growth spurt in revenue and locations

Mar. 13, 2022

Sunbelt Rentals, Fort Mill, S.C., reported total revenue of $1.64 billion during the fiscal third quarter, compared to $1.29 billion for the same period last year. Total revenue during the first nine months of the year was $4.76 billion, an 18 percent increase compared to $4.03 billion the year before. Rental revenue was $3.55 billion, up 19 percent compared to $2.99 billion the year before.

In the UK, Sunbelt Rentals reported $239.8 million in total revenue for the fiscal third quarter, compared to $228.7 million in 2021. Revenue for the first nine months of the year was $750.3 million, up 23 percent compared to $576.5 million for the same period last year.

In Canada, Sunbelt Rentals’ total revenue for the fiscal third quarter was $120.8 million, compared to $105.4 million in 2021. Revenue for the first nine months was the year was $370.2 million, compared to $269.1 million the year before.

Ashtead Group — the parent company of Sunbelt Rentals — reported revenue for the fiscal third quarter increased 23 percent to $2.00 billion compared to $1.62 billion last year. For the first nine months of the year, revenue was $5.88 billion, up 19 percent compared to $4.88 billion the year before.

In a conference call with analysts on March 9, Brendan Horgan, Ashtead Group CEO, said he was pleased with the ongoing momentum across the group.

“Rental revenues for the nine months in North America were well ahead of last year’s pandemic-affected levels by 22 percent and an impressive 16 percent ahead of the 2019 and 2020 pre-pandemic levels,” Horgan said, citing a 19 percent increase in year-on-year growth for general tool rental and a 34 percent increase in specialty rental revenue.

“The supply and demand equation remains incredibly tight, an ongoing dynamic that 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. When you combine these supply and demand circumstances, inflation realities and focus on delivering leading service to our customers, you should be able to do it while increasing rental rates. We have done just that,” Horgan said, later adding that the company will likely finish its fiscal year with an average 5 percent year-on-year rate improvement.

In addition, Horgan talked about faster than expected progress in terms of adding locations as part of the company’s Sunbelt 3.0 three-year plan.

“Sunbelt 3.0 is embedded in the business, and we are making good progress across all actionable components. In the nine months, we invested $1.7 billion in capital across existing locations and greenfields and $938 million on 19 bolt-on acquisitions, adding a combined total of 81 locations in North America. This significant investment takes advantage of the ongoing structural growth opportunity that we continue to see in the business as we seek to deliver on our strategic priorities to grow general tool and amplify specialty, all achieved while remaining at the lower end of our target leverage range,” he said.

Regarding greenfield locations, he said the company has opened 57 so far with an expectation of adding 90 or more in the first year of Sunbelt 3.0.

“These are incredibly targeted openings following a detailed playbook to offer more specialty product solutions and general tool convenience with a focus on advancing our clustered market approach for our customers,” Horgan said.

During the call, he also said the company has completed the acquisition of ComRent, a solutions-driven load bank rental business, in February with more details to come.

“The load bank market represents an exciting growth opportunity in a rapidly advancing electrification environment, a product and service which is highly complementary to our largest specialty business, Power & HVAC, creating an even more powerful cross-selling opportunity across many of our specialty and generalist business lines,” he said, adding that the addition increases the company’s scale and expertise in load bank offerings.

“The lineup of bolt-on acquisitions completed, augmented and added to our greenfield campaign, having added temporary structures via the Mahaffey acquisition, our tent specialty business line, and most recently, significantly bolstering our Power & HVAC business with the addition of ComRent. Our plan is clear, and our team is engaged and focused on continuous delivery,” Horgan said.

During the fiscal third quarter, the company said it completed the following acquisitions:

• On Nov. 5, 2021, Sunbelt US acquired the business and assets of All Keys Rental — a general tool business in Florida.
• On Nov. 19, 2021, Sunbelt US acquired the business and assets of Essex Rental & Sales Center — a general tool business in Vermont.
• On Nov. 23, 2021, Sunbelt Canada acquired the business and assets of Lift Services — a general tool business in Ontario.
• On Dec. 1, 2021, Sunbelt US acquired the entire share capital of Mahaffey Tent & Awning Co., Mahaffey USA, Mahaffey Industrial Contractors and Cajun Affiliates (together ‘Mahaffey’). Mahaffey is a temporary structure business operating across the United States.
• On Dec. 8, 2021, Sunbelt US acquired the business and assets of Toolshed Rental & Sales — general tool business in California. The Stansberry Firm, Fair Oaks Ranch, Texas, represented the seller in this transaction.
• On Dec. 10, 2021, Sunbelt US acquired the business and assets of Jackson Rents & Supply — a general tool business in Florida.
• On Dec. 15, 2021, Sunbelt US acquired the business and assets of Pilchuck Equipment Rental & Sales — a general tool business in Washington.
• On Dec. 17, 2021, Sunbelt US acquired the business and assets of Illinois Truck & Equipment Co. — a general tool business in Illinois. The Stansberry Firm represented the seller in this transaction.
• On Jan. 21, 2022, Sunbelt US acquired the business and assets of Priority Equipment Rental — a general tool business in Pennsylvania.