Sunbelt Rentals posted £1.125 billion (about U.S. $1.415 billion) in fiscal fourth-quarter 2020 revenue, up slightly from £1.106 billion in the fiscal fourth quarter of 2019. The total figure includes Sunbelt Rentals U.S., Sunbelt Canada, and the newly branded Sunbelt U.K., formerly known as A-Plant. Operating profit, however, declined from £250 million to £155 million, a 38-percent tumble.
For the full fiscal year ended April 30, Sunbelt Rentals U.S. posted $5.490 billion in revenue compared to $4.989 billion a year ago, a 10-percent increase. Sunbelt Canada reported CDN $420.7 million in fiscal 2020 compared to CDN $344 million a year ago, a 22.3-percent boost, with considerable contributions from acquisitions. Sunbelt UK had a revenue of £469.2 million compared to £475.1 million a year ago, a 1.2-percent decrease.
Group revenue totaled £5.054 billion compared to £4.500 billion a year ago, a 12.3-percent increase. The fourth quarter was impacted by the COVID-19 pandemic; therefore, the fourth-quarter increase was 2 percent.
Although COVID-19 has influenced the group’s short-term planning and actions, the company’s strategy remains unchanged with long-term growth being driven by organic investment (same-store and greenfield) supplemented by bolt-on acquisitions. In the U.S. the company posted 10 percent rental-only revenue growth, while Canada had 30 percent. In the U.K., rental-only revenue dropped 2 percent, reflecting the more competitive landscape within a more uncertain U.K. market and a period of realignment for the U.K. business. Canada’s recent acquisitions, including its purchase of William F. White in December 2019, played a major role in its rental-revenue jump.
The company said that despite the unprecedented impact of COVID-19, with the U.S. fleet on rent falling 15 percent in a five-week period, overall results are still strong. “There has, of course, been an impact on our fourth-quarter results, but the underlying strength of the business and our performance in the first three-quarters of 2019/20 mean we have continued to perform well overall,” the company said in a statement. “Our business is robust and we remain open for our customers in all our geographies.”
Rental revenue for Sunbelt U.S. was 3 percent higher in March, compared to the previous year, but 12 percent lower in April. The general tool business dropped 15 percent in April, year over year, while the specialty businesses, excluding oil and gas, jumped 9 percent. The decline in the general tool was driven by a decline in volume, not a drop in rental rates. Since April 10, the U.S. fleet on rent has stabilized and then increased as markets adjusted to new working practices and restrictions gradually eased. The trend has been similar in the U.K. and Canada. May rental revenue declined by 14 percent year over year.
“I am extraordinarily proud of and grateful for, our team members and their response during a time when our communities were in need,” said Sunbelt CEO. “All levels of the organization quickly adapted our operations to continue servicing our customers while keeping our leading value of safety at the forefront of all we do. While no one could have foreseen the global impact of COVID-19, our business model, and capital structure are designed to withstand the cyclical nature of some of our end markets. We took prompt actions to optimize cash flow, reducing capital expenditure and operating costs, and strengthen further our liquidity position. In these unprecedented times, the results of our long-term strategy to mature our business through diversity and scale came through in our performance.
“Looking forward, I am certain these swift actions combined with the strength of our cash flow and balance sheet will serve the group well. The diversity of our products, services, and end markets coupled with ongoing structural change opportunities put the board in a position of confidence to look to the coming year as one of strong cash generation and strengthening our market position. Based on this confidence, the board has decided to maintain its progressive dividend policy and to recommend a final dividend of 33.5p.”
