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It lost £4m on the collapse of Britishvolt and faced up to the inevitably of seeing its biggest money-earner disappear almost overnight.
Despite this, in the year to 30th April 2023 Sunbelt UK made a profit of £65m (2022: £87m) on revenue down just 6% at £684.8m (2022: £725.7m).
In other parts of the Ashtead Group, numbers all shot upwards.
Revenue was up 27% for Sunbelt USA and 32% for Sunbelt Canada. This meant that overall group revenue increased 21% to US$ 9,667m (£7.7bn) and profit before tax was up 30% to $2,156 (£1.7bn).
What dampened the UK numbers was, as expected, the end of all the work that Sunbelt had been doing to supply Covid testing stations around the country since 2020. The Department of Health had accounted for 30% of revenue in recent years; last year this came down to just 4%.
Sunbelt had also lent money to Britishvolt, a start-up trying to build a battery manufacturing plant in Northumberland, which collapsed in January, leaving backers out of pocket.
However, Sunbelt UK increased its rental only revenue by 6% to £429m (2022: £403m).
Excluding the impact of the work for the Department of Health, which ended in spring 2022, rental only revenue increased 22%. Bolt-on acquisitions since May 2021 contributed 9% of this growth. Rental revenue increased 3% to £559m (2022: £544m) or 26% excluding the impact of the work for the Department of Health. Total revenue decreased 6% to £685m (2022: £726m) reflecting the high level of sales revenue associated with the work for the Department of Health.
The board said: “The UK remains focused on delivering operational efficiency and improving returns in the business. However, this year has been one of transition as we redeployed assets dedicated to the Department of Health testing centres elsewhere in the business, resulting in lower fleet utilisation than last year. While we have managed to improve rental rates during the year, this has been insufficient to offset the inflation impact on the cost base. These factors, combined with a £4m charge to impair a convertible loan note due from Britishvolt, which entered administration in January, contributed to the UK generating an EBITDA margin of 28.1% (2022: 29.6%) and a segment profit of £65m (2022: £87m) at a margin of 9.5% (2022: 12.0%).”
The group return on investment was 19% overall (2022: 18%). In the USA, return on investment (excluding goodwill and intangible assets) was 27% (2022: 25%), while in the UK it was 9% (2022: 14%).
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