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£184m Covid revenue boosts Sunbelt UK

16 Jun 21 The Covid-10 crisis proved a financial blessing for hire company Sunbelt Rentals UK last year as it was called on to help with emergency medical facilities.

Sunbelt built 50 regional Covid testing centres last year, including this one in Llandudno
Sunbelt built 50 regional Covid testing centres last year, including this one in Llandudno

Annual results from parent company Ashtead Group show that Sunbelt Rentals nearly doubled its UK profits and increased revenue by 35%.

In the year to 30th April 2021 Sunbelt Rentals UK made an operating profit of £60.9m (2020: £36.4m) on revenue of £635.1m (2020: £469.2m).

The company said that the results “reflect the higher level of ancillary and sales revenue associated with the work for the Department of Health, which accounted for c. 29% of UK revenue in the year”.

That reveals that Sunbelt UK was paid £184m for Covid response work during the year, of which £74m was made in the fourth quarter (February-April) when the vaccination programme was ramping up.

The UK business generated rental only revenue of £362m, an increase of 10% on a comparable basis (2020: £349m).

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Despite the strong result, the improved operating margin of 9.6% (2020: 7.8%) was still way off what Ashtead achieves in North America – 26.7% in the USA last year and 19.5% in Canada.

Total revenue for Ashtead Group, including Sunbelt US and Sunbelt Canada, was £5,031m, from which it made a pre-tax profit of £936m.

Ashtead chief executive Brendan Horgan said: “We have shown that our business can perform in both good times and more challenging ones.  We enter the new financial year with clear momentum, strong positions in all our markets, supported by high quality fleet, a strong financial position and our exciting new Sunbelt 3.0 strategic plan, positioning us well to respond to market conditions and capitalise on opportunities.  We will invest to drive long-term sustainable growth and returns and strengthen the business.  The benefit we derive from the diversity of our products, services and end markets, our investment in technology and ongoing structural change, enhanced by the environmental and social aspects of ESG, enables the board to look to the future with confidence."

In recognition of the fact that Ashtead has more than 80% of its business in the USA (and gets 90% of its profits there), the board has finally taken the decision to report its results in US dollars in future, instead of the currency of its original parent country.

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