Project commencements impact Coates

Coates Hire, Australia’s largest equipment rental company, has continued to experience weakness in project commencements, according to Seven Group Holdings (SGH).

SGH, which owns Coates, recently upgraded its full-year 2019 guidance, saying that the weakness in project commencements highlighted in the group’s first-half 2019 results has continued into the third quarter.

This is particularly true in Queensland, which has been impacted by unseasonably wet weather and resultant floods.

Despite the challenges experienced by Coates, SGH is experiencing an improvement in performance overall, with positive developments in both revenues and profits.

The group expects to exceed its original full-year 2019 guidance, which had forecast that underlying EBIT (earnings before interest and taxes) would be up 25% on 2018 underlying EBIT. It is now expected that underlying EBIT for this year will be up approximately 40% on last year.