Seven Group Holdings (SGH) said Coates Hire was continuing to build momentum based on a buoyant East coast infrastructure market and improvements in fleet utilisation and rental prices.
Coates Hire’s revenues in the six months to 31 December 2017 rose by 4% to A$477 million, with EBIT profits up 15% to A$85 million. SGH became 100% owner of Coates in October last year having held a 47% shareholding since 2008.
SGH said Coates was benefitting from an increased exposure to a growing infrastructure sector, fuelled in particular by government spending on the East coast. Revenues in New South Wales and Victoria/South Australia were up 8% and 5%, respectively, and Queensland performed even better, with 13% revenues growth. Western Australia, where the natural resources sector had previously driven much of Coates activity, continued to see softer conditions.
Seven said Coates was also seeing the benefits of improved fleet management, with utilisation rising to 57.3% in the six month period. Ongoing fleet management initiatives include projects to reduce equipment turnaround times, a transport management system, and an inbound/outbound fleet system to improve equipment identification.
In its outlook, Seven said; “Coates Hire is expected to continue its growth trajectory aided by a sustained focus on fleet optimisation.”
SGH also owns Caterpillar dealer WesTrac Australia, which saw a 16% increase in revenues to A$1,194 million for the six months, with EBIT profits up 35% at A$101 million. Product sales rose by 36% to A$326 million, with product support revenues rising 10% to A$868 million.