A 16% rise in McGrath RentCorp’s total revenues to US$122 million in the first quarter of 2019, compared to the same period last year, was underpinned by an 11% year-on-year growth in rental revenues to $82.7 million.
This was helped in part by a positive development in revenues from rental-related services, which rose from $17.8 million in the first quarter of 2018 to $21.5 million this year.
Joe Hanna, President and CEO of McGrath RentCorp, said, “I am pleased with our strong start to the year and first quarter results. Business performance was favourable with all of our rental divisions growing both top and bottom lines.”
Rental revenues from the US-based company’s Mobile Modular division increased 14% from a year ago, driven by higher rental rates, a larger fleet and improved utilisation. Meanwhile, its Portable Storage division achieved a 15% increase in rental revenues.
McGrath RentCorp’s subsidiaries also performed well. TRS-RenTelco saw its rental revenues for the first quarter of 2019 increase by 10%, primarily driven by higher average rental equipment rates and improved utilisation. Adler Tank Rentals enjoyed 7% growth in rental revenues compared to a year ago, largely due to higher rental rates.
Hanna said, “Demand was broad based across all divisions, as the markets we serve continued to show positive momentum.”
Net income for the quarter came to $18.4 million, up on the $14.5 million recorded in the first quarter of 2018, and income from operations increased by 24% year-on-year to $27.3 million.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) rose 16% year-on-year to $49.9 million, and operating profit increased 24%, fuelled by growth in rental gross profit of $3.8 million and sales gross profit of $1.9 million.
Hanna said, “We still have plenty of work to do to deliver on this year’s financial and operating goals, however customer and field feedback on project activity has been positive. We are encouraged by our early successes and will be working hard to keep our positive momentum throughout 2019.”
The company has reaffirmed its expectations for the full year, forecasting an increase of between 5 and 10% in total company operating profit compared to 2018.