Sunbelt, A-Plant sales fall

03 March 2009

Ashtead Group chief executive Geoff Drabble.

Ashtead Group chief executive Geoff Drabble.

Revenues from Sunbelt in the US in the third quarter of 2009 fell 15% to $307.8 million (€246.3 million) from $362.7 million (€290.2 million) in the same period last year. In the UK, A-Plant revenues fell 14% in the quarter to £44.0 million (€48.4 million) from £51.2 million (€56.3 million) a year ago.

For the nine months reported at the end of January, Sunbelt's sales were $1.13 billion (€904 million), 3.6% less than the $1.17 billion (€936 million) of 2008. A-Plant's sales were £153.5 million (€168.9 million), down 3.8% from £159.7 million (€175.7 million) in the same nine months.

Sunbelt's performance in the quarter reflected a 3% reduction in its fleet size, physical utilisation of 62& (down from 66% in 2008), and a 7% decline in yield. A-plant's fleet size was 2% larger than last year's, its utilisation was also 62% (down from 68%), and its yield also fell by 7%.

For the nine months, Sunbelt's fleet was 2% larger than in the period last year, utilisation was 67% (compared to 69%), and the fall in yield was 4%. A-Plant's fleet grew 10%, utilisation was 67% (compared to 70% in 2008), and yield fell 8%.

Ashtead's nine-month results benefited from an exceptional gain of almost £11 million (€12.1 million), the net of £66 million (€72.6 million) from the sale of Ashtead Technology in June 2008 and a charge of £55 million (€60.5 million) for the company's right-sizing programme. The company said about half of the used equipment to be shed had left by the end of January and had raised £17 million (€19 million). The remainder will leave the fleet by the end of the fourth quarter, "to generate a cash inflow of at least £30 million (€33.3 million) this year."

Geoff Drabble, chief executive of Astead Group in the UK, parent of Sunbelt and A-Plant, said, "As anticipated, market conditions become more difficult in the third quarter. Revenues were adversely affected both by volume and yield."

However, currency exchange rate changes allowed the Group to report third quarter sales up to 31 January 2009 of £252 million (€ 281 million), up 9% on the £230 million (€ 257 million) recorded one year ago. Pre-tax profit for the third quarter fell 41% to £11 million (€12 million), down from £18.7 million (€20.8 million) 12 months earlier.

"We continued to benefit from the stronger dollar and our strong market position has also ensured a good relative performance. We anticipate that we will continue to gain market share and our strong cash flow demonstrates our business model's ongoing flexibility through the cycle as we reduce capital expenditure and adjust our cost base to market conditions," said Mr Drabble.

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