Hire company A-Plant has suffered a dip in profits in the past year on marginal growth in revenues.
For the year ended 30th April 2019, A-Plant made an operating profit of £62.3m, down 11% on the previous year’s £70.2m. Revenue was up 0.7% to £475.1m (2018: £471.7m).
Its operating margin therefore declined from 14.9% to 13.1%. This was attributed to “the higher depreciation charge of a larger average fleet”.
A-Plant generated rental-only revenue of £357m, up 4% on the prior year (2018: £344m). This was driven by increased fleet on rent with a 1% improvement in yield, mainly due to product mix.
A-Plant’s parent company, Ashtead – although British – does most of its business in North America, through the much larger and more profitable Sunbelt equipment rental operations.
Thus total group revenue for the year was up 19% to £4.50bn (2018: £3.7bn) and pre-tax profit was up 2% to nearly £1.1bn (2018: £862m).
The group as a whole invested £1.6bn of capital into the business (2018: £1.2bn) and spent £622m spent on bolt-on acquisitions (2018: £392m). A similar level of capital expenditure is expected in 2019/20.
In the UK, A-Plant acquisitions during the year included the £7m purchase of Astra Site Services, a hydraulic attachment rental business, and the £5m takeover of Hoist It.
The average age of A-Plant’s fleet is now 38 months (2018: 32 months). It now has 196 outlets (2018: 187) and 3,789 employees (2018: 3,571).