22.01.2015

United races past $5 billion

US based United Rentals has reported its full year numbers for 2014, with revenues up almost 15 percent pushing towards $6 billion.

Total revenues for the year were $5.7 billion, an increase of 14.7 percent on 2013 and a new record. Pre-tax profits for the period were $850 million up by more than 40 percent and rental revenues were boosted by an increase in volume of equipment on rent of almost 10 percent, and a 4.5 percent rise in rental rates. Physical utilisation for the full year was 68 percent.

Fourth quarter revenues were $1.56 billion, up almost 17 percent on the same time last year, while pre-tax profits increased 38 percent to $311 million. The increases come from a 10.7 percent rise in the volume of rental equipment and 4.1 percent in rental rates. Physical utilisation was 70.6 percent.

Total capital expenditure for the year was $1.8 billion with the average age of the rental fleet dropping from 45.2 months to 43 months. The company generated $544 million from sales of used equipment during the year.

For 2015 United expects to exceed $6 billion in revenues with an EBITDA of close to $3 billion, with full year utilisation reaching 69 percent with rates rising by around 3.5 percent. Capital expenditure is expected to be in the region of $1.7 billion with a further $500 million of disposals.

Vertikal Comment

The numbers with United Rentals are quite mind boggling, $5 billion is a sizeable company no matter how you look at it, but for a rental business it is simply staggering.

The company is clearly on a roll and set to continue its growth over the next few years. One has to think the time might be right to consider expansion overseas. Although the company does not seem to have any problem generating substantial growth from within its domestic market which is a far less risky proposition.

Another good start to the 2014 reporting season.