Ashtead Group Plc, parent company of Sunbelt Rentals, said it has the tailwind to grow sales “aggressively” for several years as the U.S. market for rental equipment benefits from tight credit and steady growth.
“A slow market with difficult credit conditions accelerates our gain in market share and the switch to rental,” Chief Executive Officer Geoff Drabble, 53, said in an interview ahead of the company's announcement of results for the year ended April. “Low, steady growth is the perfect environment for us.”
The increased use of rental equipment by cash-strapped house builders and construction companies, coupled with the recent recovery in the U.S. housing market, has boosted Ashtead’s share price almost 12-fold since the start of June 2009. The U.S. economy grew 2.2 percent last year and may cool to grow 1.9 percent this year while annualized sales of new homes rose in April at the second-fastest pace in almost five years.
“Right now I think we are about six to nine months into that perfect two years where you get a little bit of recovery in the market and you get the structural change,” Drabble said. “We have always known our profit was going to grow and our revenue was going to grow. It has probably grown a little bit faster than we expected.”
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