21.04.2011

United up 9.5%

United Rental has reported total revenues up 9.5 percent, at the same time its pre-tax loss was reduced to $27 million.

Total revenues were $523 million, of which rental revenues represented $434 million, up14.2 percent on the same period in 2010. The Pre-Tax loss of $27 million is almost a third of the $64 million the company lost in in the same period of 2010.

Physical utilisation improved to 62.4 percent -6.2 percent better than it was a year ago. Rental rates edged up by 4.2 percent on volumes up 12.8 percent. The company has set itself the target of achieving a further five percent rate rise for the full year. Capital expenditure – largely on new rental equipment –was $120 million, however the fleet continues to age, with the average age at the end of the quarter being 48.2 months, compared to 47.7 months at the start of the year.

United’s chief executive Michael Kneeland said: "We have started the year with a very solid performance that includes rate improvement in all operating regions and record first quarter time utilisation, as well as stronger gross margins on every major revenue stream. Once again we outpaced our end markets with significant rental revenue growth at a very early stage in the recovery. As demand for our services increases, we are focused on attaining the optimal balance of rate and utilisation to drive returns."

Vertikal Comment

Not a bad result from United, the company is certainly doing a long of things right and if it can keep on pushing it should continue to make progress. The challenge will come if financial institutions start relaxing their lending criteria, freeing up capital for smaller companies to invest in the expansion of their rental fleets.

In times of confusion, particularly in a transition year, many companies are nervous and only need the slightest excuse to withdraw into their shells. This can play into the hands of the larger players, who if they time it right will book orders with the various manufacturers to up the supply, causing other producers to bow out or make significant push for more market share.