06.05.2013

Solid rise at H&E

Louisiana based crane and access sales and rental group H&E Equipment Services has reported a 22.3 percent increase in revenues for the first quarter.

Total revenues were $212.4 million, with increases in every sector. One of the strongest improvements was in new equipment sales which improved over 30 percent on last year. Rental also showed above average growth, thanks to a larger fleet and a 10.2 percent increase in rates compared to last year – utilisation however fell slightly in percentage terms due to the fleet additions.

Pre-tax profits wer up almost 21 percent to $6.95 million. The average age of the fleet was just 37.6 months.

Chief executive John Engquist said: “Our business is off to a solid start in 2013 as we continued to capitalise on improving market conditions, especially the high demand for rental equipment. As a result, our first quarter performance improved significantly from a year ago, with increases in revenue, operating income and EBITDA. Our rental business continued to experience healthy gains, with revenues increasing 26.4 percent on rate gains of 10.2 percent compared to a year ago. The distribution side of our business also performed well, as demonstrated by strong double digit revenue growth in both new and used equipment sales.”

“We believe the construction industry is in the early stages of a multi-year expansion cycle, and our outlook for 2013 remains positive. We expect continued fleet investment during the year based on current and expected demand levels. With our increasing exposure in the industrial sector, we believe we are positioned to capture additional market share, realize economies of scale and drive operational efficiencies throughout 2013.”

Vertikal Comment

A very solid first quarter performance from H&A with encouraging signs for the industry as a whole, given some softening seen in the market in the second half of 2012. H&E offers a wide range of construction equipment, following its acquisition of JW Burris in 2007, but remains very focussed on cranes, aerial lifts and telehandlers.

Rental rates no only showed a substantial increase on the year but were also more than two percent up on the quarter. The company is also expanding its rental fleet now both to reduce the average age and also add at what it sees as the bottom of a upward business cycle.