15.08.2005

United sales rise 15 percent

United Rentals, the world’s largest rental company, and the largest aerial lift fleet owner, has announced its preliminary results for the first half of 2005.

Total revenues in the first six month rose by 14.6 percent to $1.6 billion, while same store sales were up by 11.2 percent. Rental rates firmed by 7.1 percent.

Purchases of rental equipment in the first half totaled $482 million compared with $322 million in 2004. Free cash flow was a minus $21 million compared with $110 million in 2004. The decline was largely the result of the $160 million increase in rental fleet investment.

The size of the rental fleet, as measured by the original equipment cost, was $3.9 billion with an average age of 39 months, compared with $3.7 billion and 40 months at year-end 2004.

As previously announced, the company has delayed reporting its final results for 2004 and will also hold off on finalising its interim numbers for 2005, until the SEC investigation is complete and 2004 has been audited and closed. Until then the numbers above are preliminary.

Wayland Hicks, chief executive officer, said, "Our strong performance this quarter reflects our success in continuing to improve rental rates, while at the same time expanding our rental fleet and increasing time utilisation.

"To drive future growth, we are opening new branches in attractive markets. We expect to open 30 to 35 new branches in 2005, including the 18 we've already opened. These branches will increase our presence in existing markets and expand our footprint into new areas.

"The significant investment we are making in our branch network and our rental fleet should allow us to capitalize on the continued improvement in private non-residential construction spending. First half spending rose 5.9% year-over-year according to Department of Commerce data."

Hicks concluded, "We are working diligently to finalise our results as soon as possible. In the meantime, our organisation is continuing to focus on providing superior customer service and growing the business. For the full year 2005, we are on track to achieve total revenues of $3.4 billion, diluted earnings per share of $1.60 to $1.70 and free cash flow of at least $200 million."

For details on the SEC enquiry and restatement of prior years results see Vertikal.net July 15th president and CFO, John Milne was given 30 days to respond to main board directors questions about the reporting discrepancies, that period expired yesterday.