06.11.2005

United Rentals up 15% YTD

United rentals has announced nine month, year to date revenues of $2.6 billion a 15 percent increase on the same period in 2004. The company is also predicting that net earnings for the year will be higher than expected in the region of $165 to $175 million.

Free cash flow during the nine months was a negative $76 million compared to a positive free cash flow of $216 million for the same period in 2004.

The company said the reason for this was increased working capital and higher expenditure on new equipment, it expects to end the year, with a positive cash flow of around $100 million.

A total of $677 million was spent on new rental equipment in the first nine months of 2005 compared with $465 million for the same period last year. United expect its new equipment spend for the full year, to total around $850 million.

Rental rates were up five percent while financial utilisation increased to 72.7 percent.

Wayland Hicks, chief executive officer, said, "Our strong performance this quarter reflects continuing success in improving rental rates, expanding our rental fleet, increasing time utilisation and driving contractor supplies revenue growth. Dollar utilisation of 72.7% in the third quarter was the highest we have ever achieved.

"To capitalise on future growth opportunities, we're opening new branches in attractive markets. We expect to open 35 new branches in 2005, of which 30 are already operating. These new branches increase our presence in existing markets and expand our product offerings and footprint into new markets.

"In addition, we are growing our sales of contractor supplies at a rapid pace. These sales were up 46% compared with last year's third quarter, and we now have completed our plan to open nine regional distribution centers throughout the United States and Canada to support future growth.

In terms of the ongoing SEC enquiry it said that no final conclusions have been reached. However, based on information available to date, the special committee, set up by the company to look at its prior years results, believes that the accounting for a number of sale and leaseback transactions in 2000, 2001 and 2002, was incorrect and appears to have been improper.

The company expects to restate its results for applicable periods in relation to these transactions, and will take appropriate action with respect to anyone identified by the special committee as responsible for improper conduct.