19.04.2018

Rapid growth plan for Sunbelt

Ashtead will host an investors meeting in New York later today at which it will present plans to expand its Sunbelt Rentals business in North America by 50 percent by 2021.

The meeting will include a visit to Sunbelt’s aerial lift location on Long Island, which it acquired with the purchase of Pride Equipment last April. The visit is intended to show how Sunbelt integrates such bolt on acquisitions.

Ashtead also announced that trading in the last quarter - the fourth quarter of its financial year - continued the trend of the first three quarters. The brief statement said: “The Group has continued to perform well in the fourth quarter of the current financial year and we expect full year results to be in line with our expectations.”

Vertikal Comment

Increasing the ‘footprint’ of a company of Sunbelt’s size by 50 percent in three years is certainly very possible and even likely. However the danger with setting such a target in such a public manner carries its own risks. We only need reflect on Ron Defeo’s ‘$10 billion by 2010’ plan or in politics the past two UK Conservative governments commitment to reduce immigration to tens of thousands within its lifetime.

The danger is that all the focus goes on achieving the given growth target by the cut-off date, leading to unwise acquisitions or other policies that may help achieve that target but not be good for the company’s long-term health.

Hopefully this will not be the case for Sunbelt which has been doing very well without such a public target.