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François Rochon·SUNBELT RENTALS HLDGS IN GB SHRS
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Sunbelt Rentals Hldgs In Gb Shrs — Income Statement, Cash Flows & Balance Sheet

AI Overview

Is Sunbelt Rentals profitable?

Sunbelt Rentals grew revenue modestly, but profits declined as costs rose faster than the top line.

MetricFY2024FY2025FY2026Change (FY25→FY26)
Total revenues ($M)$10,859$10,791$11,154+3.4%
Gross profit ($M)$4,477$4,320$4,290-0.7%
Gross margin41.2%40.0%38.5%-1.5 pts
Net income ($M)$1,572$1,553$1,325-14.7%
Net margin14.5%14.4%11.9%-2.5 pts

Revenue edged higher, but costs — particularly staffing and operating expenses — climbed more quickly, squeezing margins at every level. Net income fell meaningfully year-over-year, partly due to a UK restructuring charge of $44 million and elevated SG&A, which jumped from $1.39B to $1.65B.

A one-time UK restructuring distorts the profit picture somewhat, but underlying margins are genuinely compressing.

ItemFY2026
Restructuring charges ($M)$44
SG&A ($M)$1,651
SG&A as % of revenue14.8%
Prior year SG&A as % of revenue12.8%

Stripping out restructuring costs would recover some of the apparent profit decline, but SG&A was elevated even before those charges — suggesting ongoing cost pressure rather than a purely one-off issue.

Where does Sunbelt Rentals' revenue come from?

North America dominates, with the Specialty segment growing fastest.

SegmentFY2025 Revenue ($M)FY2026 Revenue ($M)Change
NA – General Tool$6,397$6,507+1.7%
NA – Specialty$3,487$3,715+6.5%
United Kingdom$907$932+2.8%

The Specialty segment — covering Power & HVAC, Scaffolding, Pumps, and Film & TV — is the clear growth engine, outpacing General Tool by a wide margin. The UK, despite restructuring efforts, still grew slightly and contributes roughly one-twelfth of total revenue.

Profitability is heavily skewed toward North America; the UK segment is barely breaking even.

SegmentFY2025 Adj. Operating Profit ($M)FY2026 Adj. Operating Profit ($M)Change
NA – General Tool$2,093$1,932-7.7%
NA – Specialty$1,138$1,176+3.3%
United Kingdom$73$59-19.2%

The UK segment's contribution shrank sharply, and the filing explicitly flags that UK goodwill could be impaired if conditions worsen further — worth watching.

Does Sunbelt Rentals generate cash?

Sunbelt Rentals is a strong cash generator, though operating cash flow dipped slightly.

MetricFY2024FY2025FY2026Change (FY25→FY26)
Operating cash flow ($M)$3,664$3,844$3,784-1.6%
Capex — rental equipment ($M)$3,759$2,251$1,842-18.2%
Free cash flow (approx.) ($M)-$95$1,593$1,942+21.9%

The company pulled back significantly on fleet investment this year, which boosted free cash flow (operating cash minus equipment purchases) even as net income fell. This signals a deliberate shift from aggressive fleet expansion to harvesting returns from existing assets.

Sunbelt returned substantial capital to shareholders through buybacks and dividends.

Return of CapitalFY2024FY2025FY2026
Dividends paid ($M)$436$544$464
Share repurchases ($M)$108$437$1,426
Total ($M)$544$981$1,890

The scale of buybacks accelerated dramatically, funded in part by the reduction in capital spending — a deliberate reallocation rather than a sign of financial stress.

How strong is Sunbelt Rentals' balance sheet?

Debt is substantial but manageable, with no near-term maturity cliff beyond a single bond.

MetricFY2025FY2026Change
Total debt ($M)$7,500$7,583+1.1%
Short-term debt ($M)$0$550
Long-term debt ($M)$7,500$7,033-6.2%
ABL facility available ($M)~$3,616~$3,540-2.1%

The $550M short-term balance is a bond maturing in August 2026 — routine, and well within the company's liquidity. The revolving credit facility has over $3.5B of headroom, giving Sunbelt significant financial flexibility.

The asset base is large and largely composed of depreciating rental equipment — a feature of the industry.

AssetFY2025 ($M)FY2026 ($M)Change
Rental equipment, net ($M)$11,340$11,224-1.0%
Goodwill ($M)$3,348$3,476+3.8%
Total assets ($M)$21,970$22,268+1.4%

Net rental equipment — the core productive asset — edged down as the company slowed new purchases, while goodwill grew modestly from bolt-on acquisitions. The UK goodwill balance warrants attention given the restructuring underway there.