RER 100 companies are busy these days. Non-residential work is reviving in most markets, housing is coming back, and oil and gas exploration and production is creating opportunities in dozens of states. Most rental companies are increasing their fleet, spending as much as 30 percent of their revenue on equipment. New branches are being opened. A few acquisitions are occurring. Revenues are increasing. The RER 100 is riding again.
Most RER 100 companies posted revenue increases in 2013. Those companies reporting revenues for 2012 and 2013 increase an average of more than 10 percent. The total rental revenue of the 100 companies was $15.4 billion, a 10.4-percent hike compared to 2012 numbersThe top 10 of the RER 100 showed an 11.2-percent increase year over year to $9.93 billion. The numbers are consistent and the majority of the companies on the list were close to those ballpark figures.
As usual there were a few exceptions in both directions. Not every company posted higher rental volume, and a few doubled or tripled the average. Although most rental companies say business has yet to return to the levels of the peak years of 2007 or 2008, in terms of volume most are surpassing those years. The total volume of the RER 100 this year is in fact considerably higher than it was during the “peak” years: The RER 100 totaled $13.8 billion in 2008 (covering 2007 volume) and $13.85 billion in 2007 (covering 2006 volume). It may not feel as busy now and profits might not be as good, but in fact rental volume has surpassed the peak years.
Most companies are predicting similar increases for 2014. Plans are being made to increase fleet and open new branches. Unlike three years ago, when rental companies were pulling in their horns, cutting expenses, reducing the size of their fleets, and closing branches, now the horses are back out of the barn and the reverse is taking place. Although many of the steps forward are cautious, nonetheless they are movements in the direction of growth and expansion.
The increases in revenue are consistent across the RER 100, from the top 10 to the 90s-100s tier as well as those in the “extra 10” we’ve charted, the “almost 100s.” And there are more of them out there. These companies are growing fast, with solid management and analytical software helping them chart their courses.
The RER 100 companies are becoming continually more creative, improving efficiencies with far smarter analytical tools and management sophistication. Generalists are branching out into new equipment areas, opening specialty divisions. Equipment is getting bigger. Aerials are getting taller. Profits are better for the most part. The energy markets have opened vast opportunities for dozens of rental companies able to work in those areas, and rental companies have adapted their inventories to serve those niches.
Everybody knows challenges lie ahead. Rental rates are getting better but not enough to overcome potential fuel cost hikes and the unavoidable upward spiral of original equipment costs spurred on by Tier 4.
There are many stories in the RER 100. We’ll let the listings tell them.
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