Ashtead Group PLC update
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Ashtead, a British group known for providing excavators, generators and lighting equipment to construction sites, is planning a breakthrough in the Hollywood film business.
Brandon Hogan, CEO of the FTSE 100 Index Group, plans to expand its Canadian film equipment rental division to Los Angeles and the United States, the world’s largest entertainment market, as well as the United Kingdom.
Ashtead trades under the name of Sunbelt Rentals, valued at 27 billion pounds, and owns the largest equipment leasing business in the UK and the second largest equipment leasing business in the United States.
It hopes to expand its film equipment rental unit William F White International in Canada to take advantage of the success of streaming platforms such as Netflix in the pandemic, which have become a huge source of funding for film production groups.
Ashtead acquired William F White for £136 million in 2019. The company leases special cameras, array drilling rigs and lighting equipment to film and television production companies in an effort to diversify from the construction industry.
After suffering setbacks during the first wave of pandemics, streaming services’ heavy investment in new programming helped William F. White’s annual revenue increase.
The company is Canada’s largest national film and television equipment rental company, and this year’s revenue is expected to reach 200 million Canadian dollars, higher than 120 million Canadian dollars (94 million US dollars) at the time of the acquisition.
“From Netflix to Disney to CBS-they are all trying to satisfy people’s greedy appetite for content. We have zero business in the UK or the US,” Hogan said. “We plan to expand to the United States and the United Kingdom.”
According to the British Film Association, the British film industry has boomed in recent years, thanks in part to tax breaks, and production companies’ spending on high-end television increased from £1.8 billion in the 2018-19 fiscal year to £3.5 billion in the 2020-21 fiscal year. .
Amazon Studios announced last month that it is transferring its production Lord of the Rings Series from New Zealand to England, and the second season of fantasy drama good omenAfter the first arduous international filming trip, s will be filmed exclusively in Scotland.
Data from Purely Streamonomics shows that this also reflects the surge in global content spending, which is expected to record double-digit growth for another year and reach US$250 billion in 2021.
Horgan estimates that if the sector captures “a small portion of the US market,” it will generate more than $250 million in revenue. He added that cross-selling opportunities for equipment under other businesses such as generators and industrial lighting will be huge.
After a strong rebound in construction activity and on-site activity returning to normal from the Covid-19 shutdown, Ashtead raised its full-year revenue forecast this week. It expects revenue growth of 13-16% over the previous year’s 5 billion pounds, which is higher than the 6-9% previously estimated.
Supply chain pressures from equipment manufacturers such as Caterpillar and JCB also benefit Ashtead, because when suppliers, dealers and distributors are out of stock, users turn to leasing, and tight supply pushes up the price of its equipment, Horgan added.
Ashtead also provides equipment for Covid-19 testing centers and areas hit by natural disasters (such as Hurricane Ida), where it provides lighting, generators and pumps for cleanup after storms or disasters.