Ashtead Group PLC Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Lush Mahendrarajah - JPMorgan - Analyst : Hi. morning guys, I've got three questions, if that's okay. And I can say a lot of time if that helps. The first is just looking at slide 14 and that fleet on rent chart and sort of the green line of '24, '25 pulling away from '23, '24 in February. I guess, can you just give us color what's happening there? What was February trading like?And I guess was there any benefit from sort of the fires in California in there as well? Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Go ahead and fire away, Lush, give us all three.

Question: Lush Mahendrarajah - JPMorgan - Analyst : And sorry, can I just check just in that February number there isn't, I know you said it in relation to CapEx, but is there any impact from sort of hurricanes or the California fire is in the sort of February number?

Question: Lush Mahendrarajah - JPMorgan - Analyst : Okay. Brilliant. Thank you very much guys. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Thanks, Lush.

Question: Rob Wertheimer - Melius Research - Analyst : Hi. The comment you made on just being able to sort of fill the greenfield sites with some of the fleet you have in excess is interesting. I know this is a little bit of an unfair question, but do you have room to continue that for a while. And then more just thinking about growth in an industry where the smaller end has slowed, I'm not sure how you think tactically about greenfield versus acquisition growth, if that's even possible. I wonder if it's likely that we see a shift towards acquisition as some of your smaller competitors have slowed down? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:00PM, AHT.L - Q3 2025 Ashtead Group PLC Earnings Call Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Yes. Thanks, Rob. The, we do think as we continue to fuel these greenfields, there's two ways. One, it's some of the latent capacity Alex mentioned just in the marketplace where we open these new locations. And if you really think about it, it points to, obviously, when we do add a greenfield, that's, those are market share gains. And as I mentioned, of the 400 locations over the course of 3.0, which was between greenfields and bolt-ons, look at the strength and the growth, 30% year-on-year and also progressing the margins, as I had said. But the other way that we will fuel greenfields prospectively during this sort of environment is with what our replacement CapEx plans will be next year. So we'll do that very last minute test. If we have telehandlers to replace in a metropolitan area where we're also opening a greenfield and in one portion of the town or for that matter, another town or another metro area altogether, We can divert that replacement CapEx where we find that there isn't the need in the Q2 or Q3, it may be and also use that to fuel the greenfield openings. Your questions are really good when it comes to greenfield bolt-on in a market environment like this, obviously, we have been quite disciplined, as you know, when it comes to bolt-ons and holding our line from what we're valuing these at, which takes a bit of time. I do think you're going to see that turn in the quarters to come, and you're going to see more of our bolt-on engine revving up. The environment is interesting right now in terms of who there are buyers out there for some of these businesses, and we like our positioning with that, but we wouldn't completely put the greenfield program on ice. As we always do, we'll assess where we want to be geographically, which we have that road map for throughout 4.0. And we'll look to see what sort of independents could be there to replace that greenfield. But certainly, that alleviates to some degree, some pressure when it comes to the amount of fleet overall that's put into a market. Hope that answers your question.

Question: Rob Wertheimer - Melius Research - Analyst : Got it. Thanks.

Question: Suhasini Varanasi - Goldman Sachs - Analyst : Hi, good morning. Thank you for taking my questions. I have three, please. The first one is on the US organic rental revenue growth seems like it slowed a little bit in this quarter, especially when adjusting for the hurricane activity. Can you maybe discuss what change Q-on-Q, whether it was local commercial construction or the mega projects? And can you also share latest trends in February? And the second one is on tariffs, please. Do you see the risk of tariffs affecting cost of construction and therefore, the ability of projects to start and finish on time on budget in the US? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:00PM, AHT.L - Q3 2025 Ashtead Group PLC Earnings Call And the third one is, can you maybe on larger M&A transactions in this space. Can you just remind us your thoughts on doing larger deals versus smaller bolt-ons? Thank you. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Sure. When it comes to the quarter, I mean, you're right, clearly, we can see between Q2 and Q3. There was one part of that, of course, being a heavier, as Alex had mentioned, hurricane impact in the quarter. But I think really when it comes to end markets, it is what we saw in December. So no real change there in terms of that local piece. But I want to expand on that a bit. When you think about our business and our business model as it relates to a very or a highly diversified end market. We do lean as an organization compared to some others out there more heavily on that SME overall end market. And we do that unapologetically. In other words, we like that mix through the cycle. I've said it quite clearly that market will rebound. And when it does, we are poised remarkably well to take advantage of that. And that is really the heartbeat of America in so many ways, that SME network, which we are positioned in order to progress. One of the questions was on February trading overall, Alex?

Question: Suhasini Varanasi - Goldman Sachs - Analyst : Thank you. That's very clear. Just one quick follow-up, just to clarify. When you mentioned February trading was flattish year-over-year. Was that the organic rental number that you were talking about in the US?

Question: Suhasini Varanasi - Goldman Sachs - Analyst : Thank you.

Question: Katie Fleischer - KeyBanc Capital Markets - Analyst : Hey, good morning guys. I know the visibility is still relatively limited, but just curious what your thoughts on are where we are in the rental cycle and what you're looking for to really give you that confidence that a demand inflection is coming within those local accounts? Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Good morning, Katie. I think when you look at it, there are a few things to consider where we are in the rental cycle. Of course, we will, in June, in line with, alongside of our full year results, as Alex has mentioned, give guidance in terms of revenue and CapEx. And that second piece is very important when it comes to CapEx. And what we've seen in the industry has been a very disciplined CapEx approach. And that's a key ingredient as we're navigating this transitory state from a local end market. What we're seeing in local end markets, as I would have indicated in my opening remarks, as I mentioned, projects entering planning. So planning is not to be confused with starting. All projects and enter planning won't necessarily progress to start. The vast majority will. And what that shows is demand. And the reason why I highlighted those 33 projects in January that were over $100 million was how many of them 27, to be exact were below that mega project level. And that's precisely what we're talking about when it comes to local ordinary run-of-the-mill REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:00PM, AHT.L - Q3 2025 Ashtead Group PLC Earnings Call nonres construction. So that is one of the breadcrumbs that gives us the overall confidence. And furthermore, just this sort of lag that we've seen and people really have to get their minds around the real engine behind that local nonres construction. And it's these local regional developers. It's not the contractors themselves who are deciding should I build or not build. They're all eager and ready to do so. It's just a matter of those developers sensing some level of stability from an interest rate environment. So as Alex has said, in no way, shape or form are we calling when we think we will see that as time progresses, we will. The key to understanding is where we are and where the industry is positioned, which is healthy. We're in a position to be able to early on as that inevitability happens, take advantage of those opportunities with our existing latent capacity. And therefore, from a CapEx standpoint, the important discipline measure there you don't start to invest that growth CapEx until such a time when you see actually that market turning. So I think overall, look, we're in a great position. The industry structurally is in such a good position in order to navigate little patches like this. And as I've said, certainly, we lean in that SME space. But let's not forget how well we're doing as we continue to take more share. I mentioned those top customers, and that's a mix of, of course, mega project wins, but also just great contract wins and taking more share of wallet with these larger customers as we are so well positioned to do.

Question: Katie Fleischer - KeyBanc Capital Markets - Analyst : Okay, thanks. I'll pass it on.

Question: Anneliese Vermeulen - Morgan Stanley - Analyst : Hi, good morning, Brandon. Good morning, Alex. just I wanted to sort of revisit your Sunbelt 4.0 plan. I appreciate there are different components to the plan. But thinking specifically about your rental revenue growth, the CAGR of, I think, 6% to 9% clearly, growth is below that this year if we assume those softer end markets continue into the first half, I'm just wondering risk there is to that. If you look over the total five year plan, rates, I think, have stayed higher for longer than perhaps we anticipated when you set out that plan almost a year ago and a softer local construction market piece as well. So I'm just wondering how you're thinking about that and how confident you are in growth in years three, four five of the plan, accelerating to compensate for a slower start, shall we say? And then just two quick ones. You mentioned in the opening remarks that rates continue to progress. So just to clarify, you're still seeing positive

Question: Anneliese Vermeulen - Morgan Stanley - Analyst : Thank you guys. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Thank you (inaudible).

Question: Rory McKenzie - UBS - Analyst : Hello, it's Rory here. Two questions, please. Firstly, good to hear rental rates are still progressing because some of the external data stressed looks quite flattish. Are there any regional differences within that rates picture? And anything you can say about current tenders, which are going out there into the market on rate? And then secondly, in terms of CapEx plans, have you still done the first round of budget forecasting internally at this point? And I guess, it's not giving the first look CapEx guidance anymore, just a change in external communication? Or are you also changing your internal processes given some of the volatility you've seen over the past couple of years? Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Thanks, Rory. I'll take the first and turn the second over to Alex. Rates really, there is not much change throughout our regions, throughout our specialty business lines. And the key to that really is, when you think back to what I mentioned just a minute ago around our internal dynamic pricing systems. So those systems are driving the results and driving the goalpost, so to speak, that our sellers can work within. And when it comes to tenders that are going on, which there are a lot today, specifically around these mega projects, which, of course, are healthier than the average quote that happens on a Thursday afternoon for a Friday morning rental transaction, and embedded in all of those and then, of course, discussed with our customers are rate increases. And those rate increases with those customers from sort of project to project, which, frankly, when you talk to them about, they understand and furthermore, what they really care about. They care about that mantra you've heard us talk about over and over, availability, reliability and ease. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:00PM, AHT.L - Q3 2025 Ashtead Group PLC Earnings Call These customers recognize so much the uptime and the right product for the application and the right team that's actually engaged in these projects, that's the difference maker when it comes to them successfully completing their project on budget and successfully completing their project on time. So frankly, as you go through those conversations, it may, it's not the hurdle, perhaps you may think it is. Of course, rate is a consideration. However, contract after contract, renewal after renewal, we continue to see rates progress.

Question: Rory McKenzie - UBS - Analyst : Thank you. It makes sense. I guess I'm just a quite of habits. I'm missing that first look, but it makes sense Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc (Laughter) No, I see. Very good. Thanks for the questions.

Question: Neil Tyler - Redburn Atlantic - Analyst : Yeah, good morning. Thank you, morning, Brendon Alex, Following on from that previous question, I guess, in terms of capital allocation, can you frame for us either in terms of dollar or time, your thoughts on where you are currently running relative to where it's realistic to get to? I'm thinking, obviously, there's been some quite significant fluctuations over the last few years. But one of the lessons you learned, I suppose, to the tighter period of 2021 in terms of how to run the fleet more efficiently. So at what point in maybe dollar us, should we start thinking about the fleet needing to keep pace with revenue? So sort of in basis point terms sort of where we are? And then the second question I had. In the context of the larger-scale M&A that's going on, how are you, are your branches sort of located positioned to be able to take advantage from any revenue dyssynergy that might occur in the HERC H&E transaction? Thank you. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Yes. Thanks, Neil. Look, first of all, when it comes to your question around utilization, I think there are a couple of things to consider. One, we don't quote time utilization nor will we. We've demonstrated, or we've mentioned that we have some latent capacity, and that comes from a few things. You pointed out the lessons learned as the, as we went through and the entire industry went through such a prolonged period of supply constraints, coupled with a highly active and demanding high demand end market. And therefore, we realized new highs. And one could set those aside and say that they were quite exceptional or anomalous given the extraordinary conditions that we face. But at the same time, we achieved that, and we delivered that. It was probably a bit too high when it comes to really just think of units in the yard or availability to say yes, so you probably want to just be a bit lower than that. But furthermore, our overall density, how we've advanced our clusters over the years and how our specialty businesses have grown so much, whereas we have the ability to actually run at higher time utilization levels. So as we're going through this budget process and the business lines are looking through where we are from a utilization standpoint, at a class level, at a total business line, et cetera. We know that there is opportunity to continue to advance that, and that's what we'll do over the years as you get larger. It's just the law of large numbers. What you really need to pay attention to will be when we actually are in a year where we have a CapEx guidance early on and then all of a sudden, we're halfway through the year, and we dial up that CapEx guidance. That will be the signal that says we see utilization levels remarkably strong and opportunities in the end markets where we are positioned to seize that. To your second question around the HERC and H&E deal, we're not going to quote anything in terms of proximity analysis, et cetera. You would just expect our business and our people out there to know what's happening there. But all we're doing is plain simple as we always do, positioning ourselves obsessed with our customer success and being there for any needs that they may have. But these are professional organizations integrating these businesses and they'll do just fine as we will when we continue to focus on our customers.

Question: Allen Wells - Jefferies - Analyst : Hi gentlemen. A couple from me, please. If I just maybe look at the gen rent business and that minus 2% you posted in Q3. Could you maybe provide a little bit of comment specifically about gen rent and the pricing versus kind of volume discussions there? I mean assuming the general comments you made about pricing being positive. I guess it implies gen rent may be down minus 3% to 5%, and that feels a little bit weaker than some of at least the listed peers that we see more regularly. So maybe can you talk a little bit about what's driving the underperformance? I kind of hear your comments on SME focus and that feels very relevant to maybe a URI, but maybe less so than some of the other larger rental names that would maybe be still heavily focused on that market. So I'm just trying to understand what's going on there. And then also maybe just mindful in the context of the 8% rental growth that you put in your market slides as well, which, again, if I'm looking at a big chunk of that would be gen rent if you're delivering, it seems like we're delivering slightly below that. So that's my first question. Thank you. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Yes. Thanks, Allen. I mean, the gen rent business, I mean you put together some of the parts. Yes, there is rate progression there in the quarter as there has been through the year. We would expect that to continue. So, of course, you add that to a bit, and you have a bit less volume there as well. Careful about the listed peers and the exposure there. We know the environment quite well, and we know the listed peers in terms of where they lean and what their legacy sort of customer composition is and our composition is a bit more in that environment. As I've said, all part and parcel of our clustered market strategy. And we are doing great when it comes to taking share in the areas that are more flush with opportunity and work that's out there. You mentioned other rental names that are out there not seeing that. I don't think, I'd have to actually disagree with you there. And those that do have a bit more concentration in the areas that we're talking about are seeing things that are highly similar. On that line, you're quoting, which is really the industry forecast and reporting. As we have consistently said, they're very good at looking back not quite as good at looking forward, and I think you'll see some of those revised. I mean, if you think about who the reported peers are on an organic growth basis and on a like-for-like tape measure, i.e., the year ending December, I think you're seeing these being during this time, which is really, in a way, a hallmark of a structurally progressed industry where you see some more likeness during periods of time like this and that's exactly what we're seeing. So look, we are happy with the levels of revenue at this stage and poised, as we've said throughout or consistently through the call when it comes to being prepared for the rebound. And further, as Alex has added during Q&A here, the growth of our specialty business and us taking share and continuing to do very well when it comes to mega projects at our largest customers.

Question: Allen Wells - Jefferies - Analyst : Alright, thank you very much.

Question: Karl Green - RBC - Analyst : Thanks very much. Good morning. Yes, let me follow-up from Allen's question on GP. I mean, if you could switch gears to specialty. Again, looking at the Q3 performance specifically, you had a reasonably soft comp last year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:00PM, AHT.L - Q3 2025 Ashtead Group PLC Earnings Call You have the benefit this year of some of the hurricane response work. So I guess the question is ex the hurricane response work, you think a bit of a slowdown in some of the MRO-type work within specialty or what else would explain that slight dip in terms of the trend performance versus a good first half of the fiscal year? That's the first question. The second question possibly should be directly to the Dodge guys rather than you, but it'd be good to get your perspective just in terms of that strong year-on-year performance in the DMI, which historically has been a very good lead indicator with the 12-month lag for activity on the ground. Do you think in terms of the composition of projects which are being reflected in the acceleration in the DMI, the 12-month lag actually potentially extend a bit. So it could be a little bit more of a gap before we start seeing that come through on your rental volumes and potential CapEx budget impact as well? Thank you. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Yes. I'll take the second first. That's why when we cover that real step change in DMI making the note that it was less mega project leaning than what we've seen in previous periods. So I don't think that really would, I wouldn't translate that into taking longer because what we've certainly seen in terms of projects moving right rather than pulling forward is in that mega project space. When you look at mega projects overall and you look at the the planning and the start we're seeing more in that data center space. I mean quite rich in data centers, but these are data centers of old, these are data centers that are $10 billion plus. And I think when you contrast that with, say, semiconductor or chip fabs, there's just a more seasoned and experienced progressing to start there. So these projects are better understood that, of course, semiconductors being built in the US, which, of course, hasn't happened in a long, long time. So I think that's actually quite positive. And then again, as I said, in terms of mix, some of those smaller, I say smaller, between 100 and just under $400 million projects that there's, when you look at what that makeup was of those 27 projects being as broad as they were ranging from lodging to hospital, et cetera. Those are going to, those should progress to start when they want to in more accordance with the time line. When it comes to specialty, again, this is a business that we've set over and over and we've demonstrated has a long runway for ongoing growth, which is both structural and it's also part of the overall breadth of products and services that we can offer our customers. It doesn't mean that the line in terms of growth is always linear. We don't anticipate, as we would have said with 4.0 over the course of 3.0 of the specialty business effectively doubled in three years' time. And we were quite clear that we didn't expect that sort of CAGR over the course of 4.0. There will always be some tie there to sort of overall economic conditions when it comes to some aspects of that, FM, et cetera. But when we look at some of our wins in terms of the component parts of our business that will service those, we see those as being very broad. There's a nice mix of FM, there's a nice mix of MRO from an industrial standpoint that, of course, will absorb some of our specialty products. But overall, we will see when it comes to going through the budget process in terms of what the specialty business is shaping up as. But we'd expect that to be a business that grows more so than the general tool business in the period to come.

Question: Karl Green - RBC - Analyst : Okay, thanks. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Thanks, Karl.

Question: Carol Raynsford - Bernberg - Analyst : Just one quick one left for me, please. On the kind of the guidance downgrade, I just wanted to understand if there are any particular accounts that have slowed to cause you to downgrade growth there? Or is it a broader softness of demand? And so do you expect that softness to be temporary or structurally lower spend from film and TV studios and the streaming platforms going forward? Thank you.

Question: Carol Raynsford - Bernberg - Analyst : Yeah, that's very helpful. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 12:00PM, AHT.L - Q3 2025 Ashtead Group PLC Earnings Call Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Thank you.

Question: James Rose - Barclays - Analyst : Hi there. I've got one more on the cost side of things. So in the US, EBITDA ex equipment gains has been growing ahead of rental revenue all fiscal year. How have you managed to achieve that? Can you carry on doing that going into Q4 and maybe the first half of '26? And what is the cost inflation profile you are experiencing right now? Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc James, thanks for the question. This is core to our actual component number three, which is performance. And if you think about the what we put out there in terms of our playbook to progress that 3 to 5 points over the course of our five year plan, Sunbelt 4.0, there were three. Number one, leveraging SG&A. We invested in the SG&A of our organization during our explosive growth of 3.0 and over time, SG&A will be a lesser percent of our revenue, therefore, driving margin progression. The second one was the progression of the 401 locations that we opened or added over 3.0. And, of course, we've talked about that in terms of not just revenue growth, but also margin progression as those businesses begin to look more like our legacy locations. And then finally is really putting in place, not just from a technology standpoint, but also extracting the value of our density gains over the course of our growth or over 3.0 and therefore, further improving our margins. So what we're seeing, as Alex would have covered in his prepared remarks is the discipline in the organization, recognizing what's going on from an end market standpoint. I mean if you think about it from an overall head count standpoint, which, of course, is in the press release, there's really three buckets there. One, of course, is going to be the E&D year-on-year, which is roughly one-third of that delta. The second is going to be our efforts around G&A. As some of these projects take, for instance, in technology are fully implemented. You don't need the level of developers that you had before. And this is, these are developers who would have come on board, recognizing that it's a couple of year plan and then they go on to find their next. And then the third bucket is going to be really just extracting the benefits as we put in place our market logistics operations, our market field dispatch operations whereas we can leverage really the resources that we have and do it in a more efficient manner.

Question: Tom Burton - BNP Paribas - Analyst : Thanks. Yeah, hi guys. And sorry, I was cut off, so apologies if to repeat anything A few from me. First one is just trying to figure out the kind of true underlying rental revenue performance in Q3, if I strip out the hurricane because I think we said at Q2, I think it was a comment it was $55 million to $60 million and you've now said $90 million to $100 million for the first nine months. So call it the $30 million then in Q3, it sounds like it was a 3%tailwinds to. (multiple speakers).

Question: Tom Burton - BNP Paribas - Analyst : Okay. Perfect. So acting that out, I guess, rental earning revenue down 1% in Q3. The second one is trying to, I guess, reconcile that with the earlier question, slide 14, those sort of lines for fleet on rent. If fleet on rent was up in February, and the exit rate was sort of flattish. Help me understand kind of how that was possible with rental rates sort of flattish? I'm just trying to make sense of that and sort of appreciate you want to be too granular about the most recent rental rate, but just trying to get a flavor for what's going on there. And then the last one is around mega projects. I know it's been discussed a few times, but just in an industry where I guess, overall replenishment activity and utilization is under pressure and mega is kind of the one area of growth. Just thinking what you're seeing in terms of incremental kind of competitiveness, pricing and megaprojects. And specifically, with the tie-up of two of the major listed players or bigger or big listed players, at least in the industry. I just wonder what that means from a competitiveness of maybe a larger and more relevant actor now the mega project arena? Thank you.

Question: Tom Burton - BNP Paribas - Analyst : Yes, that's correct. The sort of pricing competitiveness of mega projects, more generally and then the specific one regarding H&E and HERC. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Yes. Look, first of all, mega projects is an area of good opportunity and great growth. It's not the only. We see many other areas of opportunity. Our specialty business, our greenfields, all the things that we've talked about throughout the call today. What do you see there for these mega projects, as I would have said earlier, it may have been when you're off the line. The customers that we're engaged with are the customers that our counterparts are engaged with. What they're looking for is a successful rental operation, a successful safety operation, a successful, a provider who is successful in providing a very, very broad range of products and services to these projects in order for them to successfully to deliver on what their job is. So although pricing is part of that, let's not confuse things by saying pricing is first and foremost in this. As we said earlier on the call, from contract when the contract win, we can progress rates on these projects. And look, first of all, there's no transaction that's even done yet. So let's get past the actual closing and then get through the integration, et cetera. There are few in the industry, whether it's before or after the closing of that acquisition, who are capable of delivering what these project demands are, which are quite rigorous. So our positioning remains significantly robust, and we will continue to take outsized share in the mega project landscape.