British industrial group Ashtead targets stars with Hollywood expansion plan

Ashtead Group PLC Updates

Ashtead, the UK group best known for supplying excavators, generators and lighting to construction sites, is gearing up for a breakthrough in the Hollywood film industry.

Brendan Horgan, Managing Director of the FTSE 100 Group, plans to expand its Canadian motion picture rental arm to Los Angeles and the United States, the world’s largest entertainment market, and the United Kingdom.

Ashtead, which operates as Sunbelt Rentals and is valued at £ 27 billion, owns the largest equipment rental company in Britain and the second in the United States.

It wants to expand its film equipment rental arm, William F White International, based in Canada, to take advantage of the pandemic success of streaming platforms such as Netflix, which have become big prize pools for film production groups.

Ashtead bought William F White, which leases special cameras, editing rigs and lighting equipment from film and television production companies, for £ 136million in 2019, as he sought to diversify out of construction.

After a setback in the first wave of the pandemic, an increase in investment in new shows by streaming services has helped William F White’s annual earnings grow.

The company, which is Canada’s largest national film and television rental company, is on track to hit C $ 200 million in revenue this year, up from C $ 120 million (US $ 94 million) at the time of the takeover.

“Netflix at Disney at CBS – they’re spinning to fill the voracious appetite for content. We don’t have any of these operations in the UK or the US, ”Horgan said. “We plan to expand into the US and UK. “

The UK film industry has grown in recent years, in part thanks to tax breaks, with production company spending on high-end television rising from £ 1.8bn in 2018-19 to £ 3.5bn in pounds sterling in 2020-2021, according to the British Film Institute. .

Amazon Studios announced last month the relocation of production of its The Lord of the Rings series from New Zealand to the UK, while the second season of the fantasy drama Auspiciouss will be shot exclusively in Scotland after a grueling international filming tour for the first.

It also reflects a boom in global content spending, which is expected to record another year of double-digit growth and reach $ 250 billion in 2021, according to figures from Purely Streamonomics.

Horgan estimates that if the division captured “a slice of the US market,” it would generate revenues in excess of $ 250 million. He added that cross-selling opportunities for equipment under his other businesses such as generators and industrial lighting would be significant.

The comments came as Ashtead raised its revenue forecast for the full year this week after construction activity rebounded sharply and live events made a choppy comeback from the Covid-19 closures. He expects 13-16% growth from the previous year’s revenue of £ 5bn, up from previous estimates of a 6-9% increase.

Supply chain pressures for equipment manufacturers such as Caterpillar and JCB also benefit Ashtead, as users turn to leasing when suppliers, dealers and distributors run out of stock and the Tight supply is increasing tariffs for its equipment, Horgan added.

Ashtead also provides equipment to Covid-19 test centers and areas affected by natural disasters, such as Hurricane Ida, where it provides lighting, generators and pumps for clean-up after storms or disaster.

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