Coates exits Indonesia and targets acquisitions

Scissors at one of Coates’ yards.

Seven Group Holdings, owner of Australian rental company Coates has said it will target growth through acquisitions and fleet and branch enhancement.

The company said it would target small-scale acquisitions, some of which will be funded by the previously unannounced sale of Coates Indonesia to Mitsubishi Corp in a $64.4 million (€38.7 million) deal in April.

In its report for the 2024 financial year, the company said it expects market opportunties in the form of a multi-year surge in road and rail infrastructure, government investment in social infrastructure, a ramp-up in industrial and warehousing investment, and strong growth in residential construction.

The company’s plans for growth come off the back of two acquisitions in 2024, which it described as fleet-focused purchases. The deals for GTH Equipment and Baxter Equipment increased its hire fleet by $83 million (€49 million) to $1.9 billion (€1.1 billion) on an original cost basis.

Meanwhile, the company posted rental revenues of AUS$1.1 billion (€680 million) for the 2024 financial year, up by 1.5% on 2023. Its EBIT profit increased by 8.8% to $326.7 million (€196 million).

It said that demand in site accommodation and material handling played a role in the increase, while the company also saw strong customer activity in western Australia and Queensland, with strong demand from customers in mining and oil and gas.

It described its total revenue of $1,142.3 million (€687 million) for the year as “relatively flat year-on-year”, reflecting one off product sales in the prior year.

The company also noted that the total revenue includes nine months of trading from Coates Indonesia prior to the divestment of the business as compared to 12 months of trading reflected in prior year revenue.

The company also invested $28 million (€16 million) in new low-emission equipment, which now represents 8% of its total fleet value.