Referencing slide three to specifically recognize their leadership the health and safety of our people, our customers, and the members of the communities that we serve. Your commitment and efforts resulted in a fiscal year with a total recordable incident rate of 0.65 and a lost time rate of 0.1. Both of these metrics represent record performance in frequency and severity. This is all achieved through the team's collective and ongoing prog progress of our Engage for Life program, which is central to the Sunbelt culture. Part of this progression and importantly keeping our guards up against complacency, was the holding of our thirteenth annual safety week. Throughout which every single branch, every day, week of May 12, held engaging sessions with all of our team members introducing and reinforcing practices and habits, of a world class safety organization. So to the team, thank you. Thank you for your efforts to date and your ongoing commitment. To Engage For Life. Turning now to the highlights for the year. On slide four. We delivered strong performance in the year with group and North America rental revenues up 4%, was consistent with the guidance that we gave in December. These rental revenues and strong fall through delivered group EBITDA growth of percent to $5,000,000,000.

PBT of 2,100,000,000.0, and earnings per share of $3.70. These are record rental revenues and EBITDA for the year, with group EBITDA also progressing from a margin standpoint to 47%. From a capital allocation standpoint and in accordance with our Sunbelt Ford Auto priorities, we invested 2,400,000,000.0 in CapEx. This fueled existing location fleet needs and greenfield openings, Despite this level of investment, we delivered near record free cash flow of 1,800,000,000.0. This fueled for us record returns to shareholders of 886,000,000, through dividends paid in the year of 544,000,000 and share buybacks of 342,000,000. Our current 1,500,000,000.0 buyback program which as you know, was initiated just in December, we fully intend to complete the balance in the current year. This year's results were achieved as we executed our plans to gain from the clear and ongoing structural momentum in our business and our industry and our ever strong positioning within it. Such as gaining share among large strategic customers across many construction and nonconstruction market segments. Including the exciting mega projects arena, which continues to expand in this era of deglobalization technology related construction, infrastructure. This also came from the rapid growth of our newly opened three dot o locations.

And the everyday winning of new customers gaining market share through new customers who seek solutions through our broad range of general and specialist products and services. I'll give some added color on these points in just a moment. This was a year of execution and investment. In the ongoing improvement in our business, while capturing the available growth from the current market conditions and positioning us for even more growth and success in the future. This leads me nicely into an update on our four dot o progress in the year, and we'll begin that on slide six. We launched Sunbelt four point o at our powerhouse event in April of twenty four.

And since then, our team has been laser focused on advancing each of the five actual components, which you know as customer, growth, performance, sustainability, and investment. Over the next few slides, I'll highlight some of the successes we have delivered in the first year and the play plans to progress to deliver even more. Starting with customer and growth on slide seven. Our customer obsession journey is well underway. During the year, we introduced enhanced training programs touching every one of our team members recently launched a new customer obsession metric to provide real time customer feedback to our team members. Illustrating our customer obsession and growth are the 42,000 new customers added in the year on top of the 118,000 new customers added during three dot o. In total, these market share gains these customers generated 1,900,000,000.0 of rental revenue growth in the year. Contributing to these market share gains and ongoing growth is our ability to leverage our expanded network of locations and density to further advance the cross selling prowess between our general tool and specialty businesses. We successfully added 61 locations throughout North in the year, with a nice mix of general tool and specialty businesses.

These are helping to drive growth and advance our clustered market strategy by delivering added convenience, depth, and breadth of product and solutions. Importantly, growth in the year continued to be supported by rate progression, as we are able to demonstrate to our customers. The value of our extensive range of products services, and value add solutions. Moving to performance on slide eight. Our performance actual component is designed to leverage our platform. Optimize our processes, and energize our technology. All with the output of improved customer experience, and operational efficiencies. Contributing to margin improvement over the course of Sunbelt Ford auto. There were three main areas of focus you'll remember that were embedded in this actionable component. First, leveraging our SG and A through extracting the value from the investments we made during three dot o. In the year, we delivered efficiencies allowing us to reduce g and a cost while still delivering expansion and growth. Second is the growth and maturation of the 401 locations. These locations which were opened or added during the three years of SubVault three dot o. These locations have grown to over 1,900,000,000.0 in revenue. Which is 19% higher than last year and 900,000,000 in EBITDA, while also progressing margin by 200 ace 80 basis points in the year.

These locations are on average only thirty three months young so I think we can agree there's ample runway for growth incumbent in these 101 new locations. There's a detailed scorecard I'll think you'll want to check out. Of this new cohort. In appendix slide 43. Thirdly, operational excellence, is built to leverage our scale and leading technology platforms across our network of locations and cluster markets. Among the areas of opportunity are logistics, and repair and maintenance activities, which is worthy of a little bit more on slide nine. The logistics associated with delivering rental assets our customers and executing field service and repair is a part of our operations, a large part of our our operations, and therefore, a large cost base in which we currently spend roughly $1,000,000,000 a year. Operationally, we've been moving to a market based logistics model or internally as we we refer to them MLOs. Where our drivers, trucks, and dispatchers serve all locations in the cluster rather than being allocated to individual locations as was historically the case. By the end of the year, we had embedded embedded MLO operations in 16, of our clustered markets and have seen immediate improvement in metrics in these clusters.

For example, in the four MLOs that were in place for the full year, our days to pick up, which is the time it takes for us to pick up equipment after, of course, a customer's called off rent. Was reduced by over 25%, and the spend on third party haulers was reduced by 40%. We continue to advance our MLO expansion, with a playbook to reach an excess of 30 of our top 50 markets by the end of fiscal year twenty six. This transition to MLUs has supported by our full launch of VDOS Tordano. Our proprietary vehicle dispatch optimization system. Which has been reimagined and repowered to improve availability, utilization, efficiency, and user and customer experience resulted in improved order capture through a clear path to say yes to our Every single branch and let MLO are now using this new system and beginning to realize its early benefits. Finally, touch on sustainability and investment on slide 10. On the environmental front, we're on track to meet our 2034 target. 2034 target to reduce our scope one and scope two carbon intensity by 50%. With a number of ongoing initiatives around our transportation fleet and how we electricity for our locations.

And on investment, we allocated capital dynamically throughout the year. To maintain our fleet, fuel growth, categories, and greenfield openings, and bolt on acquisitions and have executed returns to shareholders through increased dividends and share buyback. So in summary, four dot o is off to a strong start, with further exciting progress expected in this new fiscal year. So with that, I'll hand it over to Alex to cover the financials in more detail, but also give our guidance for the new year. Alex?

Thanks, Brendan, and good morning, everyone. So before I get into the numbers, I thought it'd be helpful to give you a brief update on the relist project. As you know, we received strong support from our shareholders at last week's EGM, with over 96% voting in favor of the resolutions. We're making good progress on The US GAAP conversion and on Sarbanes Oxley compliance, which means we're still on track to implement the move of the primary listing to the New York Stock Exchange in q one of calendar year twenty twenty six. We're also beginning to make plans for an investor event in New York shortly thereafter, which we'll be providing more details on as we progress through this year. Turning now to the full year results themselves on Slide 13. Firstly, as you may have noticed this morning, we've reassessed the basis of our segmental disclosures. The group operates under two primary geographic regions reflecting its North American activities and assets and its UK activities and assets. The North American business is farther split operationally as general tool and specialty, reflecting the nature of its products and services and the management structure of the group. As such, the group is identified as reportable operating segments North America general tool, North America Specialty, and The UK, which we believe reflects better the basis upon which we review the performance of the business internally and aligns with the basis of our strategic growth plan, sunbelt4.o.

Prior year comparative information has been restated to reflect these updated segments. To help you navigate your way through this change, we've included the full year results under the old segmentation on Slide 31 in the appendix. Group rental revenue increased 4%. Total revenue was down 1% reflecting the planned lower level of used equipment sales. Our growth was delivered with strong margins, and adjusted EBITDA margin of 47% and an operating profit margin of 25%. As expected, the lower level of used equipment sales resulted in lower gains on sale of $81,000,000 compared with $223,000,000 a year ago. Which affects the absolute level of EBITDA and operating profit. After an interest expense of $559,000,000 adjusted pretax profit was 5% lower than last year at $2,100,000,000 The higher interest expense reflects principally higher average debt levels. As explained at Q3 and in the press release, we are adjusting out nonrecurring costs associated with the move of the group's primary listing to The U. S. These amounted to $15,400,000 in the year. We will continue to track these as we move through the new fiscal year. Adjusted earnings per share were $370 On slide 14, we've shown the group performance adjusting out the impact of the sales of used equipment which were significantly lower in fiscal year twenty twenty five versus fiscal year twenty four.

As you can see, that total revenue excluding this impact would have been 3% higher and operating profit would have been up 2%. Now turning to the businesses. Slide 15 shows the performance for North American General Tool. Rental revenue for the year grew by 1% to $5,900,000,000 This has been driven by a combination of volume and rate improvement demonstrating the power of our diversified business model as well as our disciplined execution. As Brendan will discuss later, strength in mega projects have mitigated ongoing moderating conditions in the local commercial construction market. The 5% fall through in total revenue reflects the lower level of used to equipment sales than last year, which I referred to earlier. As Brendan has already explained, we have been laser focused on the performance actionable component of Sunbelt four point o, and the team is making strong progress driving value from our significant investments in logistics, telematics, maintenance execution, and we're already seeing the results. The team is also demonstrating strong cost control with operating costs around 5% below prior year. These actions resulted in an EBITDA margin of 54%. After the impact of lower gains on disposal, disposals and the higher depreciation charge, operating profit was $2,100,000,000 compared to $2,400,000,000 last year.

Operating margins were 33% and ROI was 20%. Now turning to North American Specialty on slide 16. Rental revenue was 8% higher than a year ago at $3,300,000,000 As with GT, this has been driven by a combination of volume and rate improvement. Rental revenue growth in the fourth quarter was impacted by the inclusion of both film and TV and oil and gas, which were both down significantly in the quarter. We took similar actions taken to control cost in specialty, and this has contributed to an EBITDA margin of 48% compared to 44% last year. After the impact of the higher depreciation charge on a larger fleet, operating profit was approximately $1,100,000,000 at a 33% margin, and ROI was 30% clearly illustrating the higher returns achievable in the specialty business. As specialty becomes a larger part of the overall business portfolio, it should help to drive up overall group returns in the future. Turning now to The UK on Slide 17. And please note that all of these numbers are now in U. S. Dollars. UK rental revenue was 5% higher than a year ago at 7 and $78,000,000. In line with the four point zero strategy, the focus in The UK remains on delivering operational efficiency and long term sustainable returns in the business.

While we continue to make progress on rental rates, these need to progress further. As a result, The U. K. Business delivered an EBITDA margin of 26% and generated an operating profit of $69,000,000 at an 8% margin, and ROI was 7%. Across all three segments, our results have shown the resilience of our business model and our disciplined execution despite challenging market conditions. Slide 18 sets out the group's cash flows for the year. This emphasizes the strong cash generation capability of the business across a wide range of market conditions. We maintain a strong focus on working capital management, which has resulted in cash flow from operations of $5,000,000,000 in the twelve months, which is a 99% conversion from EBITDA. As many are aware, two of the key attributes of our business model is both the resilience across the range of market conditions, which I mentioned previously, and the agility with which we can control capital spending. Reallocating capital dynamically to maximize value. In this environment, certain segments of our markets are more moderate, we have some latent capacity, we spent $2,700,000,000 compared with the $4,400,000,000 last year. We adjusted our priorities to principally fund fleet replacement and some pockets of growth.

This strategy generated near record free cash flow for the year of $1,800,000,000 despite some of the transitory softness we've discussed. This ended up significantly higher than our guidance of around $1,400,000,000 principally because of the timing of fleet landings at the end of the year where payment will be made in fiscal year twenty twenty six. While we've reduced our capital expenditure, this has not been at the expense of the future. We've executed on our fleet disposal plan as intended. We've isolated areas of the business with lower demand dynamically reallocated our spending to growth markets such as power and HVAC, specialty businesses more broadly as well as the mega projects arena where demand is higher. We're also using our improved logistics and telematics system to proactively reposition our existing fleet to higher growth markets. One example of this is utilizing latent capacity in our network to fund more than 60% of the OEC required in our greenfield location. This is how we can continue to grow even when our absolute spending and capital dollars is lower. Turning now to Slide 19 and our guidance for revenue. Capital expenditure and free cash flow for the fiscal year 2026.

We expect group rental revenue growth to be between flat and plus 4%, reflecting the ongoing dynamics in some of our end markets. Gross capital expenditure is planned to be in the range of 1,800,000,000.0 to $2,200,000,000 and I will give a little bit more detail on this in just a moment. Finally, based on this guidance, we expect free cash flow to be between 2,000,000,000 and $2,300,000,000 which again reflects the timing and payment of fleet landings around fiscal year end. On Slide 20, I've broken down that CapEx guidance. You'll see that we're planning rental fleet CapEx as follows. For North America between $1,300,000,000 and $1,600,000,000 and for The UK, between a 110 and a hundred and thirty million dollars. North American general tool in The UK, these are largely replacement requirements. While in North America Specialty, we're still funding pockets of growth. In all cases, there is a focus on improving time utilization and taking advantage of the latent capacity in the fleet that we already own. It's also worth noting that lead times with our key suppliers are relatively short at the moment, so there's considerable flexibility in these plans as market conditions improve. And so with that, I'll hand the call back over to Brendan.

Thanks, Alex. I'll now move on to some operational detail beginning with North America on slide 22. The North American business delivered good rental only revenue growth in the year of 4%. Specialty performed strongly with growth of 11%. With general tool up one. As Alex mentioned, the fourth quarter growth figure for specialty reflects the fact that the North American specialty segment for reporting purposes now includes oil and gas and film and TV. Which were previously reported in The US general tool and as part of Canada, respectively. So I'll say that again. Oil and gas would have been part of the GT reporting previously, and film and TV, of course, would have just been in Canada as that was reported. Excluding this, North American special grew four grew 8% in q four and twelve percent for the full year. As expected, we continue to realize moderating local nonres construction market activity through the fourth quarter, and this is offset in part by the ongoing strength of the mega project landscape and the broader nonconstruction markets. Both of which I'll further detail shortly. Importantly, rental rates continued to progress year on year, as utilization levels are improving across the industry, we anticipate continued discipline in our business as we deliver added value to our customers.

This is ongoing evidence of the progressing structural change in the business and leveraging our internal pricing tools and disciplined rate rate approach. Moving on to slide 23, we'll cover the activities and outlook for the construction and market. Consistent with our usual reporting of construction activity and forecast, the slide lays out the latest Dodge figures and starts momentum and put in place. Outlook for construction growth continues to be underpinned by mega projects and infrastructure work, which remains strong and in some cases are gaining even further momentum. This is a portion of the market where we enjoy outsized share continue to be positioned extraordinarily well as more of these very large projects begin and enter planning. Our cross functional sellers and solutions experts are highly engaged with these contractors our customers, and in many cases, the owner or developer themselves. Bringing our broad range of solutions and capabilities to bear on these not only large, but highly complex projects. At the same time, as I've already mentioned, local commercial construction space continues to moderate compared to what were really high recent years. As this prolonged environment of uncertainty has weighed on local and regional developers. This predominantly impacts some of the small, mid, and regional sized contractors.

Nonetheless, the SME contractor landscape is a powerful and important part of our customer base. Although we're seeing some positive trends in local planning, it will take some time for this segment to see a meaningful uptick. However, it will rebound. And as I've said before, when it does, I think it will quite strongly. When this inevitability happens, we're in a position of strength to benefit. Benefit with our customer relationships, cross selling opportunities, coverage of products, services, and markets, and capacity. All part of our long held clustered market strategy. Let's move on and talk a bit more about mega projects on slide 24. This is, of course, a slide you should now be pretty familiar with. It delineates mega project starts, in count and value, looking at the last three years have gone by, as well as the next three years, this is broken down in our fiscal years for context. What should you draw from this update? Particularly when compared to equivalent stock stats from our prior updates is one, some have been pushed a bit right. This should come as no surprise, showing projects of this scale and takes some time to get started. However, this should not be confused with projects being canceled.

And two, the funnel keeps growing as the mega project landscape continues expand and strength. This mega project era is being driven by deglobalization, technology advancement, and the related construction that comes from that manufacturing and production modernization and infrastructure. For these reasons and ongoing momentum, we believe this is a feature of our end markets which will be present at a significant scale for years to come. We continue to experience a very strong win rate in this arena and are highly engaged in project planning and solutions with associated customers and project owners. Turning now to slide 25. Which, of course, puts in scale our nonconstruction end market. Over half of our business is outside of commercial construction. And as we have detailed over the years and and probably best showcased most clearly during our Anytown Exhibit As Part Of Last Year's Event In Atlanta, These markets are both large and expansive. So many of our product categories have remarkably universal which presents a vast opportunity to advance rental penetration ever more broadly across our end markets. Whether it's the planned or the unplanned, there are abundant activities throughout these nonconstruction markets where our products and services deliver the requisite solutions.

We've made great progress across these segments, over the years and will continue to do so throughout 4.o. So these are big end markets with big opportunities to continue the expansion of our TAMs. Moving to capital allocation on slide 26. Alex or I have covered most of these capital allocation elements throughout this morning's presentation However, I'll highlight again. Our launching of our buyback program in December of up to 1,500,000,000.0 over eighteen months. This program takes into account our latest CapEx plans, and demonstrates the optionality and confidence which comes from the fundamental strength in our cash generative growth model. As I said in the highlights, we expect to complete this buyback in full in the current year while maintaining leverage within our target range of one to two times. There's also a robust bolt on m and a landscape which we've so often exercised. Our business development team continues to work our pipeline to find opportunities that align with our strategy, will surely result in future additions. All this is consistent with our long held policy, and we will continue to allocate capital on this basis throughout 4.o. Turning to the summary slide on 27. And to conclude, we've had a year of strong performance.

Delivering record rental revenues and EBITDA, through capturing the available growth in these market conditions. Results again demonstrate the through the cycle cash generation which is so powerful at our current scale and current margin. With which we deploy through our capital allocation priorities to maximize our benefits in the structural growth business. We have dynamic flexibility and optionality to invest in segments, organic expansion, m and a, market opportunities, and, of course, returns to shareholders as we've covered through today's update. Our business is growing and our business is improving. Positioning us for even more success over the years to come. We look forward to a strong fiscal twenty six as we continue to grow and advance our business to benefit benefit all of our stakeholders. And with that, operator, we'd be happy to open the line for q and a. [indiscernible] And up first, we have a question from Losh Mahendra Raza from JPMorgan. Please go ahead. Your line is open. Good morning, Thanks for taking my questions. I've got three, I think, if that's okay. The first is just on sort of exit rates in current trading. I mean, good to get some color on May trading and what you're seeing there.

I mean, looking at that chart on Slide 22 sort of shows fleet of rent pulling away from the sort of 23, 24 lines. Yes, just to speak, it's getting update of sort of what you're seeing there. So that was the first question. The second is just on the rental revenue guidance. I guess, how are you thinking about the building blocks of that in terms of local mega projects, rates, etcetera? And sort of time utilization, I guess, well? And so how do you see the sort of the sort of phasing of that recovery? Through the year? And I guess what gets you to the upper end? And then the last is just on your comments around at the start of the presentation, on market share and sort of some of the accounts you've been winning in the last year or for the last four years. I mean, when you look at those account wins, mean, I presume they're most mostly in sort of local, but we could get some color there. I mean, how is that working? I mean, the backdrop is tough. You're pushing rates. And sort of still taking market share. I mean, you just talk about some of dynamics there and how you think you've been so successful in sort of continuing to drive market share?

Sure. Thanks, Lush. I'm gonna do one and three, and Alex will take two. So, simply put, you know, in terms of, entry rate, May was plus two, in North America on a billion per day per billing per day basis. And, you know, you mentioned that graph on slide 22, which you're right, shows that separation in terms of fleet on rent. You know, we're we're we're we're certainly not here calling, you know, you know, some change to that local nonres market, but nonetheless, we're pleased with that progress. And, you know, we'd like to post a couple more quarters of that. As we move forward. But, anyway, 2% on a billings per day basis. I'm glad you asked this question about market I'm I'm actually gonna refer to a few slides here, and I think the first one would be beneficial to take a look at, which slide seven. And slide seven, we just demonstrate the real progress that we made. We continue to make in terms of adding new customers. And let's just be clear here. These are b to b accounts. These are businesses that before having an account with Sunbelt Rentals, did one of two things.

Mostly, they rented from someone else. And secondly, perhaps would have owned equipment rather than rented equipment. But nonetheless, you know, we added 42,000 new customers generated over 400,000,000 in revenue in the current fiscal year. And those 118,000 customers that we added over the course of just three years and three years, those added 1.4. So for combined, 1,000,000,000. When you start to think about the context to to to lean into your question there a bit, when it comes to, you know, you suspect these are mostly local. Yeah. Of course, they are local. What happens is I mean, let's face it. We, you know, we went through a period as a business and as an industry when you had you know, not a whole heck of a lot of supply and a pretty, really surprisingly strong end market. And, you know, the Salesforce at large was, you know, they were shuffling to say yes and finding availability. When things do get a bit tighter, albeit good, what you do? You turn more stones, and that's exactly what this illustrates in terms of the Salesforce finding more customers. And these are wins and these are winning market share.

And, of course, when you talk about slide eight there, which I'll refer to now, is really these new locations. And when you think about gaining market share, these are 401 locations in the center of that slide. That are only thirty three months old on average. There's that appendix slide, which is slide 43 that will be worth you taking a look at. But these businesses grew 19% in, total revenue with 24% in rental revenue in the year. There's only one answer as to where that revenue is coming from. And that's coming from ongoing gains. And then finally, and I'll get off of my market share talk here, if you refer to slide 40, you know, we we have chronicled really well. Janelle actually led this during our capital market event in April of twenty four of our deciles in the business. Of course, this is a straight pull from that slide. Our statement is this. We are winning market share with a big we're winning market share with the middle, and we're winning market share with the little. Unapologetically, we are proportionately higher SME to some of our competitors, but it is a core part of the market that we really like.

But if you take, for instance, that slide, I'll just reference a of lines illustrating the winning and growing of the top. So what were 22 customers that made up 10% of our revenue, last year were 20 of our customers. And instead of 20,000,000 on, as a median, it's 28,000,000 today. The second decile was 99 customers. Today, it's 75. Don't mistake that for losing customers. The point is those customers are getting larger significantly. So those customers went from doing 7,000,000 a year to doing 10,000,000 a year. So this really demonstrates our ongoing growth in market share on these mega projects, but also through leaning in, turning a few more stones. That's one in three. Lushen, as I said, Alex will do two.

Yes. Let me, let me just give you a little bit color on the the rental revenue guidance. So, obviously, in the prepared remarks, we've referenced, sort of flat to 4%, so midpoint of 2%. So, you know, again, a a fairly modest amount of growth, driven really predominantly by the specialty business. So if you wanna wait specialty business versus versus the general tool, you'd you'd find specialty probably in the mid single digit range and then and then GT. You know, still positive, probably in the the lower end of the single digit range. You know, The UK probably looks a little bit more flattish year over year. If you think about bridging that to your total revenue, remember, we're in this world where we'll probably have lower sales of used equipment. So that's probably about a $40,000,000 headwind year over year. That ought to get you to a pretty good estimate on what total revenue looks like Probably one last point to make and then I'll go into what would bring you to the lower end or the higher end of that range. So if you think about seasonality on that total revenue, remember, in the first half of last year, we had, about a $100,000,000 of hurricane revenue.

So I think it's reasonable to expect the year to be more back half weighted than front half as you think about the the timing. And, obviously, as Brendan would have mentioned in his prepared remarks, you know, we're we're yet to sort of call the sequential strengthening of the non or the, the nonresidential local construction market would which would also sort of lead you to a more back half weighted year. So, you know, in terms of the underlying assumptions and what might lead you to the lower versus the higher end of that range, obviously, you know, at the higher end of the range, we would anticipate you know, an accelerated strengthening of that nonresidential construction and increased utilization, you know, of our existing fleet. So just to dimensionalize that, you know, 2% increase in utilization represents about $350,000,000 of incremental revenue. So to the extent we're utilizing that latent capacity to drive growth, you know, that would that would be positive. Obviously, continued rate progression, which is what we're seeing. So to the extent you don't see either one of those two things materialize, that would probably lead you more towards the lower end of that range.

So, hopefully, that helps give you some additional color.

K. Brilliant. They're really helpful, guys. Thank you very much.

Thank you. And up next, we have a question from Katie Fleisher from KeyBanc Capital Markets. Please go ahead.

Hey, good morning. Mentioned some of the cost controls that were put in place this quarter that you executed well on that were able to drive some of that margin improvement. Just talk about the opportunity to maybe build upon those and how we should think about the the opportunities to strengthen margins going forward.

Sure. So I'll hit the first part of the question. And then Brendan will actually talk, at more length around margin progression. So so, yes, we took some action, last around just getting our cost structure more in line. And so as you know, during sunbelt.o, there were significant investments, particularly on the technology stack you know, that required us to really add resource to to do the coding and the development of that technology architecture. You know, as we got through the back end of sunbelt3.o, you know, we really looked hard at evaluating whether that those investments needed to continue or whether we could actually you know, take some of the fixed cost structure out of the business. And we did, in fact, remove some of the fixed structure out of the business. You know, that being said, a lot of the margin progression is really leveraging those investments that we made during three dot o through things like the MLO, the optimization of our of our repair and maintenance activity. And, you know, that's where where you really see the leverage come through. And I'll let Brendan talk in more detail about that.

I think, really, thanks for the question, Katie, and I think Alex is really, hit it. I'll just I'll just kind of double down on the fact that, you know, this was, of course, part of the plan. As we enter sunbelt4.o, we clearly outlined what those three steps were. You know, some of the g and a activity Alex mentioned is just what you would expect. You go through a build period, and then you prepare yourself for a run period. The overarching theme is this, though, from a from a, SG and A standpoint. We have in place the SG and A level to build on top of that what our expectations and ambitions are around Sunbelt Ford auto as we continue to grow the business. You know, we doubled the size of specialty over three dot o, and you put in place some infrastructure order to do that. And now that's in place, and you move that forward. And then, really, these efficiencies. You know, I would have mentioned, in the prepared remarks, know, this delivery cost recovery and in those markets reducing outside hauler by 40% in those four. Appreciate that's a small segment of the total, you know, as an organization, when I mentioned 1,000,000,000 in North America, just a touch over a billion in the denominator there, you know, 250,000,000 of that or so is wages for our skilled drivers we have that deliver great customer service.

It's almost matched that in outside haulers. And we know that we have the embedded efficiencies, but you have to marry the technology with that actually go to extract it, and that's what we're seeing. So this is not an overnight thing. Wanna emphasize this is margin progression over the course of four dot o. You know, really good start as you'd expect to year one, you know, in these sort of you know, moderated growth arena that Alex would have outlined in terms of that range, you know, it's a bit harder to come by. But nonetheless, you know, we we are confident about that progression as move forward throughout four dot o.

You know? And the other just the final point that I'd make that Brendan again touched on in his prepared remarks, the progression of the locations that we added. So remember, we added 401 locations over the course three dot o. For for context, year one of those locations you know, EBITDA margin is around 32%. You know, when we exited, 2025, that margin rate was, you know, closer to 49%. So as we scale those locations and mature those new businesses, you know, we will actually get the margin more in line with with what our broader group margins are, and there's still probably two to 300 basis points more upside as we scale those. And we'll continue to invest to the tune of you know, north of 60 locations in this year. So I think the continued progression of the greenfield businesses is another area where we drive significant margin potential.

Great. Thank you, Katie. Okay. Great. Thank you both.

That's helpful. Just another quick follow-up on that. Think here I heard you mention that, a specialty becomes a larger part of the business. We can expect that to drive some stronger performance. How do you think about that long term split between gen rent and specialty? And is your m and a strategy going forward going to reflect that greater emphasis on the specialty business?

Yeah. I mean, it's likely you know, if you look at the if you look at the, four zero one that Al referenced that we had we had talked about before on you know, what you'll see highlighted there in slide 43. That was, of course, biased to our specialty business over the course of that time. From an M and A standpoint, as you can imagine, we scour that in quite robust in the specialty landscape as well. Over the course of last four years, if you think about it, you know, we've we've more than doubled the specialty business while growing general tool nicely, when you had a really strong end market. But as as Alex will have again guided, today, it's a bit more than 30% of the total business, and we would expect that to to migrate up. A lot of it really just depends on what the end market unfolds. You know, as you see a a a return to that local nonres, whatever that may be the case, you know, your GT business will grow a bit more line with or maybe not lagging to the extent in which it does from the business.

So, you know, our thing is this. It's important even as Alex would have mentioned kind of the, you know, a a range there between GT and especially. Our specialty business by design captures and has a ongoing opportunity for a very broad TAM. And as a result of that, you know, you'll see some undulation in certain segments, but overall, like that. So, you know, you would expect that to progress over time. You know, one would see it growing, you know, closer to the fifth percent mark over quite some time, but much of that again has do with what what the end market deals us from a nonres standpoint.

Alright. Thanks. I'll pass it on. Thank you.

Thank you. And from Morgan Stanley, we now have Annalise Vermoylin with our next question. Please go ahead. Hi, good morning, Brendan. Good morning, Alex. I have three as well, please. So just coming back to the market share gains. Could you elaborate, you've talked a lot about the 42,000 new customers you've added in the year. Do you think you also took share with existing customers in terms of share of wallet relative to other rental players? And as part of that, do you think benefited in that regard from some of the disruption at some of your competitors in in recent months? And therefore, do you think that, that market share progression can continue at the same pace looking ahead? And then secondly, on the locations, I think you mentioned, Alex, you expect to do north of 60 locations this year. How do you think about the mix there in terms of greenfield versus bolt ons? I think you've mentioned previously valuations starting to normalize. So could we see more bolt on activity this year, particularly in the context of that fairly buoyant free cash flow you expect it to generate. And then lastly, just on the big beautiful bill, I think I gained from Will this morning that if the bonus depreciation rules were enacted, then that would benefit your free cash flow, I think.

Could you is there anything else we should consider if that bill does go ahead? In terms of what it can mean to your numbers? Thank you.

Sure, Annalise. Short answer to your first question is yes when it comes to market share as I would have as I would have demonstrated looking at that cohort slide. You know, those you know, we are this, remarkably, national or North American reaching to company today. And we bring these capabilities to bear with these national strategics, are growing significantly. But we're also gaining share across those deciles of which we're very confident. I'm not gonna comment on, you know, disruption or otherwise. You know, I I think that you know, consolidation as we have demonstrated for years and years is very positive for the industry, and I'm sure that that will all go, just fine, throughout that whole thing. The 60, just for reference that Alex mentioned, the 60 that were opened, over the course of last year. We have plans for similar location ads this year. Those are just our greenfields. Not to be confused with what what would be. So our on m and a that we would do in large part would be incremental to those greenfields. And as I've said, look, it is it is as busy a pipeline as we have seen. As you know, based on, you know, a I'll say this gently, only completing five acquisitions over the last fiscal year.

You know, we're we we have been you know, firmly holding to our valuation metrics and it goes through the ordinary meat grinder in our business of both low where it is, proximity to the rest, the specialty business line that it may bring, the culture of the business, the of the business, but also valuation. We thought there was a bit of a disconnect there for a while. And none, and I mean none of the businesses that we had interest in, have transacted. So there's a number of them out there that we have talked with and we have per evaluation on. And they're choosing to contemplate, and we're choosing to wait. So time will tell in terms of what that is, but make no mistake. It is a robust landscape. And in the meantime, we're just gonna just gonna grind away doing what we do, adding to the next chapter of the 401 locations that we have talked about. And, Alex, the big Sure. So I'll hit the bonus appreciation, and I'll give you some color on tax more broadly. So as as you think about of the GAAP tax rates, the statutory tax rate, that's typically we anticipate around the 25, 26% rate.

Now if you shift over to the cash tax because we do have such significant amount of depreciation, cash tax is around 34%. And so your specific question, what's the potential impact of going from the current regime where we're winding down the bonus to to, the big beautiful bill proposal where we reinstate the 100% depreciation, that will be worth around 10 percentage So that would take you from your 34% to your 24% roughly around $200,000,000 of of cash impact. So it is a a fairly material impact. Of course, you know, as we thought about guidance, we thought about current tax, the current tax regime. We didn't contemplate you know, what may happen in the future. So that would be upside to the guidance that we provided.

And which you also sort of alluded to what would the impact be on the broader economy. I'd say that may be a touch above our collective pay grades here. But, you know, worth mentioning related to the bonus depreciation, that also includes capital investment in, you know, manufacturing, production, construction, in another word other words, And the other one, of course, for for an overall consumer appetite. Know, if there if there were the ability. And I'm not I'm not I'm not other stating a pro or a con in this, but when it comes to taxes on overtime as an as a for instance, know, that's quite a boost to the skilled trade. A across the land, and, obviously, it's a big part of the overall consumer. So know, time will tell. Obviously, it's going through this process through congress, which is, at a at a interesting one to watch as it goes through this process, of course, of reconciliation. Anything else, Annalise?

No. That's that's very, very clear. Just coming back to the market share gains briefly. Again, that pace of adding new customers that you've done, how much of that do you think is has been sort of the launch of four point zero? Or rather, do you think that, that pace of new customer wins, do you think you can continue that over the coming year and in years ahead?

Well, yeah. I mean, look. That that just to just to point out, the 42,000 customers, those are accounts that we have opened and rented. Rest assured, there is a pipeline of accounts that have been opened that we haven't quite yet gotten to the rental point. Some of those happened yesterday that we'll rent next week, etcetera. But just do the math there. You had a 118,000 over the course of three years. Then you had 42,000 in the course of the first year of 4.o. So it's all in a way remarkably normal. The biggest difference is you look at cost of acquisition of these new accounts, This year, of course, absent bolt ons, these are just fresh organic brand new accounts. That the Salesforce has gotten. So we have every confidence not only to speak to our market share gains, but think about it more broadly when we get off of that market share piece. Which is just look how big the landscape is in terms of opportunity growth. Our business has been around for a bit. Right? And we've added, you know, a 140,000 new accounts over the course of four years. That's really what you have to think about in terms of how much progress there is to extend as we talked about so often, the proliferation of rental with so many different out there.

I mean, our our room for opportunity to ongoing growth in customers is is dynamic.

That's very helpful. Thank you both for all the detail.

Thank you. And we now move on to Will Kirkness from Bernstein.

Thanks very much. I just had a couple of clarifications questions really. First one, looking at rental revenue growth in the fourth quarter, general tools was plus one from minus one in Q3. Just with the reallocations that have happened, I wondered if you could give us a a number as you did with specialty. Secondly, just thinking about utilization, I guess you gave the uplift of what a couple of percentage points would be. Is that about how far away you feel you are from a good utilization number? Or is there even a little bit more to do? And then lastly, just on on the accounting side, it looks to have been a reallocation in central cost and also to UK profitability. I just wondered if you could explain that. Thank you.

Let let me, let me start, and then, then I'll have Brendan, follow-up. So on the rental revenue, q four, the number that you would look at as it relates to reallocations probably wouldn't affect your comparable. Remember, film and TV has always been within the special business. The difference is we didn't report specialty, so it would have been in the Canadian segment. And then the oil and gas business was historically within again, would have been within the general tool business. But, again, we didn't report that externally, so that would be within the The US reported segments. So there really wasn't a reallocation issue as you look at the historical you know, reporting, comparability. In terms of the reallocation of of support cost, that predominantly affects the North American business. So that wouldn't affect the profitability of The UK business. Remember, The UK business, largely has all of its own support cost. Whereas within North America, a lot of that cost is held centrally within our support office. So what we tried to do was pull out things that were not directional directly contributing to the contribution of of those individual reporting segments. But it it would not have affected the The UK profitability margin.

And and remind me again, Will, because I lost track it. What was your second question?

Let me target that. So so time utilization as as Yeah. Commented.

Look. We feel good about know, our sort of reaching that inflection point. In terms of year on year. You've got a bit of late capacity there, which, of course, we will exercise, which really gives you it's it's quite a nice quite a nice position to be in. In other words, you've got some latent capacity to realize progress, as we've demonstrated, but also, you know, as we do see whenever it may be some of the market conditions turning. Where you can actually test that and be confident of that before you were to up CapEx. As a for instance. But furthermore, a across the industry, you know, what we've seen is a better balancing a supply and demand standpoint, which will underpin that rate piece that I've talked about. Again, we'll just to reference on that slide 22. I appreciate there's that one piece on GT. That has got oil and gas, and it's The US and Canada. But those are reflected across the eight quarters as shown. You're not gonna have all that big of a difference between US and Canada. You know, Canada had some pockets of some real strength and then a bit of, you know, drag from a resi standpoint in Ontario, in particular.

And then US was was broadly when you look at it. Kind of across territories, you know, it it looks a bit like that, the minus one and plus one.

Okay. Thanks so much. Thanks, Will.

Thank you. And we're now moving to a question from Arnaud Lehmann from Bank of America. Please go ahead. Your line is open.

Thank you very much. Good morning, Bramadan. Good morning, Alex.

Firstly, just a clarification on rental revenue. The published is plus one and then on a billing day basis, three. Is this just a working effect? Or is there anything else to mention the small discrepancy? Secondly, on your fiscal twenty twenty six CapEx guidance, is it all replacement at this stage? Or is there any growth I think, at the midpoint, about $2,000,000,000 Is there any growth CapEx in there at this stage or it's just replacement? And lastly, I guess, more broadly, your business model is working. There's less growth, less CapEx and therefore, more free cash flow generation at least for fiscal twenty twenty six. What is your mindset about it? Are you disappointed by the growth? Or are you happy about more free cash flow, I. E, if tomorrow growth comes back, will you happily ramp up the CapEx very quickly, which would negatively impact your free cash flow? I mean, more of a qualitative question, but any color would be helpful. Thank you.

Yeah. I'll start. I'll start with the last one there. In terms of this point or happy. Look. You just run the business. And, you know, as as we've said at our current scale and margin, you know, it's it's one of the remarkably powerful and dynamic attributes of this business. You know, we we say sort of internally, I've said to a number of people, you know, I say record free cash flow. And I say record free free cash flow, and I appreciate that technically, it's a touch short of record free cash flow. But I'm gonna use that actually to to to bring you to a slide that I think is important to understand, which is slide 32. And the reason why I can't say emphatically record free cash flow was, in fact, in fiscal year twenty twenty one, we generated $1,822,000,000 in free cash flow. And this year, we generated 1,790,000,000 free cash flow. But look at the difference. Back in 2021, you remember, of course, that was really the full year of COVID where you completely cut the spigot off from a CapEx standpoint. And you deal with that, you know, black swan event, which we did.

And a lot of that investment would come very, very late in the year, and you you invest less than a billion. Whereas this year, we still put a hearty 2 and a half billion dollars of CapEx in the investment.

To maintain our fleet to grow. Make no mistake. Our fleet in certain segments where there's strong, strong demand, but we still generate nearly $1,800,000,000 in free cash flow. And the way in which we allocated, we were very pleased to do. Remarkably with the 1 and a half billion dollar buyback. So it's not disappointed at all in the growth, You know, that's just an a a matter of what happens from an end market standpoint. The key to it all, Alex would have touched on this is prepared script. Yes. It's the growth, it's also the remarkable resilience and now so clearly demonstrating the strength of the free cash flow through the cycle. Alex also commented on the shorter lead times. Rest assured, when we see increased demand, whether that be come from from e from even more mega project wins, or fueling specialty businesses like our power and HVAC business that grew over 20% last fiscal year. Our climate control business that's still growing really strong figures or some of our even smaller but newer business like temporary fence or temporary walls. Or our industrial tool business. We will fuel those, you know, in a minute. You know, our our load banks team comes to us and says, we have an extra $50,000,000 in CapEx because we have an order pipeline?

That will that will be higher than the fleet that we have the inventory that we have in our fleet.

Of course, we will, and we have all the flexibility to do so. At some point in time, we'll see markets turn from a local the other way. And very quickly, we will amp up that CapEx. From a lead time standpoint, today, you're talking for your core products, sixty to a hundred and twenty days, some of the things around power etcetera, are a bit longer, but those, of course, are planned differently. Your first question is purely billing days, a a number of days, so nothing else to that. And our CapEx as it relates to fiscal year twenty six is really a tale of two worlds. Our general tool business would have been, you know, really leaning into a replacement exercise And, certainly, let's not forget this phrase that we've so often used. Growth disguise as replacement. So John and the team who will have gone through their CapEx planning, if you have an area that's got a bit less demand and you have 10 telehandlers replaced, may only replace seven of them, as a company, we'll buy 10, and we'll put those extra three into a market that growing significantly. Specialty standpoint, of course, there's replacement.

But you'll have more growth embedded in that given the nature of the trajectory of that business. Super helpful. Thank you very much. Thank you.

And we're moving on to a question from Neil Tyler from Redburn Atlantic.

Thank you. Good morning. Two questions still, please. Firstly, just back to the topic of capital allocation and M and A. Just to I wonder if you can help me understand the you mentioned you've been very clear that the it's priced at the sort of sticking point in in terms of M and A. So I guess theoretically, were the price to come down, would you be happy bringing acquired assets and branches into the business even if demand hadn't improved much? And would you I suppose, mirror that with in that scenario with a reduction in your own CapEx to try to drive up utilization. Do you understand the sort of, I guess, the perspective I'm coming from? So that's the first question. And the second question really sort of shelving the Dodge construction forecasts for the time being. Have your customers or conversations with your customers altered at all since the, you know, since the events of early April? And the uncertainty that they've created. I wonder, Brendan, perhaps you can sort of talk about anything that you want to in terms of how the conversations might have altered against that context. Thank you.

Sure. Thanks, Neil. I'll work backwards on that. Our our discussion with the with the larger customers, but also the owners in that sense. So I'm speaking to this mega project landscape. You know, they've not really changed much. You know, obviously, everyone's trying to understand what the rules of engagement are. When you look at what the strength is really in that segment, you know, there's obvious things we've talked about around EV and batteries in general that are that that are a bit softer Really, in our view, that's more about to do with just demand in but outside of that, you know, when you look at when you look at data centers, I could say data data centers three times in terms of not only what those progressive in the start, but also the pipeline is in that environment. When you look at when you look at semiconductor, when you look at LNG, you know, those plans are continuing to move forward. So with those larger you know, we're continuing to see their pipelines actually expand expanding. So their outlook is actually improving even in even when it comes to sporting arenas, etcetera. Just trying to get a grasp, of course, of what those cost might be.

I think there's varying expectations in terms of in terms of what it all may come out to. Terms of capital allocation, you you know you know, the scenario you painted was, you know, if more of the businesses that we like and we'd be happy to acquire would be more in our level of valuation of course, we would. We we we we would acquire them. And I don't think you take a short term view in that. Most of these that we would do you have this interplay between are you adding fleet to a marketplace, which is, I think, a part of what you're getting to, and what was for a period of time probably over oversupplied a bit, to where we are today, Look. We look at a acquisition not as a six month or what's gonna happen in the current year. Know, these are long term decisions in nature, and that that's exactly how we take them. So, yes, we would do that. And, really, one doesn't depend on the other as it relates to would we take our CapEx down It all depends on the deal. Generally speaking, the the the type of acquisitions we do, of the common characteristics is undercapitalized.

These are individual businesses. They don't get overly leveraged. What we bring is, quite often, quite a growth to the overall fleet mix. But, also, you picked up on a really good point, Alex, made in his prepared remarks, how we've been able to fuel 60% of the fleet of our greenfields we opened during f y twenty five through existing fleet in locations speaking to some of that latent capacity. So that that's that's our view. Big pipeline out there. I'm glad you asked about that commentary around customers. Now when you when you talk to our OSRs and DMs, about local customers, like, the same thing they'll sort of they'll tell you they're just scraping and calling a bit more because, you know, if you look out most any skyline in some of the cities, there's just a bit less of that out there than what they're, what they're what once was. That's one that, of course, we keep a close-up eye on when it comes to activity day in and day out.

Thank you. Thank you. That's very helpful.

Thank you.

Thank you. And from Barclays, we now have James Rose with our next question. Please go ahead.

Hi, thanks. Good morning. I've got two, please.

The first is on general tool margins versus specialty margin. So the EBITDA gap between them is about six points at the moment, 54 to 48. Is that a sensible gap we should expect in the longer term? Or how would you characterize it? Is there more upside in general versus specialty for the longer term? And then second, if we look at the ROI for specialty, it's 30%. Is that a level which you think could be sustained all throughout four point zero? Is that a sensible sort of incremental ROI we can think about for specialty?

Yeah. I mean, I'll I'll I'll start here. I mean, look. Fundamentally, and, actually, it was quite lost on some over the course of three dot o when we so rapidly expanded our specialty business. But the specialty business is gonna have it's gonna be less capital intensive and therefore smaller d. So fundamentally, you have a business that will generally have a a lower EBITDA margin than you will do with general tool. But then when you get to EBIT or operating profit, you'll have a higher margin relative to general tool. And from an ROI standpoint, of course, a lower capital intensive business, is gonna lead to fundamentally a higher ROI at the levels which we have. I I wouldn't I mean, I would you know, certainly, from an ROI maintaining that over the course of four dot o, there's no reason why you wouldn't. One of the things you'll see in the feature of our CapEx as we go forward, When you think about mix, you know, there are so many product assets within specialty in particular that just have a longer useful life than does generalize. Take for instance, you know, large generators, load banks, air conditioners, chillers.

These are not machines that are operated with someone sitting in the seat or holding the steering wheel. These are self contained units. That have the capability to run for a long, long time, and the customers are remarkably happy with them over time. So, again, that speaks to James. The very nature of that book value getting lower and, of course, your return being higher You know, there'll always be puts and takes in any sort of year. Take, for instance, the year we had as strong as the year we had in spec specialty was. Remember, was absent a lot of that e and d revenue from the the project, of course, that we have talked about that had the issues late last year and through this year. We were absent so much of that labor revenue that we would have otherwise had and specialty still posted those really strong results despite that headwind, which actually carry on a bit into the now new current year. Was that was that did I get both of your questions there, James?

Yeah. Both in one. Thanks very much.

Cheers. Thank you.

Thank you. And we're moving on to a question from Alan Wills from Jefferies. Please go ahead.

Hey, good morning, Brendan. Good morning, Alex. A few for me, please. Obviously talked a lot about the optimistic outlook for mega projects. Could you maybe just remind us what the rough portion of your North American business is now exposed to these types of projects and how that's maybe trended year over year? And then secondly, just on specialty, if I understand that correctly, so the Q4 growth would be 8% without the reclassification that compares to nine obviously still slowed a little bit during the year. And it's running slightly below that of your largest peer, which I think is closer to 15%. Can you maybe talk a little bit about some of the color around the slowdown, maybe where some of that relative underperformance is particularly thinking about is it more end market related or the specific verticals that you're exposed to? And then third question, just maybe some comments on rates, and I apologize if I missed this earlier. Obviously, you still talk about rates progressing positively. Just provide a bit more color around this and maybe how you think about expectations for FY 2026. Anecdotally, we hear that, obviously, rate environment is a bit more challenging.

And maybe at the local market, there's a bit more kind of questions around some of the rate discipline in the industry, but it may be bigger players versus smaller players, that's less relevant. But any comments there would be really appreciated. Thank you.

So I'll I'll take them in order one, two there, and and maybe Alex will touch you on three around, rate. Megamix, first of all, let's let's go to 30,000 feet. Half our business nonconstruction, half our business construction, recent years from a starts, not a put in place, you've had about 30% of starts that would have met our definition of mega projects. That would be 400,000,000 and above. Everyone's kinda got a different measure as it relates to that, you know, even from a analyst standpoint, but unless that's what ours is. That's not yet making up 30% of the put in place by the very nature of talked about in terms of time, in terms of ramp. And as we've said, know, we will enjoy at least two x our share. So I think those give you the component parts to sort of build to that mega project. But overall, you know, you're talking kind of you know, still single digits, but approaching high digits of the overall revenue, but we would expect that to climb as this more progressive starts and you get to more crest as it relates to those. Specialty, Let me look. I appreciate you quoting some others from time to time, and, you know, you can pick any point in the site and there will always be differences based on what is happening from an end market standpoint.

We have designed our specialty business and our specialty business segments. To be clear again, to be very much broad from a TAM standpoint, actually help us from a overall diversity and balancing our business out during certain times of economic cycle. Let's not forget to reflect over, say, for instance, post COVID, when we when we saw still explosive gross growth in our specialty business, And when you think about those lines, it's worth understanding the puts and takes, as I said. So if we just look at the year, power and HVAC plus '20, climate, 10%, industrial tool 15, trench, plus 13, ground protection, plus 11, temporary fencing plus over a 150%, plus 60% for temporary walls. But you will always have things like special, scaffolding, minus 17, 18% because it's gonna be a lumpier business when you have big projects. You're gonna have businesses like our temporary structures where you've got some you know, migrant camps that come down or you've got some mega projects that were extensive in temporary structures that will come down. You can't miss the broader point of what really is a runway for on structural progression within specialty. We don't spend much of our time measuring that against what someone else might quote as as their version of specialty.

It's all demonstrating specialty's ability to continue to grow. Yes. So I'll I'll touch on the rate expectations. Obviously, we don't we don't talk about rate other than to say that we do we have seen it. Continue to progress, and we anticipate seeing it continue to progress. And that's, you know, driven by a couple things. Obviously, Brendan refers frequently to the structural progression of the industry and the level of discipline, you know, that we've been demonstrating. All the players have been demonstrating really just managing fleet capacity and, you know, healthy balance sheets that allow us to to do things that maybe we we hadn't been able to do in years past. But more importantly, know, we view pretty strongly that we're able to capture the value for the service that we provide to the market. So we are not a commodity you know, industrial cyclical business. We are a business services company. So let me give you some examples of how that manifests itself. First of all, the quality of our assets is second to none. So when we talk about you know, replacement capital this year and utilizing latent capacity, you know, don't confuse that with, diminishing the quality of our assets.

Brendan mentioned about the the mix of our fleet being variable. The levels of utilization perhaps allowing us to extend the useful lives for some period of time, but our assets are second to none. The second is the breadth of our asset portfolio. So when you think about competing with a smaller you know, local provider, they just can't provide the the breadth of of products and services that we can provide. And so we're able to, extract value because of that. Third, the customer service. So branch Brandon will have talked about the logistics and our ability to place fleet anywhere within our clustered market. Our ability to mobilize service twenty four hours a day if an asset breaks down. You know? And then just the scale that we have to service you know, national accounts on a national basis that, again, local regional providers can't can't do. So, you know, frequently or almost always, as Brendan will talk about in in one on ones, the the the quality of the conversation with our customers does not revolve around rates. It really revolves around the breadth of service and, that we can provide. And so, so, yes, we continue to expect rate to progress, based on on all those things that I've described.

Thank you.

Thank you. And our final question for today comes from Karl Rainsford from Berenberg.

Brendan and Alex, Just three for me, which are clarifications really. But the first, on your growth guidance of zero to 4%, I appreciate that you've had that adapted the reporting segment. But is there any way you could give some color on how The U. S. Canada and UK fit into that equation, please? The second, will depend on how the cycle progresses over the next twelve months. But are you able to give any of guidance around used equipment sales versus the 2025 number of 470,000,000 based on how you're seeing things today? And lastly, just really a follow-up on Will's question on The UK. I see cost is down around 6% or 7% in North America general tools as a proxy. But roughly flat to very slightly down in The UK. I'm aware this is immaterial from a group perspective and perhaps a misunderstanding.

But could you touch on if there's a structural issue in The UK around the ability to drive efficiencies like you had in The U. S? Thank you.

Yeah. So let me take the first part of your question, and then then I'll turn it over to Brendan to talk specifically about The UK. So on the zero to 4% guidance, breaking that down, I think I gave sort of directionally the split between GT and special in my prior comments. As it relates to The US versus Canada, you know, we think about those as the North American market. And so there's a lot of synergy across the the two markets. Canada, obviously, you'll see, we anticipate softness in the film and TV business, which we pointed to again in the prepared remarks. I don't think we anticipate that changing. But that you know, going forward, you'll see reflected in the specialty results. The other area in Canada where which is perhaps a little bit different than, than The US market is we have more heavy exposure to residential construction, particularly in Ontario, sort of the Eastern provinces. And that that part has been a little bit softer. So in terms of relative strength between The US and Canada, I would would anticipate The US being, you know, a little bit stronger, a little bit overweighted on that zero to 4% growth partially offset by by the Canadian business.

And then I actually didn't I heard you asked a question about used equipment sales, but I I didn't fully hear it. Brendan's nodding at me that he he did hear it. So I'll turn the last two questions over to Yeah. I think really from a from a I mean, you'll you'll see, of course, the guidance proceeds of $475,000,000. And, you know, if you do the you know, the math and that, we'll have a bit less gains year on year. Which is a combination of quantum, but also really us just taking kind of the residual values, if you will, that we've been experiencing towards the back part of the year. We saw it come down over the course of the year. We've been experiencing some flattening in that as of recent months, and know, if history is a predictor of the future, that tends to normalize when you do kinda find that bottom quite quickly. So that's what our position is. We as we go through the quarters, we'll update if that's any change. But that's not really the underlying business. Appreciate the fact that it impacts cost. You know, your point on cost around The UK, if you you know, as you would have heard kind of throughout for four point o, etcetera, No.

This business has improved remarkably in terms of the service we're giving our to our customers and the operational capabilities. What what Phil and the team are laser focused on now, incumbent in four point o, which in short is to achieve acceptable levels of returns and sustain them. And part of that challenge is just the cost base that goes along with this business. In particular, and a, and that is part and parcel of the plan that the team is employing. I'm sure that Alex and I would both agree. That they have a good plan on the table for the year, and we'll see how that progresses. But, you know, in the end, that is a business that is cash generative. And when we get that margin or [indiscernible] to where it need be. Part of that will indeed be cost and just the reconfiguring of how we deploy that business.

Perfect.

Thank you very much.

Thanks, Carl.

Thank you. And that concludes today's Q and A session. So I'd like to hand the call back to the management team for any additional or closing remarks.

Yes. Thank you, everyone, for taking the time this morning and allowing us to go through our growth in the year, the real resilience that we have in this business, illustrating our advancement in all of our Sunbelt four point o actual actionable components and, of course, the cash. So thank you for your time, and we look forward to speaking with you at q one.

This now concludes today's call. Thank you for all for joining. You may now disconnect your line. Go back in the postcar now.