Hello, and welcome to the Analyst Call for Ashtead Group PLC Q1 Results. I will shortly be handing you over to Brendan Horgan and Michael Pratt, who will take you through today's presentation. There will be an opportunity for Q&A later in the call. For now, over to Brendan Horgan and Michael Pratt at Ashtead Group PLC. Thank you, operator, and good morning everyone, and welcome to the Ashtead Group Q1 results presentation. I'm speaking this morning from our U.S. support office, and I'm joined on the line by Michael Pratt and Will Shaw in London. It's not been long since we saw many of you in Atlanta and then in June, following our full year results, and so this morning will be a light touch with a brief update on our progress. Turning to slide 3, I'd like to start this morning by addressing our Sunbelt team members and recognize their engagement, learning, enthusiasm, and early focus in executing on our Sunbelt 4.0 plan. Beyond the clear and actionable plans surrounding the five primary elements of 4.0: customer, growth, performance, sustainability, and investment, there are the foundational elements, which are people, platform, and innovation. The team has leaned into their strengths of people and culture to not only make early advancements within each actionable component, but also the health and safety of our people, our customers, and the members of the communities we serve. This is demonstrated by following our best ever safety performance year, which we've shared as last year, with another record quarter in the very same leading and lagging measures the team delivered on last year. This further emphasizes our cultural mindset surrounding safety. It is not one of reaching a destination, rather achieving milestones. As is the case with many things, complacency is the ultimate threat. So to our team, thank you, thank you, thank you for your efforts in the first quarter and your ongoing commitment to engage for life. Moving into the slides, let's begin with the highlights for the quarter on slide 4. Strong revenue growth continued in the quarter, with group rental revenue and total revenue up 7% and 2%, respectively, while U.S. rental revenue improved by 6% and total revenue by 1%. Group EBITDA improved 5% to a record $1.3 billion. And as expected, lower used equipment sales and increases in depreciation and interest costs on a larger fleet resulted in adjusted PBT of $573 million and EPS of 97 pence. From a capital allocation standpoint, and in accordance with our priorities, we invested $855 million in CapEx, which fueled existing location replacement and fleet growth in greenfield openings. We expanded our North America footprint by 33 locations, by 22 greenfield openings, and a further 11 through 2 bolt-on acquisitions, costing a combined $53 million. Following these investments, our Net Debt to EBITDA leverage is 1.7x, which is towards the middle of our new long-term range of 1x to 2x. These results and investment activities demonstrate our confidence in the ongoing health of our end markets and the fundamental strength in our cash-generating growth model, and accordingly, we expect full-year results in line with our June guidance. On that note, I'll hand it over to Michael, who will cover the financials and outlook. Thanks, Brendan, and good morning. The group's results for the first quarter are shown on slide 6. We've had a good first quarter with trading in line with our expectations when we announced our full-year results in June. Group rental revenue increased 7% on a constant currency basis. This growth was delivered with strong margins and EBITDA margin of 47% and an operating profit margin of 26%. After an interest expense of $144 million, which increased 22% compared with this time last year, reflecting principally higher absolute debt levels, adjusted pre-tax profit was 7% lower than last year at $573 million. Adjusted earnings per share were $0.974 for the quarter. Turning now to the businesses. Slide 7 shows the performance in the U.S. Rental revenue for the quarter grew by 6% over last year, which in turn was up 16% on the prior year. This has been driven by a combination of volume and rate improvement in overall healthy end markets. The total revenue increase of 1% reflects lower levels of used equipment sales than last year, when we took advantage of improving fleet deliveries and strong secondhand markets to catch up on deferred disposals. The third actual component is the Sunbelt 4.0's performance. As we look to leverage the infrastructure and scale we developed during 3.0 and improve margins. This, combined with our focus on the cost base and lower scaffold erection and dismantling revenue, contributed to drop through for the quarter of 69% and an EBITDA margin of 49%. Reflecting the impact of gains, $42 million lower than a year ago due to lower used equipment sales and the higher depreciation charge on a larger fleet, operating profit was $669 million at a 29% margin, and ROI was a healthy 22%. Turning now to Canada on slide 8. Rental revenue was 21% higher than a year ago at $222 million, aided by the recovery of the Film and TV business. The major part of our Canadian business is performing in a manner similar to the U.S., with rental revenue up 16%, driven by volume and rate improvement, as it takes advantage of its increasing scale and breadth of product offering. Following settlement of the strikes in the North American film and TV industry, activity levels in our film and TV business have recovered, although they are yet to reach pre-strike levels. This contributed to an EBITDA margin of 43% and an operating profit of $46 million at a 19% margin, while ROI is 11%. Turning now to slide 9, U.K. rental revenue was 6% higher than a year ago at GBP 160 million. In line with the 4.0 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 29% and generated an operating profit of GBP 18 million at a 9% margin, and ROI was 7%. Slide 10 updates our debt position at the end of July. The increase in debt in the quarter relates principally to lease liabilities, with external borrowings declining slightly. As a result, excluding these lease liabilities, leverage was 1.7x net debt to EBITDA. Our expectation continues to be that we'll operate within our new target leverage range of 1x to 2x net debt to EBITDA, but most likely towards the middle of that range. Turning now to slide 11 and our guidance for revenue, capital expenditure, and free cash flow for this year. We are reaffirming the guidance we gave in June with U.S. rental revenue growth in the 4%-7% range, 15%-19% rental revenue growth in Canada, aided by the recovery of the film and TV business, and 3%-6% rental revenue growth in the U.K. From a capital expenditure standpoint, our range of $3 billion -$3.3 billion is unchanged, although as we sit here today, we believe we'll be around the bottom end of this range. Based on this unchanged guidance, we expect free cash flow with at least $1.2 billion, with the big variable being where we land on capital expenditure. And with that, I'll hand back to Brendan. Thank you, Michael. We'll now move on to some operational detail, beginning with the U.S. on slide 13. U.S. business delivered good rental-only revenue growth in the quarter of 7%. Specialty performed strongly, up 17% in the quarter, with General Tool up 3%. Consistent with what we have said previously, and others in the industry have been noting, time utilization was lower than in Q1 last year. There is capacity to better utilize fleet as we progress through this year, and we are managing our CapEx plans accordingly. Importantly, rental rates have continued to progress year on year, doing so despite the utilization movement I've just mentioned. This is, again, affirmation of the ongoing good rate discipline in the industry as a result of the ever clearer structural progression we've experienced over the years. Moving on to slide 14, we'll cover the outlook for our largest end market, which is, of course, construction. Consistent with our usual reporting of construction activity and forecast, this slide lays out the latest Dodge figures and starts, momentum, and put in place. Due to the timing of the results, the put in place figures on the top right have not changed since our last presentation in June. We'll be getting the updated figures from Dodge in the next week or so, but based on the latest sneak peek we've seen for construction starts, we don't expect significant changes from what you see here today. The outlook for construction growth continues to be underpinned by mega projects, which are representing an increasing proportion of our rental revenue. As we covered quite extensively during our full year results and subsequent shareholder engagement, there's an ongoing softening within the local run-of-the-mill, as we call it, commercial construction space, as the effects of a prolonged higher interest rate environment weighs on local and regional developers. This, of course, impacts some of the small, mid, and regional-sized contractors. If, as is being forecast, the Fed starts to move interest rates downwards at the September meeting, then hopefully this will start to re-energize this area of the construction market, and we'll begin to see some of the planning progress to permitting. Overall, the construction environment looks to be positive as we progress into 2025 and beyond. The mega project landscape, which we've covered in great detail in April and again in June, continues to demonstrate progress in both starts and in planning. You can reference the data in the appendix, slide 27. Unsurprisingly, the latest data has slightly more starts in the fiscal year 2025 to 2027 period than illustrated on the slide. This mega project landscape reality, driven by de-globalization, manufacturing modernization, technology, and infrastructure, is here to stay for quite some time to come. Moving on to Canada on slide 15. Our business in Canada continues to deliver good growth, with rental revenue in the quarter of 21%, coming from existing General Tool and specialty locations, as well as greenfields and bolt-ons. As is the case in the U.S., rental rates continued to progress in the quarter, which we expect to continue to be the case moving forward. As Michael mentioned, activity in the film and TV business has recovered following the strikes last year, although it's still lagging the pre-strike levels we experienced. We are operating on the basis this is the new normal for the time being. Our focus in Canada, which is embedded in our 4.0 plan, is to continue to increase our addressable markets beyond construction, as we've done so well over the years in the U.S. The runway for growth, improved density, market diversification, and margin remain significant. Turning to the U.K. on slide 16. The UK delivered good rental revenue growth of 6%, driven by market share gains in an end market, which continues to favor our unique positioning through the industry's broadest offering of General Tool and specialty products, which is unmatched. The Sunbelt 4.0 plan for the U.K. will lead to an ever more diverse customer base and increased TAM, while bringing greater focus and discipline on the necessary levers and actions to deliver acceptable and sustainable levels of ROI and free cash flow. This business has transformed in recent years, and as I've previously said, Sunbelt 4.0 is designed to add the final piece to the transformation. Now, before I turn to the summary slide, I'd like to comment on the announcement we made this morning in conjunction with our results of Michael's intention to retire in September 2025, and the joining of Alex Pease as CFO designate. I could go on and on about the many contributions Michael's made to the success of our business, and what a pleasure it has been to partner with him over the years. However, Michael is not packing up just yet, and therefore, there will be plenty of time to do that down the road. Michael will be very much here and engaged in a manner we've all been so accustomed to, and you'll get to see him again, tie it all, during our half-year roadshow. I'm most pleased. However, we have the opportunity to ensure a smooth transition between Michael and Alex, and look forward to Alex's joining in early October to learn our business while also transitioning the CFO responsibilities. So let's summarize on slide 17. We've had a strong start to the year. We are well-positioned for the future as we embark on the execution of Sunbelt 4.0, through which we will extract the benefits of the well-documented and ongoing structural progression present in our business and our industry. We will deliver strong performance through volume gains, pricing progression, margin improvement, and strong return on investment, resulting in an ever stronger financial position through earnings growth, strong free cash flow, and operational and capital allocation optionality, greater than at any point in our company's history. For these reasons, we look to the future with confidence, and full year results are in line with our expectations. And with that, we'll turn it to the operator to give instructions for Q&A. Thank you. If you wish to ask a question, please press star one on your telephone keypad. That is star one on your telephone keypad. If you wish to retract the question, please press star two. And our first question comes from Annelies Vermeulen, from Morgan Stanley. Please go ahead. Hi, good morning, Brendan. Good morning, Michael, and many congratulations on your retirement, Michael. I have three questions, please. So firstly, could you give an update on the scaffolding customer, if there's any timing or any sort of update on the resolution, and the timing of that, if you have any visibility? Then secondly, on the drop-through, which is very good in the first quarter, could you share your thoughts on that, your expectations for the full year and how you expect that to progress through the quarters? And then lastly, on Canada, you've mentioned, you know, you assume the new-- this is the new normal for film and TV work. I'm just wondering, does that leave you with any excess fleet in Canada? I assume some of the equipment can be redeployed to other end markets, but I also imagine there's some film and TV-specific equipment. So how are you managing that? Thank you. Great. Thanks, Annelies. I'll do one and three, and turn two to Michael. As it relates to the project where the customer was in Chapter 11, and there was a contract dispute between contractor and owner, we've seen a lot of progress there, specifically around a settlement that was reached between a customer and project owner, which resulted in. That was all in keeping with the courts, so to speak, in terms of the approval of that. So we are feeling increasingly confident when it comes to the full collections of that. However, this no doubt has delayed and slowed down that project. So as we would have said in June, we're expecting significantly less revenue from that project over the course of the year. Annelise, you would have seen that actually or heard that from Michael when he was talking about lower scaffolding, erection, and dismantling revenues. But this is one that's just gonna play out over the course of the year. Our team's done a really good job engaging throughout this, and we're working on relationships with the new contractors that will take on that project, when, not as or not if, but when that project really ramps back up again. And we'll keep you updated as we move through the quarters or move through the year. As it relates to Canada, and you're of course, you're speaking about the film and TV business, where we're saying this just, we're viewing this as the new normal. And by that, we're certainly talking about how we invest in the business, but really how we build the infrastructure or how we level off the infrastructure in that business, which the team has done a good job dealing with the ups and downs that we've experienced in that, from pre-COVID to through COVID, to through an actors and writers strike, to make sure that we keep that adequate to or to the level that matches well the overall activity. To your question on, do we have too much fleet then? We're building the. When it comes to the fleet that we support those sets, et cetera, with, that's a lot of the specialty and General Tool equipment. And what you'll see there really is how we moderate CapEx related to what we invest in Canada. And that's how we're proceeding there. But I think, first of all, it's positive in terms of, you know, the industry is up and running. We're doing really, really well when it comes to share, and we're still synergizing in terms of cross-selling, but we're just taking it all sort of at its present level. Michael, you want to touch on drop-through? Yeah, on drop-through, yeah, it, you know, it was a good quarter for drop-through. There's always some ebb and flow as to what happened last year, what happened this year. But building on what we said at 4.0, in terms of leveraging the cost base, but also paying particular focus to the cost base, and as I touched on, we've benefited from this lower level of E& D revenue, which has a lower level of cost associated with it. So as we look forward to the rest of the year, we would now expect drop-through will start with a 6 rather than a 5, most likely. I'm not gonna guarantee you 69% for the year, but I will say it should start with a 6 rather than a 5. Perfect. Thank you, both. Thank you. Our next question comes from Lush Mahendrarajah, from JP Morgan. Please go ahead. Morning, guys. Thanks for taking my questions, and my congratulations on your upcoming retirement. A couple from me, please. The first just on local construction. I guess, is that sort of playing out how you anticipated or sort of how you guide with the full year results? Or is it sort of worsened since then? And then, I guess, tied to that, some of your sort of smaller competitors who don't quite have the benefit of mega projects and perhaps specialty like, you know, have they been a bit more irrational around pricing on some of those local contracts? So that's the first question. And then the second one is just on that drop-through. Again, I appreciate it's gonna be higher this year for a number of factors, but when that E& D does come back, would we need to think of drop-through below 50s, or can that sustain sort of above 50% type going forward when that comes back as well? Sure. To your question around local construction, I think the best way to characterize it is we're just seeing a continuing trend. This has been quarters now that we've seen, and the way that it happens, of course, is you're in a very active period from the starts that would have previously begun, and as you work through and you see some of those projects come to an end, there are simply less of those sort of projects going into the funnel. The important thing, though, around your question: What are the smaller, independent rental houses doing? Are they staying disciplined in price? I would say this: They are continuing to keep a watchful eye on what we, and I'll say we, in terms of the larger competitors out there, are doing, and I think what you're seeing in that across the board is ongoing discipline and ongoing progression. One really key point that maybe you didn't raise in the question, but it's worth adding, is what we're seeing is they are moderating CapEx, and that's the important thing when it comes to the overall fleet balance that's out in the marketplace, and we're seeing that across the board when you tune into the OEMs who largely supply this industry. Michael may clean me up here a bit on drop through, if you'd like, but I just want to make sure. I mean, certainly, E & D will ebb and flow. It's not gonna, it's not gonna change so much so as you go below 50, as you would have alluded to or asked a question around. But I wanna make sure we're not missing the point here in terms of Sunbelt 4.0 and the third actionable component, which was performance. And that's not only performance in terms of for our customers, but it's talking about operational efficiencies that we're working to put into the business, but also a discipline on leveraging our cost base and in particular, our SG&A. So what you're seeing is actually the second quarter in a row, Q4 and Q1, where we're seeing that come through in the P&L, and we would expect that to continue. Yeah. No, all I would add is, you know, on what we said in 4.0, if you go to the slide at the back, I forget what the slide number was, but, you know, we talked about the 4.0 drop-through in the mid-50s. And so you'll always have a degree of nuance, quarter over quarter, et cetera. But it's more marked. You know, when scaffold and E& D has gone up in the past, we've called it out as being a drag. It's just particularly marked, and it's what? Because it was a big drop-off, is the honest answer, because work on this project basically just stopped. So normally, it's more gradual. So you'll always see some impact as it ebbs and flows, but it was more exaggerated. It's more exaggerated this time around. Okay. Super helpful. Thanks, guys. Our next question comes from Suhasini Varanasi from Goldman Sachs. Please go ahead. Hi, good morning. Thank you for taking my questions. Just a couple from me, please. You've mentioned that you've had lower utilization on the larger fleet in this set of results. Can you maybe talk about the need to balance CapEx to not get the utilization up through the rest of the year? What are your plans on this? Will you be modifying your CapEx guidance, for example? Second one is, maybe could you just talk about the quarter? You had mentioned at the time of the full year results, how trends were in May. Maybe if you could comment on, you know, June, July, August, and how you see the next quarter versus second half of fiscal 2025. Thank you. Sure. You know, the utilization and, therefore, fleet size and therefore CapEx, all of that's a balance. What we're trying to do is match our fleet and our fleet availability, with present demand and what we see as, future demand. And, you know, given all of the discussion that we've had around that local, run-of-the-mill commercial construction, that's also balanced by the mega project work. So what you see in action today is, you know, you have had a fleet plan for the year, and you want to make sure that you keep agility in that. So as some of the local branches, so to speak, have a bit less demand when it comes to what CapEx needs that they will have, you're able to actually be agile, as I said, and direct that more towards fueling these mega projects. So that fleet is remarkably fungible. And as you're doing all that, you're balancing the availability that you're looking to extract a bit better time utilization, which we know we're capable of doing as we progress through this year. And it's all finding that equilibrium, because remember, not too long ago, we were coming off of what was an anomalous sort of high of time utilization, when we had both strong demand and we had constraint in the supply chain. Certainly, as we progress through the year, we'll have a better feel for what CapEx looks like from a full year standpoint when we come on to December. But as Michael would have said this morning in his prepared remarks, we expect CapEx, as we sit here today, to be at the bottom end of the range that we've put out there for rental fleet. To your next question, in terms of how trading is, you know, we've obviously just completed August, and August looks a lot like Q1 did. So, you know, that's why we're keeping our guidance where we are in terms of rental revenue for the U.S. and the broader group. And we'll have obviously a more current view when we get to December for the half year. Thank you. Thank you. Well, then now we'll have our next question from Rory McKenzie, from UBS. Please go ahead. Oh, good morning. It's Rory here. Two questions, please. Firstly, on average rental rates, sounds like they're still up low single digits compared to last year and continues to progress. Can you just talk more about the range of that across your businesses? For example, what's that within specialties, the local General Tool business, and mega projects, and any regions that stand out one way or another? And then, secondly, rather than focusing on drop-through, I wanted to ask a question about the cost base and the cost savings. I think that apart from the pandemic, this is the first time since 2010 that you've been reducing headcount. I think page 27 shows the U.S. headcount is now down about 7% from the January peak. Can you talk more about where and how you've been doing that, that right sizing, within the business and what the outlook is over the rest of this year? Thank you. Yeah, sure. Rory, first on average rates, yeah, we're seeing rates progress and, you know, we don't quote the exact number. You would have heard what we were targeting for the year while you were in Atlanta. And we remain vigilant on moving the needle throughout our entire network. So whether that be specialty or GT, they're going to be quite similar. Geographically, there's nothing to really point out in terms of one region that's moving versus another, not so much. It's really across the board. The important thing there is, as I said, when it comes to various types of customers, you know, you get to your larger strategic, more contract-based customers, if you will, and you have a larger proportion of those that will have pricing that will be on an annual basis. Obviously, when we get into October, November, December, you're going through those negotiations, and we're looking to set the pricing higher, based on the inputs that we've shared. We'll continue to do that throughout the year. There's no real standout there to speak of, simply our ongoing vigilance. We have all of the reasons to do that when it comes to a cost of labor, when it comes to the inherent inflation from a replacement CapEx standpoint, albeit we're seeing year-on-year pricing from an OEM standpoint, flat. Moving on to drop-through and cost savings, and you point out on heads. Remember, there's one part in there, which of course, is E&D, which is a rather large number. You're talking about, you know, several hundred on one project alone, so that will play into that. Otherwise, again, I'll go back to our performance, actionable component, not just in Q1, but what we had begun putting into place before we would have launched externally, Sunbelt 4.0. As we've increased, and we did more so than at any point in our history, the density of our markets, we have the opportunity to synergize. So if we were to take a field service technicians as an example, as we progress and have more locations, you know, once upon a time, we would have needed, you know, two field service techs per location, and when all of a sudden you have 14 locations in one market, you do not need 28 field service techs. You might be able to do it with 16 field service techs. So what you're seeing is the manifestation of that, and you're seeing the individual branches working within a market to synergize and leverage that overall headcount. And that's what you're seeing in the figures. That was really helpful. Thank you. Thanks, Rory. Our next question comes from Arnaud Lehmann, from Bank of America. Please go ahead. Thank you very much. Good morning, gentlemen. I have three, if that's okay. Firstly, a very strong specialty in the quarter. Was there any support from the hurricanes? Have you seen a busy or a quiet hurricane season so far? The second question is on used equipment sales. We knew it would come down, but I think it came down a bit more than I expected in the first quarter. Maybe could we have a guidance for the full year, or if you want, a good indication of what to expect going forward? And lastly, obviously, congratulations to Michael for his upcoming retirement. Could you give us a bit of color on the selection of Alex Pease as the new CFO? Did you and the board consider internal options? Considering Alex will be, I believe, based in the U.S., does that change anything in terms of the organization? Thank you very much. Especially business, you know, there would be some slight benefit to, in particular, our power and HVAC business, which is up + 20%, year to date. But it is certainly not a remarkable shot in the arm there. Yeah, it was rather active, but not quite the sort of hurricane that would have left the prolonged level of response. Certainly, across the board, when we look at the hurricane activity thus far this year, it would be a net neutral at best, just given the type of storms that we experienced and really the longer than usual rain and soggy weather that would have gone across most of the, let's just say, Mid-Atlantic states along the Eastern Seaboard and even into the Northeast. But nonetheless, we'll see what happens from a response standpoint, but nothing notable there. Used equipment sales, I think your characterization is reasonable. What we've seen is, we've seen, you know, really now the full normalization from a secondhand value standpoint. Michael would have pointed out, you know, gains on the year. I'm sorry, gains year on year for the quarter were circa $45 million less. We were anticipating lower gains in the year overall. Perhaps it would be, it was, it, it, it's, you know, about what we would have expected for the first quarter. We'll see what we guide to when we get to the half year, as we experience a bit more of that, but again, just a normalization. Furthermore, I would say, you know, the team, the business would have really, as Michael would have also said, took advantage even through Q4. So we have disposed of a bit more toward the end of Q4, as we were looking to extract a premium value, so to speak, but nothing really to point out there, not at least at this juncture. Moving on to Michael's coming retirement and what we considered in terms of his replacement. Sure, we would have gone through, you know, the internal candidates, so to speak, that we had. But in the end, after casting a quite wide net into the marketplace to see what the availability was, we came across Alex. I think you'll find Alex is, you know, remarkably experienced. We like a lot of things about Alex, obviously, and, you know, look forward to his joining. As I said, giving him the opportunity to learn the business while we work through a very well-choreographed succession. To your suggestion or question around, should we be thinking anything more based on having a, you know, U.S.-based CFO? I think in any circumstance, one could envision, our next CFO replacing Michael with all of his incumbent experience and understanding of this business. In no shape or no-- I can't imagine a situation whereas our next CFO would not be based right here, next to our executive team in the U.S. So no one should read any further into that than simply, if this were two years ago, or even five years ago, for that matter, we would have more than likely landed right where we are. Very clear. Thank you so much. Our next question comes from Neil Tyler, from Redburn Atlantic. Please go ahead. Thank you. Good morning, Brendan, Mike. Two from me, please. Firstly, sticking with the CapEx question, if you take the sort of midpoint of your rental revenue guidance and the low end of the CapEx guidance, I think you end up with sort of OEC value growth of about 3.5% and volume growth of perhaps 2%. Does that take you by the end of this fiscal year to a sort of time utilization situation, you know, that you're comfortable with, sort of, you know, back on an even keel? Or do you think, you know, scope through the 4.0 remainder timeframe to, you know, to push time utilization back up further than that point? And then second question, on the growth components and sort of and trying to sort of tease out mega projects as on or those you're currently active on. Obviously, we've heard, you know, that some that have broken ground are making sort of slower progress than expected, and presumably some that started in 2021, 2022 are tailing off a bit. So on those projects that you're currently working on, I appreciate this is sort of difficult to, you know, to bundle all together, but are they still able to deliver a net positive revenue contribution over the coming 12 months? Or do you need new starts for the sort of mega project piece of the revenue pie to, you know, to grow from here? Let's start with the second there. You know, certainly you have some projects that were marquee projects that are beginning to wind down, and we're seeing fleet on rent on those projects. Depending on the project, some will have $10 million in OEC, and they've gone to $5 million, and some would have had $120 million in OEC, or original equipment cost, as we abbreviate that by. That will go down to that have gone down to say $50 million, $60 million, $70 million, and over the course of Q2, Q3, we'll see those continue to come down. While at the same time, as we would have talked quite a bit about in April and again in June, we've had more recent wins. And you are right when you characterize. And it's hard to just generalize what happens with these mega projects. Some mega projects break ground and get ramped up quite quickly, particularly when you get to the smaller end, data centers, as an example, but certainly, when you get into these larger projects, like these fabs that we're experiencing, that we're loading into now, they are gonna have a bit slower start, and it's gonna be more of that slope we would have described many times, where it takes four or five quarters from breaking ground to get to, you know, your kind of max output on that project, which then lasts for quite a long time. Because the common threads we're seeing is, you know, these projects, there are a lot in the hopper. As I would have said in my prepared remarks, there are more projects and more value. If we refer to, as a for instance, slide 27 in the pack, you have seen that 501 projects for $759 billion in value or cost between this current fiscal year and fiscal year 2027, so that three-year window. Today, that looks more like $850 billion and 600 and a few projects that are coming into that hopper, so you know, it is something that you know will move in that manner. But overall, I think the key to it is mega projects will make up a larger proportion of our revenues as we do progress through this year, but as we go into next year, I think we see quite a few more of these coming online. But all in all, that's all baked into what we're given from a guidance standpoint. Moving on to the CapEx question, and really what you're getting to is utilization. Yeah, I think your characterization of that is correct. When we get toward the end of this year, we would expect to see that, you know, expect us to extract some upside in time utilization. Another way to look at that or characterize it is, really what we've been going through as a result of coming off of those anomalous highs in time utilization and the inflation in the replacement and growth CapEx, we've seen for some time now, the depreciation growth outstripping revenue growth. And I think really that's one way of looking at all that, and we would expect as we get to kind of Q4, we'll again be in the position of revenue outpacing depreciation. And in a way, that's what, what we're looking for. I hope that answers what your questions were. It does. Thank you very much. Thank you. Thank you. With this, we're going to move to our next question from Karl Green, from RBC. Please go ahead. Yeah, thanks. Good morning. A couple of questions from me. Just on the comments you made about the rate discipline amongst the smaller and mid-sized players, and obviously they're keeping an eye on what you're doing, as you've already said. I mean, just thinking about squaring the circle where there's clearly high inventories in some of the auction channels, and they are clearing at lower prices at the moment. So that equipment is finding a home. Is kind of the balancing part of that equation, the fact that actually ownership is slightly ticking up? Because I think some of the Rouse Ritchie data is suggesting that a lot of the equipment is actually staying in the U.S. rather than going overseas, as was the case in sort of previous downturn. So is that the right way to think about it? Would be the first question. And then the second question, unrelatedly, just going back to that very high drop-through of 69%. Just in terms of the delta between, say, the mid-50s and that 69%, is it fair to say that the vast majority came from that lower E&D revenue base, or was it the fact that, as you said, other dynamics there going on in terms of operating costs and current management? Thank you. I'll take the first, and Michael can take the second. You know, what you're alluding to there around rate is the structural progression. So yes, we will continue to see rental take share from ownership. And that is what we have seen, and that is what we will continue to see. I think the key, really from an understanding standpoint when it comes to rate and the discipline that we see in the industry, using the inputs that we would have shared so clearly in April when we were together in Atlanta, is really the decoupling of the notion that second-hand values are influencing what rental rates are doing. For a long time, that was a heavy focus, and when we would see any sort of softening in second-hand values, you would see that corresponding softening either in the pace of growth of rates or in absolute, whereas rates would go backwards, and this isn't a new Q1 phenomenon. We've been seeing, actually, second-hand values come down for the last five, six quarters from what was the cycle peak, so to speak, if you will, so there's not all that much to be taken as or to be read into there. Yeah, you know, I've-- We know Ritchie very well, of course, and there's a bit more of the fleet that's being sold that is staying within the U.S. But there's still quite a lot that does leave the shores of the U.S. and go elsewhere in the world. But either way, we have a perfectly liquid, second hand market for used equipment, and the values will ebb and flow, based on demand of buying that second hand equipment. But it doesn't feed into what we are expecting or looking to garner when it comes to progressing rental rates. You wanna talk drop-through, Michael? Yeah, you know, I guess the upside is a combination of all of those factors. I would say the E&D piece is maybe about a third of it or maybe just over, but the rest of it is, you know, again, focused on the cost base and leveraging the cost base. Okay, great. And just to follow up on the first question then. So can you give a kind of vague indication as to what sort of percentage of OEC you're seeing on your used equipment sales, just year on year, how that's trended, just to get a sense of the normalization, as you called it? Yeah, if you go back in time, we, you know, we've always talked about sort of mid- to high 30s as a percentage of OEC, and over the past few years, it's been in excess of 40% of OEC, and we're back into that sort of mid- to high range for 30%s of OEC. Great. Thank you. Thank you. We will now move to our next question from Allen Wells from Jefferies. Please go ahead. Hey, good morning, guys. Just two for me. Most of them have been asked. In terms of the U.S. rental growth, obviously, we've seen that slight sequential slowdown into the fourth quarter. You know, the guidance is 4%-7%. Can you just talk a little bit about how you, at least at this stage in the year, see the shape of growth through the rest of the year? Like, I guess most people would have expected to see a general easing in terms of the trends, but also mindful of easing comps as we move through the year, and actually, the fact that the organic growth number that you printed was broadly stable. That's my first question. Thanks. Oh, sorry. I'm happily talking, and Will pointed out I was on mute. So, given where we were and given what our guidance is, you would expect us it to be slightly slower in the, you know, in the second half or, you know, next nine months and in the first, or else, we, you know, our guidance would be slightly different. So, you know, we're at six, which is, yes, is towards the end. We still expect to be somewhere in that range of 4% to 7%. So, yeah, I don't--g iven that range, you're not gonna see big variances quarter over quarter. Clearly, the one thing that might influence is if there are events and, you know, and particularly at these lower levels, you know, if you're growing 20% a year, an event is probably not significant on a growth rate. Whereas if you're growing at somewhere between 4% and 7%, if there happen to be, you know, two or three events, then it might have more of an impact on that. But as we've said before, we're not planning on that. So you'd expect something sort of a moderating profile as you go through the year. Okay. And then just a quick kind of follow-up on rate as well. Obviously, you guys talked about it, it's still progressing. But could you maybe just talk about how that looks sequentially, just directionally? Are you still seeing? I guess we are still seeing, you know, inflation in the cost base, but that inflation's probably lower than it was, a quarter or two ago. So is the rate environment still slightly easing as you move through, even if it's still progressing positively? Just the industry data seems to suggest that I see, but I just wonder what you guys are seeing internally. Yeah, I mean, it is progressing. It is progressing not quite as quickly as it would have in years past, and you know, when you think about that overall inflation environment, when inflation is being printed and it's being discussed the way that it was, it does make it a tad bit easier to have those discussions with customers. Which is why, again, I'll draw back to the inputs that we covered, our pricing formula to the business in Atlanta, where some of you were spectators. That's precisely why we're going at it that way, so what you sort of read or taken in across the industry, I think is a reasonable characterization. And we would expect, you know, you know, it to continue to progress about the same as we go through the year, while we set our sights on what is more important, and that is the ongoing rental rate progression that can match or deliver a bit better than overall inflation. Okay, great. Great. Thanks, guys. Thank you. We will move now to our next question from Will Kirkness from Bernstein. Please go ahead. Thanks. Morning, just two for you, please. Just wondered if you could cut that General Tool + 3% anyway, to give us a bit more color. Sounds like it might be sort of mostly rate, so I just don't know if you could break that down, maybe by regions or kind of segments. And then secondly, just on the U.K., I think you said for a while that rates aren't really progressing where you'd like them to be. I just wondered what the impediment is and what kind of actions you can take there. Thanks. On the second, when it comes to the U.K., it's just what the industry lacks there, is that element of structural progression, which is so put in place here. And that's one part of the limiting factor. The other part of the limiting factor was the 6 inches of space between the two ears on the human head, and that part we are pushing more and more, and we're seeing progress in rates in the U.K. And the team which is leading that effort is doing good, so we would expect that to continue. When it comes to the U.S., I mean, Will, you're asking us to report specifically on what our rental rates are, and we won't do that. In terms of regional color, you know, we have 11 regions in the U.S., and we have nine that are up year on year in rental revenue. We have one that is flat, and we have one that's back ever so slightly, which is the Upper Midwest. So really what that demonstrates is, it demonstrates strength throughout the geography, and in Canada, it would be up across the board. And then, of course, our specialty business, you know, we see a big range there. We'll see, you know, we'll see our flooring business that will be up low single digits, and we'll see, we'll see, you know, climate, power, and HVAC up really nicely, and we'll see little businesses that are just getting started, like our fencing business, that's up almost 400% year on year, as we're extracting the benefits of the greenfield opening campaign that we would have had over the course of 3.0. But overall, the environment is doing what we would have largely expected. Great. Thanks so much. Thanks, Will. Thank you. As a reminder, to ask a question, please signal by pressing star one. And our next question comes from Mark Howson from Dowgate Capital. Please go ahead. Good morning, gentlemen. Just briefly on, A couple of questions. On, bolt-on acquisitions, obviously, we focus very much on CapEx and how that's rolling out and yourself and the industry. Have you found, the prices of bolt-ons, so probably just a bit too much to bear at this point in the cycle, something you might want to do when things are-- if things, do become tougher, it's easier to pick things up, and that--o r is it, is that a reflection of that, or, or is it just a question of, you know, something else? I think, you know, it's really more, it's really more. I mean, let me be clear. There is no shortage of available M&A to do in our industry. We still have thousands of independent rental companies in the U.S. and Canada that are entertaining selling. If you sort of put a level on that compared to prior periods, it still remains high. What you're seeing is that we are pushing back a bit when it comes to the value of some of these bolt-ons. You know, we all would have been taught or learned over the course of our careers that as interest rates get higher, you know, private deals sell at lower multiples, and that isn't exactly what was happening over this period of higher interest rates. We're drawing a bit of a line in the sand. The good part with all that is, we're not losing out on opportunity, because so many of the deals we do, as you know, are shoulder tap. In other words, they're not being run through a process with a broker. We have lots of deals, if you will, on the burner, that we are testing and feeling, and we'll buy them when we'd like to. Overall, I don't think there's all that much to read into that. You know, your question would kind of imply, you know, as times get tougher, you know, there may be more availability. It just all depends on what we say or what you would say, or what circumstance you would paint in terms of times get tougher. You know, when you actually go through a period of slowing, you'll have a lot of independents who will rather wait until they can repair their P&L a bit, and entertain a sale then. But either way, still there is a flush landscape of M&A, and we're just being disciplined buyers. Okay, and just a couple of things for me to finish off. Just on the election front, have you seen much difference between what Kamala Harris' view on things like the Inflation Reduction Act and Infrastructure Act versus Biden? You know the difference in Trump, and, you know, Drill, baby, drill, but are you seeing anything between Harris and Biden in terms of how the outlook may change? No, I think, I mean, overall, if you, if you think about--w hether you think about, you know, their positions on tax or their positions on infrastructure investment, it's really still very much, you know, Biden, Harris. Meaning, you know, together in terms of how they are portraying, you know, what they believe in, most importantly now, what Harris would put forth. But either way, I-- we will be consistent in what we've said, which is what we, of course, believe to be the case. Whichever direction you go, the core fundamentals of our business and the core fundamentals of structural progression will continue. It is. I would characterize it as remarkably unlikely that any of the sort of trifecta of acts, whether that be infrastructure, it be CHIPS and Science, or it be IRA, have any demonstrable change as a result of the same, in essence, administration or a change in administration. One thing I would have talked quite a bit about during the full year roadshow is, you know, once upon a time, you'll remember, most of us would have learned that the most powerful person in the U.S. isn't necessarily the president, but rather the chair of the Federal Reserve. I would say, at this particular juncture, that might be a reasonably good default, because so much when it comes to overall activity levels, you know, come down to what do we see from a cost of borrowing or interest rate environment. Time will tell when it comes to the election, but we don't expect much one way or the other. Finally from me, just say well done to Michael. I think you've done an excellent job over the years, so thank you very much. Thank you, and we will now take our last question today from Katie Fleischer from KeyBanc Capital Markets. Please go ahead. Hey, good morning. Just one question for me. You talked about the normalizing environment in the film and TV business and how you're thinking about that as the new normal going forward. Just wondering if that changes your thoughts on that business in general or the Canadian market, if you see any sort of shift in strategy going forward to adjust to this new normalizing environment. No change in strategy, just running the business, as we should, paired with what that market availability is. So, no change whatsoever. Okay. Thank you. Thank you. Thank you. With this, I'd like to hand the call back over to Brendan for any additional or closing remarks. Over to you, sir. Great. Thank you all for joining this morning, and we look forward to speaking with you along our half-year results in December. Have a great day. This now concludes today's call. Thank you all for joining. You may now disconnect your line.