At its recent investor day, Herc Holdings unveiled several new strategic initiatives to accelerate its rate of growth in both rental revenue and in adjusted EBITDA.

“We are pleased with the progress we have made over the last five years as an independently traded public company and are now shifting into high gear to accelerate our growth and return to shareholders,” Larry Silber, president and CEO of Herc Holdings, said. “We have strong momentum and intend to invest in new locations and add to our fleet to enhance our urban density while improving operating leverage and scale. We intend to increase market share through both organic growth and mergers and acquisitions.

“As we move into the next phase of our journey, we are committing to a capital allocation plan that balances our investment growth options between organic and acquisition growth. We also intend to enhance our returns to shareholders through the establishment of a quarterly dividend. We are well-positioned to execute our strategy and deliver value to all of our stakeholders.”

The company set a three-year organic rental revenue goal of 12% to 15% compound annual growth from the midpoints of fiscal years 2021 through 2024. It also established an organic adjusted EBITDA goal of 17% to 20% on the same basis.

The initiatives unveiled include:

• Increasing rental equipment capital expenditures at existing locations while expanding the company’s branch network through new greenfield locations and acquisitions in select markets
• Investing in specialty fleet, with a target of 30% of total OEC by 2024, and growing the company’s specialty network throughout North America
• Enhancing the customer experience by enabling mobile solutions and improving fleet utilization tracking and logistics management
• Advancing toward newly established 2030 goals for sustainability
• Operating against disciplined investment parameters for organic growth, strategic mergers and acquisitions and dividends

The company also raised its full-year 2021 adjusted EBITDA guidance range from $840 million to $870 million to $870 million to $890 million, marking a midpoint increase of 28% compared with 2020 results. The company also affirmed its net rental equipment capital expenditures guidance for 2021 at $500 million to $550 million. In addition, the company established guidance for the 2022 calendar year, with adjusted EBITDA increasing 25% to $1.05 billion to $1.15 billion from the midpoints of the 2021 and 2022 guidance ranges and its net rental equipment capital expenditures guidance range reaching $820 million to $1.12 billion.

“We are committed to delivering long-term sustainable value to shareholders with a balanced, disciplined and opportunistic approach to capital deployment. With our available liquidity, we plan to invest in organic growth and M&A and inaugurate a quarterly dividend, the future growth of which will be in line with our long-term business performance,” Silber said.

Herc Holdings’ board of directors declared a quarterly dividend of $0.50 per share to shareholders of record on Oct. 20, which will be paid on Nov. 4.