Ashtead Group PLC on Tuesday reiterated full-year guidance after a mixed second quarter, which was held back by continued soft US non-residential construction markets, as the company announced a new share buyback to coincide with the move of its primary listing to New York.
The London-based industrial equipment rental company said pretax profit fell 12% to $571 million in its financial second quarter to October 31 from $653 million a year prior.
Adjusted earnings before interest, tax, depreciation and amortisation slipped 2.1% to $1.38 billion from $1.41 billion, below company compiled consensus for adjusted Ebitda to be steady at $1.41 billion.
Revenue edged up 0.7% to $2.96 billion from $2.94 billion, with rental revenue of $2.76 billion, up 1.1% from $2.73 billion.
Adjusting for $55 million to $60 million of lower hurricane clean-up activity in the quarter, rental revenue was up 3%, Ashtead Group said, as ‘mega project activity gained momentum, offset by continued moderation in our local non-residential construction markets’.
‘The group reported solid results for both the first half of the year and the second quarter, with revenue, profit, and free cash flow in line with our expectations as we benefit from long-term industry trends and ongoing improvements in our sector,’ commented Chief Executive Brendan Horgan.
For the half-year that ended October, pretax profit declined 10% to $1.08 billion from $1.20 billion on revenue up 1.1% to $5.76 billion from $5.70 billion. Free cash flow improved to $1.11 billion from $420 million.
Given the ‘continued confidence in our free cash flow outlook,’ Ashtead said it plans a new $1.5 billion share buyback programme, starting March 2 next year to coincide with its re-listing on the New York Stock Exchange. Ashtead said the move of its primary listing to New York from London which ‘remains on track’.
The existing $1.5 billion buyback is expected to complete by the end of February.
In addition, Ashtead declared an interim dividend of 37.5 US cents, up 4.2% from 36.0 cents.
Ashtead pointed to ‘positive leading indicators for local non-residential construction activity’, as it reiterated annual guidance for rental revenue, capital expenditure and free cash flow for the financial year.
The company continues to expect full-year rental revenue growth of 0% to 4%, capex of $1.8 billion to $2.2 billion and free cash flow of $2.2 billion to $2.5 billion.
Shares in Ashtead Group were down 0.8% at 4,771.00 pence each in London on Tuesday morning.
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