Shares in equipment rental firm Ashtead (AHT) jumped 240p or 4% in early trading to touch a new life high of £60.92 after the company raised its full year guidance on the back of a strong first quarter.

The stock has now risen four-fold from its pandemic low of £12 in 2020 thanks to repeated increases in its earnings outlook, making it one of the best performers in the FTSE 100 index.

Today’s raised forecast comes after a 21% increase in revenues to $1.85 billion for the first quarter to the end of July, driven by a recovery in UK and Canadian rentals and a strong market in the US for used equipment and components. Importantly, the business also grew its revenues compared with 2019 levels.


While revenues have rebounded, margins continue to widen with the US approaching an EBITDA (earnings before interest, taxes, depreciation and amortization) margin of 50% on sales in the first quarter and Canada producing an EBITDA margin of 45% against 32.8% last year.

Return on investment in all three regions recovered strongly from last year with even the previously under-performing UK business generating an ROI of 14% against 5% previously thanks to increased work volumes and operational improvements.

Even more impressive, these returns have been achieved in spite of rising costs, particularly for labour and fuel, as the firm continues to bear down on non-discretionary spending, a positive legacy of the pandemic.


Thanks to its strong performance in the first quarter, Ashtead has raised its growth forecasts for the full year with rental revenues in the US expected to grow by between 13% and 16% instead of 6% to 9% previously.

Revenues in Canada, the next biggest business region, are seen growing by 25% to 30% against 20% to 25% previously, and UK rental revenues are seen rising by 9% to 12% against 5% to 8% previously.

This means that the firm can increase its capital expenditure by $100 million to between $2 billion and $2.2 billion, to underpin future growth, and still generate free cash flow in the region of $900 million to $1.1 billion.


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Issue Date: 16 Sep 2021