A drop in earnings and a weak outlook unsettle Ashtead investors / Image source: Adobe
  • Full-year pre-tax profit down
  • Debt and interest costs climb
  • US revenue target fails to inspire

Equipment rental firm Ashtead (AHT) posted a fall in pre-tax profit for both the final quarter and the full year to the end of April and forecast a slowdown in revenue growth in the key US construction market.

The shares dropped 180p or 3.3% to £53.30, undoing all their gains since mid-March and sending them to the bottom of the FTSE 100 performance table, as investors mulled over the results.


The group, which has its headquarters in London but makes the majority of its sales and profits in North America, reported revenue up 7% for the three months to April and 12% for the full year driven by strong rental growth.

In the US, rental-only revenue was up 12% during the year to $6.56 billion thanks to organic growth of 8% and bolt-on acquisitions which contributed 4% growth.

Total revenue was up 13% to $9.3 billion due to a higher level of used equipment sales as the firm took advantage of a strong secondary market to accelerate some disposals scheduled for the current financial year.

Across the group just over $900 million was spent on acquisitions, but an additional $4.3 billion was invested in existing locations and greenfield sites in order to drive sales.

Higher interest rates and a higher debt pile meant pre-tax profit was down 10% in the fourth quarter and 2% for the year, while adjusted earnings per share were down 6% in the quarter and flat on an annual basis.


Chief executive Brendan Horgan insisted the company’s North American end markets ‘remain robust with healthy demand, supported in the US by the increasing proportion of mega projects and the ongoing impact of the legislative acts’ and said the firm was in ‘a position of strength’ going forward.

However, for the year to next April Ashtead is only forecasting group rental revenue growth of between 5% and 8%, with the core US business seen increasing rental income by between 4% and 7%, down sharply on last year.

With the UK seen growing by just 3% to 6%, the onus is on the Canadian business to grow by between 15% and 19% to hit the firm’s overall target, which from the outside seems like a tall order.

Moreover, there was no mention in the statement of the company moving its main listing from London to New York which will have disappointed some investors.


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Issue Date: 18 Jun 2024