21.11.2023

Ashtead trading statement

Ashtead - owner of Sunbelt rentals in North America and the UK - has issued a first half trading statement for the six months to the end of October.

While the company will achieve record revenues and profits, revenue growth in North America will come in a couple of percent below previous forecasts in terms of revenues and profit, due to factors such as the Hollywood actor and writer’s strikes and a quieter hurricane season so far.

The statement is published below in full

The group expects to report record results for the half year and the second quarter with group rental revenue growth for the half year of 13%, EBITDA growth of 15% to approximately $2,580 million and adjusted profit before taxation growth of 5% to approximately $1,310 million, driven by strong execution against our strategic growth plan, Sunbelt 3.0.

Despite robust end markets, ongoing structural drivers and a record operating performance, the Group's revenue late in the second quarter was affected by lower levels of emergency response activity with a significantly quieter hurricane season than seen in recent years and fewer naturally occurring events, such as wildfires, with this effect continuing into the third quarter.

In addition, the well covered writers' and actors' strikes, which have impacted our Film & TV business in Canada significantly, have persisted for longer than anticipated with some impact on the rest of the Canadian, US and UK businesses that rent into that space. This has also continued into third quarter.

Full-year guidance and outlook

The group expects to deliver record full year results. However, reflecting the factors above, we are revising our full-year revenue guidance and earnings expectations:

- We now expect both group and US rental revenue growth in the range of 11% to 13% (previously 13 to 16%), which will result in EBITDA being 2 to 3% below current market expectations.

- In addition, we now expect a full-year depreciation charge of c. $2.11 billion and a net interest cost of c. $540 million which will result in adjusted profit before tax being below current market expectations.

- Capital expenditure guidance remains unchanged at $3.9 to $4.3billion.

Despite these one-off events impacting the current financial year, our end markets in North America remain robust, supported in the US by an increasing number of mega projects and recent legislative acts. This, combined with the substantial structural growth opportunities that we see for the business, enables the Board to look to the future with confidence.”

The full half year results will be published in December.