10.12.2025

Higher revenues lower profits for Ashtead

Ashtead, owner of Sunbelt Rentals in the USA, Canada and the UK, has reported its first half results to the end of October.

Group revenues improved one percent to $5.76 billion, with both regions contributing to the growth, as did rental and used equipment sales, partly offset by lower sales of new machines.

Pre-tax profit, however, declined 10 percent to $1.08 billion, due to higher operating costs and depreciation partly offset by a reduction interest, plus a $69 million cost of moving the company’s listing from the London to the New York Stock Exchange.

First half by country

North American Revenues: totalled $5.28 billion +2% with an Operating profit of $1.75 billion -3%
UK Revenues: came in at $484.2 million +3.5% with an Operating profit of $34.6 million -25%

Capex & fleet age Capital expenditure so far this year has been $1.68 billion, down 33.5 percent on the same period last year. This increased the average age of the fleet at the end of October to 51 months, compared to 46 months this time last year. The full year capital expenditure forecast remains the same at $1.8 to $2.2 billion.

Net Debt at the end of October was 3.5 percent lower at $10.55 billion.

Second quarter

Total revenues in the last three months were one percent higher at $2.96 billion, while pre-tax profits dropped 12.5 percent to $571 million.

Second quarter by country
North American Revenues: totalled $2.72 billion +1% with an Operating profit of $925.7 million -4%
UK Revenues: were flat at $241.5 million with an Operating profit of £18.4 million -23%

Second quarter acquisitions
13th August, Sunbelt US acquired security fence suppliers ARX Perimeters in Burr Ridge, Illinois.
2nd September, Sunbelt Canada acquired Location Thomas, a three outlet general rental business based in Varennes, Montreal- Québec.
17th September, Sunbelt US acquired Tadano owned Rabern Rentals, a four outlet operation in Texas.
1st October, Sunbelt US acquired T and T Equipment Rentals, a general rental business in Dubuque, Iowa.
22 October, Sunbelt US acquired Action Rentals in California.

Chief executive, Brendan Horgan said: “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. Rental revenue in the first half increased 2%. Adjusted for $55-60m of lower hurricane activity in the quarter, rental revenue was up 3%, as mega project activity gained momentum, offset by continued moderation in our local non-residential construction markets. That being said, we continue to see positive leading indicators for local non-residential construction activity, and we are reaffirming our guidance for rental revenue, capex and free cash flow for the year.”
“Our revenue growth, combined with strong margins and disciplined capital deployment, drove record free cash flow in the first half, which we used to complete seven bolt on acquisitions, support $307m in dividend payments and complete $714m of share buybacks. Given the continued confidence in our free cash flow outlook, today we are also announcing a new share buyback programme of $1.5 billion to coincide with the re-listing to the NYSE, which remains on track.

Vertikal Comment

Ashtead appears to have stagnated a little, perhaps it has been catching its breath this past 12 months, prior to a new surge? Or is it spending too much time and effort on relisting in New York?

It is very encouraging to see the UK business continue to grow, although it is hard to say how much of this is down to exchange rates and what is related to the underlying growth of the business.

This subtlety did not apply to operating profit, which has tanked, partly due to the ending of lucrative public sector contracts.
The fleet is now beginning to reach undesirable levels for such a large company, now 4.25 years - although it can be argued that it is environmentally friendly to keep equipment longer, and perhaps with more electric models in the fleet, the older kit will not push up the cost of maintenance as much as in the past?

Interesting times.