02.09.2008

Ashtead boosts profits 26%

Ashtead, owner of Sunbelt in the USA and A-Plant in the UK, has reported a five percent rise in first quarter revenues to £246 million, while pre tax profits grew by 26 percent to £35.9 million.

In the USA Sunbelt’s revenues – in dollars - were up almost four percent to $403 million, with operating profits up by over eight percent to $92 million.

Sunbelt’s fleet was eight percent larger than last year while physical utilisation grew by one percent to 70 percent. Financial utilisation slipped five percent.

In the UK A-Plant saw its revenues increase by six percent to £55.1 million, while operating profits increased by less than two percent to £7.1 million. The fleet was 16 percent larger than at the end of the first quarter last year, but physical utilisation remained at 70 percent. Financial utilisation slipped eight percent.

Capital expenditure in the quarter totalled £108.5 million (2007: £124.2m) 12.5 percent less than last year. Of this £96.6 million was spent on new equipment for the rental fleet, while sales of used machines from the fleet totalled £14.6 million, almost 40 percent down on 2007.

The average age of the Group's rental fleet at 31st July was 31 months compared to 29 months a year ago.

The company says that having considered the market it will spend around £230 million for the full year, compared to £331 million in 2007 – a fall of roughly 30 percent. This will largely be replacement expenditure

Second quarter outlook

Ashtead says that utilisation remains high at both Sunbelt and A-Plant's with both businesses continuing to have substantially more equipment on rent than at this time last year, although at a lower yield.

The company anticipates that it will continue to trade in line with
its expectations for the remainder of the year.

Ashtead's chief executive, Geoff Drabble, said: “In the US we delivered revenue and profit growth as we benefited from improvements in operational performance. We improved utilisation on a larger fleet and continue to benefit from our broad geographic and market exposure. We performed well in the UK underpinned by our exposure to the larger non-residential projects.

Despite the current economic uncertainty, our operating businesses continue to perform well and our financing costs continue to be lower than last year as we reduce debt. The Board anticipates the Group continuing to trade in line with its expectations for the remainder of the year.”