Building revival helps Ashtead to raise forecast
BRITISH industrial equipment hire group Ashtead yesterday raised its full-year guidance after posting a 33 percent rise in first-quarter pre-tax profits on strong demand from the United States and the UK.
Chief executive Geoff Drabble said he now anticipated the company’s full year results would be ahead of previous expectations and increased its plans for capital expenditure to a range of £825m to £875m.
Analysts had expected the company to report an average estimate of £437.78m in full-year pre-tax profits, according to a Thomson Reuters poll.
The company, which rents everything from small tools to large diggers and water pumps, said pre-tax profits rose to £120m for the period ending 31 July, compared with £99.5m for the same period a year earlier.
Ashtead, which makes 85 per cent of its revenue from US division Sunbelt, said rental revenue from the division rose 22 per cent in the first quarter.
Its British business, A-Plant, also grew by 19 per cent.
”As a result of this strong performance, and with a strong balance sheet to support future growth, we now anticipate a full year result ahead of our previous expectations,” said Drabble in a statement.
He added: “As the market gets busier, people are starting to realise that those who under-invested during the downturn are unable to meet [customers’] requirements. We’re buying fleet, where three days after we’ve bought it, it’s out there earning revenues”