Ashtead reports ‘robust end markets’

Photo: Ashtead Group

Ashtead Group has said its end markets remain strong following a record first half performance for 2023. 

Group revenue of US$5.5 billion represented a 16% increase on the same period in 2022, while rental only revenue saw growth of 13% (up to $4.9 billion). EBITDA profit for the half year was up by 15% to $2.5 billion. 

The company said the increase was down to robust end markets in North America, driven by an increasing number of mega projects and recent legislative acts in the US.

Its US business, Sunbelt Rentals, saw revenue increase by 18% to $4.7 billion, which the company attributed to high levels of used equipment sales when compared with last year. 

In Canada, the company posted a 15% growth in revenue to $446 million off the back of strong volume growth and rate improvement, despite the impact of the actors’ and writers’ strikes, impacting both the Film & TV business. 

Sunbelt Rentals UK was down by 1% in local currency and posted revenues of £359 million, which the company said reflected the high level of ancillary and sales revenue associated with the work for the Department of Health last year.

Meanwhile, the company invested $2.5 billion in capital across existing locations and greenfields as well as $705 million on 16 bolt-on acquisitions, adding a combined 74 locations in North America in the process.

The results come just weeks after the company announced a downwards revision of its full-year guidance, with revenue growth now projected to be between 11-13%, down from the previous 13-16% prediction. Meanwhile, EBITDA profit will be 2-3% lower than market expectations.

Ashtead said the revision was due to “the lower level of emergency response activity related to natural disasters in North America in late Q2 and into Q3 and the longer than anticipated actors’ and writers’ strikes, impacting both the Film & TV business.”

Elsewhere, it expects capital expenditure for the full year to remain unchanged from the previous guidance of between $3.9 and $4.3 billion.

Ashtead’s chief executive, Brendan Horgan said, “We are executing well against all actionable components of our strategic growth plan, in end markets which remain robust. In the period, we invested $2.5 billion in capital across existing locations and greenfields and $705 million on 16 bolt-on acquisitions, adding a combined 74 locations in North America.

“This investment is enabling us to take advantage of the substantial structural growth opportunities that we see for the business as we deliver our strategic priorities to grow our General Tool and Specialty businesses and advance our clusters. We are achieving all this while maintaining a strong and flexible balance sheet with leverage in the middle of our target range.”