Ashtead update

20 November 2023

Ashtead Group, the parent of Sunbelt Rentals, has revised its annual profit expectations in the light of lower emergency response work in the US during the hurricane season and the protracted strikes that have affected the TV and film industries.

The group still expects to report record results for the half year and the second quarter, with rental revenue growth for the half year of 13%, Ebitda growth of 15% to approximately $2,580m (2022: $2,246m) and adjusted profit before taxation growth of 5% to approximately $1,310m (2022: $1,243m).

However, 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.

The writers' and actors' strikes, which have impacted Sunbelt’s 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 serving that market, and this has also continued into third quarter.

Consequently, Ashtead is revising its full-year revenue guidance and earnings expectations, with both group and US rental revenue growth in the range of 11 to 13% (previous guidance for both: 13 to 16%), which will result in Ebitda being 2 to 3% below current market expectations.

In addition, the company now expects a full-year depreciation charge of approximately $2,120m and a net interest cost of around $540m, which will result in adjusted profit before tax being below current market expectations. Capital expenditure guidance remains unchanged at $3.9 to $4.3bn.

Ashtead adds that its end markets in North America remain robust, supported in the US by an increasing number of ‘mega’ projects (those worth at least $400m) and recent legislative acts. 

The group will announce first half and second quarter results for the period ended 31 October 2023 on 5 December 2023.