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Ashtead shows strength

18 June 2024

Ashtead shows strength

In its full year results announced today for the year ended 30 April 2024, Sunbelt Rentals’ parent Ashtead Group reported another strong performance across the business, with group revenue and operating profit at record levels up respectively by 12% and 5%.

Adjusted profit before taxation was slightly lower than the previous year at $2,230m (2023: $2,273m) after a higher interest expense, reflecting the interest rate environment and increased average debt levels.

The UK business generated rental only revenue of £466m, up 9% on the prior year (2023: £429m). Bolt-ons since 1 May 2022 contributed 2% of this growth. Rental only revenue growth has been driven by both rate and volume improvement. Rental revenue increased 6% to £590m (2023: £559m), while total revenue increased 3% to £706m (2023: £685m). This lower rate of total revenue growth reflects a higher level of ancillary and sales revenue associated with the work for the Department of Health last year, which did not repeat this year.

The focus in the UK remains on delivering operational efficiency and long-term, sustainable returns. The company says that while it continues to improve hire rates, this remains an area of focus. The UK generated an EBITDA margin of 28.2% (2023: 28.1%) and a segment profit of £58m (2023: £65m) at a margin of 8.2% (2023: 9.5%).

In the UK, return on investment (excluding goodwill and intangible assets) was 7% (2023: 9%). The decrease reflects the lower utilisation of a slightly larger fleet and increased non-rental depreciation, says Ashtead.

The UK generated rental only revenue in the final quarter of £116m (2023: £108m), 8% higher than the prior year. Total revenue increased 12% to £182m (2023: £163m) reflecting a higher level of ancillary and sales revenue.

Ashtead states that its has an 11% market share in the US, a 9% market share in Canada and a 10% market share in the UK.

Chief Executive, Brendan Horgan, commented: “Our end markets in North America remain robust with healthy demand, supported in the US by the increasing proportion of mega projects and the ongoing impact of the legislative acts. We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the opportunities arising from these market conditions and ongoing structural changes.

“Through the actionable components of our new strategic growth plan, Sunbelt 4.0, we will drive long-term sustainable growth and returns for all stakeholders and the Board looks to the future with confidence."


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