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05 Mar 2019 | 07:23

Ashtead profits rise on strong rental demand in North America

Ashtead Group posted an uptick in profits in third quarter amid strong rental demand in US and Canadian markets and the company said it expected capital expenditure toward the upper end of guidance.

In the three months ended 31 January, statutory profit before tax rose 17% to £240.9m, revenues rose 20% to £1.14bn. Underlying pre-tax profit rose 18% to £887.7m from £742.0m a year earlier, and rental revenues rose 18% to £3.12bn for the nine months to 31 January. The upbeat performance was driven by strong growth in each of the company's divisions as Sunbelt US, A-Plant and Sunbelt Canada delivered 19%, 5% and 72% rental only revenue growth, respectively. The company said it was spending currently £125m per quarter on share buybacks with the programme continuing through the 2019/20 financial year, with an anticipated spend in 2019/20 of at least £500m. 'The Group delivered a strong quarter with good performance across the Group. As a result, Group rental revenue increased 18% for the nine months and underlying pre-tax profit increased 18% to £888m, both at constant exchange rates' said Ashtead's chief executive, Geoff Drabble. 'We continue to experience strong end markets in North America and are executing well on our strategy of organic growth supplemented by targeted bolt-on acquisitions. We invested £1,290m in capital and a further £491m on bolt-on acquisitions in the period which has added 112 locations and resulted in rental fleet growth of 18%' 'Reflecting this opportunity for profitable growth, we expect capital expenditure for the year to be towards the upper end of our previous guidance (c. £1.6bn). Looking forward to 2019/20, we anticipate a similar level of capital expenditure to this year as we execute on our strategic plan through to 2021.' 'Our business continues to perform well in supportive end markets. Accordingly, we expect full year results to be in line with our expectations and the Board continues to look to the medium term with confidence.'

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