Ashtead: Profit down at equipment giant as revenue slows

Equipment rental group Ashtead’s revenue grew just two per cent, and profit fell during the three-month period ending 31 July, as a construction slowdown across the US hit the company.

The equipment hire giant, the FTSE 100’s 25th largest firm, reported revenue of $2.75bn (£2.1bn) for the period, up from $2.7bn (£2.06bn) in the prior year.

Analysts had predicted revenue rises of between five and eight per cent.

Operating profit fell two per cent to £688m despite an uptick in rental revenue, which grew seven per cent to £2.5bn.

The firm, which loans out construction and manufacturing machinery, generates 85 per cent of its revenue in the US. It also posted a seven-per cent fall in profit before tax.

The firm’s prospects have been dented by a slowdown in US manufacturing and construction, which had been booming as a result of Joe Biden’s Inflation Reduction Act.

But soggy readings from a monthly manufacturing purchasing managers index (PMI) put the firm into expectation management mode ahead of the earnings. It grew by 12 per cent in 2024, but has slowed down in a mirror image of the US economy as a whole.

Brendan Horgan, Ashtead’s chief executive, said: “We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the structural growth opportunities we see for the business. 

“We have started the year well and expect full-year results will be in line with our expectations. The Board looks to the future with confidence.”

With so much of its business in the US, Ashtead has long been the subject of speculation of a potential de-listing from the London Stock Exchange.

Rumours continue to swirl about the firm pursuing a listing in New York, but the group did not allude to any progress on that front.