UK Covid-19 sales boosts Ashtead results

Ashtead Group reported a 7% increase in revenues for the half year to 31 October at its UK Sunbelt Rentals business, buoyed by Covid-19 related sales to the UK’s Department of Health, which accounted for almost 20% of UK revenues in the period.

Sunbelt in the US saw a 5% decrease in revenues to US$2.75 billion, which Ashtead said represented a “strong market outperformance” given the disruption caused by the pandemic. Its US specialty rental business saw sales increase by 12% in the period, while general tool rentals was 8% lower.

Total group revenues were down 5% to £2.55 billion, with pre-tax profits of £506.2 million, a fall of 23%.

The improving financial performance of the business has led Ashtead to upgrade its full-year forecasts. It now expects its UK revenues to be between 15 and 20% higher than the previous year compared to the previous guidance of a broadly flat year. Its US business, meanwhile, is now expected to decline by between 4 and 7% rather than 5 to 9%.

It will also invest more, with gross capital expenditure for the full year expected to be in the £650 to £700 million range, up around 30% compared to the previous guidance.

Ashtead’s chief executive, Brendan Horgan, said; “I am delighted to report a strong quarter of market outperformance across the business contributing to rental revenue down only 4% in the half year at constant exchange rates.”

He added; “Based on our half year performance and assuming no further significant adverse impact on our business resulting from the Covid-19 pandemic, we now expect full year results ahead of our previous expectations.”