Ashtead claims market share gains

Ashtead Group, the UK-based owner of A-Plant and Sunbelt Rentals, said it was gaining market share in difficult trading conditions. The company posted revenues down 19% to £221.6 million for the quarter to 31 July, with operating profits 54% lower at £23.9 million.

Both A-Plant and Sunbelt were impacted by lower construction activity in the UK and the US. Sunbelt's revenues were 32% lower at US$179.0 and its operating profits fell from US$92.0 million to $38.9 million, while A-Plant saw a 28% fall in sales to £42.6 million and a fall in operating profits from £7.1 million to just £1.1 million.

Ashtead's chief executive, Geoff Drabble, said; "As anticipated market conditions remain difficult; however, the actions we have taken to cut costs and reduce fleet size have ensured that our margins have held up well.

"Our continuing focus on developing stronger customer relationships and maintaining an infrastructure to provide excellent customer service throughout the cycle has been rewarded with clear market share gains."

Mr Drabble said Ashtead expected market conditions and trading levels to remain largely unchanged for the second quarter (to the end of October). "Visibility for Q3 and Q4, our seasonally more challenging periods, is less clear both in terms of demand and the pricing environment. However, the Board continues to believe that the actions taken will deliver full year results and cash generation in line with its expectations."

Ashtead said that the volume of fleet on rent held up well as a result of market share gains. "Average fleet on rent in the quarter reduced 12% year on year at Sunbelt and 17% at A-Plant", reported Ashtead, "Pricing continued to be under pressure in both markets with yield declining 19% in Sunbelt and 10% in A-Plant compared to the same period in the prior year. Encouragingly, during the quarter we saw yield stabilising in both markets."

Cost cutting measures over the past year have seen A-Plant reduce its branch network from 188 locations to 115 and Sunbelt scale down from 432 to 398. Overall, staff numbers have fallen by 18% to 7763. Sunbelt continues to operate 90 branches at Lowes DIY stores in the US.