Ashtead still growing in US and UK

By Murray Pollok02 September 2008

Ashtead Group said its A-Plant and Sunbelt Rentals businesses performed well in the quarter to 31 July with revenues growing and utilisation levels maintained despite both having significantly larger fleets.

Revenues at Sunbelt and A-Plant grew by 3.8% and 5.8%, respectively, to £204.4 million and £55.1 million. Sunbelt's growth reflected an 8% larger fleet and physical utilisation up 1% to 70%, while A-Plant's fleet is 16% larger than in the same period last year and physical utilisation was the same at 70%.

However, there is evidence of pressure on rental rates, as the yield from the fleets was lower - 5% down in the case of Sunbelt and 8% at A-Plant.

Ashtead's chief executive, Geoff Drabble, said; "In the US we delivered revenue and profit growth as we benefited from improvements in operational performance. We improved
utilisation on a larger fleet and continue to benefit from our broad geographic and market exposure. We performed well in the UK underpinned by our exposure to the larger non-residential projects.

"Despite the current economic uncertainty, our operating businesses continue to perform well and our financing costs continue to be lower than last year as we reduce debt. The Board anticipates the Group continuing to trade in line with its expectations for the remainder of the year."

On a Group basis, profits before interest, tax, depreciation and amortisation (EBITDA) grew 8% to £97.6 million on total revenues for the quarter of £259.5 million. The company also benefited from lower finance costs, with reduced debt levels lowering net financing costs by 17%.

After investing £331 million in fleet in 2007 the company expects that to reduce to £230 million this financial year. The company said it continued to review expenditure levels based on the economic outlook and its own experiences from its depots.

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