Sunbelt drives record profits at Ashtead Group

Ashtead Group has reported record pre-tax profits for the quarter ending July 2012, the first quarter of its 2012/3 fiscal year.

Pre-tax profits increased 76% to £61 million and it generated £325 million in revenue in the period, a 21% increase on the same quarter in 2011

Ashtead said it now anticipated its full year results would be "materially ahead" of previous guidance.

Ashtead's chief executive, Geoff Drabble, said, "We are delighted with this record performance as we continue to benefit from the trends established in the business over a number of quarters.

"The markets in which we operate have performed as anticipated with gently improving conditions in the US and a more challenging outlook in the UK. We do not anticipate any significant changes to this environment in the short term."

Rental revenues at Sunbelt, Ashtead's US business, rose 17% to £275 million, and its UK business A-Plant reported revenues up 8% to £49.7 million.

Ashtead said; "Sunbelt delivered a strong EBITDA margin of 42.5% (2011: 37.3%) in the quarter resulting from the high 'drop through' of rental revenue to profit as we continue to benefit from improved operational efficiency. As a result, EBITDA rose to $184m (2011: $135m) and operating profit rose to $114m (2011: $74m). A-Plant's operating profit rose to £3m (2011: £2m)."

The company's capital expenditure is, as usual, concentrated in the first half of the year - £223 million was invested in Q1.

Mr Drabble said; "Against this back-drop our continued market share gains are again reflected in our strong growth in fleet on rent and improving margins demonstrate our operational efficiency. Given the momentum established in the business, we now anticipate a full year result materially ahead of our previous expectations."