US fuels revenue and profit growth at Ashtead

Ashtead group reported second quarter revenues up 9% to £245.2 million and operating profits 32% higher year on year to £35.5 million, driven by improvements in the Sunbelt Rentals business in the US.

Sunbelt - with revenues in the quarter of £202.5 million - accounted for almost all the group's growth and profits in the three months to 31 October, the result of having more fleet on rent, higher pricing and increased rental penetration. For the quarter Sunbelt reported yields increased by 3%, year on year, and it had 6% more equipment on rent. Ashtead said physical utilisation at Sunbelt was at a five year high.

In the UK, A-Plant's revenues were up 3.1% to £42.7 million, with operating profits of £2.0 million in the quarter, almost the same as the £1.8 million reported for the same period in 2009.

Ashtead's chief executive, Geoff Drabble, said; "In this, the second consecutive quarter in which we have delivered good profit growth, it was pleasing to see rental revenues accelerating with growth of 9% in the US. In the UK there were improving trends throughout the first half and, whilst the UK market remains difficult, this was also encouraging.

"Clearly end markets remain fragile. However, increased reliance on rental by our customers particularly in the US, together with continuing market share gains, is supporting our performance, a trend we expect to continue."

Mr Drabble said forecasting remained difficult; "However, the momentum we have established during the year has continued into November and will, we expect, be sufficient to ensure a full year outcome ahead of our earlier expectations."

The company invested £84 million on replacement fleet during the first six months of its financial year. For the full year it expects to spend £225 million gross, principally on fleet replacement. That would maintain the average age of its fleet over the course of the fiscal year.