Ashtead to beat annual guidance as US business grows

Equipment rental company Ashtead has said it expects to beat its full-year targets after positive growth in the US during the first half.

Rental revenue was up 18% to £2.07 billion, while underlying pre-tax profits jumped 19% to £633 million.

“Our business is performing well in supportive end markets,” said chief executive Geoff Drabble.

“Accordingly, we expect full year results to be ahead of our prior expectations and the Board continues to look to the medium term with confidence.”

Shares in Ashtead were up 2.4% in morning trading on Tuesday.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said that the London-listed company was strongly positioned due to its US operations.

“Ashtead is one of the most heavily US exposed businesses on the UK stock market, and as Trump’s America enjoys a tax cut fuelled investment boom that’s stood it in great stead,” he said.

“Investment has dramatically increased the kit Ashtead has available for rent, and both the US and Canada have seen the amount of equipment on rent at any one time increase.”

Investment in growing the business was higher than this time last year, with over £1 billion in capital invested compared with £708 million in the comparable period.

Meanwhile £362 million was spent on bolt-on acquisitions, up from £298 million in the first half of 2017.