US rentals lift growth at hire firm Ashtead

BRITISH industrial equipment hire company Ashtead said a continued shift to rentals from ownership left it well placed for 2012, after posting full-year pre-tax profit in line with expectations.

The FTSE 250 company, which hires out equipment from diggers to small tools, yesterday said the trend of contractors renting rather than buying equipment had continued in the face of limited financing and a slow construction recovery.

Pre-tax profit for the year to the end of April was £31m against £5m in 2010 -- a year that was blighted by weak construction markets. Results for the year, bolstered by a 10 per cent revenue rise in its largest market -- US Sunbelt operations -- compared with a consensus of £29.47m, according to a poll of 11 analysts.

“Although continued challenging end-market conditions are likely to constrain upgrades, we expect consensus 2012 pre-tax profit to move to the high £50m. We remain a buyer on the basis of the strong long-term structural growth story in the US,” Investec analysts said in a note.

In its UK market, full-year revenue grew one per cent and Ashtead said it could benefit from an improving outlook for UK housebuilders.