Ashtead: Chief says firm is in ‘position of strength’ after rare profit warning
Ashtead’s chief executive has said the company is in a “position of strength,” despite a rare profit warning in November, as it reported flat second quarter profits.
The FTSE 100 firm, which rents out equipment ranging from diggers to construction tools, reported a one per cent rise in pre-tax profits to $666m, while revenues rose 13 per cent to $2.9bn.
Earnings before interest, taxation, depreciation and amortization (EBITDA) increased 12 per cent to $1.4bn and the company, which operates in markets across the UK and America, said it had hiked its interim dividend by five per cent year-on-year.
Investors had been looking to the results to provide more clarity on an out-of-character profit warning last month, which sent shares spiralling nearly 10 per cent.
The equipment retailer said at the time it expected a more than £1.6bn depreciation charge for the year. Lower levels of emergency response, caused in part by a far quieter hurricane season, had hit demand for its products, while longer than anticipated Hollywood actors’ and writer’s strikes battered the firms Canadian film segment.
Ashtead confirmed today that the depreciation charge would result in adjuted pre-tax profits coming in below current market expectations. It noted the Hollywood strikes had had a “significant impact” that stretched to the wider Canadian business and the UK and US.
But chief executive Brendan Horgan insisted in a statement to markets this morning: “Our end markets in North America remain robust with healthy demand, supported in the US by the increasing number of mega projects and recent legislative acts.”
“We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the opportunities arising from these market conditions and ongoing structural change.”