Industrial equipment group Ashtead beat market expectations for its third quarter this morning, with revenue up 23 per cent, and rentals booming 25 per cent.
The owner of Sunbelt Rentals in the UK, USA and Canada made significant investment in the past year, including $1.7bn (£1.3bn) in capital in the last quarter, with 81 locations added in North America.
Full year results are therefore expected to be slightly ahead of previous expectations, with capital expenditure at $2.5bn (£1.9bn).
The company rent construction and industrial equipment to a range of clients, and Ashtead’s chief Brendan Horgan explained: “Our business continues to perform strongly and is well positioned to manage and benefit from the unique market circumstances we face, including supply chain constraints, inflation and labour scarcity, which we believe to be drivers of ongoing structural change.”
This was echoed by Barclays, which maintained its positive view of the stock, with a target price of 5940p.
Analysts at the bank said: “Ashtead continues to thrive despite the current challenges of supply chain constraints, inflation and a scarcity of labour in key areas; we believe this continued strong performance demonstrates that while such issues all present challenges”.
Commenting on the results, AJ Bell investment director Russ Mould said: “Ashtead is best known for its earthmovers, small tools and cherry-picker platforms and the equipment rental giant is giving its shareholders a lift with a strong trading update and another upgrade to earnings forecasts from chief executive Brendan Horgan.”
“However, the shares are still down by almost a quarter from November’s all-time high – technically bear market territory – and investors are still clearly concerned by the danger posed by surging energy and commodity prices to the economic upcycle in the USA and beyond.”
Despite relatively positive reaction, Ashtead’s stock remained relatively unmoved on today’s market.