Ashtead reduces growth forecast

Photo: Ashtead

Ashtead Group has reduced its growth forecast for the 2024 financial year following what it describes as “local commercial construction market dynamics in the US.”

The company, owner of Sunbelt in the UK and US, has revised its previous guidance for group rental revenue of between 5-8% growth down to between 3-5%.

It said local construction markets had been largely impacted by the “prolonged higher interest rate environment” but expects the segment to recover thanks to a continuation of strong demand.

As for its half year results, the company announced rental revenues of $5.2 billion, a 6% increase on the same period last year. Group revenue increased by 2% to $5.6 billion, while EBITDA for the period saw a moderate rise of 4%.

The company reported a 6% rise in rental revenue in the US to $3.5 billion, while Canada’s rental only revenue increased 21% to C$374 million. Ashtead said its Canadian business had benefitted from the development and and investment in expanding its network and markets as well as the recovery in the Film & TV business.

Its UK business generated rental only revenue of £248 million, up by 3% which the company said was driven by both rate and volume improvement. Total revenue in the UK also increased by 3% to £371 million.

Capital expenditure across the group for the first half was $1.6 billion gross, with the full year expected to be somewhere in the region of $2.5 billion and $2.7 billion. 

According to chief executive Brendan Horgan, the company benefitted from mega projects and hurricane response efforts, which helped it to offset downturns in construction.  

He said, “We remain in a position of strength, with the operational flexibility and financial capacity to capitalise on the ongoing structural growth opportunities we see for the business and enhance returns to shareholders as we follow our Sunbelt 4.0 plan and the Board looks to the future with confidence.”

Meanwhile, the company also announced that it is to to make US listing switch and will seek shareholder approval with the goal of completing the US listing within 12 to 18 months. That move would see the group rebrand as Sunbelt Rentals.