Hollywood writers’ strike and higher financing costs hit Ashtead’s profits
Profits have ticked up at equipment hire firm Ashtead despite strong financing cost headwinds and troubles across the pond.
The group’s adjusted operating profit for the nine months ending 31 January rose to $2.1bn (£1.65bn) from $2.03bn (£1.6) the year prior while financing costs leapt 55 per cent to $400m (£315.5m) on the back of higher average debt levels and interest rate environment.
Capital expenditure for the nine months was $3,509m (£2.76bn) gross and $2,848m (£2.2bn) net of disposal proceeds, up from $2,618m gross (£2.05bn) and $2,194m (£1.72bn) net in the previous year.
Despite adding 106 new business locations in North America, the company said it was adversely affected by the lower level of emergency response activity related to natural disasters and the “longer than anticipated actor and writers strike”.
As a result, the group said it expected revenue growth for the full year to be at the low end of its 11 per cent guidance.
The US rental business grew to $4.9bn (£3.86bn) from $4.4bn (£3.4bn) the year prior, while the UK business generated only £350m of revenue, up nine per cent on the year prior.
The company is set to reveal its next strategic growth plan, entitled Sunbelt 4.0, at its capital markets event in April.
“We are executing well against all actionable components of our strategic growth plan, in end markets which remain robust,” said company chief executive Brendan Horgan.
We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the opportunities arising from market conditions and ongoing structural changes and we are achieving all this while maintaining a strong and flexible balance sheet.”
The company is set to reveal its next strategic growth plan, entitled Sunbelt 4.0, at its capital markets event in April.