Photographer: Chris Ratcliffe/Bloomberg
Rental equipment specialist Ashtead reversed on Tuesday, as tough market conditions forced profits lower despite record revenues.
At £43.51 per share, the FTSE 100 company was last dealing 0.7% lower on the day.
Lower equipment sales meant that headline revenue dropped 1% in the 12 months to March, to $10.8 billion. But record revenues across its core rental operations helped reduce the top-line reversal.
Rental revenues at the Sunbelt Rentals owner increased 4% year on year, to $10 billion.
Operating profit reversed 4% to $2.6 billion, while adjusted pre-tax profit dropped 5% to $2.1 billion.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose 3% to $5 billion. This was also a record high.
Rental Revenues Increase
Ashtead has operations in the US, Canada and the UK, though it generates the lion’s share of revenues from customers in the States.
At its North America General Tool unit, it said rental sales edged 1% higher to $4.9 billion thanks to “both volume and rate improvement” which it said “[demonstrated] the benefits of our strategy of broadening our end markets.”
On an organic basis, revenues were flat due to tough market conditions. Ashtead said that hurricane response efforts contributed around $25 million to $30 million to the top line.
North America Specialty rental revenues, meanwhile, leapt 11% to $2.4 billion.
Rental revenues in the UK rose 2%, to $599 million.
Cash Machine
Last year Ashtead invested $2.4 billion in the business, down from $4.3 billion in financial 2024. This was supported by near-record free cash flow of $1.8 billion, up from $216 million the year before.
It spent $137 million on five bolt-on acquisitions “to both expand our footprint and diversify our end markets,” it said. This was down from the $905 million it forked out on 26 purchases in financial 2024 as it slashed spending to reflect market conditions.
Through a combination of dividends and share buybacks, Ashtead returned $886 million to shareholders, an all-time high.
It raised the full-year dividend to 108 US cents per share from 105 cents previously.
Chief executive Brendan Horgan commented that “the strength of our foundation and growth strategy is reflected in our results and guidance today. I am excited for financial 2026 and what lies ahead as we continue to advance our great company.”
Ashtead said it expects rental revenue growth of 0% to 4% during the current fiscal period. Capital expenditure is put at $1.8 billion to $2.2 billion, while free cash flow is predicted to range between $2 billion and $2.3 billion.
“Robust” Performance
Analyst Andy Murphy of Edison Group commented that “while adjusted profit before tax fell… the group’s underlying rental business remains robust. The Sunbelt 4.0 strategy continues to gain traction, with customer growth, network expansion, and margin improvements supporting medium-term optimism.”
Murphy added that “the proposed US primary listing remains a strategic milestone” for the current financial year.
Ashtead plans to switch its primary listing from London to New York during the first quarter of the 2026 calendar year, whilst retaining a secondary listing in the UK.
The Footsie company received the green light from 96.4% of shareholders at an extraordinary general meeting earlier in June.
Royston Wild owns shares in Ashtead Group.
