Ashtead sees profits slide and cuts sales outlook amid US listing rumours
Ashtead financials
Equipment hire firm Ashtead has announced falling annual profits and warned of slowing rental sales over the year ahead, amid speculation it may look to switch its listing to the US.
The FTSE 100 firm posted a 2% fall in underlying pre-tax profits to 2.23 billion US dollars (£1.76 billion) for the year to April 30.
Ashtead, which rents equipment to construction, emergency response and entertainment markets across the US, UK and Canada, said underlying pre-tax profits tumbled 10% to 417 million US dollars (£328.6 million) in the final three months of its financial year.
It put the full-year profit fall down to higher interest rate costs on an increasing debt pile, with the operating result more resilient, growing 5% over the year to 2.65 billion US dollars (£2.09 billion) despite a 2% fall in the fourth quarter.
Hot off the heels of news that it may be looking to move its main listing to the US, this was a slightly soft set of results
Matt Britzman, Hargreaves Lansdown
But the results also showed sharply slowing rental revenue growth, at 10% group-wide, down from 22% in 2022-23, and it forecast a further steep fall to between 5% and 8% over the year ahead.
Shares fell 5% in early morning trading on Tuesday.
It comes as rumours have grown that the firm is considering a possible switch from London to New York’s stock market.
Ashtead’s board was recently reported to be reviewing a potential listing switch, although the plans are said to be at an early stage.
The firm said earlier this month, in response to the reports, that it “reviews its capital structure regularly, including its domicile, recognising the fact that 90% of its business is in the US”.
Matt Britzman, equity analyst at Hargreaves Lansdown, said: “Hot off the heels of news that it may be looking to move its main listing to the US, this was a slightly soft set of results.
“Whether you look at revenue, profit, or guidance, it’s hard to see much for markets to get excited about here.
“Management would be forgiven for giving slightly conservative guidance for the coming year after several disappointments of late, and it looks like that’s the case.”
The figures showed that Ashtead took a blow from last year’s Hollywood actors and writers’ strike.
It said the action had a “significant impact” on its Canadian film and television business, and took its toll on parts of the US and UK businesses, as demand for rental equipment fell as productions were halted.
The group said that after the industrial action was settled in early December, activity levels in the film and TV business “recovered progressively through the fourth quarter”.
In the US, its largest market, where it trades as Sunbelt Rentals, the group saw rental revenues rise by 12%, but this was half the 24% growth seen the previous year.
In the UK, rental revenue lifted 6%, double the 3% seen the previous year.
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