End markets ‘remain strong’ says Ashtead
By Murray Pollok07 March 2023
Ashtead Group is to increase its capital investment this financial year to US$3.5-3.7 billion – slightly ahead of its previous guidance – and will further accelerate its 2023/24 investment to $4.0-4.4 billion.
Around three quarters of the gross investment next year will be focused on Sunbelt Rentals in the US. Ashtead said the spending would enable mid-teens revenue growth in the US on the back of “clear momentum in strong end markers” fuelled by mega projects and recent legislation on infrastructure spending.
The Financial Times reported, meanwhile, that Chief Executive Brendan Horgan said the company would retain its London, UK listing, despite the growth of its North American business.
The company reported a 23% increase in revenues to $2.43 billion for the three months to 31 January, with EBITDA profit up 26% to $1.09 billion.
The US business saw third quarter revenues up 26% to $2.07 billion, while sales in Canada were 35% higher at $163.8 million.
The UK business was down 19% at $193.3 million for the quarter and Ashtead said the business was facing a “transition year” as it redeployed equipment used on pandemic-related contracts with the UK’s Ministry of Health.
The UK business has also taken a £4 million impairment charge in the quarter on a loan to BritishVolt, the battery manufacturing business in the North east of England that entered administration in January.
Ashtead’s Chief Executive, Brendan Horgan, said the business had delivered a strong quarter across all geographies; “In the [nine month] period, we invested $2.6 billion in capital across existing locations and greenfields and $970 million on 38 bolt-on acquisitions, adding a combined 120 locations in North America.
“This significant investment is enabling us to take advantage of the substantial structural growth opportunities that we see for the business as we deliver our strategic priorities to grow our general tool and specialty businesses and advance our clusters.”
He added; “Our business is performing well with clear momentum in strong end markets, which are enhanced by the increasing number of mega projects and recent US legislative acts.
“We are in a position of strength, with operational flexibility to capitalise on the opportunities arising from these strong markets and the ongoing drivers of structural change, including supply chain constraints, inflation and labour scarcity.”