10th Dec 2019 09:04
(Alliance News) - Ashtead Group PLC on Tuesday posted a rise in interim profit as strong US and Canadian growth pushed revenue higher despite a weaker UK performance.
Shares in Ashtead were down 7.7% at 2,184.98 pence in London in morning trade.
For the six months ended October 31, the FTSE 100-listed equipment rental firm posted a GBP660.2 million pretax profit, 8.2% higher than its GBP610.0 million profit the year before.
This improvement stemmed largely from rental revenue, which was up 18% to GBP2.45 billion from GBP2.07 billion, lifting group revenue 19% to GBP2.68 billion from GBP2.25 billion.
According to Ashtead, its half-year revenue performance reflects "strong growth in the US and Canadian markets". However, investment in its Canadian business and "weakness in the UK" meant a more modest performance in terms of profit.
Chief Executive Brendan Horgan said: "Our North American end markets remain strong and we continue to execute well on our strategy of organic growth supplemented by targeted bolt-on acquisitions. In contrast, the UK market remains challenging and we are therefore refocusing A-Plant on leveraging its platform to deliver long-term sustainable results while generating strong cash flow."
Ashtead has increased its interim dividend by 10% to 7.15p per share from 6.5p per share the year prior.
The firm will be increasing investment but will aim to maintain leverage within a target range of between 1.5 times and 2.0 times net debt to earnings before interest, tax, depreciation, and amortisation excluding IFRS 16.
Horgan said: "Our business continues to perform well in supportive North American end markets, while we have taken decisive strategic action to refocus our UK business in the challenging market conditions. Thus, except for the UK and a currency headwind, we expect results to be in line with our expectations and the board continues to look to the medium term with confidence."
By Anna Farley; [email protected]
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