Ashtead rises as trading picks up

The price of shares in FTSE 100 industrial equipment firm Ashtead (LON:AHT) climbed 3.31% to 3,336p (as of 10:35 GMT) after trading saw some recovery in the quarter ended 30th October. Revenues for the three months were flat against the same period last year and while pre-tax profits were still down by 8%, there was a significant improvement over the prior quarter.

CEO Brendan Horgan commented: “I am delighted to report a strong quarter of market outperformance across the business contributing to rental revenue down only 4% in the half year at constant exchange rates. Our dedicated team members throughout North America and the United Kingdom have made this possible, once again delivering for all our stakeholders. I am extraordinarily proud of, and grateful for, their collective response and execution, all while keeping our leading value of safety at the forefront of what we do.

“This performance illustrates the successful execution of our long-term strategy, which we embarked upon after the last recession, to broaden and diversify our end markets and strengthen our balance sheet. This positioned us to capitalise on our ever increasing scale, while remaining agile, particularly during these unprecedented times. The actions we took to optimise cash flow, reducing capital expenditure and operating costs, resulted in record free cash flow for the first half of £822m (2019: £228m) contributing to reduced leverage of 1.7 times compared to 1.9 times at year end, in the lower half of our target range.

“Looking forward, the strength of our business model and balance sheet positions the Group well in markets that are likely to remain uncertain. Based on our half year performance and assuming no further significant adverse impact on our business resulting from the COVID-19 pandemic, we now expect full year results ahead of our previous expectations. The benefit we derive from the diversity of our products, services and end markets, coupled with ongoing structural change, enables the Board to look to the future with confidence.“