Ashtead paints cautious full-year outlook after Q3 slowdown

5th Mar 2024 07:01

(Sharecast News) - Equipment rental firm Ashtead has said that full-year group revenues will expand at the low end of its guidance as a result of the previously disclosed slowdown in North America.

The company, which provides everything from emergency response equipment to cameras and lighting for the film industry, said revenues for the 12 months to 30 April are now forecast to grow at the bottom end of the 11% to 13% target range.

Ashtead has seen lower levels of emergency response activity related to natural disasters in the US following strong hurricane, wildfire and winter storm related revenue last year, while longer-than-anticipated actors' and writers' strikes dented demand in Canada. Revenue growth guidance in Canada specifically was cut from 14-16% to 11-13%, while all other guidance ranges were maintained.

Nevertheless, chief executive Brendan Horgan said the long-term outlook for North America still remains positive.

"Our end markets in North America remain robust with healthy demand, supported in the US by the increasing number of mega projects and recent legislative acts," he said.

"We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the opportunities arising from these market conditions and ongoing structural changes."

Revenues for the third quarter ended 31 December were up 9% on the prior year at $2.66bn, after 16% growth in the first half.

However, adjusted pre-tax profit was down 11% at $473m, which the company put down to a higher depreciation charge due to the lower utilisation of a larger fleet and increased financing costs.