News Column

Ashtead raises profit forecast after construction boom in the UK and US

September 4, 2014

Sean Farrell, theguardian.com



Ashtead has increased its guidance for annual profits after booming construction markets in the US and Britain increased demand for its industrial equipment hire business.

Ashtead, which makes 85% of its revenue in the US, said rental revenue there rose 22% in the first quarter of the financial year. Revenues at its British business rose 19%.

Excluding currency fluctuations, pre-tax profit in the three months to 31 July rose by a third to a record 120m. Business continued strongly in August.

Geoff Drabble, Ashtead's chief executive, said: "As a result of this strong performance, and with a strong balance sheet to support future growth, we now anticipate a full-year result ahead of our previous expectations."

The upbeat statement sent Ashtead's shares up 2.8% to 10.09.

US construction spending rose 1.8% to a high not seen since December 2008, while in the UK construction output jumped at its fastest rate in seven months in August, industry data showed on Tuesday.

However, economists are concerned that the resurgent market for UK residential construction is supported by an unsustainable property boom, fuelled by low interest rates and the government's Help to Buy mortgage guarantee scheme.


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Source: Guardian Web


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