Ashtead Q1 profit drops 35% on Covid-19 impact

Equipment rental firm Ashtead reported a 35% decline in first-quarter profit on Tuesday as it took a hit from the Covid-19 pandemic and subsequent lockdowns.

In the first quarter to the end of July, underlying pre-tax profit fell to £208m from £319m in the same period a year ago, with rental revenue down 8% to £1.08bn. Earnings per share were 33% lower at 34.7p.

The company said its first quarter had been "dominated" by the impact of the Covid-19 pandemic.

Chief executive Brendan Horgan said the company’s performance had been resilient, pointing to the fact that it achieved record free cash flow for the first quarter of £447m compared to £161m in 2019, contributing to reduced leverage of 1.8 times compared to 1.9 times at year-end.

"Looking forward, the strength of our business model and balance sheet positions the group well in these more uncertain markets. Assuming there is no significant Covid-19 second wave leading to major market shutdowns, like we experienced earlier this year, we expect full-year group rental revenue to be down mid to high single digits when compared with last year on a constant currency basis.

"The benefit we derive from the diversity of our products, services and end markets, coupled with ongoing structural change, enables the board to look forward to a year with free cash flow in excess of £1bn, continued strengthening of our market position and the medium term with confidence."