First-quarter trading at US-focused tool hire group Ashtead has been terrible. Underlying revenues fell 19 per cent and, due to the group's high fixed costs and interest payments on its £873m debt pile, the effect of the revenue decline on profits was exaggerated.
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Underlying profits before tax dived 75 per cent and basic earnings per share were down 93 per cent. There was also little management could say on the outlook as hire companies have very little order visibility, but the second quarter of Ashtead financial year is usually a busy period. A severe cut in capital expenditure has helped alleviate the debt situation, as has a big currency move.
