Equipment hire group Ashtead (AHT) says that while trading through to the second week of March was in line with expectations, it has since seen some disruption from Covid-19. Over in its largest market, the US, rental-only revenue is expected to come in 15 per cent lower year-on-year in April. The group expects underlying pre-tax profit of £1.05bn for the year ending 30 April, in line with analysts’ revised expectations, but down from the £1.11bn seen last year.
In response to the pandemic, Ashtead will reduce capital expenditure for the 2021 financial year from previous guidance of £1.1bn-£1.3bn to £500m. Just like the last recession, it can afford to age its relatively young fleet. Acquisitions activity is being suspended and it had already paused share buybacks in mid-March. Having increased its debt facilities by $500m (£403m), the group now has $2.1bn of headroom. It is confident it will continue to generate free cash flow over the next year, even if activity levels decline further.
