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(Sharecast News) - Equipment rental company Ashtead Group said on Tuesday that both revenue and profits had grown in the three months ended 31 July, driven by "ongoing momentum" in supportive end markets, but cautioned that increased interest costs would offset much of its outperformance.
Ashtead stated revenues were up 25% in the first quarter at $2.25bn, with rental revenues improving 26% to $2.07bn, while operating profits increased 26% to $594.0m and underlying earnings improved 22% to $1.03bn.
Pre-tax profits grew 28% to $527.0m and adjusted earnings per share rose 33% to USD 94.4 cents.
However, despite the group's improved quarterly performance, Ashtead warned that its strong showing had been offset by heightened interest costs and said it expects full-year adjusted pre-tax profits to be in line with previous expectations.
Ashtead invested $669.0m of capital back into the business during the period, up from $551.0m a year earlier, and spent $337.0m on bolt-on acquisitions, a $224.0m year-on-year increase.
The FTSE 100-listed group also generated $91.0m in free cash flow during the quarter, down from $420.m at the same time a year earlier, while net debt surged from $5.7bn to $7.71bn.
Chief executive Brendan Horgan said: "The business is performing strongly, with revenue and operating profit ahead of our previous expectations. This performance is offset by increasing interest costs and therefore, we expect adjusted profit before taxation for the year to be in line with our previous expectations and the board looks to the future with confidence."
Reporting by Iain Gilbert at Sharecast.com
