(Alliance News) - Ashtead Group PLC on Tuesday said its profit rose in the first quarter of its financial year, pushed higher by a strong performance from its Sunbelt US and Sunbelt Canada units.
Shares in Ashtead were down 2.3% at 2,232.00 pence in London in morning trade.
For the three months ended July 31, the equipment rental firm posted a GBP304.7 million pretax profit, up 11% from GBP274.4 million a year before.
Ashtead's rental revenue for the period came in at GBP1.16 billion, up 21% from GBP961.0 million year-on-year, as Sunbelt US rental only revenue grew 18% and Sunbelt Canada grew 26%, offsetting a 1% decline in rental only revenue from Ashtead's A-Plant business due to the UK's flatter market.
This led to a total revenue rise of 22% to GBP1.28 billion from GBP1.05 billion, and helped drive up profit.
Ashtead said its first quarter results "are not comparable directly" with its financial 2018 results as it adopted IFRS 16, an accounting rule that governs the financial treatment of leases. Excluding IFRS 16, pre-tax profit rose 12% to GBP319 million from GBP286 million.
Chief Executive Brendan Horgan said: "We remain focused on responsible growth. Our increasing scale and strong margins are delivering good earnings growth and significant free cash flow generation. This provides significant operational and financial flexibility, enabling us to invest in the long-term structural growth opportunity and enhance returns to shareholders, while maintaining leverage within our target range of 1.9 to 2.4 times net debt to [earnings before interest, depreciation, taxation, and amortisation] (1.5 to 2.0 times excluding IFRS 16). We spent GBP125 million under our share buyback programme in the quarter, and expect to spend a minimum of GBP500 million on share buybacks in 2019/20."
Horgan added: "Our business continues to perform well in supportive end-markets. Accordingly we expect business performance in line with our expectations and the board continues to look to the medium term with confidence."