Ashtead Group shares dropped 3.3% to 4,169p in early morning trading on Tuesday after its outperformance in Q1 2022 was mitigated by rising interest costs, resulting in a pre-tax profit projection in line with previous expectations.
The firm reported a 25% revenue growth to $2.2 billion from $1.8 billion the year before, alongside a 26% rental revenue increase to $2 billion against $1.6 billion.
“Our end markets remain strong and we continue to execute well across all actionable components of our strategic growth plan, Sunbelt 3.0. In the quarter, we invested $699m in capital across existing locations and greenfields and $337m on 12 bolt-on acquisitions, adding a combined 33 locations in North America,” said Ashtead CEO Brendan Horgan.
“This significant investment is enabling us to take advantage of the substantial structural growth opportunities that we see for the business as we deliver our strategic priorities to grow our general tool and specialty businesses and advance our clusters.”
“We are achieving all this while maintaining a strong and flexible balance sheet with leverage near the bottom of our target range.”
Ashtead Group confirmed a 22% EBITDA rise to $1 billion compared to $860 million, and a 26% operating profit climb to $594 million against $477 million.
The rental company highlighted a 29% adjusted pre-tax profit growth to $555 million from $437 million and a 28% pre-tax profit climb to $527 million against $416 million.
The firm noted a 33% adjusted EPS rise to 94.4c compared to 71.5c and a 33% reported EPS growth to 89.7c from 68c the last year.
“Our business is performing well with clear momentum in supportive end markets. We are in a position of strength and have the experience to navigate the challenges and capitalise on the opportunities arising from the market circumstances we face, including supply chain constraints, inflation, labour scarcity and economic uncertainty, all factors which we are convinced are drivers of ongoing structural change,” said Horgan.
“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.”