Ashtead (LON:AHT) has updated investors on its third-quarter performance.
Highlights from the company statement:
Group revenue increased 25% to £2,356m in the nine months (2016: £1,880m) with strong growth in both Sunbelt and A-Plant. Overall revenue growth reflects the benefit of weaker sterling, partially offset as expected by a lower level of used equipment sales due to lower replacement capital expenditure. This revenue growth, combined with strong drop-through, generated underlying profit before tax of £605m (2016: £482m).
Ashtead's chief executive, Geoff Drabble, commented:
"The Group continues to perform well and delivered a strong quarter with reported rental revenue increasing 30% (13% at constant exchange rates) for the nine months and underlying pre-tax profit of £605m. In the nine months, the reported results were positively impacted by weaker sterling (£82m). The underlying performance of the business continues to benefit from a clear and consistent strategy of organic growth supplemented by bolt-on acquisitions.
We continue to grow responsibly, adhering to the capital allocation priorities we have outlined. We invested £812m by way of capital expenditure and a further £196m on bolt-on acquisitions. With the continuing opportunity for profitable growth, we expect capital expenditure this year to be towards the upper end of our guidance (c. £1.2bn). As is customary, we have given our early guidance to growth for 2017/18. This is consistent with the strategic plan we recently outlined to the market which anticipates circa double-digit growth in the US through to 2021. Our end markets remain supportive and we continue to benefit from ongoing structural change as our customers increasingly rely on the flexibility of rental.
Both divisions continue to perform well. Accordingly, we expect full year results to be in line with our expectations and the Board continues to look to the medium term with confidence."