Ashtead’s pre-tax profit slides 37% in the fiscal first quarter

Ashtead Group plc (LON: AHT) said on Tuesday that its profit before tax came in 37% lower on a year over year basis in the fiscal first quarter. The company blamed the Coronavirus pandemic that weighed on its revenue in the recent quarter and forecast that its annual revenue is likely to remain under pressure this year. Its yearly profit in fiscal 2020 was also reported dovish in April.

Ashtead Group plc is currently about 1% in the stock market on Tuesday. It is exchanging hands at £27.25 per share that marks a little under 15% of growth in 2020 so far. In comparison, COVID-19 restrictions had pushed the stock to as low as £13 per share in March.

Ashtead reports £1.20 billion of revenue in Q1

In the quarter that concluded on 31^st July, Ashtead reported £192.4 million of pre-tax profit that was significantly lower than £304.7 million in the same quarter last year. Its underlying profit before tax that strips out non-recurring and exceptional items, registered at £208.3 million in Q1 versus the year-ago figure of £319 million.

In terms of revenue, the industrial equipment rental company recorded £1.20 billion in the recent quarter versus a higher £1.28 billion in the comparable quarter of last year. In the fiscal first quarter, Ashtead noted £1.08 billion of rental revenue that came in lower than £1.16 billion in Q1 of fiscal 2020. A report last week said that Ashtead had delivered a better ROE than its industry.

Ashtead’s forecast for full-year revenue

The company attributed the decline in its profit and revenue in the first quarter to the restrictions associated with COVID-19 that has so far infected more than 350 thousand people in the United Kingdom and caused over 41 thousand deaths. The London-based company didn’t resort to cutting jobs to combat the ongoing health crisis in recent months.

For annual revenue, Ashtead now forecasts a range of mid to high single-digit. In comparison, its rental revenue in fiscal 2020 came in at £4.61 billion. The company’s board also highlighted on Tuesday that it was waiting for the right time to reinstate the share buyback programme.

Ashtead performed fairly upbeat in the stock market last year with an annual gain of about 40%. At the time of writing, it is valued at £12.25 billion and has a price to earnings ratio of 16.88.