Ashtead: Equipment firm looks to manage expectations ahead of results
Expectations have been kept low for equipment hire specialist Ashtead Group as it reports its first quarterly results of the firm’s fiscal year on Tuesday.
The FTSE 100-listed firm has seen its shares slump 12 per cent from the two-and-a-half-year highs it reached in the spring.
It had been one of the big beneficiaries of Joe Biden’s Inflation Reduction Act, but soggy readings from a monthly manufacturing purchasing managers index suggest the US construction sector, where Ashtead makes a 85 per cent of its sales, is no longer firing on all cylinders.
Boss Brendan Horgan has therefore tapered expectations for this Tuesday’s results, forecasting a revenue growth of between five and eight per cent at constant exchange rates.
That would represent a considerable slowdown from the 12 per cent underlying growth achieved.
AJ Bell said it would be unlikely for Horgan to give any indication of profit at this early stage in Ashtead’s fiscal year, but analysts are coalescing around an income forecast of roughly $2.1bn (£1.60bn).
Any news relating to that could majorly affect the equipment giant’s share price, and in June, a spokesperson told City PM: “Ashtead reviews its capital structure regularly, including its domicile, recognising the fact that 90 per cent of its business is in the USA.”