YEAR TO DATE TRADING

Sunbelt
Following a strong August performance rental revenues in dollar terms for the four months ended 31 August were 2.3% above the same period last year at Sunbelt, our US subsidiary. However, lower levels of scaffold erection & dismantling income meant that total revenues were marginally (0.5%) below last year. In sterling terms total revenues were down 6.4% reflecting the weakness of the dollar. Based on published data, Sunbelt continues to take market share. In the year to date four of our five regions are ahead of last year in terms of contribution although the fifth, our West Coast business, is suffering from still weak economic conditions. As far as our specialist businesses are concerned, we have achieved significant increases in our pump and power division but declines in our scaffolding business. Overall we have seen some improvement in rental rates reflecting a better balance between supply and demand in terms of equipment availability and our willingness to sacrifice a little in utilisation which is marginally behind last year’s levels.

A-Plant
In the UK, we have seen a modest rise in business levels, since the announcement of our refinancing in early June helped restored stability to our A-Plant business. Nevertheless, revenues for the four months ended 31 August are down 6% over the previous year on a same store basis but 13% overall following the closure in the past year of 19 profit centres and the recent disposal of two non-core businesses. Significant cost savings have been achieved offsetting a substantial element of this shortfall. We continue to review the cost base and to increase our earnings visibility through framework agreements with our major account customers. In the last year 11 new contracts have been signed, the most significant of which was our recent appointment as preferred supplier to Laing O’Rourke. We have successfully maintained the revenues derived from our top 100 customers who accounted for one-third of A-Plant’s turnover in the four months to 31 August 2003.

Ashtead Technology
Ashtead Technology has achieved revenues marginally behind last year, but this shortfall has been offset by improved margins.

Group
Group revenues for the first four months were 8.3% below last year, 4.6% in constant currency. On a same store basis, rental revenues at constant currency are down 1% over the same four months in the previous year. Following our very difficult second half last year we are once again generating profits before tax, goodwill and exceptionals (which relate to our refinancing), although not presently on a par with last year’s levels.

CASHFLOW AND FINANCING
Although the early months of our financial year normally produce a cash outflow, tight cash controls have secured a reduction in debt levels of £22m in the first four months, mainly as a result of lower capital expenditure and higher disposal proceeds. We would still expect the investment in our rental fleet during the current year to be close to last year’s level and our debt levels to continue to reduce.

Following the extension of our bank facilities until January 2005 we advised shareholders that we were confident of achieving further longer term financing well in advance of that date. We are actively investigating the most appropriate means of achieving this with our financial advisers.

OUTLOOK
According to figures published by the US Department of Commerce, non-residential construction fell almost 30% from its March 2001 peak but has now stabilised and indeed is showing a marginal increase over the ten months since last September. Against this background we are seeking to maintain Sunbelt’s recent momentum. We are anticipating some improvement in our scaffolding business in the coming months and continued strength in our pump and power business. We have also developed a disaster recovery capability which has been very active during the recent power shortages in the north-eastern United States and in dealing with the aftermath of Hurricane Isabel.

Ashtead Technology has also seen some improvement in its North American business, although California has been a difficult market.

In the UK we see a weaker commercial construction market but continued strong PFI activity. We are looking to expand our Tool Hire Shop division following the achievement of same store sales growth in the four months to 31 August.

We note some more positive statistics in terms of the US economy and are encouraged by some signs of rental rate improvements. Nevertheless we believe it appropriate to continue our cautious stance of anticipating generally flat market conditions for the Group as a whole in the current year.