16 September, 2021

Unaudited results for the first quarter ended 31 July 2021

Read and download the unaudited results for the first quarter ended 31 July 2021. You can also view the latest webcast.

 First quarter
Revenue 1,8521,50521%
Rental revenue1,6691,35222%
Operating profit47731153%
Adjusted2 profit before taxation43726068%
Profit before taxation41624174%
Adjusted2 earnings per share71.5¢43.4¢66%
Earnings per share68.0¢40.1¢71%


  • Strong quarter with clear momentum
  • Revenue up 21%1; rental revenue up 22%1
  • Operating profit of $477m (2020: $311m)
  • Adjusted pre-tax profit of $437m (2020: $260m)
  • Adjusted earnings per share of 5¢ (2020: 43.4¢)
  • $551m of capital invested in the business (2020: $122m)
  • Free cash flow of $420m (2020: $558m)
  • $123m spent on bolt-on acquisitions (2020: $nil)
  • Net debt to EBITDA leverage1,3 of 1.3 times (2020: 1.8 times)
  • Refinancing marks debut investment grade issuance
  • Board now expects full-year results ahead of its earlier expectations

1   Calculated at constant exchange rates applying current period exchange rates.
2   Adjusted results are stated before exceptional items and amortisation.
3   Throughout this announcement we refer to a number of alternative performance measures which provide additional useful information. The directors have adopted these to provide additional information on the underlying trends, performance and position of the Group. The alternative performance measures are not defined by IFRS and therefore may not be directly comparable with other companies’ alternative performance measures, but are defined and reconciled in the Glossary on page 28.

Ashtead's chief executive, Brendan Horgan, commented:

“The Group delivered a strong quarter with rental revenue up 22% over the prior year, but more importantly up 12% when compared with the first quarter of 2019/20, both at constant currency.  This reflects continued market outperformance across the business.  I never cease to be impressed by all our dedicated team members who have enabled this performance, delivering for each of our stakeholders, while ensuring our leading value of safety remains at the forefront of all we do.

Our performance continues to illustrate the benefits of our long-term strategy to broaden and diversify our end markets, while maintaining a strong balance sheet.  In the quarter, we invested $551m in capital across existing locations and greenfields and $123m on five bolt-on acquisitions, adding a combined 29 locations in North America.  This investment takes advantage of the ongoing structural growth opportunity that we continue to see in the business as we execute our Sunbelt 3.0 strategy.

Our business is performing well in supportive markets with strong momentum.  The benefit we derive from the diversity of our products, services and end markets, our investment in technology and ongoing structural change, enhanced by the environmental and social aspects of ESG, enables the Board to look to the future with confidence and we now expect business performance this year to be ahead of our previous expectations.”


Will ShawDirector of Investor Relations+44 (0)20 7726 9700
Neil BennettMaitland/AMO+44 (0)20 7379 5151
James McFarlaneMaitland/AMO+44 (0)7584 142665

Brendan Horgan and Michael Pratt will hold a conference call for equity analysts to discuss the results and outlook at 10am on Thursday, 16 September 2021.  The call will be webcast live via the Company’s website at www.ashtead-group.com and a replay will be available via the website shortly after the call concludes.  A copy of this announcement and the slide presentation used for the call are available for download on the Company’s website.  The usual conference call for bondholders will begin at 4pm (11am EST).

Analysts and bondholders have already been invited to participate in the analyst call and conference call for bondholders but any eligible person not having received details should contact the Company’s PR advisers, Maitland/AMO (Audrey Da Costa) at +44 (0)20 7379 5151.

Forward looking statements

This announcement contains forward looking statements.  These have been made by the directors in good faith using information available up to the date on which they approved this report.  The directors can give no assurance that these expectations will prove to be correct.  Due to the inherent uncertainties, including both business and economic risk factors underlying such forward looking statements, actual results may differ materially from those expressed or implied by these forward looking statements.  Except as required by law or regulation, the directors undertake no obligation to update any forward looking statements whether as a result of new information, future events or otherwise.

Change in presentational currency

As announced on 15 June 2021, effective from 1 May 2021, the Group changed its presentational currency from sterling to US dollars to allow for greater transparency in the Group’s performance to investors and other stakeholders and to reduce exchange rate volatility in reported figures, given that c. 80% of the Group’s revenue and c. 90% of the Group’s operating profit originate in US dollars.  Accordingly, the Group’s financial statements within this announcement are presented in US dollars.  Further details were provided in our 15 June 2021 announcement ‘Change in presentational currency’ and in the Group’s Annual Report & Accounts 2021, available via the Company’s website at www.ashtead-group.com.

    Trading results

     2021 20202021202020212020
    US in £m190.2123.362.236.331.58.3
    Canada in C$m148.790.466.929.734.6(0.1)
    UK in $m265.7154.386.945.444.010.4
    Canada in $m121.066.154.421.728.2-
    Group central costs--(6.4)(3.1)(6.8)(3.4)
    Interest expense(61.0)(70.7)
    Adjusted profit before tax436.5260.4
    Profit before taxation415.8240.6
    Taxation charge(111.6)(61.2)
    Profit attributable to equity holders of the Company304.2179.4

    1   Segment result presented is adjusted operating profit.

    Group revenue for the quarter increased 23% (21% at constant currency) to $1,852m
    (2020: $1,505m) against COVID-19 affected comparatives and was up 14% (13% at constant currency) when compared with the first quarter of 2019/20.  This revenue growth, combined with strong operational execution, resulted in adjusted profit before tax increasing 68% to $437m (2020: $260m).

    In the US, rental only revenue of $1,102m (2020: $953m) was 16% higher than the prior year (and 7% higher than 2019), representing continued market outperformance and demonstrating the benefits of our strategy of growing our specialty businesses and broadening our end markets.  In the quarter, our general tool business grew 14%, from the depressed activity levels in the prior year, while our specialty businesses, which grew throughout last year, grew 22%.  While rental revenue growth has been driven by volume, it has benefitted from sequential rate improvement since March, in what is a better rate environment than we have seen for a number of years.  US total revenue, including new and used equipment, merchandise and consumable sales, increased 14% to $1,465m (2020: $1,284m).

    The UK business generated rental only revenue of £99m, up 24% on the prior year (2020: £80m).  While our performance continues to benefit from our essential support to the Department of Health in its COVID-19 response efforts, our core business is performing strongly and is benefitting from the operational improvements in the business, which are ongoing.  Total revenue increased 54% to £190m (2020: £123m) reflecting the higher level of ancillary and sales revenue associated with the work for the Department of Health, which accounted for c. 34% of UK revenue in the quarter.

    Canada’s rental only revenue increased 81% to C$111m (2020: C$61m).  This rate of growth reflects, in part, the depressed comparatives last year, when lock-downs affected Canada more severely than the US and our lighting, grip and studios business generated minimal revenue as most film and TV production activities ceased in the March to July 2020 timeframe.  Canada’s total revenue was C$149m (2020: C$90m).

    In all our markets last year, we took action to reduce operating costs and eliminate discretionary expenditure.  While we continue to maintain a focus on the cost base, a number of these costs have returned to the business, reflecting the increased activity levels.  In addition, we continue to invest in our technology platform and face inflationary pressures, particularly in relation to labour and fuel costs.  As a result, in the US, 46% of the rental revenue increase dropped through to EBITDA.  This contributed to a reported EBITDA margin of 50% (2020: 48%) and a 33% increase in segment profit to $432m (2020: $324m) at a margin of 29% (2020: 25%).

    The UK business continues to be focused on delivering operational efficiency and improving returns in the business, while continuing to support the Department of Health.  These factors contributed to an EBITDA margin of 33% (2020: 29%) and a segment profit of £31m (2020: £8m) at a margin of 17% (2020: 7%).

    Our Canadian business is still in the early phase of its development as it invests to expand its network and develop the business.  Growth has been achieved across the business while delivering a 45% EBITDA margin (2020: 33%) and generating a segment profit of C$35m (2020: C$nil) at a margin of 23% (2020: nil%).

    Overall, Group adjusted operating profit increased to $498m (2020: $331m), up 50% at constant exchange rates.  After financing costs of $61m (2020: $71m), Group profit before amortisation of intangibles and taxation was $437m (2020: $260m).  After a tax charge of 27% (2020: 25%) of the adjusted pre-tax profit, adjusted earnings per share increased 66% at constant currency to 71.5ȼ (2020: 43.4ȼ).  The tax charge in the quarter includes a $10m charge, reflecting an increase in the UK deferred tax liability due to UK legislation being substantively enacted which increases the UK corporate tax rate to 25% from 1 April 2023.

    Statutory profit before tax was $416m (2020: $241m).  This is after amortisation of $21m
    (2020: $20m).  Included within the total tax charge is a tax credit of $5m (2020: $5m) which relates to the amortisation of intangibles.  As a result, basic earnings per share were 68.0¢
    (2020: 40.1¢).

    Capital expenditure and acquisitions

    Capital expenditure for the quarter was $551m gross and $477m net of disposal proceeds
    (2020: $122m gross and $30m net).  Fleet deliveries were slower than expected due to supply chain delays and therefore we have deferred certain fleet disposals to meet strong demand.  As a result, the Group’s rental fleet at 31 July 2021 at cost was $12.2bn and our average fleet age is now 41 months (2020: 38 months).

    We invested $123m (2020: $nil), including acquired borrowings, in five bolt-on acquisitions during the quarter as we continue to both expand our footprint and diversify our end markets.

    Return on Investment

    Following the adverse impact of COVID-19, return on investment (excluding goodwill and intangible assets) continues to improve across the business.  In the US, return on investment for the 12 months to 31 July 2021 was 22% (2020: 19%).  In the UK, reflecting the benefits of increased volumes supporting the Department of Health and operational improvements, return on investment (excluding goodwill and intangible assets) increased to 14% (2020: 5%), while in Canada, return on investment (excluding goodwill and intangible assets) was 21% (2020: 6%). In Canada, this reflects improved performance across the business and an increasing contribution from our lighting, grip and studio business.  For the Group as a whole, return on investment (including goodwill and intangible assets) was 17% (2020: 14%).  Return on investment excludes the impact of IFRS 16.

    Cash flow and net debt

    The increased scale of the business enabled the Group to generate free cash flow of $420m (2020: $558m) during the period, while investing $333m (2020: $158m) in capital expenditure.  During the quarter, we spent $104m (£75m) on share buybacks.

    Net debt at 31 July 2021 was $5,705m (2020: $6,329m).  Excluding the effect of IFRS 16, net debt was $4,033m (2020: $4,891m), while the ratio of net debt to EBITDA was 1.3 times
    (2020: 1.8 times) on a constant currency basis, slightly below the Group’s target range for net debt to EBITDA of 1.5 to 2.0 times excluding the impact of IFRS 16 (1.9 to 2.4 times post IFRS 16).  Including the effect of IFRS 16, the ratio of net debt to EBITDA was 1.8 times (2020: 2.2 times) on a constant currency basis. 

    At 31 July 2021, availability under the senior secured debt facility was $3,146m with an additional $2,207m of suppressed availability – substantially above the $410m level at which the Group’s entire debt package is covenant free.

    In August 2021, the Group took advantage of strong debt markets and refinanced its debt facilities by issuing $550m 1.500% senior notes maturing in August 2026 and $750m 2.450% senior notes maturing in August 2031.  The net proceeds of the issues were used to repurchase the Group’s $600m 4.125% senior notes due 2025 and $600m 5.250% senior notes due 2026, pay related fees and expenses and repay an element of the amount outstanding under the ABL facility.  In addition, the Group also increased and extended its asset-based senior bank facility, with $4.5bn committed until August 2026.  Other principal terms and conditions remain unchanged.  These actions ensure the Group’s debt package continues to be well structured and flexible, enabling us to optimise the opportunity presented by end market conditions.  The Group’s debt facilities are now committed for an average of seven years at a weighted average cost of 3%.

    Capital allocation

    The Group remains disciplined in its approach to allocation of capital with the overriding objective being to enhance shareholder value. 

    Our capital allocation framework remains unchanged and prioritises:

    • organic fleet growth;
        - same-stores;
        - greenfields;
    • bolt-on acquisitions; and
    • a progressive dividend with consideration to both profitability and cash generation that is sustainable through the cycle.

    Additionally, we consider further returns to shareholders.  In this regard, we assess continuously our medium term plans which take account of investment in the business, growth prospects, cash generation, net debt and leverage.  Therefore the amount allocated to buybacks is simply driven by that which is available after organic growth, bolt-on M&A and dividends, whilst allowing us to operate within our 1.5 to 2.0 times target range for net debt to EBITDA pre IFRS 16.

    Current trading and outlook

    Our business is performing well in supportive markets.  The benefit we derive from the diversity of our products, services and end markets, our investment in technology and ongoing structural change, enhanced by the environmental and social aspects of ESG, enables the Board to look to the future with confidence and we now expect business performance this year to be ahead of our previous expectations.

     Previous guidanceCurrent guidance
    Rental revenue1
    - US6 – 9%13 – 16%
    - Canada20 – 25%25 – 30%
    - UK5 – 8%9 – 12%
    - Group6 – 9%13 – 16%
    Capital expenditure (gross) 2$1.9 – 2.2bn$2.0 – 2.3bn

    Free cash flow2

    $800 – 1,100m$900 – 1,100m

    1 Represents change in year-over-year rental revenue at constant exchange rates
    2 Stated at $1=C$1.21 and $1=£0.71