British equipment rental firm, Ashtead Group, has announced that its annual profit is expected to fall below market expectations due to lower emergency response activity in the US. The company is also set to take a depreciation charge of over $2 billion for the year. Ashtead, which is listed on the London Stock Exchange’s FTSE 100 index, attributes its downbeat outlook to factors such as a quieter hurricane season and a decline in naturally occurring events like wildfires.
Ashtead competes with United Rentals in the US and provides rental equipment for various sectors including construction, emergency response, and entertainment in the US, UK, and Canada. Their range of equipment includes diggers and construction tools.
The company has also been impacted by the Hollywood actors’ and writer’s strikes, which have had a lingering effect on its film and television business in Canada. This has had some impact on the rest of its Canadian, US, and UK operations in the entertainment sector, as they too rent equipment for this space.
Sunbelt Rentals, operating under the Ashtead name, is the company’s largest market in the US. As a result of the downturn, Ashtead has revised its annual group and US rental revenue growth forecast to 11%-13%, down from the previous estimate of 13%-16%. Net interest costs for the year are expected to reach around $540 million.
This news comes as a disappointment to investors who had high expectations for the company’s performance. Ashtead’s decline in profit can be attributed to factors beyond its control, such as the decrease in emergency response activity and the extended impact of the strikes in the entertainment industry.
Ashtead’s announcement raises questions about the overall health of the US rental equipment market. It also highlights the vulnerability of businesses that rely on emergency response activity and naturally occurring events. Analysts will be closely watching the company’s future performance and its ability to adapt to changing market conditions.
Ashtead’s shares have fallen in response to the news, with investors concerned about the company’s ability to generate profits in the current economic climate. However, the company remains optimistic about its long-term prospects and is focused on delivering high-quality service to its customers.