Ashtead cuts debt despite profits slump

3rd Dec 2009 07:52

Equipment rental group Ashtead Group saw interim profits plummet and expects trading to remain tough in the second half of its financial year.Underlying profit before tax in the six months to 31 October dived 74% to £20.1m from £76.6m the year before on revenue that fell by 24% to £441m from £581.1m.Reported profit before tax more than halved to £18.6m from £39.5m last year, when the company’s depreciation charge was £123.6m versus this year’s £94.2m. Performance improved in the second quarter, with underlying profit down 72%, versus a 77% fall in the first quarter. Net debt over the period was reduced to £847m from £1,036m at the end of April.‘Our operational performance is strong and we are clearly gaining market share. This has helped protect our profitability and deliver strong cash generation in the first half,’ said the company’s chief executive, Geoff Drabble.The company is braced for a decline in activity in the first half of 2010 as projects signed off before the recession started draw to a close, but is hopeful that this will represent the low point of the cycle as the effects of US stimulus measures kick in and the housing market recovers.The interim dividend has been left unchanged at 0.9p.