Ashtead hikes Q2 profit

9th Dec 2010 07:17

Growing sales in North America lifted second quarter sales at equipment hire firm Ashtead but it warned end markets remain fragile.Underlying pre-tax profit rose 49% to £18.1m in the second quarter ended 31 October 2010. Revenue advanced 9% to £245.2m. Statutory pre-tax profit was down 14% at £9.6m."Revenue growth accelerated in the second quarter driven by increased rental penetration, more fleet on rent and higher yields," Ashtead explained in a company statement.Ashtead, which generates 80% of its revenue from North America, said conditions in the US are 'gradually improving'. Its US Sunbelt unit posted a 4% increase in rental revenues in the first half to $557m.In the UK, A-Plant's first half rental revenues declined 2% to £77m reflecting 3% more fleet on rent relative to the previous year and 5% lower yield. UK yield declines continue to moderate with a second quarter reduction of 2%, the group noted."However, increased reliance on rental by our customers particularly in the US, together with continuing market share gains, is supporting our performance, a trend we expect to continue," said chief executive Geoff Drabble.Looking ahead, as it enters the seasonally weaker winter period, forecasting remains difficult. "However, the momentum we have established during the year has continued into November and will, we expect, be sufficient to ensure an outcome ahead of our earlier expectations," the group added.The board has declared an interim dividend of 0.93p per share, up from 0.9p in 2009.