Ashtead sees modest US pick-up

17th Jun 2010 08:05

Equipment rental group Ashtead saw underlying full year earnings tumble but has seen some signs of improvement in the fourth quarter, especially in the US, where it makes the bulk of its money.Revenue in the year to 30 April was down to £836.8m from £1,073.5m the year before. This decline was more than broker Singer Capital Markets was expecting; it had forecast a figure of £868.6m. Fourth quarter revenue was down to £210.1m from £232.1m.Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the full year fell to £255.1m from £356.1m a year earlier, but fourth quarter underlying EBITDA was down just 10.1% to £61.3m from £68.2m in 2009.Underlying profit before tax collapsed to £5m from £87.4m the year before, but was almost twice as high as the £2.6m forecast by Singer. Statutory profit before tax was £4.8m, up from £0.8m a year earlier when the company's profits were reduced by £86.6m by one off items. Net debt reduced to £829m from £1,036m at the end of April 2009. The ratio of net debt to EBITDA (at constant exchange rates) rose to 3.1 from 2.6 a year earlier."Having taken decisive and prompt actions to prepare the business for the contraction in our end markets we have maintained healthy margins and strong cash generation whilst gaining market share," said Ashtead's chief executive Geoff Drabble. "Although market conditions remain difficult we are pleased to have seen some early signs of improvement in Q4 [fourth quarter], particularly in the US," Drabble added.Though things are stabilising in the US the company is taking a cautious view on the UK where public sector spending cuts could have an impact on trading. A final dividend of 2p has been proposed, up from 1.675p a year earlier. The full year dividend is therefore 2.9p, up from 2.575p in 2009.