Ashtead Group has reported a record performance in the first half of its financial year, despite a recent warning that full-year profits would be below expectations.

The international rental firm, headquartered in London, reported revenue growth of 16% in the first half of its latest financial year compared to 2022 from $4.8bn (£3.8bn) to $5.57bn (£4.41bn), with rental revenue also increasing 14% from $4.38bn (£3.47bn) to $4.96bn (£3.93bn).

Ashtead, which has added 74 new US locations in the latest half of the year, also saw its revenue in the US increase by 18%.

The group also recorded that the capital invested into the business also increased from $1.7bn (1.35bn) in H1 2022 to $2.5bn (£1.98bn) in the latest half of the year.

Chief executive officer at Ashtead, Brendan Horgan, said: "The group continues to perform strongly with revenue up 16% and rental revenue growth of 13%, both at constant currency. This strong performance is only possible through the dedication of our team members who deliver for all our stakeholders every day, while ensuring our leading value of safety remains at the forefront of all we do.

"We are executing well against all actionable components of our strategic growth plan, in end markets which remain robust. In the period, we invested $2.5bn (£1.98bn) in capital across existing locations and greenfields and $705m (£558.6m) on 16 bolt-on acquisitions, adding a combined 74 locations in North America.

"This investment is enabling us to take advantage of the substantial structural growth opportunities that we see for the business as we deliver our strategic priorities to grow our General Tool and Specialty businesses and advance our clusters. We are achieving all this while maintaining a strong and flexible balance sheet with leverage in the middle of our target range.”

The results follow on from the firm issuing a trading update on 20 November, which lowered its expected revenue growth and earnings guidance for the full year to reflect the "lower level of emergency response activity related to natural disasters in North America in late Q2 and into Q3", as well as the longer than anticipated actors’ and writers’ strikes, which Ashtead said impacted both the film and TV business and adjacencies in its Canadian, US and UK businesses.

However, Ashtead has said that the North American market remains robust with healthy demand, supported by the US by the increasing number of mega projects and recent legislative acts.

Equity analyst at Hargreaves Lansdown, Matt Britzman, added: "Despite some near-term headwinds, demand for Ashtead’s construction equipment remains strong. Fresh off the back of a rare earnings downgrade, it’s good to see a continued upbeat tone about the longer-term demand dynamics. It was a little unnerving to see revenue and profit guidance get cut a couple of weeks ago, markets had largely assumed there was enough of a buffer in guidance to absorb some near-term demand weakness.

"Nonetheless, more reassurances today on the underlying demand dynamics were welcomed. The North American market is key, with mega projects off the bank of recent legislation being Ashtead’s bread and butter. Its scale and expertise are a winning formula in a fragmented industry. There’s still a general feeling of positivity around the group, and next year’s strategy update should be the next major catalyst for movement in the valuation."

---