On Monday, British equipment rental company Ashtead Group announced that its annual profit will be lower than market expectations due to a decline in emergency response activity in its US business and an anticipated depreciation charge of over $2 billion.
The company’s share price plunged as much as 13.6% following the results, making it the worst-performing stock on the FTSE 100 index. However, since the open, it has regained some of its initial losses, currently down over 9%, trading around the 4,757p mark.
Despite record results for the first half of the year, Ashtead attributed its disappointing outlook to several factors, including a quieter US hurricane season and a decrease in naturally occurring events such as wildfires.
The company now expects both full-year group and US rental revenue growth in the range of 11 to 13%, down from the previous guidance for both of 13% to 16%. As a result, EBITDA is expected to be 2% to 3% below current market expectations.
By James Fyeman