Ashtead warns on profit after ‘quiet hurricane season’ and Hollywood strikes
The FTSE 100 equipment rental firm saw shares slide by as much as 15% after the markets opened in London.
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Your support makes all the difference.Ashtead Group has warned earnings are set to miss previous guidance after it was impacted by fewer natural disasters and the Hollywood writers’ strike.
The FTSE 100 equipment rental firm saw shares slide by as much as 15% after the markets opened in London.
In the downbeat trading update, the London-based firm said revenues over the three months to October 31 were hampered by “lower levels of emergency response activity”.
Despite these one-off events impacting the current financial year, our end markets in North America remain robust
Need for some of its equipment was affected by a “significantly quieter hurricane season than seen in recent years and fewer naturally occurring events”, such as wildfires, which it said continued into November.
Ashtead also blamed weakness on the writers’ and actors’ strikes.
It said the industrial action “significantly” weighed on its film and TV business after its persisted longer than expected, while its US and UK business renting into the sector were also affected.
The company said the effects of this also continued into November.
It told shareholders that both group and US rental revenues are now predicted to grow by between 11% and 13% in for the year. It had previously guided towards a range of 13% to 16%.
The slowdown in growth meant its earnings for the current full year are set to be between 2-3% below market expectations, it added.
The company said: “Despite these one-off events impacting the current financial year, our end markets in North America remain robust, supported in the US by an increasing number of mega projects and recent legislative acts.
“This, combined with the substantial structural growth opportunities that we see for the business, enables the board to look to the future with confidence.”