Ashtead Group Plc reports solid Q1 2025 performance with strong cash generation

Ashtead Group Plc (LON:AHT) has announced its unaudited results for the first quarter ended 31 July 2025

	First quarter
	2025	2024	Growth
	$m	$m	%
Performance¹
Revenue	2,801	2,754	2%
Rental revenue	2,601	2,541	2%
Adjusted² EBITDA	1,276	1,288	-1%
Operating profit	642	688	-7%
Adjusted² profit before taxation	552	573	-4%
Profit before taxation	512	544	-6%
Adjusted² earnings per share	95.3¢	97.4¢	-2%
Earnings per share	87.7¢	92.4¢	-5%

Highlights

· Group rental revenue up 2%; revenue up 2%

· Operating profit of $642m (2024: $688m)

· Adjusted² profit before taxation of $552m (2024: $573m)

· Adjusted² earnings per share of 95.3¢ (2024: 97.4¢)

· $532m of capital invested in the business (2024: $855m)

· Free cash flow¹ of $514m (2024: $161m)

· $330m spent on share buyback (2024: $nil)

· Net debt to adjusted EBITDA leverage of 1.6 times (2024: 1.7 times)

· Reaffirm guidance for revenue and capex while increasing it for free cash flow

Throughout this announcement we refer to a number of alternative performance measures which provide additional useful information. The directors have adopted these to provide additional information on the underlying trends, performance and position of the Group. The alternative performance measures are not defined by IFRS and therefore may not be directly comparable with other companies’ alternative performance measures but are defined and reconciled in the Glossary of Terms on page 28.

Adjusted results are stated before amortisation and non-recurring costs associated with the move of the Group’s primary listing to the US.

Ashtead Group’s chief executive, Brendan Horgan, commented:

The Group delivered solid first quarter results with revenues, profits and free cash flow in line with our expectations as we continue to take advantage of secular tailwinds and the structural progression of our industry. Rental revenue increased 2.4% as mega project activity gained momentum, and we are seeing positive leading indicators for local non-residential construction activity.

Our revenue growth combined with strong margins and disciplined capital deployment resulted in near record free cash flow in the quarter. In addition, we were able to complete $330m of share buybacks in the quarter bringing our total to c. $675m under the current programme, as well as paying down $91m of long-term borrowings, with leverage of 1.6x. I would like to thank the team for these results, while leading with our safety-first culture and Engage for Life programme, which are continuing to drive improvements in our safety metrics.

We are reaffirming our revenue and capex guidance for the year, while raising it for free cash flow. Lastly, we continue to progress our relisting on the NYSE that is currently scheduled for March 2026.

Brendan Horgan and Alex Pease will hold a conference call for equity analysts to discuss the results and outlook at 11:30am (6:30am EST) on Wednesday, 3 September 2025. The call will be webcast live via the Company’s website at www.ashtead-group.com and a replay will be available via the website shortly after the call concludes. A copy of this announcement and the slide presentation used for the call are available for download on the Company’s website. The usual conference call for bondholders will begin at 3pm (10am EST).

Analysts and bondholders have already been invited to participate in the analyst and bondholder calls but any eligible person not having received details should contact the Company’s PR advisers, H/Advisors Maitland (Audrey Da Costa) at +44 (0)20 7379 5151.

Forward-looking statements This announcement contains forward-looking statements. These have been made by the directors in good faith using information available up to the date on which they approved this report. The directors can give no assurance that these expectations will prove to be correct. Due to the inherent uncertainties, including both business and economic risk factors underlying such forward-looking statements, actual results may differ materially from those expressed or implied by these forward-looking statements. Except as required by law or regulation, the directors undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

Trading results¹

	Revenue		SegmentEBITDA^2,3		Profit^2,3
	2025	2024	2025	2024	2025	2024
	$m	$m	$m	$m	$m	$m

North America General Tool	1,648.9	1,661.1	870.7	900.2	519.5	561.3
North America Specialty	909.3	855.3	435.9	410.5	301.2	279.5
UK	242.7	237.3	61.4	63.9	16.2	22.1
Central costs	–	–	(92.1)	(86.9)	(154.3)	(145.9)
	2,800.9	2,753.7	1,275.9	1,287.7	682.6	717.0
Financing costs					(130.2)	(143.9)
Adjusted profit before tax					552.4	573.1
Non-recurring costs					(12.7)	–
Amortisation					(28.1)	(28.7)
Profit before taxation					511.6	544.4
Taxation charge					(136.1)	(140.9)
Profit attributable to equity holders of the Company					375.5	403.5

Margins
North America General Tool			52.8%	54.2%	31.5%	33.8%
North America Specialty			47.9%	48.0%	33.1%	32.7%
UK			25.3%	26.9%	6.7%	9.3%
Group			45.6%	46.8%	24.4%	26.0%

¹ During the prior financial year, the Group reassessed the basis of its segment information to report its results reflecting North America General Tool, North America Specialty and UK segments, which we believe reflects better the basis upon which we review the performance of the business internally and aligns with the basis of our strategic growth plan, Sunbelt 4.0. Prior year comparative information has been restated to reflect these segments.

² Segment performance is measured internally excluding central costs which support the business as a whole. Furthermore, the Group manages debt, including lease liabilities, centrally and therefore segment profit measures are presented before the application of lease accounting adjustments in accordance with IFRS 16 Leases but instead reflect the cash cost incurred in the period. The impact of lease accounting adjustments are included within the central costs line item above.

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³ Segment results presented are adjusted EBITDA and adjusted operating profit. A reconciliation of adjusted measures to statutory measures is provided in the Glossary of Terms on page 28.

North America General Tool

In the North American General Tool business, rental revenue of $1,535m (2024: $1,524m) was 1% higher than the prior period, driven by volume growth. Organic performance (same-store and greenfields) was flat, while bolt-ons since 1 May 2024 contributed 1% of rental revenue growth. North American General Tool total revenue, including new and used equipment, merchandise and consumable sales, was $1,649m (2024: $1,661m). As expected, this reflects a lower level of used equipment sales than the comparable period last year ($71m; 2024: $94m).

We continued to focus on the cost base which contributed to North America General Tool EBITDA of $871m (2024: $900m) and an EBITDA margin of 52.8% (2024: 54.2%). The margins reflect higher costs associated with internal repairs and repositioning of rental fleet to drive utilisation improvements. As anticipated, lower used equipment sales and second-hand values resulted in lower gains on sale. After higher depreciation on a larger fleet, this contributed to adjusted operating profit decreasing by 7% to $520m (2024: $561m) with a margin of 31.5% (2024: 33.8%).

North America Specialty

In the North American Specialty business, rental revenue of $854m (2024: $813m) was 5% higher than the prior year, driven by both volume and rate improvement, demonstrating the benefits of our strategy of growing our Specialty businesses. North American Specialty total revenue, including new and used equipment, merchandise and consumable sales, was $909m (2024: $855m).

This performance combined with our focus on the cost base contributed to North American Specialty EBITDA of $436m (2024: $410m) and an EBITDA margin of 47.9% (2024: 48.0%). After higher depreciation on a larger fleet, this contributed to adjusted operating profit increasing by 8% to $301m (2024: $279m) with a margin of 33.1% (2024: 32.7%).

The UK business generated rental revenue of $212m, up 4% on the prior year (2024: $204m). Rental revenue growth has benefitted from favourable foreign exchange movements, with rental revenue in local currency 2% lower than the prior year. Total revenue increased 2% to $243m (2024: $237m).

In the UK, the focus remains on delivering operational efficiency and long-term, sustainable returns in the business, while rental rate achievement remains an area of focus. The UK generated EBITDA of $61m (2024: $64m) at a margin of 25.3% (2024: 26.9%) and adjusted operating profit of $16m (2024: $22m) at a margin of 6.7% (2024: 9.3%).

Group

Group revenue was $2,801m (2024: $2,754m) during the quarter. This revenue and our focus on the cost base, but with lower used equipment sales, resulted in adjusted EBITDA decreasing 1% to $1,276m (2024: $1,288m). We invested in the infrastructure of the business during Sunbelt 3.0 to support the growth of the business now and into the future. Our intention is to leverage this infrastructure during Sunbelt 4.0 as we look to improve operating performance.

Adjusted operating profit decreased 5% to $683m (2024: $717m), reflecting a depreciation charge which was 4% higher than the prior year. The higher increase in the depreciation charge relative to revenue growth reflects the ongoing impact of life cycle fleet inflation, contributing to the decline in adjusted operating profit.

After lower net financing costs of $130m (2024: $144m), reflecting lower average debt levels, Group adjusted profit before tax was $552m (2024: $573m). After a tax charge of 26% (2024: 26%) of the adjusted pre-tax profit, adjusted earnings per share were 95.3ȼ (2024: 97.4ȼ).

Statutory profit before tax was $512m (2024: $544m). This is after non-recurring costs of $13m (2024: $nil) associated with the move of the Group’s primary listing to the US and amortisation of $28m (2024: $29m). Included within the total tax charge is a tax credit of $8m (2024: $7m) which relates to the amortisation of intangibles and non-recurring costs. As a result, basic earnings per share were 87.7¢ (2024: 92.4¢).

Capital expenditure and acquisitions

Capital expenditure for the quarter was $532m gross and $416m net of disposal proceeds (2024: $855m gross and $722m net). As a result, the Group’s rental fleet at 31 July 2025 at cost was $19bn (2024: $18bn) and our average fleet age was 50 months (2024: 46 months) on an original cost basis.

We invested $20m (2024: $53m) in two bolt-on acquisitions during the period, as we continue to both expand our footprint and diversify our end markets. Further details are provided in Note 14.

Return on Investment

The Group return on investment was 14% (2024: 16%). For North America General Tool, return on investment (excluding goodwill and intangible assets) for the 12 months to 31 July 2025 was 20% (2024: 24%), while for North America Specialty it was 31% (2024: 29%). The reduction in North America General Tool return on investment reflects principally the impact of lower average utilisation of a larger fleet. In the UK, return on investment (excluding goodwill and intangible assets) was 6% (2024: 7%). Return on investment excludes the impact of IFRS 16.

Cash flow and net debt

The Group generated free cash flow of $514m (2024: $161m) during the quarter, which is after capital expenditure payments of $506m (2024: $933m). In December 2024, the Group launched a share buyback programme of up to $1.5bn over 18 months. During the quarter, we spent $330m (2024: $nil) on share buybacks under this programme.

Net debt at 31 July 2025 was $10,268m (2024: $10,761m). Excluding the effect of IFRS 16, net debt at 31 July 2025 was $7,425m (2024: $8,033m), while the ratio of net debt to adjusted EBITDA was 1.6 times (2024: 1.7 times) on a constant currency basis. The Group’s target range for net debt to adjusted EBITDA is 1.0 to 2.0 times, excluding the impact of IFRS 16. Including the effect of IFRS 16, the ratio of net debt to adjusted EBITDA was 2.0 times (2024: 2.2 times) on a constant currency basis.

At 31 July 2025, availability under the senior secured debt facility was $3,702m with an additional $6,325m of suppressed availability – substantially above the $475m level at which the Group’s entire debt package is covenant free.

The Group’s debt facilities are committed for an average of five years at a weighted average cost of 5%.

Capital allocation

The Group remains disciplined in its approach to allocation of capital with the overriding objective being to enhance shareholder value.

Our capital allocation framework remains unchanged and prioritises:

· organic fleet growth;

– same-stores;

– greenfields;

· bolt-on acquisitions; and

· a progressive dividend with consideration to both profitability and cash generation that is sustainable through the cycle.

Additionally, we consider further returns to shareholders. In this regard, we assess continuously our medium-term plans which take account of investment in the business, growth prospects, cash generation, net debt and leverage. As we execute on Sunbelt 4.0, we expect a number of years of strong earnings and free cash flow generation. Given this outlook, we have the opportunity to enhance returns to shareholders, while maintaining leverage towards the middle of our target range of 1.0 to 2.0 times net debt to adjusted EBITDA (excluding the IFRS 16).

Guidance

Set out below is our guidance for 2025/26:

	Initial guidance	Current guidance

Rental revenue growth	0% – 4%	0% – 4%

Capital expenditure (gross)¹	$1.8bn – $2.2bn	$1.8bn – $2.2bn

Free cash flow^1,2	$2.0bn – $2.3bn	$2.2bn – $2.5bn