(Reuters) – British equipment rental company Ashtead Group kept its annual profit forecast on Tuesday after reporting a drop in quarterly earnings, reassuring investors as it also named a new finance chief to replace Michael Pratt, who is retiring next year.
The company, which serves construction, emergency response and entertainment markets in Britain, Canada and the United States, posted a 7% fall in adjusted profit before tax for its fiscal first quarter ended July 31, on higher depreciation costs and lower used equipment sales.
Still, the company expects annual results in line with its prior expectations.
“In North America, the increasing proportion of megaprojects and the strength of our Specialty businesses has more than offset the lower activity levels in local commercial construction markets,” it said in a statement.
Shares in Ashtead climbed 3% to be among the top gainers on London’s FTSE 100 index. The stock has increased nearly three-fold since Pratt became finance chief.
“Overall, we would expect these results to be taken relatively well today with the in-line messaging reassuring following the negative earnings revisions seen over the past year,” JPMorgan analysts wrote in a note.
Ashtead has seen lower demand in the U.S., its biggest market, due to a drop in emergency response activity, as well as an economic slowdown. In June, the company forecast a slowdown in U.S. rental revenue growth in fiscal 2025.
Pratt, 60, who became chief financial officer (CFO) in April 2018, will retire in September next year and Alex Pease has been named as CFO designate.
Pease, former CFO at Westrock until its recent merger with packaging firm Smurfit Kappa, will join in October.
(Reporting by Prerna Bedi, Radhika Anilkumar and Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich and Mark Potter)
