Ashtead Group PLC on Tuesday hailed mega projects in the US as it reported profit growth buoyed by momentum in North America, but lowered its rental revenue outlook for the UK.

Ashtead shares fell 4.9% to 5,200.00 pence each on Tuesday morning in London.

In the first quarter ended July 31, the industrial equipment rental company said revenue rose 19% year-on-year to $2.70 billion from $2.26 billion, as pretax profit climbed 11% to $585 million from $527 million.

‘Our business has clear momentum with robust end markets in North America, which are supported in the US by the increasing number of mega projects and recent legislative acts,’ said Chief Executive Brendan Horgan.

He added that the company invested $1.1 billion in capital across existing locations and greenfields and $361 million on nine bolt-on acquisitions, which add a combined 40 locations in North America.

‘This significant 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,’ CEO Horgan said.

In the UK, the focus remains on delivering operational efficiency and improving returns in the business, the firm said. ‘While we continue to improve rental rates, which remains an area of focus, this has

been insufficient to offset the inflation impact on the cost base,’ Ashtead explained.

Despite ‘softening’ conditions in UK markets, Ashtead expects its overall performance to be in line with its expectations.

However, the company lowered its rental revenue guidance for the UK, while that for total, Canada and US rental revenue remained the same. For the UK, Ashtead now expects rental revenue growth of 6% to 9%, down from its previous guidance of 10% to 13%. For rental revenue growth outlook in the US it remained between 13% and 16%, for Canada between 15% and 20% and in total it remained at 13% to 16%.

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