Ashtead Group PLC on Tuesday reported an annual revenue increase and boosted its dividend, but profit declined on higher interest expenses amid lofty central bank rates.

In the financial year that ended April 30, the London-based provider of equipment hire said pretax profit fell 2.1% to $2.11 billion from $2.16 billion. This came despite a 12% increase in revenue to $10.86 billion from $9.67 billion.

Profitability was dented by higher interest expenses, reflecting higher interest rates and an increased average debt level. Interest expenses were 48% higher at $546.3 million compared with $368.8 million a year prior. Net debt at April 30 was $10.66 billion, up from $8.96 billion a year before.

Shares in Ashtead were down 4.8% to 5,248.00 pence in London early Tuesday.

Ashtead said US revenue, the majority of its business, rose 13% to $9.31 billion from $8.22 billion, with rental revenue up 11% to $8.32 billion from $7.50 billion.

Canada’s rental-only revenue increased 10% and the UK business generated rental-only revenue growth of 9%.

Ashtead proposed a final dividend of 89.25 US cents per share, up 5.0% from 85.0 cents. Its annual dividend totalled 105.0 cents, also rising 5.0% from 100.0 cents.

Looking ahead, Chief Executive Brendan Horgan said: ‘Our end-markets in North America remain robust with healthy demand, supported in the US by the increasing number of mega projects and recent legislative acts. We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the opportunities arising from these market conditions and ongoing structural changes.’

For the new year, Ashtead expects rental revenue growth of 5% to 8% at constant exchange rates, slowing from a 10% rise in the year just ended.

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