A profit warning from Ashtead Group PLC (LSE:AHT) last month provided a sharp reset to expectations ahead of Tuesday's half-year results from the US-focused equipment hire group, where there remains speculation that it could join the exodus of London stocks to New York.
The FTSE 100-listed group warned that group and US rental revenue growth would be below previous guidance, resulting in underlying profit (EBITDA) being 2% to 3% below current market expectations.
It blamed a quieter wildfire and hurricane seasons and the writers’ and actors’ strikes persisting longer than expected, which led to lower demand for construction equipment in Canadian, American and British operations.
But this set of results should be no less informative for that warning, said analysts at AJ Bell.
"Shareholders and analysts will be looking for more details on the reasons for the downgrade to full-year expectations and the extent to which the second-quarter slowdown could linger into the third period (or beyond)."
Before the announcement, the City had been looking for US$5.2 billion of EBITDA for the year to March 2024, up 17% from fiscal 2023.
A figure nearer to $5 billion now seems more accurate, given the revised outlook, said the AJ Bell team, adding that any changes to the dividend would be a "sign of management’s confidence in the future" since Ashtead’s current streak of increases in its annual distribution stretches back to 2005.
Shares in the company are up around 200% over five years, but down from peaks reach in recent years, with the profit warning knocking the share price from £52 to below £48.