Next week’s results from equipment hire firms Ashtead Group PLC (LSE:AHT) and Speedy Hire PLC (LSE:SDY) will provide a health check on two sides of the industry – one dominated by the vast US market, the other still largely tied to the fortunes of the UK construction sector.
Ashtead reports full-year numbers on Tuesday 17 June, with the market keen to see how final figures compare to guidance issued after last December’s profit warning – its third in quick succession.
The FTSE 100 group, which generates 90% of revenues through its Sunbelt Rentals business in the US, flagged a slowdown in Stateside construction activity due to higher interest rates, prompting a downward revision in rental growth forecasts and capital expenditure.
Nine-month results to January showed a marginal dip in US revenue to $7.05 billion, with profit margins also edging lower. The full-year is expected to show a 4% drop in headline sales to $10.6 billion, while analysts forecast adjusted pre-tax profit of $2 billion, down from $2.3 billion the year prior.
Analysts at RBC slashed their forecasts in April, noting that because of the way Ashtead’s business is structured, with high operating and financial gearing, a relatively small hit to revenues translates into much bigger drops in profits.
CEO Brendan Horgan’s updated view on the US market – particularly demand linked to hurricane recovery and projects tied to the Inflation Reduction Act – will be closely watched.
Investors will also seek clarity from new CFO Alex Pease, particularly on capital allocation and cash generation. Capex is expected to fall to $2.6 billion, with another cut likely next year.
Dividend growth remains on the cards, with consensus pointing to a $1.15 total payout – though sterling investors may see less benefit, as the US dollar hovers near three-year lows versus the pound.
Strategically, eyes will be on the status of the Sunbelt 4.0 productivity programme and progress towards Ashtead’s proposed move to a primary New York listing.
Speedy Hire: margin recovery and self-help narrative in spotlight
One day later, on Wednesday 18 June, Speedy Hire will deliver full-year figures to March that will be examined for signs of stability following February’s profit warning.
"Speedy Hire is in the same business as Ashtead, albeit with a different client and geographic mix, notably a UK focus, and the share price is mired in a long slump," said analysts at AJ Bell.
The AIM-listed firm blamed its setback on delays in National Rail contracts, soft economic conditions, and slower-than-expected traction in its retail push, flagging a "slower post-December shutdown recovery across the majority of our customer base".
Revenue from new partnerships was now expected later and its Kazakhstan joint venture faced a "significant downturn".
Sales are expected to rise slightly to £430 million, though pre-tax profit is forecast to remain flat at £5.1 million. The dividend is seen holding steady at 2.6p per share.
Investors will be looking for early signs of progress from the three-year Velocity cost-cutting programme, which is expected to yield £3.5 million in annualised savings.
Guidance for the year to March 2026 will be key, with analysts currently modelling a 5% rise in revenue, more than a doubling in pre-tax profit to £12 million, and a maintained dividend.
"Comments on rail project progress may be of interest to shareholders in Renew Holdings and Costain, especially as the former has also noted delays in spending after the start of the CP7 regulatory cycle which began back in April 2024," the AJ Bell analysyts said.
"Investors may also look for updates on the long-term contract with Amey, won last summer at the expense of HSS and worth up to £25 million a year in sales."