Ashtead PLC (LON:AHT) has slashed its cash spending even though it said rentals of its heavy construction equipment stabilised in April after the initial shock of the coronavirus-related lockdown.
“Since 10 April, we have seen the level of US fleet on rent stabilise and show a modest improvement," it said in a statement.
“This positive trend follows a period of consistent decline over the previous four weeks.
"This recent trend in fleet-on-rent is similar in our UK and Canadian businesses,”
Ashtead added it has halted its £500mln share buyback programme for 2020/21 to bolster its cash position, with a £600mln reduction in capital expenditure and suspension of all M&A activity also implemented.
The group said it has modelled several downside scenarios and on all of these it remains free cash flow positive throughout the year to April 2021.
Underlying profit before tax for the year ending this month will be around £ 1.05bn, it added.
Nearly all its outlets in the UK, US and Canada are open, it said, with the businesses deemed essential in all three countries.
They have been supplying items to hospitals, testing sites, food services, telecom and utility companies as well as construction sites and this has helped to offset subdued trading elsewhere, Ashtead said.
Rental-only revenue for US arm Sunbelt in March was 2% higher than the prior year, though it has fallen by 15% in April so far compared to a year earlier.
Tool hire is down by 18%, though the broader-based speciality businesses are running 9% higher than last year and similar to the performance in March.
Brendan Horgan, chief executive, said: “Looking forward, I am certain the swift actions we took during these unprecedented times and the strength of our balance sheet will serve the group well.”