Ashtead profits hit by Hollywood strike and fewer natural disasters

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Ashtead has warned that annual profits will fall short of forecasts, as fewer natural disasters in the US and the Hollywood writers’ strike hit demand for the equipment rental company’s services.

Shares in the FTSE 100 group tumbled 14 per cent in early trading on Monday following the warning.

The group said that full-year revenues would now grow between 11 per cent and 13 per cent, below a previous prediction of between 13 per cent and 16 per cent.

As a result of the slower than anticipated revenue growth, earnings before interest, tax, depreciation and amortisation would likely be 2 per cent to 3 per cent below market expectations, Ashtead added.

The US, where Ashtead trades under the name Sunbelt Rentals, accounts for about 90 per cent of the company’s revenue.

Analysts at Peel Hunt described the profit warning as “disappointing”, but said that they view it largely as a one-off, stemming from the quieter hurricane season and disruption from the writers’ strike.

The London-listed group has been one of the beneficiaries from construction projects spurred by US President Joe Biden’s Inflation Reduction Act.

In its statement, Ashtead said that it also now expected its full-year depreciation charge to be larger than expected.

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