ASHTEAD GROUP PLC LONDON (Reuters) - British industrial equipment hire company Ashtead (>> Ashtead Group plc) said it expected economic growth in the United States and Britain to boost earnings this year, building on a 33 percent rise in first-half profit announced on Wednesday.
The company raised its annual earnings guidance for the second time this year on strong demand from its markets on both sides of the Atlantic.
"There is no getting away from the fact that if you look at employment levels, the GDP growth, that in our core market in North America and indeed increasingly in the UK, our markets are getting better and we will benefit from that," Chief Executive Geoff Drabble said.
"We think we are in for a long steady recovery," he told Reuters.
Pre-tax profit jumped by a third to 266 million pounds for the six months to Oct. 31. Ashtead also raised its interim dividend by 33 percent to 3.0 pence per share.
Ashtead, which rents everything from small tools to large diggers and water pumps, has lifted its forecasts at nearly every announcement for the past seven quarters despite a slow recovery in construction markets.
Its U.S. business Sunbelt accounts for around 83 percent of group revenue and UK business A-Plant provides the remainder.
Drabble said he now anticipated full-year results ahead of its previous expectations. He did not give a precise figure but said it was likely to be at the higher end of analyst estimates.
Shares in the company rose by 10 percent in early trading to 1189 pence and were up 7.6 percent by 10:15 a.m., making the company the highest riser on the FTSE 100 <.FTSE> index.
"Ashtead continues to demonstrate significant market share gain against a backdrop of recovering demand for non-residential construction," said Liberum analysts.
"Q2 profit growth is 8 percent ahead of our expectation and will likely prompt a 7 percent upgrade to consensus."
Prior to the announcement Ashtead was on average expected to post a full-year pretax profit of 452 million pounds, according to Reuters data.
Rival United Rentals Inc (>> United Rentals, Inc.) reported better than expected third quarter profit in October after rental revenue rose more than 15 percent.
(Additional reporting by Neil Maidment; editing by Keith Weir)
By Li-mei Hoang
