Ashtead Group PLC Q1 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Anneliese Vermeulen - Morgan Stanley - Analyst : I get two questions, please. So just on your margin expectations for the rest of the year, I think your margins improved in Q4, thanks to some of those cost controls you spoke about previously. But clearly, we're a little bit under pressure this quarter due to the factors you mentioned on ancillaries, fleet repositioning, repairs, et cetera. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 03, 2025 / 10:30AM, AHT.L - Q1 2026 Ashtead Group PLC Earnings Call So should that continue through the remaining quarters? Or was Q1 a bit of a one-off in that regard? And do you have further plans offsetting cost control factors for the remaining three quarters? And then secondly, on your free cash guide upgrade, just wondering if you had any plans at this stage for that cash, either in terms of deleveraging more buyback. You mentioned that you plan to acquire additional businesses through the year. So within that, could you perhaps comment on the M&A environment in terms of valuations, willingness to sell, et cetera?

Question: Anneliese Vermeulen - Morgan Stanley - Analyst : Just to double check on the margins, those fleet repositioning costs and so on. Is that something that will continue in Q2? Or have you done the bulk of that kind of in Q1?

Question: Suhasini Varanasi - Goldman Sachs Group Inc - Analyst : Just a quick for me, please. Your commentary on leading indicators and business momentum seems to suggest that maybe the August trading environment was a bit better than last year. Would you say that was true? And is it possible to give some color on how August trading was? And then second one, just to go back to the point on the margins that Annelies sorry about that. Is it possible to quantify the impact of the repair cost, the ancillary revenues, the positioning of fleet just so we can understand if there was any lumpiness in that particular quarter, should we think about any of them unwinding in Q2? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 03, 2025 / 10:30AM, AHT.L - Q1 2026 Ashtead Group PLC Earnings Call

Question: Suhasini Varanasi - Goldman Sachs Group Inc - Analyst : And Brendan, just two quick follow-up, please. Was there any comment that you would like to make on current trade in August, please?

Question: Rob Wertheimer - Melius Research LLC - Analyst : Two, if I could. The first is just -- I wonder if you could talk about your ongoing experience in mega projects with the color around market share, capture rates and then profitability on those projects. And then second, I'll just ask it now. I think Alex mentioned kind of market service areas. I wonder if you could kind of just expand on what that is, what kept you from doing it before? And how much potential evolves?

Question: James Rose - Barclays Services Corp - Analyst : I've got two, please. Firstly, can you update us on how tariffs are impacting the business? And then secondly, I see you've won the contract for the Olympics. Any color you can provide on that bid would be much appreciated, and congratulations.

Question: Rory McKenzie - UBS AG - Analyst : It's Rory here. Two questions on margins. No, I'm kidding there about rental rate of the other topic. Within the group average rates being stable, are there any regions or products that you saw achieved good increases or any that came under pressure? And then secondly, within Sunbelt 4.0, I know you were budgeting for kind of annual rate increases over the planned cycle. Can you talk about if you think that's still feasible? Especially, Brendan, I think you could just commented, you were looking to OEMs for fleet cost to be flat to down. So maybe can you talk about how we think about pricing power in any recovery, your customers' affordability of cost increases and maybe some of those points to discuss, please.

Question: Allen Wells - Jefferies LLC - Analyst : Just a couple for me. One, just a clarifying comment just about rates and repair costs and how these trend? So my understanding is that because of the repositioning you saw a bit of an improvement in time utilization this quarter sequentially. But obviously, if I look at the General Tool rate REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 03, 2025 / 10:30AM, AHT.L - Q1 2026 Ashtead Group PLC Earnings Call environment, it's stable now versus improving, which you said in core. That looks like a deterioration. So rates haven't followed utilization up at least this quarter. Can you just confirm that? And then on the repair costs, this looks like it should be a multiyear event, multiyear headwind, right, because your CapEx stepped up again in '24 versus '23. So obviously, there's a need for to offset that. So that's just to understand those dynamics is the first question. And then secondly, just on it possible you can provide the specialty growth if you adjust out the oil and gas and the film business? And as I look at the kind of the direct comparison there, power and HVAC and climate saw double-digit growth. I mean my understanding that makes up the biggest portion of your Specialty business. So what are the areas of real weakness outside oil and gas, film that are dragging that specialty growth and double --

Question: Carol Raynsford - Bernberg - Analyst : Two from me, please, if I may. The first, going back to both on rates really. Would you be able to quantify the sort of general time lag roughly between time utilization improvements and the pricing improvement if that has sort of happened in the past, a similar dynamic? This is the first one. And the second one, just on mega projects. Could you briefly explain the contract dynamics when those projects are multiyear. So for instance,