Ashtead Group PLC Q2 2025 Earnings Call Transcript

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

Question: Will Kirkness - Bernstein - Analyst : Thanks, good morning. And two questions, please. Firstly, just kind of thinking about end markets, and peer data has, I guess, been a bit mixed. I mean the data sort of looks okay. I'm just wondering if there's something sort of specifically beyond the local market you're not happy with, whether there's any particular regions or particular end markets that aren't where you'd hope they'd be? And secondly, just on CapEx, just looking at US CapEx. So the guidance for the second half would seem to suggest that we'll be about half the level that we saw in the first half. I'm just wondering about sort of implications for growth versus replacement. There's a comment about growth CapEx potentially being overstated given inflation. So I just wondered if you can maybe quantify how out that might be and then how we would think about CapEx rolling into FY26. Thank you. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Yes. Thanks, Will. You were a little broken up there. So we'll do our best. The first one in terms of end markets, what we'll point out clearly is this is a local construction environment. But nothing beyond that, that we see. We see really strength from a growth standpoint across our geographies, Northeast, Southeast, Central. West is the only one that's kind of been flat for the half year, but actually is gaining some momentum as we make the turn into the second half. It's important to understanding that local construction that we're talking about. The real engine behind that in the US, it's really your local and regional developers. And as we've talked about, and as we've seen in some of the -- trends as of late, they're just waiting to find what the resting place, let's call it, is from an interest rate environment. And I think that we would all agree that there's underlying demand there, and we'll see that recover, and we'll be keeping a very watchful eye on that and be ready to take that opportunity as it arises. I'll turn that CapEx question about the back half to Michael, but I want to point out one thing about that, and that is, sure, there are the headline CapEx figures, which look, no one wants could do a downgrade as we've done today, chief among them is me, I can tell you that. But what you do REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00AM, AHT.L - Q2 2025 Ashtead Group PLC Earnings Call in this business is when you do notice some changing or some transitory position in one of your end markets, you adjust your CapEx. That's what you do. And then, of course, when you see that recover, you take advantage of it. But the first way we'll do that is actually with some capacity in the investment we've already made. We made a significant investment from a capacity standpoint and certainly from a structural standpoint and infrastructure standpoint throughout 3.0 and we have room for that to deliver extra growth. So it's not just the headline CapEx figure instead it's understanding that capacity. But anything further, Michael, in terms of first half -- or second half --

Question: Will Kirkness - Bernstein - Analyst : No, that's great.

Question: Rory Mckenzie - UBS - Analyst : Two questions, please. Firstly, can you just quantify what the rate increases contributed within the 4% US rental revenue growth and perhaps outside the hurricane response work, if possible? And can you talk about the spread of performance across your different markets. Are there any geographies that are stronger or weaker for rates depending on the degree of local market overcapacity, for example? And then secondly, on growth, as you said, not realistic now to expect local markets to rebound in the second half of your fiscal year. Can you talk about what you think demand pickup might look like over the whole next calendar year? I saw your headcount came down another 1% in this quarter. I think, now down about 7% compared to last year. So it does look like you're bracing for maybe a slightly longer period of weaker markets. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Yes. Sure, Rory. We don't report exactly from a pricing standpoint. You heard you were in the audience in Atlanta, we spoke to what our internal targets were, not to be confused with what our budgets were, but we see rental rates progressing year on year a couple of percent. There's not the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00AM, AHT.L - Q2 2025 Ashtead Group PLC Earnings Call geographic disparity you might think, which really demonstrates I think the progression of it all, just in terms of how the markets behave and how we retain our discipline. You'll know that one of the technology advancements we made over the course of 3.0 was our dynamic pricing system, which we continue to extract benefits from, and we will do going forward. From a local construction standpoint, what we'll know is this, when we see what has been increased planning, which we're seeing progress to permits, we'll know then that we'll begin to see those progress to starts, and we'll see that. But I wouldn't expect, as I said in the prepared remarks, for that to happen -- look, it takes kind of four quarters to six quarters. We're a bit into it now. So I think one could logically come to an opinion that, again, if we see interest rates moderate and there's some foreseeable stability in that, you can see those local and regional developers I mentioned begin to rev their engines up and you might get some of that back half of next calendar year and then really, you would think that could really rev up into calendar 2026. Furthermore, I'll point out, we've talked about this a lot over the years, when you see resi go as well. If you look at some of the resi forecasts that are out there, I think, largely believed in from a demand standpoint where you'll see a single-family eclipse or reach 1 million homes again in '25, '26 before they recover to $1.2 million, $1.3 million. And again, Rory, you've been around for this, and you know that you'll have a bit more of that local construction that will follow that as well that will be healthy. On your headcount point, I don't want anyone to draw into that or read into it any more than they should. So half year to half year, we have about 1,400 fewer heads. I'll remind you of the scaffold, the ND project. So there's a bit more than half, so about 750 of that delta year on year is literally not having those scaffold builders that were on that project. And I'll also remind you that the quarter that we've just left and the quarter that we're now in, we're the most difficult comps. Frankly, they go all the way through April when it comes to that. But don't forget the central thread of Sunbelt 4.0, meaning the third actual component of performance, and us working to leverage the increased density that we built over the years and in particular, in 3.0, and one would expect a combination of the density and also more of the work in these mega projects where you can leverage overall your output per person. So this isn't preparing for a rainy day, as you might have suggested, rather just running the business and running the 4.0 plan.

Question: Suhasini Varanasi - Goldman Sachs International - Analyst : Good morning. Thank you for taking my questions. I have a few, please. Can you please remind us what the exit rate in November was? And did you see any benefits from hurricane activity in this month? Secondly, given your expectation of the local commercial construction activity rebounding in the back half of calendar '25, is it fair to assume that the growth rate for fiscal '25 will be more similar to fiscal -- 2026 will be similar to fiscal '25? And now that you're moving to the US listing and going through the process, should we expect a change to a GAAP accounting reporting anytime in the next 6, 12 months? Thank you. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Michael, you want to touch on hurricane activity? I think that was the first question.

Question: Katie Fleischer - KeyBanc Capital Markets - Analyst : Good morning. I was wondering how you're thinking about mega projects now that we're in the new administration in the US. Just wondering if there's any risk to certain types of projects or if you're expecting to see that mix shift maybe from some more renewables to maybe oil and gas or LNG. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Yes, it's a good question. I mean, first of all, I think it's worth saying, we don't build a strategic growth plan nor our business model based on an administration or Congress. That being said, I think if you really look at why we are in this mega project era, what are the real drivers behind that? And I would order those in this order, deglobalization, manufacturing modernization, the advancement of technology, which we're seeing so clearly. And certainly, there was some impact when it came to infrastructure as was chips and science and as was IRA. So I think the headline is this and the real tailwind is there is no turning around the very core to it all, which is deglobalization. Would argue, if anything, the tailwind there will be enhanced with some of the proposals that are out there. Will you have some puts and takes between renewables and fossil fuel? So in other words, we have maybe a bit less in terms of solar farms and a bit more in terms of LNG, time will tell. This has nothing to do with my personal preferences, but when it comes to running the business, I could really care less which one it is. Our equipment, as I would have said in the prepared remarks, is remarkably suitable to many different applications. But if you reference what is slide 17 in the results, it's worth just looking at that in a really short period of time, what we see now over the current fiscal year and the next two, there are -- almost 690 identified projects that plan to start during that period of time for almost $1 trillion. So when you combine -- even taking into account that, which we've raised a bit from what was the prior three years, overall, that's an increase of 12%, that is if there are no signs whatsoever nor would I draw any conclusions about an election that would slow down this mega project era that we're in. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00AM, AHT.L - Q2 2025 Ashtead Group PLC Earnings Call

Question: Arnaud Lehmann - BofA Global Research - Analyst : Thank you, very much, and good morning, gentleman. The first one, sorry to come back on your US rental revenue growth. I think Q2 was about 4% and in the first half, about 5% growth. If I take the midpoint of your guidance, that would imply about 1% in fiscal H2. And I think you mentioned November being up 2.5%, 3%. So are you being just a little bit conservative just in case? Or are you actually -- do you actually believe things could slow down a little bit further relative to November? That's my first question. My second question, if I may, on the CapEx. Big CapEx in fiscal '23, '24. Not quite a large cut for '25. Could you maybe give us a medium-term update on what we expect in terms of CapEx spending to achieve your Sunbelt 4.0 plans? Is it somewhere in the middle between the '25 spending and the '24 spending? Or any sort of guidance would be helpful. And the last one, if I may, on the buyback. Is it related at all to the US relisting? So are you trying to anticipate maybe some initial outflows from the European and UK indexes and therefore, will be more back end loaded? Or do you think it's going to be spread broadly evenly across the 18 months period? Thank you, very much.

Question: Lush Mahendrarajah - JPMorgan - Analyst : Sorry, got kicked off before. And apologies if I'm repeating any questions, but the first is on just trying to sort of understand in terms of -- if you look at the slide, when we talk about construction put in place, I think the number for this year has gone down versus the last time reported, and it's gone up to 2025, so plus 10% -- sorry, plus 9% versus plus 5%. You look at the mega project outlook, clearly shift to the right a bit, obviously make the outlook look better than it improved year on year, I guess. But obviously, that sort of mismatches with what you're saying. And I appreciate that's the local side getting tougher and the different mixes in mega project versus local versus for the industry and for yourselves. But yes, I'm just trying to square that really invest in terms of, yes, why is it -- why is your outlook seemingly more increasingly negative versus the last time reported when sort of everything else looks maybe a bit more positive? Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Yes. Well, I mean, Lush, as we said, the construction market overall, there are a number of areas of strength. And what you're seeing in the forecast changed from what the print was before to this print that we now have on slide 16, which was, of course, the December 2024, you'll see there that some of that non-res will have gone down and the same would have been the case for 2025. While obviously, what we've seen is a growth in the anticipation of what those mega projects are. And when you read all of the detail behind Dodge that's exactly what you're seeing. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00AM, AHT.L - Q2 2025 Ashtead Group PLC Earnings Call So we are seeing that. It's just -- it's a, I guess, the law of dropping big numbers into either the starts or spreading those over the put in place. It's going to be interesting as there's more experience in actually building the models from a Dodge standpoint on the mega projects in terms of how far they spread them. Because what we have seen is we've seen they take a bit to really get going and then they tend to take longer to complete. But we're comfortable when we look into the real nooks and crannies where we see the evidence so pronounced is when you start looking at projects that are under $100 million, between $100 million and $200 million and then finally, below $400 million. When we look at the starts for those buckets of projects going from calendar year 2022, 2023 and then 2024, we've seen that step change down on the lower two buckets in particular.

Question: Lush Mahendrarajah - JPMorgan - Analyst : Okay. Thank you. And just the last one is just on sort of capital allocation. With the buyback announcement, I appreciate it's up to 1.5. I wouldn't say flexible, but I guess sort of bolt-on activity has been a bit quieter in the first half. Is that sort of a message that maybe there isn't much out there at the moment or is it multiple? Or just, I guess, what's happening there, I guess, in terms of that sort of bolt-on landscape? Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc No, there is a big pipeline. There's a flush M&A, bolt-on M&A landscape out there. As I would have said in the prepared remarks, our business development team is highly engaged. We've made it, no secret, over the last few quarters that we've been very disciplined when it comes to multiple. But the important part there is, they're not going away. We have made our point and we have our metrics. I mean, long before the purchase price, we have to fit, the geography, the line of business and the culture of the business. But when it comes to our math in terms of an ROI that we want to get, we balance those so often with our Greenfields, which we're seeing progress really well. So -- but rest assured that we will have -- there will be no absence of bolt-on M&A in our future. We're just being mindful of what we pay. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00AM, AHT.L - Q2 2025 Ashtead Group PLC Earnings Call

Question: Neil Tyler - Redburn Atlantic - Analyst : Thank you, and good morning Brendan and Mike. Three then from me, please. Firstly, I'm afraid I'm going to slightly labor the point on demand. The lower expectation in the US rental revenue growth, if I think about the way you frame the business, construction is half of it and maybe the commercial component, half of that, then taking 2.5 percentage points off of your growth outlook seems to imply that, that market, that commercial component, sort of 10 percentage points worse than it was last time you assessed it. So is that the right way to think about it? And if not, why not? And if that is the right way, then it doesn't look like from the end market data that things have gotten that much worse. That's the first question. Second one on rate. You've been very clear about the way you approach rate, but it feels as if you've kind of over recovered life cycle inflation over the last two years or three years in aggregate. \So are you sort of comfortable with sort of approaching rate as if sort of on a through cycle basis? Or do you look at it from a sort of standing start each year? And then finally, on time utilization, I know you don't give us the numbers specifically, but the -- can you give us a sense of at what point that should inflect positively year on year based on sort of current CapEx and your existing demand outlook, please? Thank you. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Neil, I'll take -- I'll try to get your first one here. Well, I just explained the way that we would look at it. So if you look at our business, and we just -- let's just use even numbers, and say half non-construction, half construction. And then you look at our customer mix. And although it's not in the slide deck, I'll refer you to slide 33, I think it was of our Capital Markets deck, where we deciled our customer base. And if you look at our business, we are 30%, 35% of our customers that we call strategic, aka national customer base, and therefore, the balance, so whether it be 65% or 60% of our customers who are the SMEs that are out there on the construction side. So therefore, when you put it all together, you're talking about 30%, 35% of your addressable end market. So it's that portion of your addressable end market where we're seeing the dampening from a local demand. So that's how we look at it. And I think that when you take into account what we've guided and Michael has covered, obviously, absent the hurricanes in October and a touch in November, the second quarter would have been different. So when you take that into account and then you extrapolate that through the year, that's where we come up with 2% to 4% from a US rental revenue standpoint. When it comes to rate, again, I'll bring you back to the Capital Markets Day, when we shared what our pricing strategy is. When we take into account various components of inflation in the end market, ranging -- or in the business rather, ranging from rental assets from a life cycle replacement standpoint to wages and then all of the rest of -- or if any other inflation in the business, and then proportionate to the cost, and that's what we set our sights on from a pricing standpoint year in and year out. Sometimes, it will come a bit easier, so to speak, and sometimes it will be a bit more challenging. The important thing again that we've been pointing out and you think about it -- some of you have covered this industry for over a decade, it is pointing to the outputs of the structural progression that we have been part of creating and is clearly evident in our markets today. Despite having, as I mentioned, lower time utilization, certain spottiness in the end markets that we're talking about, that being local, we still have great -- we're seeing great results and discipline around pricing and fleet size. And I think your final question was time utilization. Yes. I mean, we're modeling that our time utilization will get progressively better and close that gap and we don't report on time utilization. So you'll see where we get to giving guidance for next year on both CapEx and revenue, what our outtake on that will be -- or outlook on that would be. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00AM, AHT.L - Q2 2025 Ashtead Group PLC Earnings Call

Question: James Rose - Barclays Capital - Analyst : Good morning. I've got two, please, and they're both somewhat related. Firstly, are you still confident that you're taking share in the local marketplace -- local construction marketplace? And then secondly, on rental rates progressing, do you get the sense that this is a broad-based across the whole industry, i.e., is it primarily a focus of just the larger national or regional players? Or are the smaller competitors, are they progressing rates too? And linked to that, are there any signs -- or are there any branch managers saying to you that putting rates up is costing new business in the marketplace? Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Number one, yes, we're taking share in the local market. You can look at the half year results or if you want to work to figure it out, look at the calendar year result, in terms of our growth. Let's face it, during a period of time particularly in that supply constrained environment when the construction market was better than most would have thought it was going to be following the pandemic, taking that share was a bit easier. It was a -- your competition from a local standpoint had one maybe two arms tied behind their back. They've had the opportunity to spend some from a replacement standpoint, very, very little actual growth in their fleet size. And hence, we are remarkably comfortable that in that local market we're gaining share. From a rental rate standpoint, yes, we're seeing this across the industry. And certainly, it is one of discipline from the leaders in the industry. And as sure as we have analysts on the call this morning, I'm sure we have lots of local competitors from around the US in particular, that are listening into our tone, et cetera. So this is something that we're seeing through -- in our data as rental rates progressing across the industry. And your question about branch managers, I mean, look, we do have agility on a deal-by-deal basis that we take into account all the time, but our direction and our sort of plans and targets that are throughout the business are designed to drive rental progression. But this is not about losing share because of pricing. It's impossible to say that across 4,000 independents. There's not a transaction here or there where some will give it a try. But as time goes on, they come back and we take great care of them, provide an incredible service with a breadth of products unmatched by certainly any local competitors.

Question: Allen Wells - Jefferies - Analyst : Good morning, guys. A couple for me, please. Firstly, I just wanted to kind of follow up on the competitive landscape side. And your messaging, obviously, today, seems like the guidance team is very much kind of market-driven on the local side. You're still suggesting you're taking share from smaller players. But if I look at the peer group or listed peer group commentary from the last month, I mean, yes, it was a bit mixed, but specifically thinking about your largest US peer, they were guiding 4% earlier in the year. Excluding the M&A, you were guiding 4% to 7%. You're now down at 2% to 4%. So obviously, it implies a bit of relative underperformance here, mindful of non-overlapping year-end. But what do you think? Is there anything in that specific that you think may be driving that relative underperformance? Is it end market exposure, et cetera? That's my first question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00AM, AHT.L - Q2 2025 Ashtead Group PLC Earnings Call Secondly, just maybe a clarification question. You talked on the emergency risk, the hurricane work that you were still seeing a little bit in November. Obviously, we're in December now, but relative to that $55 million to $60 million that you called out in 2Q, are we going to see a bigger impact in the third quarter from emergency response than we have in, what was essentially three weeks in 2Q? And then final question, maybe just a follow-up on M&A and maybe the limited bolt-on work done in 2Q. Can you maybe just comment from a management team perspective, as the underlying growth environment is a bit weaker, particularly on the organic side, what's the appetite and the opportunity to maybe do some bigger deals within the US market? Is there stuff out there may be interest you, obviously, without giving details? And how do you think about that as a business that typically hasn't done bigger deals in the past? Does it become more of an option moving forward? Thank you. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Sure, Alex. Well, our competitive landscape, I think you can't just dismiss albeit different year-ends because they're quite different. I'm sure you can work through the math and look at the businesses that ourselves and our peers January through September or January through October. And I think you'll find that we're doing just fine. It will -- we will all give guidance to our new fiscal years as we get into them, and we'll see how things shake out. I mean, look, as I referred to that slide 33, we have a business that is built to service large nationals as well as SMEs, of course, across that broad spectrum of non-construction markets we talk about so often. When it comes to some of our competitors, their makeup is a bit different between nationals and SMEs. We like very much that local market. And that local market over time, it will go up, it will go down. And -- but it is one that is very large and very bountiful. But like anything else, it goes through cycles. But again, I would encourage you to look at what our growth is in our January through September or January through October period. In terms of hurricane activity, there's not a bigger piece as we go into Q3. There's a bit of lingering that would have been in November. Let's not confuse that with the real infrastructure-like work that, of course, we'll see as a result of what would have happened as an example in the Western North Carolina area. That's not really the hurricane response efforts that you see early on. Those are rebuilding bridges and some of the infrastructure and that takes years to complete. And then finally, on M&A, I'd answer it this way, first of all, the definition of bolt-on changes over time. We're a much, much larger business today than we were when we began this many, many years of bolt-ons. Look, we did $3 billion worth of bolt-on M&A over the course of 3.0, but the average deal size, because there were 101 of them, was $32 million, $33 million. And there was a range inside of that. We will look at anything that we believe brings value to ultimately our shareholders. So we're quite capable. I don't want that to sound in any way, shape or form like our strategy is changing. But we look at what's out there, and we consider lots of things. So I think, again, refer back to what you've seen through 3.0, what our plan is, and that's what we're going to be consistent with.

Question: Karl Green - RBC Capital Markets - Analyst : Just two for me. Firstly, just on the Specialty rental revenue growth, that's slow to touch in the second quarter from the first quarter. I had I think a 3% easier comp and also benefited, I'm assuming, from the majority of the hurricane response incremental revenue. So I just wondered if you could talk about kind of what's going on underlying in Specialty. I know from quarter to quarter, it can be a little bit London than GT. But just any kind of dynamics you're seeing there that talk to potential changes in MRO activity. That's question number one. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00AM, AHT.L - Q2 2025 Ashtead Group PLC Earnings Call The second question just a much simpler one for Michael, just in terms of some of the mix shifts we're seeing in the core US business. Are there any working capital implications from that, just thinking especially in terms of DSO changes and averages, please? Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Karl, so Specialty, certainly, we would have had some benefit with the -- with Helene and Milton. Underlying, it would be 9%, 10% growth in the quarter. And really, the growth is broad throughout Specialty. Every single one of our Specialty business lines, which you would have seen that we've covered in our CMDs, absent one temporary structures, has grown over the course of the year, and we continue to see that long structural opportunity in that space. Let's face it, that specialty business doubled over the course of three years. And it would be wrong to expect that, that will grow at a 33% CAGR going forward. And hence, the reason why we guided to -- not guided, but how we illustrated Specialty as part of our 4.0 plan. I'm sorry, I mentioned temporary structures. I did mention scaffold. So scaffold as a result of the big E&D project would also be backward. But removing that, then the scaffold business continues to grow. Michael, the second question?

Question: Mark Howson - Dowgate Capital - Analyst : Certainly, let me feel a bit old. I mentioned people following you for 10 years. I mean, following it for 30, I think, including the acquisition of McLaren, right word. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc We see your name on it. I should have corrected myself. So I've got about 28 years and you have 30. So we'll take score --

Question: Mark Howson - Dowgate Capital - Analyst : Yes. So 35% of OEC should be still a small profit, I would guess, at that level.

Question: Mark Howson - Dowgate Capital - Analyst : Yes. Just a second question. But just in terms of the UK, I mean, obviously, there are some items of specialty equipment where the rental penetration is low. But in the majority, it's a much higher level of rental penetration than the US. For you, you've done well with the business, has got -- still got a low return on invested capital. If you look at cash flow paybacks on the same item in the UK versus the US, it's much better to put your in the US than it is in the UK. I mean are you wedded to that business longer term? Or is that something that you could potentially consider selling? Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc Mark, I set out a communication to the UK business this morning immediately following the announcement of our intentions to relist. That team is present in Atlanta when we launched Sunbelt 4.0. And we have a Sunbelt 4.0 strategic plan in place for our Sunbelt UK business, which we are using as our playbook and we have no intentions whatsoever of changing that. More importantly, what we're focused on is really what's inherent in Sunbelt 4.0 for our UK business, which is getting to a level of margin and return that is both acceptable and sustainable and absolutely being that free cash flow generative sort of as a stand-alone business. We've gotten this beachhead here. And increasingly, in particular, over the last couple of years, we've had quite a few nice wins. We've had wins with customers who rely on what the power of Sunbelt has to offer in America. And also, the same here. And lots of these are non-construction customers, which is also key to our strategic growth plan Sunbelt 4.0. So I don't think you'd expect us to say anything different on the call here today. Our plan is as it was in the UK's part. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 10:00AM, AHT.L - Q2 2025 Ashtead Group PLC Earnings Call

Question: Rory Mckenzie - UBS - Analyst : I want also one follow-up. I wanted to ask about the time line about the US listing and why now. Just really, are there any fundamental considerations within that? For example, is there anything within that about wanting to start the US listing with positive EPS growth? Or is that 12 months to 18 months purely the kind of mechanics to work through? Thank you. Brendan Horgan - Ashtead Group PLC - Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Executive - Sunbelt Rentals Inc It is purely a process, Rory. It's not picking timing in terms of the landing as you have suggested there. It is purely a process. There are technical aspects to get through. And of course, it begins with our dialogue with shareholders, which is really what we're announcing today.