(Reuters) - Equipment rental giant Ashtead Plc (L:AHT) said on Tuesday it plans to refocus its A-Plant business in the UK due to competitive pricing and market uncertainty, and warned of facing currency headwinds ahead, sending shares down 5%.
The UK-based company, which last year benefited from a weaker sterling as the value of its dollar revenues rose, said that except for the UK and a currency headwind, it expected results to be in line with expectations.
The company posted higher half-yearly pretax profit, driven by growth in its North America business and led by a rise in non-construction activity.
Ashtead, which rents out diggers, construction tools and other equipment, said underlying pretax profit rose 6% to 633 million pounds on a post-IFRS basis for the six months ended Oct. 31.
"This performance reflects good profit growth in the U.S., a more moderate improvement in Canada as we invest in the business and a drag from weakness in the UK," said Chief Executive Officer Brendan Horgan.
The company would refocus its UK business to mirror the growth of its non-construction businesses in North America and to capitalise on cross-selling opportunities with 'project unify' in order to deliver free cash flow of more than 100 million pounds in the full year, he added.
The company also said it expected annual capital expenditure to fall toward the lower end of its range of 1.4 billion pounds to 1.6 billion pounds, with an average fleet age at 33 months.
A-Plant, its UK business that accounts for a smaller part of its revenue and profit, reported a 2% drop in rental revenue.
Shares were down 5.5% at 2,233 pence as of 0817 GMT.