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UPDATE 2-Ashtead to beat targets as U.S. drives profit jump

* H1 pretax profit up 41 percent to 30 million pounds

* Total U.S. revenue rose 7 pct, rental revenue up 4 pct

* Rental revenue in Britain fell 2 pct to 77 million pounds

* Interim dividend 0.93 penny

* Shares up 4.2 percent

(Adds CEO comments, analyst quote, updates shares)

By Brenda Goh

LONDON, Dec 9 (Reuters) - British industrial equipment-hire company Ashtead AHT.L expects full-year results to beat its own expectations after first-half pretax profit rose 41 percent, boosted by robust U.S. rental demand.

“The momentum we have established during the year has continued into November and will, we expect, be sufficient to ensure an outcome ahead of our earlier expectations,” chief executive Geoff Drabble said on Thursday.

Ashtead shares were up 4.2 percent at 0900 GMT, just below an earlier 41-month high and making them one of the biggest risers on London's FTSE 250 .FTMC index of mid-sized companies, which was 0.6 percent higher.

The company said pretax profit rose to 30 million pounds ($47.5 million), on revenue 5 percent higher at 484 million in the six months to Oct. 31.

In the United States, where the company generates 80 percent of revenue, rental revenues from its Sunbelt unit grew 4 percent, bucking a 14 percent decline in the country’s overall non-residential construction market.

“Clearly in a period where money is uncertain, money is tight, people are basically just outsourcing, they are renting more rather than owning it, and that is what is driving our improved performance,” said Drabble.

“(Rental penetration) accelerated through the early part of the recovery because our customers are focusing their limited resources on other areas of capital expenditure.”

The company, which hires out industrial equipment from diggers to small tools, said while rental revenues in Britain fell 2 percent to 77 million pounds it was encouraged by “improving trends” throughout the first half.

UBS analyst Alex Hugh upgraded his full-year forecast for 2010/11 by 37 percent and kept his “buy” rating on the stock.

“Results were ahead of expectations,” he said. “Q2 represented the first quarter of revenue growth in this cycle for Ashtead and it could well accelerate from here.”

Net debt as of Oct. 31 stood at 777 million pounds, down from 829 million on April 30.

Ashtead also said it expected to spend around 225 million pounds this year, principally on fleet replacement. (Editing by Paul Hoskins and Dan Lalor) ($1 = 0.6317 pound)

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