(Reuters) - British equipment rental company Ashtead Group Plc (AHT.L) on Tuesday posted a full-year pretax profit that missed market expectations, with rental revenue growth slowing in the final quarter of its fiscal year.
Shares of the company fell more than 8 percent to a two-year low in morning trading on the London Stock Exchange.
Although the company benefited from solid demand for its diggers and tools in the first half of the fiscal year for clean-up efforts after hurricanes Harvey and Irma in North America, fourth-quarter rental revenue dipped more than 5 percent from the preceding quarter.
When compared with the year-earlier period, rental revenue rose 21 percent in the fourth quarter ended April 30, but the growth rate lagged the previous two quarters.
Underlying profit before tax fell to 185.3 million pounds ($244.3 million) in the final quarter, from 233.3 million pounds in the third quarter to Jan. 31.
The company’s U.S. Sunbelt unit, which accounted for more than 80 percent of the annual revenue, made a significant contribution to hurricane clean-up efforts, the company said, estimating that it resulted in incremental rental revenue of about $100 million for the year.
Annual underlying rental revenue rose 21 percent to 3.42 billion pounds on constant currencies, the company said.
Profit rose 21 percent to 927.3 million pounds for the year, but came in slightly below company-compiled consensus of 935 million pounds. Ashtead said in March full-year results would be in line with expectations.
The FTSE 100 company said it would continue with its strategy to grow organically, supplemented by bolt-on acquisitions, and expressed confidence in its medium-term outlook.
The company also bumped up its share buyback program to a minimum of 600 million pounds from the previous target of at least 500 million pounds it announced in December.
Reporting by Shashwat Awasthi in Bengaluru; Editing by Amrutha Gayathri