Interim Results - Part 2

Ashtead Group PLC
22 January 2001


Part 2

                              ASHTEAD GROUP PLC

           Interim Results for the 6 months ended 31 October 2000

Overview

On  1  June Ashtead acquired for £320m the BET USA American equipment  rental
business  from  Rentokil  Initial.  It was integrated  into  Sunbelt  Rentals
within  70 days.  Sunbelt now trades as one business across the United States
and raised its operating profit by 160% to £32.5m (£12.5m) in the period.

In  the  UK  cost  increases of £4.1m in depreciation and in operating  costs
incurred in developing information technology for the growing number  of  key
accounts  and the opening of A-Plant's state-of-the-art Training Centre  were
not fully compensated by the 5% increase achieved in revenues.  This resulted
in a 19% decline in A-Plant's operating profit to £14.2m (£17.6m).

Ashtead Technology has recovered well from the setbacks brought about by  the
temporary  lull in offshore oil and gas activity.  This is now  beginning  to
recover and, moreover, Ashtead Technology's product base was strengthened  by
its acquisition in October of an on-shore environmental equipment business in
North  America.   Operating  profits for the six months  rose  31%  to  £2.1m
(£1.6m).

Adjusted profit before tax before the one-off BET integration costs of £6.5m,
the  underwriting fees of £8.3m incurred for the new bank facility re the BET
acquisition  and  the non-cash items of goodwill amortisation  of  £3.1m  and
accrued  interest  amortisation on the convertible loan of £3.3m  was  £30.0m
(1999  -  £26.6m)  or £26.7m after the accrued interest amortisation  on  the
convertible  loan.  Profit before tax measured in accordance  with  FRS3  was
down  67%  to  £8.8m  (£26.6m).  Adjusted earnings per  share,  again  before
integration  and amortisation expenses, were 8.5p (7.1p) or  7.6p  after  the
accrued  convertible loan interest amortisation.  The dividend is raised  for
the  eleventh consecutive period, this time by 11% to 0.62p.  It will be paid
on 6 April to shareholders on the register on 2 March 2001.

Divisional reviews

USA - Sunbelt Rentals

The  American  equipment rental market is estimated  to  be  worth  some  $23
billion or about seven times its UK equivalent.  And yet only about 20-25% of
product  usage is believed to be rented with the balance owned by users.   In
the UK by comparison, about 80% of equipment is rented.

However,  rental penetration in the US has quadrupled in the last few  years.
Having  originally begun the Group's US operations with just 2 branches  more
than  10  years  ago,  Sunbelt is now well placed to exploit  its  new  found
strength  and scale.  Indeed, the benefits are already beginning to show  and
will  further  manifest themselves in the first full  year  of  our  enlarged
business.   Future prospects in America for Ashtead have never  been  better.
The Group's US management team which has delivered compound annual growth  in
operating profit over the last four years of 53% whilst opening 62 new Profit
Centres  has now created a unified pan-American business in a little  over  2
months.   The enlarged Sunbelt now has 151 Profit Centres across America  and
is  that nation's fourth largest business of its kind, yet it has just  a  2%
market share.

Whilst the degree to which the US economy is likely to slow down is currently
subject to much debate amongst economic commentators it is worth noting  that
current  'soft  landing' projections would mean the US economy continuing  to
grow  as  fast  as the UK does in normal times i.e. at 2-3%  per  annum.   In
either a 'soft' or a 'hard' landing scenario Sunbelt expects to benefit as A-
Plant  did  from the comparatively severe UK recession in the early  nineties
which  was  itself the catalyst for Ashtead's sevenfold growth in  the  seven
years to April 2000.

Sunbelt's  established  highly devolved culture with  an  emphasis  on  local
profit motive equips the business well to share in the growing demand for the
outsourced rental solution in all currently foreseeable conditions.  The wide
spread  of  Sunbelt's  more than 100,000 customer base goes  far  beyond  new
construction  and  new  housing  and extends  into  almost  every  aspect  of
commercial  and industrial activity.  Commercial construction  is  about  one
third of the customer profile with, for example, industrial and manufacturing
maintenance close behind with an estimated 27% share.

                             6 months  6 months      %
                                to        to
                              31 Oct    31 Oct   Increase
                               2000      1999

Turnover £m: excluding BET   84.0      53.6         57
Profit Centres
:    BET Profit Centres      87.5      -          -
:   Total                   171.5     53.6         220
EBITDA £m                    64.7      23.8         172
Depreciation £m              (32.2)    (11.3)       185
Operating profit £m          32.5      12.5         160

EBITDA margin %              37.7      44.3          -
Operating profit margin %    19.0      23.3          -
Return on capital employed   23.0      21.7          -
%
Net investment in hire       74.3      29.0         156
equipment £m
Net assets employed £m       558.6     126.6        341
Employees at period end      3,313     1,119        196
Profit Centres at period     151       77           96
end

This  was  a  satisfying  performance as management dealt  with  the  growing
demands  of  Sunbelt's existing business, the swift integration  process  and
began  to  address the inherited decline in the fortunes of  BET  USA.    For
information,  the  table below gives a comparison of this year's  performance
with  a  pro  forma combination of Sunbelt and BET for the equivalent  period
last year.

                           1999                2000
                Sunbelt     BET      Pro     6 months
                6 months  5 months  Forma       to
                 to 31     to 31   Combined   31 Oct   Increase
                Oct 1999  Oct 1999  Total      2000        %

Turnover        53.6      95.8     149.4     171.5        15%
EBITDA          23.8      27.8     51.6      64.7         25%
Depreciation    (11.3)    (14.2)   (25.5)    (32.2)       26%
Operating       12.5      13.6     26.1      32.5         25%
profit

EBITDA margin   44.4%     29.0%    34.5%     37.7%
Operating       23.3%     14.2%    17.5%     19.0%
profit margin


The reduction in margins reported for the period over those previously earned
by  Sunbelt is due solely to the impact of the different product mix  of  BET
USA.   Measures  have  already  been taken to  emphasise  rental  which  will
increase  the margins over time as the low margin sales activities  inherited
with the acquisition are eliminated.  The early success of this programme  is
shown  by  the improvement in margins achieved compared with those earned  by
Sunbelt  and BET combined in 1999.  The 1999 figures for BET are  taken  from
its  unaudited monthly management accounts and have been adjusted to  conform
to  Ashtead's accounting year so that the pro forma combined total  for  1999
shown  above includes the BET locations for only the five months  to  October
1999  to  give a true comparison with Sunbelt's 2000 results which  similarly
include the BET locations for only the five months from their acquisition  on
1 June.

Also pleasing was the strength of the core Sunbelt locations which grew their
revenues  by some 57%.  On a like for like basis taking only the stores  open
throughout  both periods (i.e. those opened prior to 1 May 1999)  same  store
revenues  grew by 35% measured in sterling and by an underlying 24%  measured
at constant rates of exchange.

UK - A-Plant

Whilst  in the United States many recently created competitors are  at  least
temporarily becalmed, in the UK market conditions have begun the  process  of
much  needed  rationalisation with several traditional  competitors  offering
themselves  for sale, downsizing or exiting the industry.  In November  2000,
it  was  announced that our largest UK competitor would be acquired by  North
American interests.

There  has been no evidence of new entrants into our main market or even  the
major  speciality sectors for many months.  The reasons for this,  the  Board
believe, are to do with the changing nature of customer expectations and  the
consequent cost of entry.  Unlike the tool hire market, where the cost  of  a
new  business start is typically less than o100,000, in equipment rental  the
equivalent  figure  is between £1m and £2m.  Scale has  become  important  to
principal  customers  together with an expectation of  an  array  of  support
information services.

The  Board's view is that A-Plant currently has both time and cost protection
and  instead  of  new  entrants rather there will be a  steady  reduction  in
participants.  However, the market will remain very competitive  whilst  this
process of change takes place.

In  the meantime it is the Group's task to use its UK market leadership  more
effectively  than has been the case in this period.  Whilst  the  investments
referred to earlier have reduced profits, it is also evident that cost growth
exceeded current and prospective revenue growth and measures better to  match
costs  with realistic revenue expectations have been implemented.   Also  the
rate  of  further  investment will reduce until  such  time  that  management
believes  improved returns are available.  Initial indications are  that  the
much  needed price increase programme launched right at the very end  of  the
six month interim period is beginning to have a favourable effect.

                             6 months    6 months      %
                                to          to
                             31 Oct      31 Oct    Increase
                              2000        1999

Turnover £m                   99.5        94.4       5
EBITDA £m                     38.9        39.3       (1)
Depreciation £m               (24.7)      (21.7)     14
Operating profit £m           14.2        17.6       (19)
EBITDA margin %               39.1        41.6       -
Operating profit margin %     14.3        18.6       -
Return on capital employed %  13.9        16.4       -
Net   investment   in   hire  41.9        15.1       177
equipment £m
Net assets employed £m        283.4       239.7      18
Employees at period end       2,771       2,602      6
Profit Centres at period end  270         261        3


The  5% organic growth achieved in turnover was insufficient to prevent a  1%
decrease  in  EBITDA  and  a  19% reduction in operating  profits  as  costs,
particularly  depreciation,  grew faster than revenue.   Measures  have  been
taken  to correct this imbalance, which was not helped by the effect  of  the
fuel  crisis  and  unusually wet weather, but second half profits  are  still
likely to be lower than the equivalent period last year.

Offshore - Ashtead Technology

After  last  year's  disappointment  of Ashtead  Technology's  first  profits
decline  in 10 years in this market, brought about solely by the then adverse
conditions  in the offshore oil and gas industries, the Board is  pleased  to
report that the prospects for Ashtead Technology have been restored.

Despite significantly lower rental rates - some are down by more than  30%  -
caused  by  a  reduction  in  exploration, production  and  maintenance,  the
management response of seeking to over recover fixed cost by generating  more
revenue was successful.

Having   come  through  this  difficult  period  Ashtead  Technology,   which
historically  has  operated  almost entirely in  the  offshore  markets,  has
achieved  a like for like revenue increase of 17%.  Prospects for substantial
revenue  growth  next year have been further enhanced by the continuing  high
price of oil.

On 1 October Ashtead Technology expanded with its acquisition of the business
and  assets of Response Rentals.  This business specialises in the rental  of
environmental  test  and  measurement  equipment  throughout  North  America.
Response  broadens  Ashtead  Technology's  product  range  and  enlarges  its
existing US business in product, customer base and sphere of activities  with
a  predominantly on-shore profile to augment the current off-shore bias.  The
price  of  $5.8m was a multiple of 3.2x Response's earnings before  interest,
tax,  depreciation  and  amortisation  in  the  year  to  31  December  1999.
Response's  four  locations  have  now been  fully  integrated  into  Ashtead
Technology.

The  results  achieved  in the period which include a one  month  first  time
contribution from the Response locations are shown overleaf:

                            6 months    6 months   Increase
                              to          to
                             31 Oct      31 Oct       %
                              2000        1999

Turnover £m                   5.6         4.4        27
EBITDA £m                     3.7         2.7        37
Depreciation £m               (1.6)       (1.1)      45
Operating profit £m           2.1         1.6        31
EBITDA margin %               66.1        62.7       -
Operating profit margin %     37.5        37.0       -
Return on capital employed %  39.1        48.1       -
Net   investment   in   hire  1.0         0.9        11
equipment £m
Net assets employed £m        12.5        7.3        71
Employees at period end       56          39         44
Profit Centres at period end  7           3          133

Financial

Cash  generated in the period before integration costs amounted to  a  record
£77.4m (£54.3m).  Investment in new fleet was £155.0m (£67.9m) reflecting the
growth demands in the US of greenfield openings in the previous year, product
expansion and the increases created by BET USA.  In the UK it was decided  to
commit  the  bulk  of  the  annual spend in the first  few  months  with  one
consequence being, of course, the increased A-Plant depreciation charge.

Interest cover excluding one-off integration costs, the underwriting fees for
the new debt facility and non-cash items, following the use of borrowings  to
acquire BET USA, was 2.6x (6.2x) and gearing (including the convertible  loan
note  issued  to  Rentokil  Initial plc as part  consideration  for  the  BET
acquisition) was 230% (60%).  Excluding the debt assumed to finance the  cash
element of the consideration plus costs and ignoring one off costs associated
with the acquisition, gearing at 31 October was approximately 92% compared to
78%  at  30  April  2000.  On a pro forma basis, assuming conversion  of  the
convertible loan note had taken place at 31 October 2000, gearing would  have
been 122%.

Facilities  to  acquire  BET USA and to refinance all  the  group's  existing
borrowings  were provided through a US$825m committed loan facility  arranged
and  underwritten by Salomon Brothers International Limited,  LloydsTSB  Bank
PLC  and  Bank  of America International Limited which has subsequently  been
fully  syndicated.  The loan facility is divided between a $375m  seven  year
term  loan and a $450m five year revolving credit line.  At 31 October  2000,
$151m  (£104m)  remained  available from the committed  facility  to  finance
future expansion and working capital requirements.  Looking to the future the
recent reduction in US dollar interest rates will reduce the Group's interest
costs.

Consistent with previous years, the sale of retired assets again generated  a
profit over book value.  Assets with an original cost of £45.2m (£22.8m) were
disposed of in the period realising proceeds of £20.6m (£12.1m) and producing
a profit of £2.5m (£2.8m).

Staff

At  all levels the Group's staff which now number 6,140 (3,763) have to  deal
daily  with the challenges of competitive and complex market conditions.   In
our  highly  devolved business culture with its emphasis on the local  profit
motive,  every  employee  can participate in the monthly  paid  profit  share
programme  thereby aligning their personal contribution to the  interests  of
shareholders.   In the period, profit share of £4.2m (£2.5m)  was  earned  by
staff at all levels.

Current and Future Trading

In  the  United States Sunbelt will continue to concentrate for the remainder
of this year largely on the management and training needs of the newly merged
business.  The profit centre opening programme will recommence in the  second
half with six new profit centre locations.  It is also intended to manage the
larger  scaffolding locations acquired from BET separately  from  the  aerial
work  platform businesses with which they are currently combined so that this
profitable  but  specialist  activity  receives  the  management   time   and
investment  justified by its contribution.  Sunbelt is therefore expected  to
end  the  current financial year with 165 to 175 Profit Centres depending  on
how  many  scaffolding locations have been separated in this way by year  end
compared with 151 at October.

In  the  next  financial  year Sunbelt will build further  on  this  platform
acquisition with the renewal of its policy of developing clusters -  networks
of Profit Centres in major conurbations - with around 30 openings planned.

A  further  5  new A-Plant Profit Centre openings are planned for  March  and
April.  A-Plant will also concentrate on measures designed to restore margins
by  displaying  industry leadership in standards of customer  service  whilst
pursuing realistic pricing.

Ashtead  Technology  has  come  through  a  major  industry  downturn.    Its
performance   should   build  throughout  2001  as  its  customers   increase
exploration  activity  and  it develops the new product  ranges  provided  by
Response Rentals.

The  second half has begun with revenues in November and December up  44%  in
Sunbelt  excluding BET USA and 208% with its inclusion, up 9% in A-Plant  and
up  50%  in Ashtead Technology excluding Response Rentals and 100%  with  its
inclusion.  For the Group as a whole revenues for the first two months of the
second half are up 87% over the equivalent period last year.

The prospects for sustained growth beyond this year are being enhanced by the
customer appeal of our growing range of specialist products, the speed of the
successful  US  integration,  our progress in beginning  to  turn  round  the
inherited decline in BET USA and the enthusiasm for our business model across
the enlarged Profit Centre network.  It remains a clear goal of management to
improve return on capital employed in the UK.

Overall, the Board anticipates achieving a satisfactory outcome for the  year
as a whole.


Contacts:

Peter Lewis         Chairman            )    01372 362300
George Burnett      Chief Executive     )
Ian Robson          Finance Director    )

Andrew Grant        )   Tulchan Communications    0207 353 4200
Nigel Fairbrass     )


MORE TO FOLLOW