Trading Statement

Ashtead Group PLC
20 September 2002

 
                              ASHTEAD GROUP PLC 
                              AGM TRADING UPDATE

Henry Staunton, Chairman of Ashtead Group plc, will make the following statement
to shareholders at the Annual General Meeting being held later today:

Market background

When I reported to shareholders at the 2001 Annual General Meeting, the world
was still coming to terms with the events of September 11. Trading, however,
particularly in the United States, had not yet been affected and the early
months of our 2001/02 fiscal year had produced good year on year growth in Group
revenues. Twelve months on, market conditions are very different. In the United
States non-residential construction is down 20% year on year to July according
to the US Department of Commerce and although house building remains strong, as
in the UK it does not have any major benefit for rental companies, being mostly
concerned with labour and materials. 

In the UK, forecasts of GDP growth have been lowered. Generally construction 
markets remain sound, manufacturing weak and industrial activities somewhere in 
between.

First quarter trading

Against this background the Group has achieved total first quarter revenues
within 1% of those of the same period last year at constant currency rates. Due
to the weakness of the dollar, the currency in which 67% of our business is
carried out, sterling revenues of £145.8m represented a decline of 6% on the
previous year. In Sunbelt, a 5% decline in total sterling revenues masks a 2%
increase in its dollar revenues. We have taken market share from our major
quoted US competitors, all of whom showed negative growth in their latest
quarter. We continue to benefit from the growth of our Specialist Scaffolding
and Pump and Power businesses. The access to industrial markets that they and
the former BET businesses have provided has helped to offset the significant
decline in non-residential construction.

In the UK, A-Plant's revenues were in line with our expectations despite being
almost 7% down on the equivalent period which was last year's strongest quarter.
Following the reduction in capital expenditure over the last two years, the
rationalisation of the rental fleet, and the restructuring of the business under
new management, further actions have been taken to improve the operating
efficiency of A-Plant. All Corporate and support staff will be based in a newly
opened office in Warrington replacing offices at Haydock, Bootle, Walsall Wood 
and Leatherhead. A major rationalisation programme will reduce the number of
suppliers from some 10,000 to around 1,000 with attendant cost savings. 50 of
our 73 Tool Hire Shops have been rebranded and the balance will be completed on
schedule by 31 October.

Our smaller specialist business, Ashtead Technology has suffered from weak
markets in its offshore businesses in Aberdeen and Houston, although Singapore
and the environmental division have traded well.

Profit before tax and goodwill amortisation for the Group for the quarter
amounted to £8.0m in line with our budget, with lower interest rates, which are
predominantly dollar denominated, partially offsetting the negative currency
effects on revenues. Expressed at last year's exchange rates, profits would have
been 10% higher at £8.8m. This performance compares with the profit before tax,
goodwill amortisation and exceptional items of £l2.2m for the same quarter last
year and with the £3.1m earned in the six months ended 30 April 2002. August
revenues were in line with first quarter trends.

Cash flow and debt reduction

Net cash inflow from operations was £52.2m compared with £51.5m in last year's
strong first quarter. Working capital was lowered by £5.1m in the quarter. Net
bank debt reduced by £81.8m to £433.2m aided by the receivables securitisation
completed in June and currency effects. Approximately half of the anticipated
capital expenditure payments for the year to 30 April 2003 were made in the
first quarter reflecting the seasonal concentration of capital expenditure in
the early summer months.

Outlook

The position set out in our July results announcement and the annual report
(page 7) is essentially unchanged. We anticipated in our budgets that our
markets would be generally flat for the whole of the financial year. In the
United States we continue to gain market share. Although there is no current
sign of an upturn, as of this week Sunbelt's current number of rental contracts
is its highest ever and its 66% equipment utilisation rate is the highest since
August last year. These volume gains are, however, being largely eroded at the
revenue line through pricing pressure from our competitors. In the UK, A-Plant's
trading position has been stabilised and steady progress is being made. Recent
awarded national accounts business includes a sole supply agreement for the
provision of tool hire equipment to a consortium of leading contractors at
Heathrow airport. In Ashtead Technology, business levels in Aberdeen and Houston
have improved considerably in recent weeks.

The Board anticipates little help from its markets in the immediate future. It
believes that it has a strong management team, taking sensible policy decisions,
in difficult trading conditions. Those of you who are long-standing shareholders
will recall that following a strong period of growth from the Group's formation
in 1984 through the 1980s, we experienced a 70% fall in profits in the first two
years of the 1990s before achieving a 25 times profit increase over the next
decade. Just as then, keeping the integrity of the business intact remains
fundamental to its future growth. Just as then, we have continued, albeit more
modestly than in recent years, to invest for the long-term success of your
Group. At the same time we continue to pay down debt and anticipate further
substantial reductions over the next two years. Given our young fleet this can
be achieved without detriment to the business, which remains extremely well
positioned to take advantage of the upturn whenever it comes.


Contacts:

George Burnett      Chief Executive          )   01372 362300 
Ian Robson          Finance Director         )

Andrew Grant        Tulchan Communications   )   020 7353 4200 
Nigel Fairbrass                              )

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