RUNWAY
SUCCESS
ANNUAL REPORT &
ACCOUNTS 2024
4
THE NEXT LEVEL
OF AMBITION
WITH PURPOSE
We have had another year of strong growth and operational
delivery. I am immensely grateful to our colleagues who
go above and beyond to make our business such a success.
This year has been one of transition. In April we celebrated
the successful completion of our Sunbelt 3.0 strategic plan,
delivering for all our stakeholders and we launched our next
strategic growth plan, Sunbelt 4.0. We have built a strong
and resilient platform for growth, so we can realise fully the
potential generated by the ongoing structural progression
in our industry. This is our runwayfor success.
BRENDAN HORGAN
Read more on page 26
OUR RUNWAY 4 SUCCESS
RUNWAY SUCCESS
4
STRATEGIC REPORT
2 Our Group at a glance
4 Chair’s letter
8 Strategic review
12 Our markets
20 Our business model
26 Our strategy
34 Key performance indicators
36 Principal risks and uncertainties
44 Stakeholder engagement
46 s172 statement
47 Financial review
56 Responsible business report
70 Task force on Climate-related
Financial Disclosures
80 Non-financial and sustainability
information statement
DIRECTORS’ REPORT
82 Chair’s introduction to Corporate
Governance
84 Our Board of directors
86 Corporate governance report
94 Audit Committee report
99 Nomination Committee report
100 Remuneration report
128 Other statutory disclosures
130 Statement of directors’
responsibilities
FINANCIAL STATEMENTS
132 Independent Auditors’ report
138 Consolidated income statement
138 Consolidated statement of
comprehensive income
139 Consolidated balance sheet
140 Consolidated statement of changes
in equity
141 Consolidated cash flow statement
142 Notes to the consolidated financial
statements
ADDITIONAL INFORMATION
180 Ten-year history
181 Glossary of terms
184 Additional information
Throughout the Annual Report we refer
toanumber of alternative performance
measures, including measures such as
adjusted results, free cash flow and
constant currency growth. These are
defined in the Glossary of terms on
page181.
Forward looking statements
This report contains forward looking
statements. These have been made by the
directors in good faith using information
available up to the date on which they
approved this report. The directors can give
no assurance that these expectations will
prove to be correct. Due to the inherent
uncertainties, including both business and
economic risk factors underlying such
forward looking statements, actual results
may differ materially from those expressed
or implied by these forward looking
statements. Except as required by law or
regulation, the directors undertake no
obligation to update any forward looking
statements whether as a result of new
information, future events or otherwise.
Discover how we've
performed in the
Financial Review,
page 47
2,156
1,668
1,235
1,244
2024
2023
2022
2021
2020
2,110
Profit before taxation ($m)
$2,110m
2,640
2,056
1,579
1,627
2024
2023
2022
2021
2020
2,775
Adjusted operating profit ($m)
$2,775m
205.4
205.2
368.4
280.9
2024
2023
2022
2021
2020
365.8
EPS (¢)
365.8¢
1,824
1,316
1,343
2024
2023
2022
2021
2020
2,273
2,230
Adjusted profit before tax ($m)
$2,230m
7,962
6,639
6,399
9,667
2024
2023
2022
2021
2020
10,859
Revenue ($m)
$10,859m
Financial highlights
307.1
219.1
221.5
388.5
2024
2023
2022
2021
2020
386.5
Adjusted EPS (¢)
386.5¢
1Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
1
2
3
7
4
5
6
8
1
2
3
4
5
6
US
An international
network of
equipment
solutions
andservices
The second largest equipment rental
company in the US with 1,186 stores
Revenue $9,307m
Return on investment
1
23%
Segment result $2,633m
Employees 19,245
Stores 1,186
Fleet size $15,057m
1 United Rentals ......... 15%
2 Sunbelt ..................... 11%
3 Herc Rentals ..............4%
4 Home Depot ...............2%
5 H&E ............................. 2%
6 Top 6–10 ......................4%
7 Top 11–100 ................20%
8 Others ...................... 42%
1 Mobile elevating
work platforms ........29%
2 Forklifts ....................19%
3 Earth moving ...........14%
4 Power and HVAC ..... 11%
5 Scaffold ......................2%
6 Other .........................25%
1 Excluding goodwill and intangible assets.
2 Source: Management estimate basedonS&P Global Market Intelligence
market size estimate.
3 Source: Management information.
MARKET SHARE
2
FLEET COMPOSITION
3
1,186
STORES
OUR GROUP AT A GLANCE
2 Ashtead Group plc Annual Report & Accounts 2024
UK
1
2
3
1
2
3
4
5
1
2
3
4
5
6
1
2
3
4
5
6
Revenue C$897m
Return on investment
1
11%
Segment result C$138m
Employees 2,306
Stores 135
Fleet size C$1,751m
Revenue £706m
Return on investment
1
7%
Segment result £58m
Employees 4,384
Stores 190
Fleet size £1,130m
CANADA
The second largest equipment rental
company in Canada with 135 stores
The largest equipment rental company
in the UK with 190 stores
1 United Rentals ......... 19%
2 Sunbelt .......................9%
3 Others ...................... 72%
1 Sunbelt .....................10%
2 Speedy ........................ 6%
3 HSS .............................5%
4 VP ................................ 5%
5 Others ...................... 74%
1 Mobile elevating
work platforms .......28%
2 Film & TV .................. 17%
3 Power and HVAC .....15%
4 Earth moving ...........12%
5 Forklifts ....................10%
6 Other ......................... 18%
1 Accommodation ......15%
2 Panels, fencing
and barriers ............. 11%
3 Earth moving .............9%
4 Forklifts ......................9%
5 Mobile elevating
work platforms ..........9%
6 Other ......................... 47%
1 Excluding goodwill and intangible assets.
2 Source: Management estimate, excluding Film & TV, based on latest
S&P Global Market Intelligence market size estimates.
3 Source: Management information.
1 Excluding goodwill and intangible assets.
2 Source: Management estimate based on S&P Global Market
Intelligence market size estimates.
3 Source: Management information.
MARKET SHARE
2
MARKET SHARE
2
FLEET COMPOSITION
3
FLEET COMPOSITION
3
135
STORES
190
STORES
3Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
CHAIR’S LETTER
A STRONG YEAR
OF TRANSITION
Dear Shareholder
I am delighted to report another
year of strong performance as we
continue to execute on our strategic
priorities which were embedded in
our Sunbelt 3.0 plan. The continued
success of our business is only
possible because of the knowledge
and commitment of a highly
engaged workforce who deliver
outstanding service to our
customers every day of the year.
So,thank you to all our team
members in the business who
proudly represent Sunbelt.
Strategic progress
A key theme in our Sunbelt 3.0 strategy
was to continue to expand our North
American footprint to meet a growing
market demand as the structural change
from ownership to rental accelerated.
Wealso recognised that there is an
opportunity to extend our product
offerings as the demand for rental grows
in non-construction markets. I am
delighted to report that during the last
three years we have added 401 new
locations in North America through
231 greenfield locations and 170 through
bolt-on acquisitions. This has expanded
our North American footprint
significantly. We have also been
successful in expanding our Specialty
lines of business through a series of
acquisitions adding adjacent products to
existing sectors as well as new markets
such as temporary structures and
temporary fencing.
Sunbelt 4.0, announced in April 2024,
builds on the success of 3.0, leveraging
the investments made in the last three
years as well as having five new
actionable components which provide a
clear roadmap for continued growth in the
business. These five new actionable
components, described later in this
Annual Report, are underpinned by our
foundational elements for success which
are People, Platform and Innovation.
I look forward to reporting our progress
in next year’s Annual Report.
A sustainable business model
Health and safety will always be our first
priority in all aspects of our day-to-day
life at Ashtead. Our Engage for Life
programme has now been running for
several years and has helped embed
safety into the daily lives of our team
members. I am delighted to report that
we had our safest year ever in terms of
our total recordable incident rate, an
achievement of which our team members
are extremely proud.
Sustainability is a key component in our
4.0 strategic plan, and we are committed
to delivering long-term sustainable value
for our people, customers, communities
and shareholders as a thriving and
growing business. Our business model
is inherently sustainable as we provide
rental equipment to the ‘many’ rather
than the ‘many’ buying and disposing of
equipment they use for their own purpose.
We announced with Sunbelt 4.0 a new
Scope 1 and 2 carbon intensity reduction
target and a Scope 1 and 2 Net Zero target
by 2050. We have a clear roadmap to
help us achieve this objective, including
investment in the latest and most
advanced transportation fleet. In addition,
we are investing in advanced rental fleet,
with early access to sustainable products
from our key suppliers, including battery
energy storage systems which enable a
more efficient use of our power fleet.
Financing
Our balance sheet remains strong with
net debt of $10.7 billion (2023: $9.0 billion)
at 30 April 2024. Our net debt to EBITDA
leverage was 1.7x at 30 April 2024
compared to 1.6x in the prior year
(excluding IFRS 16). During the year we
accessed the debt markets to further
strengthen our balance sheet and to
ensure we have appropriate financial
flexibility. Following the issue of these
notes, our debt facilities are committed
for an average of six years at a weighted
average cost of 5%.
We continue to deploy capital in
accordance with our capital allocation
policy. During the year we returned
$78m to shareholders through buybacks.
At our Capital Markets Day in April 2024,
we announced a revised target leverage
range of 1.0 to 2.0 times net debt to
EBITDA (pre IFRS 16) which will provide
enhanced flexibility and optionality to
allocate capital in accordance with our
long-term priorities.
PAUL
WALKER
Chair
4 Ashtead Group plc Annual Report & Accounts 2024
Board
I would like to extend my thanks to
Lindsley Ruth who is leaving the Board at
our AGM in September 2024. Lindsley has
made a terrific contribution to the Board
as well as providing advice and support to
executives in the business. I would also
like to thank Eric Watkins, who retired
in April this year as company secretary
and general counsel. Eric has made a
significant contribution to the business
and the development of the Board over
many years. I am delighted to welcome
Roy Twite to the Board who was appointed
as a non-executive director in June
2024. Roy is the chief executive officer of
IMI plc and brings significant business
experience to the Board. I would also like
to welcome Alan Porter who is our new
company secretary.
I was delighted that the Board was able
toattend our Powerhouse event in Atlanta
in April 2024 when we announced our
Sunbelt 4.0 strategy. My Board colleagues
and I very much enjoyed this opportunity
to meet and engage with team members,
customers, suppliers and shareholders.
It truly was a memorable event.
Dividends
We continue to have a progressive
dividend policy which is designed to
ensure sustainability through the
economic cycle. In recognition of our
strong operating performance and
outlook for the Company the Board are
proposing a 5% increase in the final
dividend to 89.25¢. The final dividend
willbe paid, if approved at the AGM,
on 10September 2024 to shareholders
on the register on 9 August 2024.
In addition, the Group intends to
rebalance the split between its interim
and final dividend to align with normal
market practices, and pay a greater
proportion of the Group’s dividend as
part of the interim dividend, commencing
with the interim dividend for 2024/25.
Outlook
Our business continues to perform well,
and our recently announced Sunbelt 4.0
strategic plan will drive future growth
as well as benefitting from the strong
fundamentals that have been created
anddeveloped in the business over
manyyears.
Our balance sheet remains strong, and
with a well-defined and proven go-to-
market strategy as well as an outstanding
workforce, we are well positioned for
continued growth in the business.
PAUL WALKER
Chair, 17 June 2024
HIGHLIGHTS OF THE YEAR
+12%
Revenue up 12%
1
,
rental revenue up 10%
1
$4,311m
$4,311m of capital invested in the
business (2023: $3,772m)
$2,654m
Group operating profit of $2,654m
(2023: $2,522m)
$905m
$905m spent on bolt-on acquisitions
(2023: $1,146m) and 66 greenfield
locations opened in North America
$2,230m
Group adjusted pre-tax profit of $2,230m
(2023: $2,273m)
$216m
$216m of free cash flow generation
(2023: $531m)
386.5¢
Adjusted earnings per share of 386.5¢
(2023: 388.5¢)
1.7x
Net debt to EBITDA leverage
1,2
of 1.7 times
(2023: 1.6 times)
365.8¢
Earnings per share of 365.8¢
(2023: 368.4¢)
89.25¢
Proposed final dividend of 89.25¢, making
105.0¢ for the full year (2023: 100.0¢)
1 At constant exchange rates.
2 Excluding the impact of IFRS 16.
5Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
ACTIONABLE
COMPONENT
CUSTOMER
Elevate our obsession
with customer service
and their success
throughout the
organisation to a level
unparalleled in the
broader service sector.
1
Ashtead Group plc Annual Report & Accounts 20246
Elevating our customer culture
fromcentric to obsession
Roadmap for success
Opportunity for share gains and
annuityvalue
Hallmark of enduring success
KEY OBJECTIVES:
Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
7
BRENDAN HORGAN
Chief executive
MICHAEL PRATT
Chief financial officer
NEXT PHASE OF
AMBITION WITH
PURPOSE
We have delivered another year of
growth driven by the strength of our
North American markets and ongoing
momentum. We completed successfully
our Sunbelt 3.0 strategic plan and
launched the next phase of our strategy,
Sunbelt 4.0 – Runway for Success.
Welaunched Sunbelt 4.0 in April at
Powerhouse, a combined internal
meeting and external Capital Markets
event which brought together c. 5,000
team members from the US, Canada and
the UK, c. 300 customers and suppliers
and c. 160 investors and analysts.
Powerhouse was a great success,
providing a unique opportunity for
everyone to immerse themselves in
Sunbelt 4.0 and understand the breadth
of our capabilities and end markets
and most importantly, our culture.
We are proud of our performance through
Sunbelt 3.0 and are excited about the
nextphase of the Group’s development.
Sunbelt 3.0 provides a strong foundation
from which we can capitalise on our
existing competitive advantage. We have
grown our General Tool and Specialty
businesses, expanded our geographical
footprint, progressed our cluster strategy,
embedded new technologies to enhance
order capture and dynamic pricing while
also investing in a transformative
technology ecosystem, made progress
against our sustainability initiatives while
flexing all parts of our capital allocation
priorities. We continue to embed
sustainability into the business and our
new Sunbelt 4.0 strategy has brought
additional clarity and forward motion to
our commitments. We are delighted to
announce our commitment to being Scope
1 and 2 Net Zero by 2050 and we have a
clear, tangible path to get us there, with
ashorter-term Scope 1 and 2 carbon
intensity reduction target of 50% by 2034.
Our success is made possible through the
dedication of our team members who
deliver for all our stakeholders every day,
while ensuring our leading value of safety
remains at the forefront of everything
wedo.
During the final year of Sunbelt 3.0 we
executed on all our priorities. We invested
$4.3 billion in new rental fleet and
delivery vehicles to fuel our existing
locations and greenfield additions. This
investment positions us well to capitalise
on the opportunities arising from ongoing
structural changes and our expanded
network. We added 113 locations in North
America, 66 by way of greenfields and 47
through bolt-on acquisitions. We are now
present in all 50 US states and eight
Canadian provinces. We have created a
strong platform for future growth and are
confident in the ongoing health of our end
markets, and the fundamental strength
in our cash generating growth model.
We saw growth in all our markets last
year. Group rental revenue increased 10%
for the year, on a constant currency basis.
This growth was delivered with strong
margins, an EBITDA margin of 45% and
an adjusted operating profit margin of
26%, delivering adjusted operating profit
of $2,775m, 5% higher than last year.
After an interest expense of $545m, 49%
higher than this time last year, which
reflects both higher absolute debt levels
and the significantly higher interest rate
environment, adjusted pre-tax profit was
slightly lower at $2,230m. Adjusted
earnings per share were 386.5¢ for
theyear.
STRATEGIC REVIEW
8 Ashtead Group plc Annual Report & Accounts 2024
Rental revenue in the US grew by 11%
over last year to $8,321m, which was on
top of growth of 24% the previous year.
General Tool grew 11% and Specialty grew
14%, despite some impact from the lower
level of emergency response work than in
previous years. Rental revenue growth
was driven by a combination of volume
and rate improvement in strong end
markets. Rates continue to be an
important part of the equation given the
increased costs we face, whether it be
interest costs or the impact of continued
inflation on our rental fleet and operating
cost base. We used the opportunity of
strong second-hand markets to catch up
on delayed equipment disposals and
accelerate the disposal of some older
fleet where utilisation has been lower
than optimal.
Canada continues to deliver strong
growth, from existing general tool and
specialty locations, as well as greenfield
and bolt-on acquisition activity. Rental
revenue was 10% higher at C$765m.
Advancing our clusters enabled
us to increase our markets beyond
construction as we have done so well over
the years in the US. Importantly, as is the
case in the US, rental rates continued to
grow year over year, which we expect to
continue to be the case moving forward.
Our Film & TV business was impacted
significantly by the strikes in the North
American film and television industry,
which were settled in December.
Excluding the drag from the Film & TV
business, EBITDA margins in Canada
are slightly better than last year.
UK rental revenue was 6% higher than
ayear ago at £590m. Total revenue
increased 3% for the year reflecting the
higher level of service revenue in the prior
year associated with the demobilisation of
the Department of Health Covid testing
sites and the Queen’s funeral. While we
continue to make progress on rental
rates, this has not kept pace with the
inflationary environment in the UK,
whichimpacted margins adversely. We
continued to make market share gains in
an end market composition which favours
our unique positioning through the
industry’s broadest offering of general
tool and specialty products which is
unmatched. While progress has been
made on rental rates, we have plenty
more to do. We are focused on passing
through the necessary rate increases
for the leading services we provide.
This has been another period of good
growth, location expansion, and continued
momentum in our business. We are
experiencing strong demand for our
products and services and gaining
improved clarity to the strength of both
our construction and non-construction
end markets. This is driven in part by
the ongoing realities of US onshoring,
technology and manufacturing
modernisation, and the Federal legislative
acts discussed in the strategy section of
this report. These factors add to what was
already a strong underlying level of end
market construction activity, further
supported by increasingly large and
resilient non-construction activity,
forexample the day-to-day MRO
(maintenance, repair and operations)
ofour markets.
Our business is positioned to win in the
near, medium, and long term as we both
influence and benefit from the structural
advancement of our business and
industry. We have had a very successful
Sunbelt 3.0 campaign which positions
us well for future success. For these
reasons, and coming from a position of
ongoing strength, and positive outlook, we
look to the future with confidence. Sunbelt
4.0 is our runway for successful growth,
increased resilience and performance,
for our customers, our team members,
and our investors.
RUNWAY
SUCCESS
4
9Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
STRATEGIC REVIEW CONTINUED
Sunbelt 3.0 – Successful completion
Actionable component How we delivered
1
Grow General
Tool and Advance
Our Clusters
− Grew General Tool revenue at 17% CAGR
− Expanded our North American footprint by 401 locations: 230 in Specialty and 171
in General Tool
− Now present in all 50 US states and eight Canadian provinces
− Progressed our top 100 US clusters from 31 to 58
2
Amplify Specialty
− Amplified Specialty by growing revenue at 24% CAGR to $2.9bn and adding three
new business lines
− Extracted the power of cross-selling our unique mix of products and services to
a broadened customer base by 30%
3
Advance
Technology
− Embedded our order capture and dynamic pricing systems enabling
overperformance in volume and pricing
− Developed comprehensive and powerful technology ecosystem, with
implementation roadmap in place for these domains: Sales, Logistics, Service,
Connected, Frontline, enabling:
- Enhanced order capture
- Improved customer experience
- Efficiencies for next chapter of growth
- Market share gains
4
Lead with ESG
− Reduced carbon intensity by 31%, ahead of our 15% target
− Rental penetration increased, thereby reducing embedded carbon
− Our ‘Engage for Life’ health and safety programme and culture delivered
record-low incident rates
− Continued strength demonstrated through our team member engagement surveys
– 87% engagement score
5
Dynamic Capital
Allocation
− Consistent application of our capital allocation policy to optimise capital
deployment for the benefit of all stakeholders
− $10.5bn invested in the business
− 231 greenfields opened in North America
− $3.3bn spent on bolt-ons with 170 locations added in North America
− Returned $1.8bn to shareholders through dividends ($1.1bn) and share
buybacks ($0.7bn)
− Underpinned by target net debt to EBITDA leverage range of 1.5 to 2.0 times;
1.7times at 30 April 2024
10 Ashtead Group plc Annual Report & Accounts 2024
IN THE
STRATEGIC
REPORT
CAPITALISING ON
MARKET OPPORTUNITIES
We are building market share
through same-store growth, new
greenfield investments, select
bolt-on acquisitions and the
expansion of our product offering.
page 12
CREATING
SUSTAINABLE VALUE
Our equipment rental business
model, and the management of
that over the economic cycle,
enable us to create long-term
sustainable value.
page 20
IMPLEMENTING
OUR STRATEGY
We focus on building market share,
maintaining flexibility in our
operations and finances, and
delivering Availability, Reliability
and Ease to our customer base.
page 26
MANAGING
OUR RISKS
Our main risks relate to economic
conditions, competition, cyber
security, health and safety, people
and culture, the environment and
laws and regulations.
page 36
MEASURING OUR
PERFORMANCE
We had a year of strong market
outperformance across the
business, delivering for all our
stakeholders.
page 34
BEING A RESPONSIBLE
BUSINESS
We report on responsible business
through the Group Risk Committee.
We focus on health and safety, our
people, the environment, including
climate change, community
investment and ensuring the
highest ethical standards across
the Group.
page 56
STRATEGIC REPORT
11Ashtead Group plc Annual Report & Accounts 2024
OUR MARKETS
Our markets continue to grow and evolve
as we expand our footprint and the
services we provide and contribute to
and benefit from structural progression.
We continue to see a shift from ownership
to rental, with rental increasingly
essential for customer success where
thelarger, experienced rental companies
are able to respond to a wide range of
customer needs. As such, we are taking
market share in what are larger and more
diversified markets. Our markets are far
less cyclical than in the past because
construction, while still an important part
of our business, is much less so, relative
to the other markets we serve. That
means that our markets are more
resilient than ever before, making the
Group more resilient too. Our growth
used to be a factor of fleet size. The bigger
our fleet size, the more revenue we could
generate. Now, as we and the industry
have matured into business service
providers, pricing progression will
become fundamental to our operations.
We believe the market changes we
have seen during Sunbelt 3.0 are now
permanent. Together with our plan, these
changes have created the foundations for
our next chapter and the growth expected
during our new strategic plan, Sunbelt 4.0.
The breadth and resilience
of our markets
We serve increasingly broad and diverse
end markets. Our markets continue to
expand, in terms of geography, range of
equipment provided and the applications
for which our equipment is used. The
graphic on page 13 shows the diversity
of end markets that use our equipment.
This is often the same equipment, just
used for a different purpose. A significant
proportion of our fleet was developed
originally for the construction industry
but is now used in applications varying
from Formula 1 racetracks to home
decor. Our customers are equally diverse
from major global companies to DIYers.
For any of these markets, there is a huge
range of equipment used.
Construction remains a core part of our
end markets but accounts for less than
50% of total activity, and we see an
increasing level of crossover between our
General Tool and Specialty businesses on
any typical construction site. Increasingly
we are seeing bigger, longer construction
projects, often over several years. We now
refer internally to projects worth over
$400m as mega projects and these are
an important part of our project portfolio.
Mega projects last typically for around
three years and we expect to see more
of these coming online in the future.
Our non-construction markets are
increasingly large and resilient and
amongst other sectors include:
− Maintenance, repair and operations is a
highly stable end market characterised
by recurring work needed, regardless
of what may be happening in the wider
economy.
− Our entertainment and special events
market is a large and stable end market
with long-term growth prospects.
− Emergency response and restoration
is a key market for us and we are
designated an essential service in the
US, Canada and the UK in times of
need, supporting government and the
private sector in response to both
day-to-day emergencies as well as
major events, including hurricanes,
tornadoes and other disasters. Natural
disasters generate spikes in demand
but day-to-day emergencies generate
steady demand.
− State and local government is our most
stable end market with expenditure
typically determined in advance and
sheltered from macroeconomic shifts.
Across these non-construction end-
markets, there are ongoing opportunities
for further rental penetration.
12 Ashtead Group plc Annual Report & Accounts 2024
Examples of major non-construction markets
− Government
− Hospitals
− Parks and recreation departments
− Schools and universities
− Pavement/kerb repairs
− Airports
− Highways and bridges
− Office buildings
− Data centres
− Schools and universities
− Shopping centres
− Residential
− Remodelling
− Manufacturing plants
− Green energy
− Fire
− Hurricanes
− Flooding
− Tornadoes
− Winter storms
− Residential emergencies
− Health emergencies
− Alternative care facilities
− Points of distribution
− Healthcare testing facilities
− National events
− Concerts
− Sporting events
− Film and television production
− Theme parks
− Festivals
− Farmers’ markets
− Local 5K runs
− Cycle races
− Office complexes
− Apartment complexes
− Data centres
− Shopping centres
− Golf course maintenance
− Industrial
− Entertainment and conference venues
MAINTENANCE,
REPAIR AND
OPERATIONS
CONSTRUCTION
ENTERTAINMENT
AND SPECIAL
EVENTS
EMERGENCY
RESPONSE AND
RESTORATION
STATE AND LOCAL
GOVERNMENT
13Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
OUR MARKETS CONTINUED
THE US
Dodge Construction Starts continue to
show strength and growth. We believe
we are entering a period of moderate
growth after three years of amplified
non-residential and non-building growth.
This positive outlook is underpinned by
market dynamics such as deglobalisation
and Federal support.
As we have noted before, the
Infrastructure Investment and Jobs Act,
the Chips and Science Act and the
Inflation Reduction Act are all fuelling
growth. These provide an underpin to
demand in a market which is very active
and we expect this to continue.
The non-residential and non-building
components of the construction end
market remain strong. Furthermore,
thecontinuing evolvement of the mega
project landscape will drive further
construction as infrastructure is
developed around the mega projects
tosupport their operation and future
workforce. For example, if a major
manufacturing facility is built for electric
vehicles or for power storage, this will
create a significant number of new jobs
and infrastructure will be required to
service and support the people taking
those new jobs and their families.
Assuch, we believe most mega projects
willlikely generate broader ecosystems,
creating significant opportunities
forgrowth.
Mega projects made up roughly 30% of
recent years’ construction starts values,
more than double what they represented
in the past. Projects of this scale and
sophistication require suppliers with
relatable scale, but also expertise,
experience, breadth of product and
services, and the financial strength to
meet the needs of the customer. While the
nature of the risks associated with mega
projects (contractual and counterparty
risk principally) are similar to the rest of
our business, they are heightened due to
the scale of the projects. We are active on
many mega projects and continue to win
more, including data centres, electric
vehicle factories, battery plants, and
semi-conductor factories. These make
upapproximately 10% of our fleet on rent
today and this will increase as the
increasing number of starts translate
intoput-in-place construction and
hence,activity.
Chart 02 shows the last four construction
cycles. These have followed one of two
patterns. From 1975 to 1982 and from
1982 to 1991 the initial recovery was very
aggressive but the overall cycle was
relatively short. In contrast from 1991
to2011, and 2011 to 2020, the cycle was
characterised by a more gradual recovery
over a longer period of time.
The forecasts for the current cycle are
more similar to the last two cycles, and
we believe that we are entering a period of
more moderate growth following strong
growth over the last three years as the
market recovered following the COVID-19
pandemic, buoyed by the emergence
of mega projects and underpinned by
legislative Acts. While these forecasts are
for growth through 2028, there could be
bumps on the way due to inflation, the
interest rate environment and other
broader macro-economic conditions.
However, our business model is well
equipped to deal with this environment
aswe are able to reduce our capital
expenditure and generate significant
free cash flow. In the event of a slowing
economy, the impact will be mitigated
to adegree by the opportunity from the
structural shift from ownership to rental
and our ability to increase market share.
14 Ashtead Group plc Annual Report & Accounts 2024
T
T+2
T+4
T+6
T+8
T+10
T+12
T+14
T+16
T+18
T+20
40
60
80
100
140
120
180
160
200
1975–1982
1982–1991
1991–2011
2011–2020
Forecast
(T=100 based on
constant dollars)
Market share in the US
We continue to grow our market share
inthe US and even though we are the
second largest equipment rental
company, there remains plenty of room
togrow as Chart 03 on page 16 shows.
Our major competitors are United Rentals
and Herc Rentals with 15% and 4%
respectively. Home Depot and H&E have
shares of c. 2%. Most of the remainder
ofthe market is made up of small local
independent rental shops, with five or
fewer locations, comprising c. 50% of
allrental locations in the US.
Much of our market share gain comes
from these small independents when
we set up new stores or acquire them,
and hence our runway remains long
with ample opportunity for bolt-on
investments. In our industry size and
expertise matters. Scale brings cost
benefits and sophistication in areas like
technology and other services, and this
leads ultimately to further consolidation.
The proportion of the market enjoyed by
the larger players continues to increase
and we have clearly been a major
beneficiary of this trend.
This market share analysis is based on
the latest definition of the rental market,
which incorporates a broader range of
equipment, much of which is used in
non-construction across a wide range of
end markets. These markets include the
facility maintenance, repair and operation
of the geographic markets we serve,
characterised by square footage under
roof. In the US there is more than 100bn
square feet under roof with minimal
rental penetration currently. Thus, despite
the change, we believe the size of the
rental market is still understated and
hence our, and everyone else’s, market
share is overstated. This only serves to
increase the opportunities for growth.
Source: S&P Global Market Intelligence (May 2024) Source: Dodge Data & Analytics (May 2024)
01 US market outlook
Industry rental revenue
2024 +10%
2025 +5%
2026 +4%
02 Construction activity by cycle
STRATEGIC REPORT
Ashtead Group plc Annual Report & Accounts 2024 15
OUR MARKETS CONTINUED
The trend to rental
Rental penetration continues to deepen
and those benefitting from this increased
rental penetration are the larger, more
experienced, more capable rental
companies who can position themselves
to be there as partners for this increasing
customer base, delivering more complex
solutions, and capitalising on this
largermarket.
Rental still only makes up around 55%
to 60% of the US market compared to
around 75% in the UK. However, this is
abroad average with penetration levels
ranging from low single-digit percentages
for, say, floor scrubbers to 90%+ for large
aerial equipment. We like specialty
products because they are at the low
endof this range, which provides greater
scope for growth. We see the potential
market penetration for rental equipment
to be well over 60% in the US.
The drivers of this evolution include
significant cost inflation in recent years
associated with the replacement of
equipment, technical changes to
equipment requirements and health,
safety and environmental issues which
make rental more economical, easier and
safer. Environmental regulations have
driven further rental penetration through
the reduction in fleet size by those
customers who previously may have
chosen to own some, if not all, of their
larger equipment needs. Customers and
smaller competitors with older fleets are
faced with heavier replacement spend
causing them to replace less and rent or,
in the case of smaller competitors, reduce
their fleet size. Furthermore, the difficulties
of getting to grips with new technology
and maintenance requirements have also
caused more operators to decide to rent.
Maintaining optimally serviced and
therefore safe equipment can be a big
outlay for a smaller operator. The
diversity of our fleet helps us take
advantage of this increasing trend to
rental and we continue to expand the
range of products we rent.
Our development and use of technology is
also driving rental penetration. Our highly
sophisticated proprietary customer
management, inventory and delivery
tracking systems all contribute to
Availability, Reliability and Ease for
ourcustomers. Sustainability is also
increasingly an important consideration.
Renting from us can help customers with
their own sustainability aspirations. They
can use the most environmentally friendly
equipment available, reduce their own
direct and indirect carbon emissions
during the operation and transportation
of equipment and means that they are
not responsible for the disposal of the
equipment at the end of its life. We save
customers money by teaching them to use
the right product for the right job and
using it in the most energy efficient
manner possible.
03 US market share 04 US market share development
Target
20%
11%
5%
4%
2%
202420132007
2002
Source: Management estimate, 2024 market
share based on latest S&P Global Market
Intelligence market size estimates.
Source: Management estimate, basedon
latestS&P Global Market Intelligence market
size estimates.
1
2
3
7
4
5
6
8
1 United Rentals .....................................15%
2 Sunbelt .................................................11%
3 Herc Rentals ..........................................4%
4 Home Depot ...........................................2%
5 H&E .........................................................2%
6 Top 6–10 .................................................. 4%
7 Top 11–100 ........................................... 20%
8 Others ................................................. 42%
We are confident that as the market
grows, our share will also increase.
We continue to set ambitious targets with
our long-term market share target of
20%. The speed at which we increase our
market share is in part a function of how
quickly we can get new locations up and
running. However, as noted above, our
market share growth also comes from
continuing to broaden both our end
markets and the range of equipment we
have available to rent in each location.
The combination of our business model,
which you can read more about on
page 20, the continued attractiveness of
our markets and the long-term trend to
rental, provides the perfect environment
for us to achieve our goals. In addition,
our market share gains accelerate as we
make the most of our scale advantages.
As we increase our market share and
grow our Specialty businesses, they
become a greater proportion of the
business mix across the cycle and
accounted for c. 30% of revenue in
2023/24. The acquisitions we make
areoften to expand into a new specialty
area or to develop an existing one and
then we supplement them with
greenfieldopenings.
16 Ashtead Group plc Annual Report & Accounts 2024
CANADA
05 Canadian market share
Source: Management estimate, excluding Film &
TV, based on new S&P Global Market Intelligence
market size estimates.
1
2
3
1 United Rentals .....................................19%
2 Sunbelt ...................................................9%
3 Others ................................................. 72%
Canada remains a relatively newand
growing market for us. Theoverall rental
market is less than a tenth of the size of
the US. Butin the same way that the US
has experienced structural growth as
more and more types of equipment are
rented for different applications, we
expect similar trends in Canada.
Our share of the Canadian rental market
is around 9%. There is plenty of scope to
develop this in the same way as in the
USand we are growing rapidly. We are
seeing continued market growth in
2024and S&PGlobal Market Intelligence
predicts Canadian rental revenue to grow
7% in 2024, 7% in 2025 and 5% in 2026.
Weanticipate growing more rapidly as
wetake market share and broaden
ouroffering.
Our original Canadian business goes from
strength to strength as it takes advantage
of its increasing scale and breadth of
product offering as we expand our
Specialty businesses and look to build out
our clusters and increase market density
in that market. In contrast, our Film & TV
business was impacted significantly by
the writers’ and actors’ strikes in the
North American film and television
industry, which persisted for longer than
we anticipated and were only resolved in
December 2023. This also had some
impact on the rest of the Canadian
business given our success in cross-
selling our more traditional rental
product into the film and television space,
which is one of our competitive advantages
in the market.
We have grown to 135 locations across
Canada. We have a significant presence
inOntario and are now present in eight
provinces. The rental market has,
historically, been construction focused,
but we continue to develop new markets.
We began by introducing General Tool
businesses into the Canadian market but
have subsequently added Specialty lines
of business.
Contributing to growth and positioning
forfurther success was the June
acquisition of Loue Froid, a leading
provider of Power and HVAC rental
solutions with four locations across
Canada, and a base in Montreal. As is
often the case with new acquisitions,
there are cross-selling opportunities
inherent in this deal, and of course
theexpansion of our business in the
Quebec market.
Over time we would expect our Canadian
market share to be similar to that in
theUS.
17Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
THE UK
A consistent area of focus to improve
ourUK business has been on advancing
rental rates and the associated fees
wecharge to provide services to our
customers. Although progress has been
made, there is still work to be done.
Thisis something the UK rental industry
falls behind in and our position will
besteadfast in making a demonstrable
change in the face of the notable
inflationour business and the industry
has absorbed.
We continue to see significant
opportunities in both construction and
non-construction markets in the UK as in
the US and Canada. We will continue to
invest responsibly in the UK market as
we seek to increase market share and
enhance returns.
Our UK business continues to progress
despite local market challenges. We
believe our ability to deliver complex
solutions to our customers is unmatched
in the UKmarket.
This is no small accomplishment,
beingbrought about by our unique
cross-selling capabilities across our
unmatched product and services
portfolio. As a result, we have seen
market share gains, particularly in
infrastructure and industrial projects,
aswell as increasing progress into areas
such as facility maintenance.
Market share in the UK
We are the largest equipment rental
company in the UK. There are a greater
number of major players in the UK
marketand, as the largest, we have
a 10%market share.
Chart 06 on page 19 shows our key
competitors and their share of the
market. We believe we continue to be
well-positioned in the market with our
strong customer service, broad based
fleet and a strong balance sheet. We have
enhanced this market position through
simplifying our go-to-market message
and leveraging the cross-selling
opportunities provided byour broad
product offering and Specialty businesses.
OUR MARKETS CONTINUED
18 Ashtead Group plc Annual Report & Accounts 2024
06 UK market share
Source: Management estimate based on
latest S&P Global Market Intelligence market
size estimates.
1
2
3
4
5
1 Sunbelt .................................................10%
2 Speedy ....................................................6%
3 HSS .........................................................5%
4 VP ............................................................5%
5 Others .................................................. 74%
07 UK construction industry forecasts
£m
2022
Actual
2023
Actual
2024
Estimate
2025
Forecast % of total
Residential 69,927 66,069 63,070 65,639 35%
-6% -5% +4%
Private commercial 45,787 48,628 47,839 48,200 26%
+6% -2% +1%
Public and infrastructure 66,324 70,895 70,631 71,537 39%
+7% - % +1%
Total 182,038 185,592 181,540 185,376 100%
+2% -2% +2%
Source: Construction Products Association (Spring 2024).
19Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
We have a platform
which enables our
customers to rent what
they want, when they
want and where they
want with ease.
BUY
We buy a broad
range of equipment from
leading manufacturers.
RENT
We rent it on a short-term
basis to a broad range
of customers.
SELL
We sell the older
equipment in the
second-hand market.
OUR BUSINESS MODEL
CREATING SUSTAINABLE VALUE
ACROSS THE ECONOMIC CYCLE
We create value through the short-term rental of equipment that is used for
a wide variety of applications and the provision of services and solutions to a
diverse customer base through a broad platform across the US, Canada and
the UK. Our rental fleet ranges from small hand-held tools to the largest
construction equipment.
Powering the platform Managing through the cycle
A
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DIFFERENTIATING
OUR FLEET AND
SERVICE
ENSURING
OPERATIONAL
EXCELLENCE
INVESTING IN
OUR PEOPLE
MAXIMISING
OUR RETURN ON
INVESTMENT
1
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What we do How we do it
Creating sustainable value across the economic cycle
20 Ashtead Group plc Annual Report & Accounts 2024
How we share value with our stakeholders:
OUR PEOPLE
Investing in our people to provide opportunity
for development and to ensure we take the
very best care of our people.
See more on page 25
OUR CUSTOMERS
The provision of cost-effective rental
solutions to a diverse customer base.
See more on page 22
OUR SUPPLIERS
Developing long-term relationships with
suppliers.
See more on page 45
OUR COMMUNITIES
Enhancing the communities in which we
operate, through employment, opportunity
and community involvement.
See more on page 45
OUR INVESTORS
Generating sustainable returns for
shareholders through the cycle.
See more on page 22
OUR ENVIRONMENT
Working to ensure we provide
environmentally friendly solutions.
See more on page 56
Creating value
1 2
DIFFERENTIATING OUR
FLEET AND SERVICE
− Broad fleet mix
− Evolution of Specialty
businesses
− Broad range of
customers
andapplications
− Scale to meet size and
range ofrequirement
ENSURING OPERATIONAL
EXCELLENCE
− Culture of health andsafety
− Focused, service-driven
approach
− Long-term partnerships
with leading equipment
suppliers
− Industry-leading application
of technology
See more on page 24 See more on page 24
3 4
INVESTING
IN OUR PEOPLE
− Highly skilled team
− Devolved structure
− Maintaining significant staff
continuity
− Strong focus on
recruitment, training and
incentive plans
MAXIMISING OUR RETURN
ON INVESTMENT
− Effective fleet management
− Optimisation of utilisation
ratesand returns
− Flexibility in local pricing
structures
− Focus on higher-return
equipment
See more on page 25 See more on page 24
STRATEGIC REPORT
Ashtead Group plc Annual Report & Accounts 2024 21
OUR BUSINESS MODEL CONTINUED
WHAT WE DO IS SIMPLE.
HOW WE DO IT IS NOT.
At its most basic, our model is simple –
we purchase an asset, we rent it to
customers through our platform and
generate a revenue stream each year
we own it (on average, seven years) and
then we sell it in the second-hand market
and receive a proportion of the original
purchase price in disposal proceeds.
Assuming we purchase an asset for
$100,generate revenue of $60 each year
(equivalent to 60% dollar utilisation) and
receive 35% of the original purchase price
as disposal proceeds, we generate a
return of $455 on an initial outlay of $100
over a seven year useful life. We incur
costs in providing this service, principally
employee, maintenance, property and
transportation costs and fleet
depreciation. However, this simple
overview encompasses a significant
number of moving parts, activities and
expertise that powers the platform to
ensure Availability, Reliability and Ease
for our customers. Our ability to excel
in these areas enables us to provide a
rewarding career for our team members,
generate strong margins and deliver
long-term, sustainable shareholder value,
while managing the risks inherent in our
business (refer to pages 36 to 41).
Managing the cycle
We describe ourselves as being a late
cycle business in that our biggest end
market, non-residential construction,
is usually one of the last parts of the
economy to be affected by a change in
economic conditions. This means that we
usually have a good degree of visibility on
when we are likely to be affected, as the
signs will have been visible in other parts
of the economy for some time. When we
expect a slow-down in construction
markets, we are able to plan accordingly,
react in a timely manner and lower levels
of capital expenditure. This then ensures
we are better positioned and potentially
stronger than our competitors to take
advantage of market changes once we
are out the other side. See content on
our strategy on page 26.
Renting generators,
access equipment,
barriers and trackway
for a stadium concert
Providing temporary
climate control solutions
for retail premises and
office buildings
Airports – Tarmac/runway
resurfacing, construction/
remodelling of terminals,
facility maintenance, floor
care maintenance
Drying out and
cleaning up after
a flash flood at
an industrial
warehouse
Managing the
flow at a water
treatment plant
to enable the
refurbishment
of ageing
infrastructure
DIVERSE MARKETS ANDAPPLICATIONS
Our range of construction, industrial and general equipment is applicable to broad and diverse end markets, with individual
products having many different applications. As such, our equipment serves the needs of customers from construction to
zoos and from data centres to community events. c. 60% of our revenue comes from non-construction markets.
Healthcare
– Indoor Air
Quality, facility
maintenance,
advanced
climate control
applications
22 Ashtead Group plc Annual Report & Accounts 2024
ANYTOWN
AnyTown started as AnyTown USA,
a graphical representation of our
markets and the equipment put to
work in serving them. At the Group’s
Powerhouse event in Atlanta in April
2024, where we launched our Sunbelt
4.0 strategy, we built a 3D version of
AnyTown through which people could
walk and interact, to demonstrate the
breadth of end markets and the wide
range of applications of different types
of equipment.
Our AnyTown comprised a number
of commercial zones and provided an
opportunity for our team members,
customers, suppliers and investors
to experience the nature of our end
markets today and see how equipment
is deployed in different scenarios.
Our range of General Tool and Specialty
equipment is applicable to broad and
diverse end markets, with individual
products having many different
applications. As such, our equipment
serves the needs of customers from
construction to zoos, and from data
centres to community events large
andsmall.
Today, more than 50% of our revenue
comes from non-construction markets,
but it is the same equipment which
services both our construction and
non-construction end markets.
For example, our Power and HVAC
Specialty business may provide power
to a construction site, or ensure the
uninterrupted power supply to a major
entertainment event, or may provide
temporary power in an emergency
response situation, to name just
three applications.
Designing,
erecting and
dismantling
scaffolding
systems
On-site tool hire,
accommodation and
maintenance for a
new residential
construction site
Data centres – Power
generation, load banks,
temporary HVAC
solutions, access,
environmentally
friendly focused
solutions
Designing bespoke
liftingsolutions for the
construction of a new bridge
Providing equipment for
facilities management at
a shopping complex
Providing traffic
management solutions
forengineering projects
Facilitating fit-out
and ongoing
maintenance at
apower plant
23Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
OUR BUSINESS MODEL CONTINUED
Differentiating our fleet
and service
The differentiation in our fleet and service
means that we provide equipment to
many different sectors. Construction
continues to be our largest market but
now represents less than 50% of our
business in the US as we have deliberately
reduced our reliance in this area through
broadening our product offering and
customer base.
We continue to develop our existing
specialty areas, such as Power and HVAC,
Climate Control, Scaffold Services,
Flooring Solutions, Pump Solutions and
Trench Safety, and seek to add to our
Specialty lines of business. In total, our
speciality lines of business represent
c. 30% of our US revenue. Residential
construction is a small proportion of
our business as it is not a heavy user of
equipment. In the UK, Specialty areas
represent c. 65% of our revenue.
Our customers range in size and scale
from multinational businesses, through
strong local contractors to individual
DIYers. Our diversified customer base
includes construction, industrial and
homeowner customers, service, repair
and facility management businesses,
emergency response organisations,
event organisers, as well as government
entities such as municipalities and
specialist contractors. The nature of the
business is such that it consists of a high
number of low-value transactions. In the
year to April 2024, Sunbelt US dealt with
over 800,000 customers, who generated
average rentalrevenue of $10,200.
However this average reflects a broad and
diverse customer base, which includes
our smallest customers who transact
with a single line of business, compared
to our largest who transact across all of
our services. We believe that we are well
positioned to service our customers
whatever their needs.
The individual components of our
GeneralTool fleet are similar to our
peers. However, this is complemented by
our Specialty businesses offering a broad
range of differentiated equipment. It is the
breadth and depth of our fleet across our
General Tool and Specialty businesses
that differentiates us from our peers and
provides the potential for higher returns.
The size, age and mix of our rental fleet
is driven by the needs of our customers,
market conditions and overall demand.
The equipment we provide to each
customer is diverse and we are often
involved in supplying various types of
equipment over an extended period at
each distinct stage of a project’s
development. Our equipment is also
usedin a wide range of other applications
including industrial, events, repair and
maintenance and facilities management.
Ensuring operational
excellence
Our operating model is key to the way
we deliver operational excellence:
− In the US we achieve scale through
a ‘clustered market’ approach of
grouping large and small General Tool
and Specialty rental locations in each
market. We seek to build fleet density
around these clusters. This approach
allows us to provide a comprehensive
product offering and convenient service
to our customers wherever their job
sites may be within these markets.
When combined with our purchasing
power, this creates a virtuous circle of
scale. You can find out more on our
cluster/market density strategy on
page29.
− In Canada, we are focused on
expanding our presence and lines of
business, achieving scale through a
clustered market approach similar to
the US. The businesses we acquired
have strong positions in construction
equipment, mobile elevating work
platforms and general tools. We are
expanding the range of products
available to customers in all areas,
including building up our specialty
service offering.
− In the UK, our strategy is focused on
having a store structure that allows us
to offer a full range of General Tool and
Specialty equipment on a nationwide
basis. We are migrating to a regional
operating centre model with a few,
larger locations which are able to
address all the needs of our customers
in their respective markets, combined
with smaller, local locations, not
dissimilar to a cluster approach.
This approach reflects the nature of
the customer base (more national
accounts) and the smaller geography
of the UK.
− Across our rental fleet, we generally
carry equipment from one or two
suppliers in each product range and
limit the number of model types of
each product. We believe that having
a standardised fleet results in lower
costs. This is because we obtain greater
discounts by purchasing in bulk and
reduce maintenance costs. We are also
able to share spare parts between
stores which helps minimise the risk of
over-stocking. Furthermore, we can
08 Business mix – US
NON-
CONSTRUCTION
>50%
CONSTRUCTION
<50%
24 Ashtead Group plc Annual Report & Accounts 2024
easily transfer fleet between locations
which helps us achieve strong levels
of fleet on rent, one of our key
performance indicators (‘KPIs’).
− We purchase equipment from well-
known manufacturers with strong
reputations for product quality and
reliability and maintain close
relationships with them to ensure
certainty of supply and good after-
purchase service and support. We work
with suppliers to provide early visibility
of our equipment needs which enables
them to plan their production schedules
and ensures we receive the fleet when
we need it.
− We are also focused on sustainability
within our procurement strategy,
working with our major equipment
suppliers in developing and piloting
new technologies. This focus is also
expanding our supplier base, as we
identify new technologies which
respond to customer needs or which
provide solutions to sustainability
challenges.
− We aim to offer a full-service solution
for our customers in all scenarios.
OurSpecialty product range includes
equipment types such as pumps,
powergeneration, heating, cooling,
scaffolding, traffic management,
temporary flooring, structures and
fencing, trench shoring and lifting
services, which involve providing
service expertise as well as equipment.
− We look to build rental penetration
through expanding the breadth and
depth of equipment we rent. As well
as our Specialty businesses, we are
increasingly focused on developing the
rental penetration of the smaller end of
our product range. Chart 09 shows how
the largest equipment in our fleet has
high levels of rental penetration while
the smaller, but often still costly to own,
equipment has not traditionally been
alarge part of the rental mix.
− We invest heavily in technology,
including the mobile applications
required to deliver efficient customer
service. Customers can track the
equipment they have on rent, place new
orders, request pickup or service or
extend their contract, either from their
desk or via a mobile app. Our sales reps
have access to the same information,
along with details of the location of our
fleet and all other information required
to serve the customer. Our order
fulfilment system utilises automated
workflows connected to and powering
our point of sale and logistics systems
to enable our sales reps to say ‘yes’
with confidence. Vehicle telematics help
drive best in class driver performance
and safety. Technology enables our
business, and provides power to the
platform and a significant advantage
over our competitors. During Sunbelt
3.0 we developed a more advanced
and integrated technology ecosystem
across Sales, Logistics, Service,
Connected and Frontline which will be
implemented over the coming months
enabling enhanced order capture,
improved customer experience,
operational efficiencies and market
share gains.
− Our large and experienced sales force
is encouraged to build and reinforce
customer relationships and to
concentrate on generating strong,
whole-life returns from our rental fleet.
Our sales force works closely with our
customers to ensure we meet their
needs. Through the application of
technology, it is equipped with real-time
access to fleet availability and pricing
information enabling it to respond
rapidly to the needs of a customer
while optimising returns.
− We guarantee our service standards
and promise our customers we will
make it happen. We believe that our
focus on customer service and the
guarantees we offer help distinguish
our businesses from competitors
and assist us in delivering superior
financial returns. Our responsiveness
to customer needs is critical in a
business where c. 60% of orders are
placed for delivery within 24 hours. We
have long-standing relationships with
many of our customers. Our customer
retention is high due to the scale and
quality of our fleet, our speed of
response and our customer service.
− Our local management teams are
experienced and incentivised to
produce excellent customer service,
high quality standards and strong
financial returns. We believe that the
autonomy given to management teams
to take decisions locally ensures that,
despite our size, we retain the feel of a
small, local business for our employees
and our customers.
Investing in our people
Our people enable us to provide the
exceptional customer service that keeps
our customers coming back. Our
exceptional staff and focus on service
give us a huge competitive advantage in
what we do. On pages 64 to 67 we discuss
the importance of our team members and
corporate culture in more detail. We aim
to recruit good people and then invest
in them throughout their careers.
HIGH LOW
09 Rental penetration – the product range
25Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
OUR STRATEGY
RUNWAY FOR SUCCESS –
SUNBELT 4.0
As we enter 2024/25, we move from the
very successful Sunbelt 3.0 to its next
iteration, Sunbelt 4.0, our next level of
ambition with purpose. Sunbelt 3.0,
launched in April 2021, created the
platform from which we feel confident
to make the very most of the continuing
structural progression in our business
and the rental industry. You can see
our performance against Sunbelt 3.0
on page 10. The continuing shift from
ownership to rental and the increasingly
essential nature of rental for customer
success, mean the industry in which
we excel continues to expand rapidly,
providing the springboard for our next
chapter of growth. Our size, experience
and expertise mean that we will continue
to get disproportionately larger in this
growing and highly diversified market.
Our history of strategic planning and
execution has built a highly successful
and robust business. Sunbelt 4.0 is
designed to deliver further growth,
resilience and performance.
Sunbelt 4.0: April 2024
Positioned to execute and realise the
benefits of ongoing structural change
present within the rental industry
Strategic growth plan designed to
deliver a period of strong performance
through growth in volume, pricing,
margin and return on investment
Ever-strengthening financial position
through earnings growth, strong free
cash flow, and low leverage, providing
significant operational and capital
allocation optionality for the benefit of
all stakeholders
Over the course of decades, we have
beenboth influencing and realising the
structural change agents in our industry,
the first being that ongoing shift from
ownership to rental. Secondly, we can
now say categorically that everything has
changed in the eyes of our customers.
Rental, and therefore Sunbelt, is essential
to their success. Our business is now
mainstream. Rental is the first option
for our customers, rather than being the
‘top-up’ provision of the past. That is the
platform for growth we saw coming
together through our previous strategic
plan. It is the industry-built foundation
for our new plan, Sunbelt 4.0.
Traditionally ours was a highly cyclical
business and we managed the cycles
that impacted us to accommodate the
changing nature of our business.
We are significantly less cyclical now.
Construction accounts for less than 50%
of our total business, rather than being
the majority. We are far more resilient to
market changes than ever before. We
have a much larger addressable market
given the diversification we have built
throughout the business, because rental
is now core in a multitude of areas.
Sunbelt 4.0 actionable components
CUSTOMER
1
Elevate our obsession with customer service and their success
throughout the organisation to a level unparalleled in the broader
service sector
GROWTH
2
Grow General Tool and Specialty through the ongoing structural
progression in our business and industry and advance our clusters
to deepen our presence and increase our total addressable markets
PERFORMANCE
3
Operate with more efficiency through scale, process, and technology
to unlock margin progression
SUSTAINABILITY
4
Advance our position as a thriving, growing enterprise to deliver
long-term sustainable value for our people, customers, communities
and investors
INVESTMENT
5
Disciplined capital allocation driving profitable growth, strong cash
generation and enhanced shareholder value
PEOPLE PLATFORM INNOVATION
FOUNDATIONAL ELEMENTS
26 Ashtead Group plc Annual Report & Accounts 2024
Our Sunbelt 4.0 strategic priorities
STRATEGIC
PRIORITY
KEY
INITIATIVES
RELEVANT
KPIs
RELATED
RISKS
1
Customer
− Elevate our customer culture from centric to
obsession
− Grow the percentage of revenue from customers
which rent from General Tool and three or more
Specialty lines of business
− Increase value of existing customers and add new
credit customers
− Return on investment
− Fleet on rent
− Dollar utilisation
− Economic conditions
− Competition
− People and culture
2
Growth
− Increase market density through investment
in General Tool and Specialty businesses
− Access latent capacity through existing
location growth
− Add greenfield stores to establish and deepen
market presence, progressing our market clusters
− Make rate progression a sustained contributor
to growth
− Return on investment
− Fleet on rent
− Dollar utilisation
− Adjusted EPS
− Economic conditions
− Competition
− People and culture
3
Performance
− Leverage SG&A with increased scale
− Increase maturity of existing store portfolio,
in particular those added during Project 2021
and Sunbelt 3.0
− Deliver against operational excellence initiatives
and embed industry-leading technology platform
developed during Sunbelt 3.0
− Return on investment
− Fleet on rent
− Dollar utilisation
− EBITDA margins
− Adjusted EPS
− Economic conditions
− Competition
− People and culture
− Cyber security
4
Sustainability
− Continue prioritisation of health and safety
− Target Scope 1 and 2 Net Zero by 2050 target,
supported by a tangible pathway
− Unlock the sustainability potential in our
people strategies
− Advance an integrated community investment
strategy enabled by technology
− Safety
− Carbon intensity
− Staff turnover
− Health and safety
− Environmental
− People and culture
− Laws and regulations
5
Investment
− New target leverage range of 1.0 to 2.0 times net
debt to EBITDA
− Dynamic capital allocation policy, prioritising
organic growth investment in existing locations
andgreenfields
− Returns to shareholders through progressive
dividend policy and share buybacks
− Free cash flow from operations will fund 100% of
ambitious Sunbelt 4.0 organic growth plans, leaving
significant flexibility and optionality to allocate
capital in accordance with our long-term priorities
− Adjusted EPS
− Return on investment
− Net debt and leverage
− Economic conditions
− Competition
The change in the role and importance of
rental means that industry pricing is also
evolving, and rental rate discipline and
progression has been seen across the
industry. It used to be that the bigger
our fleet was, the more money we made.
There was little variation in pricing
available. We now see ourselves more
as a business services company and
envisage having pricing progression as
our norm. We and the industry have
demonstrated this over the last year as,
despite lower levels of physical utilisation
and used equipment prices, rental rates
have continued to progress. This marks a
huge change for us and the industry and
is part of our growth algorithm which did
not exist in the past. When we have the
scale we have in these market conditions,
we expect to see increased margin
performance, particularly when we
combine these market conditions with
confidence and excellence in execution.
Our strategy has evolved and will continue
to evolve to meet this new level of
opportunity. In our next phase of growth,
we will be guided by five actionable
components, powered by three strong
foundational elements. We have called
these components, Customer, Growth,
Performance, Sustainability and
Investment. These are the backbone of
the Sunbelt 4.0 runway for success –
the core components of the next level
of our ambition with purpose.
27Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
OUR SPECIALTY
BUSINESSES
Our Specialty businesses focus
onproducts with comparatively low
rental penetration in predominantly
non-construction markets. They
arehugely important to our business
and remain core to our Sunbelt 4.0
strategy. Specialty products and
services are often a natural add-on
toour General Tool products and
services. We are always looking
fornew rental opportunities and
toexpand the number of our
Specialty lines of businesses
which in NorthAmerica include:
− Power and HVAC;
− Climate Control;
− Scaffold Services;
− Flooring Solutions;
− Pump Solutions;
− Trench Safety;
− Industrial Tool;
− Film & TV;
− Temporary Structures;
− Ground Protection;
− Temporary Fencing; and
− Temporary Walls.
Our Specialty businesses are true
specialisms with in-house experts
in each business line with in-depth
product and application knowledge,
who enable us to provide the very best
level of service to our customers.
Cross-referrals between General Tool
and Specialty are becoming more
and more commonplace.
OUR STRATEGY CONTINUED
Our second actionable component is
to grow our General Tool and
Specialty businesses through the
ongoing structural progression of
our business and industry.
We are evolving our cluster approach as
we look to increase our fleet density. We
believe that there is a clear opportunity to
increase the fleet density in our markets
through accessing the latent capacity
in our existing locations, particularly
those added through Sunbelt 3.0 and
supplementing those through further
greenfield locations. In this way, we aim to
ensure that rental penetration increases
in ever broadening markets as our market
density grows. We aim to add 300 to 400
greenfield locations during Sunbelt 4.0.
To illustrate our opportunity, the fleet
density map, Chart 10 on page 29, shows
fleet density (original equipment cost
(‘OEC’) per capita) by state. Highlighting
three markets, each of which we believe
has opportunity for further growth:
1
Florida: $69 of OEC per capita with 99
locations and being the third largest
US rental market.
2
Ontario: $39 of OEC per capita with 73
locations and being the largest
Canadian rental market.
3
California: $34 of OEC per capita with
126 locations and being the largest US
rental market.
We would need a fleet size of $26bn to
achieve the same level of fleet density
throughout the US and Canada that we
have in Florida.
The first of our actionable
components is to elevate our
obsession with customer service
and their success throughout the
organisation to a level unparalleled
in the broader business sector.
Customers have always been the priority
at Sunbelt but putting them front and
centre in our new strategic plan elevates
that further. As our business has
changed, so too have our customers. They
now rely on us to get their job done, safely,
efficiently, without any hassle and often
in the most sustainable way possible.
Cross-selling the power of Sunbelt
is an important part of the customer
experience and a great source of our
competitive advantage. We continue to
grow our customer base, having added
over 108,000 new credit customers in the
US during Sunbelt 3.0. Meanwhile, those
customers who rent from multiple lines of
business also grew over the same period.
In addition, the revenue generated by
individual customers is also growing.
Our focus on ensuring those customers
enjoy the very best customer service
and experience will enable us to
capitalise on these factors in building
the business further.
1. CUSTOMER
2. GROWTH
28 Ashtead Group plc Annual Report & Accounts 2024
CONTINUING TO ADVANCE
OUR CLUSTER APPROACH
Our cluster approach has been a very
important aspect of our strategy and
success at building the business to
where we have the scale we have today.
We are now amplifying this cluster
approach, focusing also on increasing
our market density where we have
clusters. Our greenfield sites are
chosen to enhance our existing
business and we believe that this
approach continues to provide
significant continuing opportunity
for growth. We focus on building
clusters of stores because, as they
mature, they access a broader range
of markets unrelated to construction
leading to better margins and return
on investment.
The size and composition of a cluster
depends on the market size based on
Designated Market Areas. We have
defined clusters such that a top 25
market cluster in the US has more than
15 stores, a top 26–50 market cluster
more than 10 stores and a top 51–100
market more than four stores. We also
include the smaller 101–210 markets
within our cluster analysis although our
focus is predominantly on the top 100
markets in the US. Nevertheless, we
have found that the smaller markets,
while performing less well than others
overall, often prove more resilient when
times are less good. Our definition of a
cluster in these markets is two or more
stores. With the advanced technology
we have in place, we can analyse local
market data accurately. This allows us
to find similarities between certain
USand Canadian centres, and
modelour growth plans accordingly.
The more customers get to know and
trust us, the faster we are able to grow.
We focus on ensuring our clusters meet
the multiple needs of local customers
even if that means some stores may
appear to perform less well than others.
The interaction of the stores in a cluster
is what gives us real competitive
advantage. We find that having a blend
of locations is highly desirable and we
like to mix up the large equipment
locations with smaller General Tool
stores. The addition of Specialty stores
serves to differentiate us from
competitors in the area. This enables us
to broaden and diversify our customer
base and our end markets, as we extend
our reach within a market. The value is
in the mix of products and services we
are able to provide in a concentrated
environment.
US Canada
Rental markets Top 25 26–50 51–100 101–210 Top 5 6–10 11–55
Rental market % 57% 19% 16% 8% 48% 19% 33%
Cluster definition >15 >10 >4 >1 >10 >7 >1
Clustered 21 12 25 26 3 2 8
Sunbelt 4.0 target
22
markets
15–17
markets
30–33
markets
39–48
markets
4–5
markets
3–5
markets
13–15
markets
10 Fleet density
$ OEC per capita
0–10
10–20
20–30
30–40
40–50
50–60
>60
Source: ARA Rentalytics,
US and Canada census.
2
1
3
US & CANADA
HAWAII
ALASKA
29Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
Operations Customers Our people Communities
− Committing to
Scope 1 & 2 Net
Zero by 2050
supported by a
tangible pathway
− Reducing
environmental
impact and
advancing
sustainability
through the
value chain
− Driving the
benefits of rental
amplified by our
scale
− Partnering and
innovating to
bring new
products to the
rental market
− Health and safety
remaining our
key priority
− Focus on
attracting,
developing and
retaining top
talent
− Fostering
inclusion and
belonging
− 1% of post-tax
profit to
community
investment by
2028/29
− Advancing an
integrated
community
investment
strategy
− Scaling strategic
sustainability
and community
partnerships
Our third actionable component
is performance, unlocking the
capacity to operate more efficiently
through process, technology and
scale, resulting in margin
progression with growing revenues.
We see three areas of opportunity where
we can drive performance:
1. firstly, we will leverage our central
and field sales and support services,
using the investments made during
Sunbelt 3.0 as a platform for future
growth. We believe that our central
and field support functions have now
reached the scale to drive Sunbelt 4.0
growth. The investments made over
Sunbelt 3.0 provide the foundation to
Our fourth actionable component is
sustainability, and this underpins
everything we do. We will advance
our position as a thriving, growing
enterprise to deliver long-term
sustainable value for our people,
customers, communities and
investors.
We intend to lead sustainability in our
industry and have set an updated target
of a 50% reduction in Scope 1 and 2
greenhouse gas intensity by 2034 (using
the base year as 2024), on our journey to
being Net Zero by 2050. We have four
areas of focus within our sustainability
actionable component; operations,
customers, our people and communities,
and we report on these in more detail
inour Responsible business report on
page 56.
tackle the next chapter of growth
without the same levels of
incremental cost, contributing to
margin improvement;
2. secondly, we will extract the full
potential from our existing footprint
and leverage our scale. We have
added c. 400 locations in North
America during Sunbelt 3.0 which
have ample room for revenue growth
and margin progression. Capital
investment targeted in these locations
presents a significant opportunity;
and
3. finally, we aim to achieve further
performance advantage through
market-based operational excellence
programmes and harnessing the
power of digitally enabled solutions.
During Sunbelt 3.0, we launched and
benefitted from dynamic pricing,
order capture and eCommerce tools,
but have been investing in a wide
range of industry-leading technologies
which will take our technology
platform to the next level. Asset
telematics, logistics, field service and
customer-focused tools will provide
further opportunities.
3. PERFORMANCE
4. SUSTAINABILITY
OUR STRATEGY CONTINUED
30 Ashtead Group plc Annual Report & Accounts 2024
Our fifth and final actionable
component is investment, by
which we mean disciplined capital
allocation to drive profitable
growth, strong cash generation
and enhanced shareholder value.
We will continue to allocate capital within
our clearly defined framework:
− organic growth investment in existing
locations and greenfield sites;
− bolt-on acquisitions; and
− returns to shareholders – a progressive
dividend policy and share buybacks
to maintain our leverage within our
target range.
Maintaining financial and operational
flexibility enables us to flex our business
and operational models through the
economic cycle. This enables us to react
quickly to both opportunities in the market
and adverse changes. Having a strong
balance sheet is fundamental to our
success at all stages in the cycle.
We have been consistent in our
commitment to both low leverage and a
well invested fleet, and we benefit from
the options this strategy has provided.
The length and gradual nature of the last
cycle enabled us to establish a smooth,
well distributed fleet age. Traditionally,
rental companies have only generated
cash in a downturn when they reduce
capital expenditure and age their fleet.
Inthe upturn, they consume cash as they
replace their fleets and then seek to grow.
We have changed this dynamic through
the cycle with our scale and strong
margins. During Sunbelt 4.0, strong free
cash flow will fund 100% of our organic
growth plans, leaving significant capacity
for bolt-ons and returns to shareholders.
Our capital allocation will be underpinned
by a revised target leverage range of 1.0
to 2.0 times net debt to EBITDA (excluding
IFRS 16).
5. INVESTMENT
FOUNDATIONAL ELEMENTS
Underpinning our five actionable components are our foundational elements, which we
believe are essential to the delivery of our strategy. These are our people, our platform
and innovation. Our foundational elements are present in everything we do and core to the
culture of our organisation, enabling us to deliver on our customer promise of Availability,
Reliability and Ease. We believe that these foundational elements drive the success
of our business, and as such, underpin our strategic plan.
PEOPLE PLATFORM INNOVATION
STRATEGIC REPORT
31Ashtead Group plc Annual Report & Accounts 2024
GROWTH
Grow our General Tool
and Specialty businesses
through the ongoing
structural progression in
our business and industry
and advance our clusters
to deepen our presence
and increase our total
addressable markets.
ACTIONABLE
COMPONENT
2
Ashtead Group plc Annual Report & Accounts 202432
Increasing our market density through
investment in our General Tool and
Specialty businesses
Accessing latent capacity through
existing location growth
Greenfield expansion; progressing our
market clusters
Positioned to make rate progression
a sustained contributor to growth
KEY OBJECTIVES:
Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
33
KEY PERFORMANCE INDICATORS
MEASURING OUR
PERFORMANCE
At Group level, we measure the performance ofthe
business using a number of key performance indicators
(‘KPIs’). These help toensure that we are delivering against
our strategic priorities as set out on page 26. Several of
these KPIs (adjusted EPS, return on investment, leverage
and carbon intensity) influence the remuneration of our
executive team (see page 109).
Certain KPIs are more appropriately measured for each of
our operating businesses, whereas other KPIs are best
measured for the Group as a whole.
Adjusted EPS (¢) Return on investment (‘RoI’) (%) Net debt and leverage at
constant exchange rates
2
5
3
2
3
1
5
5
222
219
307
388
387
2020 2021 2022 2023 2024
15
15
18
19
16
2020 2021 2022 2023 2024
Apr 24Apr 23Apr 22Apr 21Apr 20
Net debt ($m) Leverage (x)
5,368
4,180
5,179
6,588
8,014
1.5
1.4
1.9
1.6
1.7
Calculation
Adjusted Group profit after taxation divided
by the weighted average number of shares in
issue (excluding shares held by the Company
and the ESOT).
Target
As a cyclical business, adjusted EPS varies
through the cycle.
2024 performance
Adjusted EPS was 386.5¢ per share in
2023/24.
Calculation
Last 12-month (‘LTM’) adjusted operating
profit divided by the LTM average of the sum
of net tangible and intangible fixed assets,
plus net working capital but excluding net
debt and tax. RoI is calculated excluding the
impact of IFRS 16.
Target
Averaged across the economic cycle we look
to deliver RoI well ahead of our cost of
capital, as discussed in our strategic review.
2024 performance
Our RoI was 16% for the year ended 30 April
2024. The decrease in RoI compared with the
prior year is predominantly due to the impact
of a lower utilisation of a larger fleet.
Calculation
Net debt is total debt less cash balances, as
reported, and leverage is net debt divided by
EBITDA, calculated at constant exchange
rates (balance sheet rate). Both net debt and
leverage exclude the impact of IFRS 16.
Target
We seek to maintain a conservative balance
sheet structure with a target for net debt
to EBITDA of 1.0 to 2.0 times (excluding
IFRS 16).
2024 performance
Excluding lease liabilities arising under
IFRS 16, net debt at 30 April 2024 was
$8,014m and leverage was 1.7 times.
Key:
Key performance
indicator linkages
1
Customer
2
Growth
3
Performance
4
Sustainability
5
Investment
Linked to remuneration
34 Ashtead Group plc Annual Report & Accounts 2024
Fleet on rent ($m/C$m/£m) Dollar utilisation (%) EBITDA margins (%)
21
3
2 31
3
7,524
500
626
9,633
791
698
8,629
627 655
2022 2023 2024
US Canada UK
58
47
53
2022 2023 2024
57
55
58
61
55
53
US Canada UK
47
40
28
2022 2023 2024
48
45
30
48
41
28
US Canada UK
Calculation
Fleet on rent is measured as the daily
average of the original cost of our itemised
equipment on rent.
Target
To achieve growth rates in excess of
the growth in our markets and that of
our competitors.
2024 performance
In the US, fleet on rent increased 12% (rental
revenue up 11%), in Canada, fleet on rent
increased by 26% (rental revenue up 10%),
while in the UK it increased by 7% (rental
revenue up 6%). The US market increased by
13%, the Canadian market by 5% and the UK
market by 3%.
Calculation
Dollar utilisation is rental revenue divided by
average fleet at original (or ‘first’) cost
measured over a 12-month period.
Target
Improve dollar utilisation to drive improving
returns in the business.
2024 performance
Dollar utilisation was 58% in the US, 47% in
Canada and 53% in the UK. The decrease in
US dollar utilisation is due to principally
lower physical utilisation while Canadian
dollar utilisation reflects both lower physical
utilisation and the drag of the Film &
TV business.
Calculation
EBITDA as a percentage of total revenue.
Target
To improve or maintain margins with EBITDA
margins of 40-50% in the US, 40-45% in
Canada and 35-40% in the UK.
2024 performance
EBITDA margins in 2023/24 were 47% in the
US, 40% in Canada and 28% in the UK.
Carbon intensity (tCO
2
e/$m) Staff turnover (%) Safety
4
4 4
54.0
48.5
42.2
38.4
37.4
2018 2021 2022 2023 2024
21
28
25
20
21
24
21
29
23
2022 2023 2024
US Canada UK
0.90
1.49
0.97
0.76
0.89
0.78
2022 2023 2024
0.22
0.25
0.19
2022 2023 2024
US (TRIR) UK (RIDDOR)Canada (TRIR)
Calculation
Carbon intensity is calculated as emissions
per $m of revenue (tCO
2
e/$m), calculated at
constant exchange rates.
Target
To reduce our carbon intensity by 35% by
2030 with reference to 2018 as a base year,
with a shorter-term target of 15% by 2024.
2024 performance
Our carbon emission intensity ratio was 37.4
(2023: 38.4).
Calculation
Staff turnover is calculated as the number of
leavers in a year (excluding redundancies)
divided by the average headcount during
the year.
Target
Our aim is to keep employee turnover below
historical levels to enable us to build on the
skill base we have established and maintain
and enhance the culture of the business.
2024 performance
Employee turnover in the US was 20%,
in Canada 21% and in the UK 24%.
Employee turnover and the actions we are
taking to reduce it are discussed on page 66.
Calculation
In North America, reportable incidents
are reported in accordance with the
OSHA (Occupational, Safety and Health
Administration) framework as a Total
Recordable Incident Rate (‘TRIR’). In the UK,
the RIDDOR (Reporting of Injuries, Diseases
and Dangerous Occurrences Regulations)
reportable rate is the number of major
injuries or over seven-day injuries per
100,000 hours worked.
Target
Continued reduction in accident rates.
2024 performance
The TRIR was 0.76 in the US and 0.78 in Canada.
The RIDDOR reportable rate was 0.19 in the UK.
More detail is included in our Responsible
business report on page 60.
35Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
MANAGING
OUR RISK
and ethical behaviour. The Committee is
chaired by our chief financial officer and
also includes:
− the Group’s general counsel;
− the Group’s head of internal audit
and risk officer;
− the Sunbelt North America chief
financial officer;
− the Sunbelt UK finance director; and
− the Group’s company secretary.
The Group Risk Committee reports
annually through the Audit Committee to
the Board and, as part of this process,
produces a Group Risk Register. The
Board assesses on a regular basis
whether the appropriate risks have been
identified, including any emerging risks
which may impact the Group, and that
adequate assurance is obtained over
those risks.
In addition, consideration is given to
ensure that risks have been assessed
appropriately in relation to risk rating.
Our risk appetite is reflected in our rating
of risks and ensures the appropriate
focus is placed on the correct risks.
The Board takes a view of the prospects of
the business through the cycle and, given
the inherent cyclicality in the business,
tends to operate with a low risk appetite.
Further detail on our risk management
framework and priorities during the year
is provided on pages 37 to 41.
The Group Risk Committee priorities this
year included:
− assessment of the Group Risk Register,
including identification and
prioritisation of business risks;
− health and safety, together with
continuous improvement through
training and awareness;
− driver safety, training and compliance;
− focus on the continued development of
our technology environment, including
cyber security;
− assessment of the environmental and
social impact of the Group, including
emerging risks such as climate change;
− monitoring of compliance with laws
and regulations; and
− performance standards audits.
Our priorities for next year focus on the
principal areas of risk to the Group and
are similar. In particular:
− continue our safety initiatives, Engage
for Life: Amplified, focused on serious
injury and fatality (‘SIF’) protocols and
driver programmes;
− focus on the development of our
technology environment in accordance
with the Group’s strategic plans,
including a continued focus on cyber
security; and
− focus on our sustainability initiatives,
delivering against our environmental
and social priorities.
The Group recognises the importance of
identifying and managing financial and
non-financial risks faced by the business.
In response to this, it has developed a
rigorous risk management framework
designed to identify and assess the
likelihood and consequences of risks and
to manage the actions necessary to
mitigate their impact, including those
related to climate-related matters.
Our risk identification processes seek
to identify risks from both a top-down
strategic perspective and a bottom-up
business perspective. The Board has
overall responsibility for risk
management, setting of risk appetite and
implementation of the risk management
policy. This is designed to enable our
employees to take advantage of attractive
opportunities, yet to do so within the risk
appetite set by the Board.
The Group Risk Register is the core of
the Group’s risk management process.
It contains an overall assessment of the
risks faced by the Group together with the
controls established to reduce those risks
to an acceptable level and is maintained
by the Group Risk Committee. The Group
Risk Register is based on detailed risk
registers maintained by Sunbelt in
North America and the UK, which are
reviewed and monitored through local
risk committees. The operation and
effectiveness of the local risk committees,
which meet two to four times a year,
continues to be enhanced.
The Group Risk Committee meets as
required, but at least twice a year, with
the objective of encouraging best risk
management practice across the Group
and a culture of regulatory compliance
36 Ashtead Group plc Annual Report & Accounts 2024
Group Risk Committee
− Reviews key and emerging risks on
a regular basis with support from
the businesses’ risk committees
which meet two to four times a year.
− Receives in-depth presentations
from the businesses’ risk
committees on key matters.
Audit Committee
− Receives presentation from Group
Risk Committee on the Group Risk
Register on an annual basis.
− Assesses effectiveness of risk
management process.
Board
− Overall responsibility for risk
management framework and
the definition of risk appetite.
− Undertakes Board monitoring
of significant risks throughout
the year.
− Assessed both on a top-down and bottom-up basis.
− Risks considered most material to the business.
− Consideration of emerging risks.
− Risk appetite assessed for individual risks in accordance
with our overall Group risk appetite.
− Financial, operational, environmental and regulatory
impacts considered.
− Mitigating controls identified, implemented and monitored
to ensure risk is reduced to an acceptable level.
Risk
identification
Risk appetite
determined
1
3
Assessment of
likelihood and impact
2
Mitigating controls
implemented
4
Risk management framework
Group Risk Register
Group Risk Register summarises work of Group Risk Committee, changes in risks identified and details by significant risk
material controls and monitoring activities completed.
Risk appetite determined
Risk appetite determined with reference to the Group’s risk categories:
STRATEGIC OPERATIONAL FINANCIAL
37Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
Economic conditions
2 51
3
Potential impact
In the longer-term, there is a link between
levels of economic activity and demand for
our services. The most significant end
market which affects our business is
construction. The construction industry
is cyclical and typically lags the general
economic cycle by between 12 and 24 months.
The economic uncertainties resulting from
the impact of pandemics is considered as
part of this risk.
Mitigation
− Prudent management through the
different phases of the cycle.
− Flexibility in the business model.
− Capital structure and debt facilities
arranged in recognition of the cyclical
nature of our market and able to
withstand market shocks.
Change
Our business continues to be well
positioned to benefit from supportive end
markets. However, while market forecasts
are predicting continued growth both in
terms of starts and the rental market,
supported by the emergence of ‘mega
projects’, there remains some uncertainty
in end market conditions due to the level
of interest rates. At all times, we remain
cognisant of market dynamics and
uncertainties to ensure that we take
actions to ensure the Group is positioned
to take advantage of opportunities.
Competition
2 51
3
Potential impact
The already competitive market could
become even more competitive and we
could suffer increased competition from
large national competitors or smaller
regional or local companies resulting in
reduced market share and lower revenue.
This could negatively affect rental rates
and physical utilisation. Continuing
industry consolidation could also have
a similar effect.
Mitigation
− Create commercial advantage by
providing the highest level of service,
consistently and at a price which
offers value.
− Differentiation of service.
− Enhance the barriers to entry to
newcomers provided by our platform:
industry-leading technology, experienced
personnel and a broad network and
equipment fleet.
− Regularly estimate and monitor our
market share and track the performance
of our competitors.
Change
Our markets continue to be competitive but
the big continue to get bigger. We have an
11% market share in the US, a 9% market
share in Canada and a 10% market share in
the UK.
PRINCIPAL
RISKS
The Board has completed a robust
assessment of the Group’s emerging and
principal risks. Set out below are the
principal business risks identified that
could impact the Group’s business model,
future performance, solvency or liquidity
and information on how we mitigate them.
Our risk profile evolves as we move
through the economic cycle and
commentary on how risks have changed
is included below. The Committee has
considered whether climate-related
matters represent a principal risk for the
Group. The Group believes that climate-
related matters are addressed principally
through our environmental risk and our
commitment to reduce carbon intensity.
On balance, the Committee believes
that climate change and emerging
technologies will increase the demand
for rental and continue the shift from
ownership to rental, rather than
presenting a risk to our business model.
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Key:
1
Customer
2
Growth
3
Performance
4
Sustainability
5
Investment
Change in risk in 2023/24:
Increase in risk
Constant risk
Decrease in risk
Link to strategic priority:
38 Ashtead Group plc Annual Report & Accounts 2024
Cyber security
3
Potential impact
A cyber attack or serious uncured failure in
our systems could result in us being unable
to deliver service to our customers and/or
the loss of data. In particular, we are heavily
dependent on technology for the smooth
running of our business given the large
number of both units of equipment we rent
and our customers. As a result, we could
suffer reputational loss, revenue loss and
financial penalties.
This is the most significant factor in our
business continuity planning.
Mitigation
− Stringent policies surrounding security,
user access, change control and the
ability to download and install software.
− Testing of cyber security including red
team exercises, system penetration
testing and internal phishing and other
training exercises undertaken.
− Use of antivirus and malware software,
firewalls, email scanning and internet
monitoring as an integral part of our
security plan.
− Use of firewalls and encryption to
protect systems and any connections
to third parties.
− Use of multi-factor authentication.
− Continued focus on development of IT
strategy taking advantage of cloud
technology available.
− Separate near-live back-up data centres
which are designed to be able to provide
the necessary services in the event of a
failure at a primary site.
Change
The Group remains vigilant with regards
to cyber security, with a significant and
ongoing investment in resource and tooling
to maintain and where appropriate,
enhance our posture. Nevertheless,
cyber security remains a continually
evolving area and a priority for the Group.
In relation to business continuity, our plans
have been subject to continued review and
update during the year and our disaster
recovery plans are tested regularly.
Health and safety
4
Potential impact
A failure to comply with laws and
regulations governing health and safety
and ensure the highest standards of health
and safety across the Group could result in
accidents which may result in injury to or
fatality of an individual, claims against the
Group and/or damage to our reputation.
Mitigation
− Maintain appropriate health and safety
policies and procedures regarding the
need to comply with laws and regulations
and to reasonably guard our employees
against the risk of injury.
− Induction and training programmes
reinforce health and safety policies.
− Programmes to support our customers
exercising their responsibility to their own
workforces when using our equipment.
− Maintain appropriate insurance coverage.
Further details are provided on page 50.
Change
Health and safety remains a key focus area
for the Group and an area of continuous
improvement in order to consider what
actions can be implemented to further
reduce the risks within our business.
In terms of reportable incidents, the TRIR
was 0.76 (2023: 0.97) in the US and 0.78
(2023: 0.89) in Canada. The RIDDOR
reportable rate was 0.19 (2023: 0.25) in the
UK. Further details are provided in our
Responsible business report.
People and culture
21
3
4
Potential impact
Retaining and attracting good people is key
to delivering superior performance and
customer service and maintaining and
enhancing our culture.
Excessive staff turnover is likely to impact
on our ability to maintain the appropriate
quality of service to our customers and
would ultimately impact our financial
performance adversely.
At a leadership level, succession planning
is required to ensure the Group can
continue to inspire the right culture,
leadership and behaviours and meet its
strategy objectives. Furthermore, it is
important that our remuneration policies
reflect the Group’s North American focus
and enable us to retain and enhance our
strong leadership team.
Mitigation
− Provide well-structured and competitive
reward and benefit packages that ensure
our ability to attract and retain the
employees we need.
− Ensure that our staff have the right
working environment and equipment
to enable them to do the best job possible
and maximise their satisfaction at work.
− Invest in training and career development
opportunities for our people to support
them in their careers.
− Ensure succession plans are in place
and reviewed regularly which meet the
ongoing needs of the Group.
Change
Recruiting, retention and training continue
to be key priorities for the business.
Our compensation and incentive
programmes have continued to evolve to
reflect market conditions, the economic
environment and the results of our
employee engagement surveys.
Diversity, equity and inclusion programmes
are established across the business to
enhance our efforts to attract and retain
the best people.
39Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
Environmental
4
Potential impact
As part of Sunbelt 4.0, the Group has made
a long-term commitment to reduce its
Scope 1 and 2 carbon intensity by 50% by
2034, compared to a baseline of 2024, on
a journey to Net Zero by 2050. Failure to
achieve these goals could adversely impact
the Group and its stakeholders.
In terms of the Group’s assessment of the
broader environmental impacts of our
activities, we also consider the upstream
and downstream impacts of our operations
and note that a significant part of our Scope
3 emissions arises from our rental fleet,
which today is reliant on diesel engines.
Over time, ‘greener’ alternatives will
become available as technology advances.
If we do not remain at the forefront of
technological advances, and invest in the
latest equipment, our rental fleet could
become obsolete.
In addition, we need to comply with the
numerous laws governing environmental
protection matters. These laws regulate
such issues as wastewater, storm water,
solid and hazardous wastes and materials,
and air quality. Breaches potentially create
hazards to our employees, damage to
our reputation and expose the Group to,
amongst other things, the cost of
investigating and remediating
contamination and also fines and
penalties for non-compliance.
Mitigation
− Policies and procedures in place at all
our stores regarding the need to adhere
to local laws and regulations.
− Procurement policies reflect the need
for the latest available emissions
management and fuel efficiency tools
in our fleet.
− Collaboration with key suppliers to
develop and pilot new technologies.
− Lower carbon vehicle transition plan.
− Real estate and facility standards to
reduce emissions from our operations.
− Monitoring and reporting of carbon
emissions.
Change
The work of the Health, Safety and
Environmental departments, and the
Sustainability and operational audit teams,
continue to assess environmental
compliance.
Our 2022/23 Scope 1 and 2 carbon
emissions have been validated by the
Carbon Trust and we will obtain assurance
over our 2023/24 Scope 1 and 2 data prior
to the publication of the Group’s 2023/24
Sustainability Report.
In 2023/24 our Scope 1 and 2 carbon
emission intensity ratios reduced to 37.4
(2023: 38.4). Further detail is provided on
page 62.
We quantified our Scope 3 emissions for
the first time during the year, the largest
components of which are category 11
(use of sold products) and category 13
(downstream leased assets). These
categories are complex to measure and
reliant on significant assumptions and
estimation techniques. Further detail is
provided on page 62.
Laws and regulations
4
Potential impact
Breaches of laws or regulations governing
the Group’s activities could result in
criminal prosecution, substantial claims
and loss of reputation.
Mitigation
− Maintaining a legal function to oversee
management of these risks and to
achieve compliance with relevant
legislation.
− Group-wide modern slavery, business
ethics and ethical sourcing policies and
whistle-blowing arrangements.
− Evolving policies and practices to take
account of changes in legal obligations.
− Training and induction programmes
ensure our staff receive appropriate
training and briefing on the relevant
policies.
Change
We monitor regulatory and legislative
changes to ensure our policies and
practices reflect them and we comply with
relevant legislation.
Our whistle-blowing arrangements are
well established, and the company
secretary reports matters arising to the
Audit Committee and the Board during the
course of the year. Further details as to the
Group’s whistle-blowing arrangements are
provided on page 69.
During the year 4,929 people in the US, 513
people in Canada and 944 people in the UK
underwent induction training. In addition,
training programmes were undertaken in
safety and business ethics.
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
40 Ashtead Group plc Annual Report & Accounts 2024
EMERGING RISKS
In addition to the principal risks
identified above, the Board considers
what emerging risks may also impact
the Group. In identifying emerging
risks, the Board has considered both
third-party risk analysis as well as
internal views of emerging trends which
may impact the business. As a result
of this analysis, the Board specifically
considered supply chain constraints,
incremental climate-related matters
(including future laws and regulations
which may arise) and emerging
technologies (including battery-led
technologies and autonomous machines).
In relation to our supply chain, we work
with industry-leading rental equipment
manufacturers and have achieved
significant competitive advantages,
including cost savings, through our scale
and working relationships. Across the
Group, our top five suppliers now
account for c. 50% of our rental capital
expenditure and, in most cases, we are
larger than our suppliers. There is a
risk that our key suppliers are unable
to supply the equipment required to
meet our replacement and growth
requirements in a timely manner.
The Board believes that the Group has
sufficient alternative sources of supply
and inherent flexibility in its business
model and an $18bn rental fleet, if a
supplier is unable to deliver equipment
as scheduled. However, it acknowledges
that transitioning to a new principal
supplier could cause short-term
disruption to our procurement.
In relation to climate-related matters,
the Board believes these are addressed
principally through our environmental
risk and our commitment to reduce our
carbon intensity, but notes that this is a
developing area and as such continues
to monitor the ways in which climate
change may affect the Group in the
future, particularly in relation to the
emergence of future laws and
regulations which may impact the
Group. On balance, the Board believes
that the impact from climate change
and emerging technologies will
increase the demand for rental and
continue the shift from ownership to
rental, rather than presenting a risk to
our business model.
Assessment of viability
The Group prepares an annual budget
and three-year business plan. This plan
considers the Group’s cash flows and is
used to review its funding arrangements
and available liquidity based on expected
market conditions, capital expenditure
plans, used equipment values and other
factors that might affect liquidity. It also
considers the ability of the Group to raise
finance and deploy capital.
The nature of the Group’s business
is such that its cash flows are
countercyclical. In times of improving
markets, the Group invests in its rental
fleet, both to replace existing fleet and
grow the overall size of the fleet, which
results in improving earnings but lower
cash flow generation from operations in
times of rapid growth. However, as the
cycle matures and the rate of growth
slows, the Group generates strong cash
flow from operations. In more benign
or declining markets, the Group invests
less in its rental fleet and, as a result,
generates significant cash flow
from operations.
Recognising the impact of the economic
cycle and the risk of an economic
downturn on the business and its
financing requirements, we undertake
scenario planning based on the timing,
severity and duration of any downturn
and subsequent recovery. This scenario
planning considers the impact of the cycle
on revenue, margins, capital expenditure,
cash flows, overall debt levels and
leverage. In a scenario where revenue
growth is lower than expected due to
lower activity levels, the Group would
reduce its growth capital expenditure and
therefore expect to generate higher free
cashflow. In a scenario where revenue
declined, the Group would reduce its
capital expenditure further, with no
growth capital expenditure incurred and
lower replacement capital expenditure
requirements arising, while still disposing
of the equipment which was at the end of
its useful life, therefore ensuring the
Group’s fleet size was appropriate to
market activity and continuing to generate
disposal proceeds. In this scenario,
the Group would expect to generate
significant free cashflow. Furthermore,
in a lower-growth environment, or in a
declining market, the Group would reduce
its cost base accordingly. As such, in
either scenario, total levels of debt and
the Group’s leverage ratio would be
expected to decrease over time.
The Group maintains a net debt to EBITDA
leverage target range of 1.0 to 2.0 times
(pre IFRS 16) and long debt maturities
to mitigate financing risk. Our senior
secured credit facility matures during
the viability assessment period and we
believe the Group’s financial profile and
capital structure will enable the Group to
refinance it and continue to access debt
markets as required.
Based on this analysis, and the Board’s
regular monitoring and review of risk
management and internal control
systems, we do not believe there are any
reasonably foreseeable events that could
not be mitigated through the Group’s
ability to flex its capital expenditure plans
and cost base, which would result in the
Group not being able to meet its liabilities
as they fall due. The nature of the
business’ other principal risks is such
that, while they could affect the Group’s
ability to achieve its objectives, they are
unlikely to prevent the Group from
meeting its liabilities as they fall due.
Viability statement
Based on the foregoing, the Board has a
reasonable expectation that the Group
will be able to continue in operation and
meet its liabilities as they fall due over the
period to 30 April 2027.
Assessment of prospects
and viability
The prospects of the Group are inherently
linked to the environment in which we
operate. While our principal market is
construction, which is cyclical in nature,
itrepresents less than 50% of our
business. The balance is non-
construction related activity, including,
inter alia, industrial, events, maintenance
and repair, emergency response and
facilities management which, by their
nature, are typically less cyclical.
Our markets in the US and Canada are
undergoing structural change. Customers
are increasingly choosing to rent
equipment rather than own it and the
fragmented markets are consolidating.
The Group is well positioned to take
advantage of these structural changes.
The UK market is more mature and
competitive than the US and Canada but
Sunbelt UK is the largest rental company
in that market and, with the Group’s
strong financial position, is well
positioned to optimise market conditions.
Period of assessment
The Board discusses regularly the factors
affecting the Group’s prospects and the
risks it faces in optimising the opportunity
presented in its markets. The principal
risks, which the Board concluded could
affect the business are set out on the
preceding pages. The Group’s risks are
ongoing in nature and therefore could
crystallise at any time, rather than being
linked to a specific timeframe. While the
Board has no reason to believe the Group
will not be viable over a longer period, the
period over which the Board considers it
possible to form a reasonable expectation
as to the Group’s longer-term viability, is
the three-year period to 30 April 2027.
This also aligns with the duration of the
business plan prepared annually and
reviewed by the Board. We believe this
provides a reasonable degree of
confidence over this longer-term outlook.
41Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
PERFORMANCE
Operate with greater
efficiency through scale,
process and technology
to unlock margin
progression.
ACTIONABLE
COMPONENT
3
Ashtead Group plc Annual Report & Accounts 202442
Leveraging SG&A with increased
scale
Increasing maturity of Project 2021
and Sunbelt 3.0 greenfields and
bolt-ons
Operational excellence and adoption
of our next-generation technology
platform
KEY OBJECTIVES:
Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
43
POWERHOUSE –
LAUNCH OF
SUNBELT 4.0
STAKEHOLDERS
MOST IMPACTED:
− Employees
− Customers
− Suppliers
− Investors
Engaging actively with our stakeholders
is critical to the success of the Group
and the Group engages regularly with
stakeholders on a variety of topics
relevant to the business.
A high degree of delegation of the
engagement with stakeholders to the
management teams within the Group
exists in order to ensure the smooth
operation of the Group on a day-to-day
basis. As noted within our Corporate
governance report, the role of the Board
is to provide a framework under which
the Group operates but under which the
Group’s businesses have freedom and
decision-making authority to pursue
business opportunities, underpinned by
the culture of the Group. The directors
believe that this is an important factor
in the operation of the Group and the
Group’s overall success.
Authority for the operational management
of the Group’s businesses is therefore
delegated to the chief executive, or
further delegated by him to the senior
management teams within the Group.
This ensures effective day-to-day
operation of the Group while maintaining
effective governance.
At a board level, Board members are
encouraged to engage with our
stakeholders directly, for example
through meeting with individual
employees during site visits or through
investor meetings, such as those to obtain
remuneration policy feedback or through
attendance at the Group’s annual general
meeting. In addition, the Board receives
feedback from management as to
stakeholder views. This occurs in a
number of ways including through board
reports, investor feedback reports from
our brokers and employee survey reports.
An example of board level engagement
has been illustrated in the case study on
the right-hand side of this page, focusing
on the Board’s engagement with our
people and other stakeholders at the
recent Powerhouse event.
In relation to the Group’s overall
engagement with stakeholders, the
Grouphas identified the following groups
as being fundamental to the success of
the Group:
Definition
− Existing and prospective employees,
including apprentices.
Why relevant?
Our employees want to work for a
company which values them, provides
ongoing development, treats them fairly
and remunerates them appropriately.
Investing in our people ensures we
maintain our culture by having the right
people and enables us to deliver on our
strategic goals.
Nature of engagement
− Employee engagement apps
− Regular ‘toolbox talks’ and ‘town hall’
meetings
− Employee surveys
− National conferences, leadership team
meetings and other employee events
− Regular communication on safety,
with dedicated safety weeks
− Training programmes
− Apprentice programmes
− Employee relief programme
− Employee resource groups
Further details are provided on pages 64
to 67.
Our response to engagement
− Employee reward and benefit structure
which recognises the contribution our
employees make to the success of
the business
− Employee policies which ensure our
people are treated fairly
− Ensuring safety remains a cornerstone
of our culture
− Continued focus on diversity, equity and
inclusion across the Group, with DEI
taskforces in place in North America
and the UK and employee resource
groups to support our endeavours
Relevant KPIs
− Employee survey scores
− Safety metrics
− Employee retention metrics
Definition
− National and other managed accounts
− Small and mid-sized enterprises
− Individuals
Why relevant?
− Our customers want to have confidence
in the ‘Availability, Reliability and Ease’
of our offering as a reliable alternative
to ownership.
Nature of engagement
− Account managers for major customers
− Customer feedback mechanism
− Store level staff with local customer
relationships
− Customer centric technology to
facilitate customer engagement
− Customer-focused websites
Our response to engagement
− Continued investment in fleet, including
greener rental options where we are
working with customers and suppliers
to develop new technologies
− Investment in new market offerings
to broaden our rental offering
− Continued investment in customer
focused technology solutions, including
launch of new customer eCommerce
websites andapps
− Relevant KPIs
− Customer satisfaction scores
− Level of repeat business
− Customer spend
− Debtor days/days to credit
OUR
PEOPLE
OUR
CUSTOMERS
Board level engagement
STAKEHOLDER ENGAGEMENT
44 Ashtead Group plc Annual Report & Accounts 2024
Definition
− Major equipment suppliers
− Other equipment suppliers
− Service providers
Why relevant?
Partnering with our suppliers in a
collaborative manner ensures that we
have access to equipment when we need
it and enables us to deliver new innovation
to the market.
Nature of engagement
− Dedicated account managers for
major suppliers
− Central procurement teams manage
supplier relationships
− Collaboration to develop and pilot
new technologies, including making
targeted investments where
appropriate to support the development
of greener technology
Our response to engagement
− Regular meetings with key suppliers
to assist in management of
production cycles
− Policies in place in relation to working
with our suppliers fairly
− Clear procurement terms agreed
Relevant KPIs
− Payment practices statistics
Definition
− Local communities to our operations
− Families of employees
Why relevant?
We want to make a positive contribution
to the communities in which we operate.
Establishing the right relationships with
our communities also helps us to attract
the best talent into our business.
Supporting the families of our staff
is just the right thing to do.
Nature of engagement
− Nationwide programmes in addition
to local community initiatives entered
into by individual depots
− Responding to community needs for
emergency relief
− Charity partnerships which support
our communities
Further details are provided on page 68.
Our response to engagement
− Community building activities
− Disaster response when required
− Financial support at time of crisis
− Provision of rental equipment
Relevant KPIs
− Charitable donations
− Employee time contributed to
community initiatives
Definition
− Shareholders (institutional)
− Shareholders (private)
− Financial lending institutions
Why relevant?
Our investors want to understand how we
are managing the business to generate
sustainable returns through the cycle
and to promote the long-term success
of the Group.
Nature of engagement
− Investor conferences
− One-to-one meetings
− Site visits
− Capital markets events
− Annual Report and other communications
− Results presentations and bond
holder calls
− Reporting to financial lending
institutions
− Annual General Meeting
− Ashtead Group website including
investor relations section
Further details are provided on pages 87
and 88.
Our response to engagement
− Communication of business model
and strategic plan
− Application of stated capital
allocation priorities
− Maintain compliance with stated
financial objectives (e.g. leverage
range, etc.)
− Manage business through the cycle
Relevant KPIs
− Returns to shareholders
OUR
SUPPLIERS
OUR
COMMUNITIES
OUR
INVESTORS
Consideration:
After detailed consideration by the Board
throughout 2023/24, the Group’s new strategy,
Sunbelt 4.0, was launched in Atlanta, Georgia
in April 2024 through a combined internal and
Capital Markets event which brought together
c. 5,000 of our Sunbelt team from the US,
Canada and the UK, c. 300 of our customers
and suppliers and c. 160 investors and analysts.
In assessing the proposed strategy during the
course of 2023/24, the Board undertook a
strategy planning session at the Group’s US
support office in Fort Mill, South Carolina,
in October 2023. Here, the Board met with
c. 100 of our senior leaders to receive a
detailed update on the performance of
the business and details of the strategic
planning being undertaken.
Sunbelt 4.0 elevates the Group’s strategy to
thenext level, providing opportunities for
continued profitable growth and furthering
ourreturn on investment, but also prioritising
the customer experience and ensuring the
long-term sustainable value generation
for ourpeople, customers, communities
and investors.
The Group’s Board attended the event in
Atlanta, which comprised general sessions,
the Group’s AnyTown exhibit experience
detailed earlier in this report, an investor
reception and an opportunity to engage directly
with customers, suppliers and, importantly,
our team members. In particular, the AnyTown
exhibit showcased our breadth of capabilities
and end markets, and enabled Board
members to engage with subject matter
experts across our business who are those
which operate in the field on a daily basis
directly with our customers and suppliers.
Board level engagement
45Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
Statement by the Directors
inperformance of their
statutory duty in accordance
with s172(1) of the Companies
Act 2006.
The Board of directors of Ashtead Group
plc considers that it has, both
individually and collectively, acted in
good faith in a way which would most
likely promote the success of the
Company for the benefit of the members
as a whole, and in doing so have had
regard (amongst other matters) to
factors (a) to (f) as set out in s172(1)
ofthe Companies Act 2006 for the
decisions taken during the year ended
30 April 2024. In making this statement,
the directors have considered the
following matters:
− the likely consequences of any
decision in the long-term: the Board
monitored progress against the
Group’s strategy, Sunbelt 3.0, and
reviewed the Group’s next strategic
growth plan, Sunbelt 4.0, as disclosed
on pages 26 to 31, during the year and
concluded that the strategy in place
will support the long-term success
of the Company. Shorter-term
expectations in supporting that
strategy are approved by the Board as
part of the annual budgeting process,
against which the performance of the
Group is then monitored. Decisions
taken during the year are made in
the context of the Group’s strategy
in order to ensure that they are
consistent with that strategy, take
account of the Group’s principal risks
as described on pages 36 to 41 and
are in line with the Group’s capital
allocation policy, which is designed to
support long-term value generation
for all stakeholders as detailed
on page 31 and is reflected in the
Board’s assessment of viability as
described on page 41;
− the interests of the Company’s
employees: our people are critical
to the success of our business and
a core component of our business
model. We endeavour to recruit
the best people, train them well and
look after them so that they provide
the best possible service for our
customers and remain with us for the
long-term. The Board has ultimate
responsibility for ensuring the
Group’s decisions consider the
interests of our employees. Further
details and examples of our activities
with employees are provided on
page44 of the Strategic report and
pages 64 to 67 of the Responsible
business report;
− the need to foster the Company’s
business relationships with
suppliers, customers and others:
managing the Company’s
relationships with suppliers and
customers is critical in ensuring the
Company delivers on its strategy.
We dedicate account teams to our
national customers to ensure that we
maintain an ongoing dialogue while
local customers are managed at a
store level to enable us to respond
at all levels of the organisation
appropriately. The Board receives
regular updates on our relationships
with suppliers and customers,
and has ultimate responsibility for
approving investments made. Further
details and examples of our activities
with suppliers and customers are
provided on pages 44 and 45 of the
Strategic report;
− the impact of the Company’s
operations on the community and
the environment: the Group seeks
to have a positive impact on the
communities in which it operates and
minimise the environmental impact
of our operations. Examples of our
community initiatives and the
environmental steps we take are
provided in further detail on page 68
of the Responsible business report
and pages 70 to 77 of the Task Force
on Climate-related Financial
Disclosures;
− the desirability of the Company
maintaining a reputation for high
standards of business conduct: the
Group regularly reviews and updates,
where appropriate, its business
conduct and ethics policies and
ensures that these are communicated
to employees, are readily available to
employees, customers and suppliers
and that appropriate training is
undertaken by relevant employees
on a regular basis to reinforce the
Group’s policies. The Group business
ethics and conduct policy is formally
reviewed and approved by the Board
on an annual basis and available on
the Group’s website, while employee
specific policies are provided in
employee handbooks available to
team members. Further details
are provided on page 69 of the
Responsible business report and on
page 86 of the corporate governance
report; and
− the need to act fairly as between
members of the Company: the
Company always seeks to ensure that
its communications are transparent
and its actions are in accordance with
the Group’s stated strategic aims to
promote the long-term success of
the Company. On pages 87 and 88
within the Corporate governance
report we detail how we engage
with our shareholders, including
both institutional investors and
private investors.
SECTION 172 STATEMENT
46 Ashtead Group plc Annual Report & Accounts 2024
Revenue EBITDA Profit
1
2024 2023 2024 2023 2024 2023
Canada in C$m 896.8 827.1 362.9 337.0 137.8 167.4
UK in £m 706.0 684.8 199.0 192.2 57.9 65.0
US 9,306.7 8,222.4 4,405.5 3,955.3 2,632.9 2,464.7
Canada in $m 664.4 622.1 268.9 253.5 102.1 125.9
UK in $m 887.6 822.8 250.1 231.0 72.8 78.1
Group central costs – – (31.9) (28.0) (32.9) (29.0)
10,858.7 9,667.3 4,892.6 4,411.8 2,774.9 2,639.7
Net financing costs (544.5) (366.2)
Adjusted profit before tax 2,230.4 2,273.5
Amortisation (120.9) (117.7)
Profit before taxation 2,109.5 2,155.8
Taxation charge (511.1) (538.1)
Profit attributable to equity holders of the Company 1,598.4 1,617.7
Margins
US 47.3% 48.1% 28.3% 30.0%
Canada 40.5% 40.7% 15.4% 20.2%
UK 28.2% 28.1% 8.2% 9.5%
Group 45.1% 45.6% 25.6% 27.3%
1 Segment result presented is adjusted operating profit.
Throughout the Financial review, we use a number of alternative financial performance measures (‘APMs’) which the directors have adopted in order to provide additional
useful information on the underlying trends, performance and position of the Group. Further details are provided in the Glossary of terms on page 181.
Our financial performance
Group revenue increased 12% to
$10,859m (2023: $9,667m) during the year.
This revenue growth resulted in EBITDA
increasing 11% to $4,893m (2023:
$4,412m), adjusted operating profit
increasing 5% to $2,775m (2023:
$2,640m) and adjusted profit before tax
was $2,230m (2023: $2,273m). The higher
increase in the depreciation charge
relative to revenue growth reflects lower
utilisation of a larger fleet, resulting in
thelower rate of operating profit growth
while increased financing costs due to
increased average debt levels and the
higher interest rate environment resulted
in adjusted profit before tax slightly lower
than last year.
In the US, rental only revenue of $6,558m
(2023: $5,879m) was 12% higher than the
prior year, representing continued market
outperformance and demonstrating the
benefits of our strategy of growing our
Specialty businesses and broadening our
end markets. Organic growth (same-store
and greenfields) was 8%, while bolt-ons
since 1 May 2022 contributed 4% of rental
only revenue growth. In the year, our
General Tool business grew 11%, while
our Specialty businesses grew 14%.
The fourth quarter saw growth in our
Specialty businesses return to levels
similar to those seen in the first half.
Rental only revenue growth has been
driven by both volume and rate
improvement. Rental revenue increased
11% to $8,321m (2023: $7,503m). US total
revenue, including new and used
equipment, merchandise and consumable
sales, increased 13% to $9,307m (2023:
$8,222m). This reflects a higher level of
used equipment sales, as we took
advantage of improved fleet deliveries
and strong second-hand markets to
catch up on delayed disposals and bring
forward some disposals scheduled for
early 2024/25.
Canada’s rental only revenue increased
10% to C$605m (2023: C$548m). Markets
relating to the major part of the Canadian
business are growing in a similar manner
to the US with strong volume growth and
rate improvement. However, the Writers
Guild of America and Screen Actors Guild
strikes, which were settled in December,
had a significant impact on the
performance of the Specialty Film & TV
business and some impact on the rest of
the Canadian business, which rents into
that space. Parts of the US and UK
businesses have been affected similarly.
Following the settlement, activity levels
recovered progressively in the fourth
quarter. Rental revenue increased 10%
to C$765m (2023: C$696m), while total
revenue was C$897m (2023: C$827m).
The UK business generated rental only
revenue of £466m, up 9% on the prior year
(2023: £429m). Bolt-ons since 1 May 2022
contributed 2% of this growth. Rental only
revenue growth has been driven by both
rate and volume improvement. Rental
revenue increased 6% to £590m (2023:
£559m), while total revenue increased 3%
to £706m (2023: £685m). This lower rate
of total revenue growth reflects a higher
level of ancillary and sales revenue
associated with the work for the
Department of Health last year,
which didnot repeat this year.
We have invested in the infrastructure
of the business during Sunbelt 3.0, to
support the growth of the business
now and into the future. This has been
combined with inflationary pressures
across most cost lines, particularly in
relation to labour. During the second half
of the year, in recognition of the lower US
revenue growth, we increased our focus
on the cost base. US rental revenue drop
through to EBITDA of 40% in the fourth
quarter was after an additional
receivables provision following a
customer filing for Chapter 11 bankruptcy
protection post year-end, due to a
contract dispute. This resulted in drop
through of 49% for the year. Excluding this
provision, drop through was 57% for the
quarter and 52% for the full year. As a
result, the EBITDA margin was 47.3%
(2023: 48.1%) and segment profit
increased 7% to $2,633m (2023: $2,465m)
at a margin of 28.3% (2023: 30.0%).
FINANCIAL REVIEW
47Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
Our Canadian business continues to
develop and enhance its performance
as it invests to expand its network and
broaden its markets. Despite the drag
from the strike-affected Film & TV
business, Canada generated an EBITDA
margin of 40.5% (2023: 40.7%) and a
segment profit of C$138m (2023: C$167m)
at a margin of 15.4% (2023: 20.2%).
In the UK, the focus remains on delivering
operational efficiency and long-term,
sustainable returns in the business.
While we continue to improve rental rates,
this remains an area of focus. The UK
generated an EBITDA margin of 28.2%
(2023: 28.1%) and a segment profit of
£58m (2023: £65m) at a margin of 8.2%
(2023: 9.5%).
Overall, Group adjusted operating profit
increased to $2,775m (2023: $2,640m),
up 5% at constant exchange rates. After
increased financing costs of $545m
(2023: $366m), reflecting higher average
debt levels and the higher interest rate
environment, Group adjusted profit before
tax was $2,230m (2023: $2,273m).
Statutory profit before tax was $2,110m
(2023: $2,156m). This is after amortisation
of $121m (2023: $118m).
Taxation
Tax charge for the year
The adjusted tax charge for the year was
$541m (2023: $568m), representing an
effective rate of 24% (2023: 25%) of
adjusted pre-tax profit of $2,230m (2023:
$2,273m). The cash tax charge was 14%.
Included within the total tax charge is a
tax credit of $30m (2023: $30m) which
relates to the amortisation of intangibles.
Tax strategy and governance
The Group believes it has a corporate
responsibility to act with integrity in all tax
matters. It is the Group’s policy to comply
with all relevant tax laws, regulations and
obligations including claiming available
tax incentives and reliefs in the countries
in which it operates. The Group’s appetite
for tax risk is considered to be cautious
and this policy has remained unchanged
for a number of years. This approach to
taxation is reviewed and approved by the
Board on a periodic basis.
While the Board retains ultimate
responsibility for the tax affairs of the
Group, we have a dedicated internal
tax function which takes day-to-day
responsibility for the Group’s tax affairs.
In addition, we seek regular professional
advice to ensure that we remain in
compliance with changes in tax
legislation, disclosure requirements
and best practice.
Tax risks are monitored on an ongoing
basis and tax matters are reported to the
Audit Committee as part of our routine
reporting on a quarterly basis.
The Group is committed to having a
transparent and constructive working
relationship with all tax authorities,
including seeking to obtain agreement
from tax authorities prior to undertaking
material transactions where there is a
degree of uncertainty surrounding the
appropriate tax treatment.
Legislative changes
We continue to monitor developments
in the OECD’s work on Base Erosion
and Profit Shifting (‘BEPS’) to ensure
continued compliance in an ever-changing
environment. In December 2021, the
OECD published a framework for the
Pillar Two model rules which introduced
a global minimum corporation tax rate of
15% for groups with global revenues of
over €750m. We do not expect that the
15% global minimum tax rate will affect
materially the amount of tax the Group pays,
as corporation tax rates in the jurisdictions
in which the Group operates exceed 15%.
We continue to follow the guidance issued
and other developments closely.
Following its state aid investigation,
in April 2019 the European Commission
announced its decision that the Group
Financing Exemption in the UK controlled
foreign company (‘CFC’) legislation
constitutes state aid in some
circumstances. In common with the
UK Government and other UK-based
international companies, the Group does
not agree with the decision and has
therefore lodged a formal appeal with
the General Court of the European Union.
In common with other UK taxpayers,
the Group’s appeal has been stayed
while the appeals put forward by the
UK Government and ITV plc proceed.
On 8 June 2022 the General Court of the
European Union dismissed the appeals
put forward by the UK Government and
ITV plc. However, there remains a high
degree of uncertainty in the final outcome
given the UK Government and ITV plc have
both appealed against the decision to the
EU Court of Justice. The EU Court of
Justice held a hearing on the case in
January 2024 and the Advocate-General’s
opinion was published in April 2024,
proposing that the EU Court of Justice set
aside the judgement of the General Court
and annul the decision made by the
European Commission that the Group
Financing Exemption in the UK CFC
legislation constituted state aid.
The Group will continue to monitor
proceedings closely.
Despite the UK Government appealing the
European Commission’s decision, His
Majesty’s Revenue & Customs (‘HMRC’)
was required to make an assessment of
the tax liability which would arise if the
decision is not successfully appealed
and collect that amount from taxpayers.
HMRC issued a charging notice stating
that the tax liability it believes to be due
on this basis is £36m, including interest
payable. The Group has appealed the
charging notice and has settled the
amount assessed on it, including interest,
in line with HMRC requirements. On
successful appeal in whole or in part, all
or part of the amount paid in accordance
with the charging notice would be
returned to the Group. If either the
decision reached by the General Court of
the European Union or the charging notice
issued by HMRC are not ultimately
appealed successfully, we have estimated
the Group’s maximum potential liability
to be £36m as at 30 April 2024 ($45m at
April 2024 exchange rates), including any
interest payable. Based on the current
status of proceedings, we have concluded
that no provision is required in relation to
this matter.
The £36m ($45m at April 2024 exchange
rates) paid has been recognised
separately as a non-current asset on the
balance sheet.
FINANCIAL REVIEW CONTINUED
48 Ashtead Group plc Annual Report & Accounts 2024
Total tax contribution
For the year ended 30 April 2024, total
taxes paid by the Group were $1,616m,
comprising taxes borne by the Group of
$551m and taxes collected on behalf of
tax authorities of $1,065m.
Taxes borne by the Group by type
of tax
As a profitable group, a significant portion
of the taxes borne by the Group relate
to taxes paid on profits. The $246m net
tax paid on profits (as shown in the
consolidated cash flow statement for the
year ended 30 April 2024) is lower than
the $291m current tax charge for the year
(as shown in Note 7 to the consolidated
financial statements). This is partly
because payments made during the year
are generally based on estimates of the
full-year tax liability in each jurisdiction,
which can differ to the tax charge for
the year calculated once the Group’s
results are known, but also as a result
of credits receivable under the Inflation
Reduction Act in relation to investment
in green technology.
Taxes borne by the Group by type
of tax
1
4
3
2
Type of tax
1 Profit $246m 45%
2 People $177m 32%
3 Product $119m 22%
4 Property $9m 1%
$551m 100%
Given the Group’s large number of
employees, significant employer social
security contribution payments are made
during the year. Product taxes include
taxes incurred on the purchase and
ongoing ownership of the Group’s rental
fleet and other operational expenditure.
The Group also paid property taxes and
business rates in relation to the extensive
network of stores from which it operates.
Taxes collected of $1,065m comprise
$562m of net sales taxes on the products
and services we provide to customers and
$503m in relation to taxes and social
security contributions withheld on behalf
of our employees.
Taxes by jurisdiction
The Group’s operations are based in the
locations and jurisdictions necessary to
best serve our customers and the Group
pays tax in accordance with relevant
tax laws and regulations in those
jurisdictions. As with the split of the
Group’s revenue, the majority of taxes
borne and collected have been paid in
the US.
Taxes collected on behalf of tax
authorities by jurisdiction
1
2
3
1 US 83%
2 Canada 8%
3 UK 9%
Taxes borne by the Group
by jurisdiction
1
2
3
1 US 86%
2 Canada 5%
3 UK 9%
Earnings per share
Adjusted earnings per share were 386.5¢
(2023: 388.5¢) while basic earnings per
share were 365.8¢ (2023: 368.4¢). Details
of these calculations are included in
Note 8 to the financial statements.
Return on investment
The Group return on investment was
16%(2023: 19%). In the US, return on
investment (excluding goodwill and
intangible assets) was 23% (2023: 27%),
while in Canada it was 11% (2023: 18%).
The reduction in US return on investment
reflects principally the impact of lower
utilisation of a larger fleet. Canada’s lower
return on investment reflects the drag
from the recent performance of our Film
& TV business combined with lower
utilisation of a larger fleet. In the UK,
return on investment (excluding goodwill
and intangible assets) was 7% (2023: 9%).
The decrease reflects the lower utilisation
of a slightly larger fleet and increased
non-rental depreciation. Return on
investment excludes the impact of IFRS 16.
01 Taxes borne by the Group by jurisdiction
$m Revenue Tax collected Tax borne
US 86% 888 83% 474 86%
Canada 6% 80 8% 26 5%
UK 8% 97 9% 51 9%
100% 1,065 100% 551 100%
49Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
Balance sheet
Property, plant and equipment
Capital expenditure in the year totalled
$4,311m (2023: $3,772m) with $3,624m
invested in the rental fleet (2023:
$3,262m). Expenditure on rental
equipment was 84% of total capital
expenditure with the balance relating
to the delivery vehicle fleet, property
improvements and IT equipment.
Capitalexpenditure by division is shown
inTable 02 below.
In a strong US rental market, $1,235m
of rental equipment capital expenditure
was spent on growth while $1,935m was
invested in replacement of existing fleet.
The growth proportion is estimated based
on the assumption that replacement
capital expenditure in any period is equal
to the original cost of equipment sold.
In a period of inflation, this understates
replacement capital expenditure and
overstates growth capital expenditure.
Life cycle inflation is c. 20%.
The average age of the Group’s serialised
rental equipment, which constitutes
the substantial majority of our fleet, at
30 April 2024 was 45 months (2023: 50
months) on an original cost basis. The US
fleet had an average age of 44 months
(2023: 49 months), the Canadian fleet had
an average age of 52 months (2023: 55
months) and the UK fleet had an average
age of 50 months (2023: 52 months).
Dollar utilisation was 58% in the US (2023:
61%), 47% for Canada (2023: 55%) and
53% for the UK (2023: 53%). The decrease
in US dollar utilisation is due to principally
lower physical utilisation while Canadian
dollar utilisation reflects both lower
physical utilisation and the drag of the
Film & TV business.
Trade receivables
Receivable days at 30 April 2024 were
50 days (2023: 48 days). The bad debt
charge for the last 12 months ended
30 April 2024 as a percentage of total
turnover was 0.8% (2023: 0.5%). Trade
receivables at 30 April 2024 of $1,528m
(2023: $1,385m) are stated net of
allowances for bad debts and credit
notes of $141m (2023: $107m), with the
provision representing 8% (2023: 7%)
of gross receivables.
Trade and other payables
Group payable days were 60 days at
30 April 2024 (2023: 43 days) with capital
expenditure related payables totalling
$512m (2023: $606m). Payment periods
for purchases other than rental
equipment vary between seven and
60 days and for rental equipment
between 30 and 120 days.
Provisions
Provisions of $118m (2023: $108m)
relate predominantly to the provision for
uninsured risk. The Group’s business
exposes it to the risk of claims for
personal injury, death or property damage
resulting from the use of the equipment it
rents and from injuries caused in motor
vehicle accidents in which its vehicles are
involved. The Group carries insurance
covering a wide range of potential claims
at levels it believes are sufficient to cover
existing and future claims.
Our US liability insurance programmes
provide that we can recover our liability
related to each and every valid claim in
excess of an agreed excess amount of
$2m in relation to workers’ compensation,
$5m in relation to general liability and
$3m in relation to motor vehicle claims.
In the UK our self-insured excess per
claim is much lower than in the US and is
typically £50,000 per claim. Our liability
insurance coverage is limited to a
maximum of £175m.
Pensions
The Group operates a number of pension
plans for the benefit of employees, for
which the overall charge included in the
financial statements was $48m (2023:
$40m). Amongst these, the Group has one
defined benefit pension plan which was
closed to new members in 2001, closed to
future benefit accrual in October 2020 and
in respect of which the Group completed
a buy-in with the purchase of a bulk
annuity policy in March 2024. All our
ongoing pension plans are defined
contribution plans.
The Group’s defined benefit pension plan,
measured in accordance with the
accounting standard IAS 19, Employee
Benefits, was $0.4m in deficit at 30 April
2024 (2023: surplus of $18m). The
investment return on plan assets was
FINANCIAL REVIEW CONTINUED
03 Fleet and utilisation
Rental fleet at original cost
LTM rental
revenue
LTM dollar
utilisation30 April 2024 30 April 2023 LTM average
Canada in C$m 1,751 1,438 1,631 765 47%
UK in £m 1,130 1,081 1,122 590 53%
US 15,057 13,407 14,453 8,321 58%
Canada in $m 1,274 1,061 1,209 567 47%
UK in $m 1,414 1,358 1,411 742 53%
17,745 15,826 17,073 9,630
02 Capital expenditure
2024 2023
Replacement Growth Total Total
Canada in C$m 160.5 157.1 317.6 254.2
UK in £m 129.8 44.1 173.9 161.0
US 1,935.2 1,234.9 3,170.1 2,877.5
Canada in $m 118.9 116.4 235.3 191.2
UK in $m 163.2 55.4 218.6 193.4
Total rental equipment 2,217.3 1,406.7 3,624.0 3,262.1
Delivery vehicles, property improvements & IT equipment 686.7 510.0
Total additions 4,310.7 3,772.1
50 Ashtead Group plc Annual Report & Accounts 2024
$25m lower than the expected return
while a net actuarial gain of $2m arose,
predominantly due to the increase in the
discount rate assumption. Overall, there
was a net remeasurement loss on the
defined benefit pension plan of $23m
which was recognised in the statement
of comprehensive income for the year.
The most recent triennial actuarial
valuation was carried out as at 30 April
2022 by a qualified independent actuary
and showed a funding surplus of £11m
($14m at April 2024 exchange rate).
Contingent liabilities
The Group is subject to periodic legal
claims in the ordinary course of its
business, none of which is expected to
have a material impact on the Group’s
financial position. As discussed earlier,
if the findings of the European
Commission’s investigations into the
Group Financing Exemption in the UK
controlled foreign company legislation are
upheld, we have estimated the Group’s
potential liability to be £36m ($45m at
April 2024 exchange rate). Based on
the current status of the investigation,
we have concluded that no provision is
required in relation to this amount.
Cash flow
Cash inflow from operations before the
net investment in the rental fleet was
$4,541m (2023: $4,074m). The conversion
ratio for the period was 93% (2023: 92%).
Total payments for capital expenditure
(rental equipment and other PPE) during
the year were $4,445m (2023: $3,530m).
Disposal proceeds received totalled
$879m (2023: $615m), giving net
payments for capital expenditure of
$3,566m in the period (2023: $2,915m).
Financing costs paid totalled $513m
(2023: $340m) while tax payments were
$246m (2023: $287m). Financing costs
paid typically differ from the charge in
the income statement due to the timing
of interest payments in the year and
non-cash interest charges.
Accordingly, the Group generated free
cash flow of $216m (2023: $531m) and,
after acquisition and investment related
expenditure, net of disposal proceeds,
of $889m (2023: $1,126m), a cash outflow
of $672m (2023: $594m), before returns
to shareholders. Acquisition expenditure
related to 26 bolt-on acquisitions
completed during the year as we
continue to both expand our footprint
and diversify our end markets. Further
details are provided in Note 27 to the
financial statements.
Capital structure and allocation
The Group’s capital structure is kept
under regular review. Our operations are
financed by a combination of debt and
equity. We seek to minimise the cost of
capital while recognising the constraints
of the debt and equity markets. At 30 April
2024 our average cost of capital was
approximately 10%.
The Group remains disciplined in its
approach to allocation of capital with the
overriding objective being to enhance
shareholder value.
Our capital allocation framework remains
unchanged and prioritises:
− organic fleet growth;
- same-stores;
- greenfields;
− bolt-on acquisitions; and
− a progressive dividend with
consideration to both profitability and
cash generation that is sustainable
through the cycle.
Additionally, we consider further returns
to shareholders. In this regard, we assess
continuously our medium-term plans which
take account of investment in the business,
growth prospects, cash generation, net
debt and leverage. Therefore, the amount
allocated to buybacks is simply driven by
that which is available after organic growth,
bolt-on M&A and dividends, whilst allowing
us to operate within our revised 1.0 to 2.0
times target range for net debt to EBITDA
pre IFRS 16.
We spent $78m (£62m) under the buyback
programme which concluded in April 2024.
04 Cash flow
Year to 30 April
2024
$m
2023
$m
EBITDA 4,892.6 4,411.8
Cash inflow from operations before changes in rental equipment 4,541.0 4,073.6
Cash conversion ratio* 92.8% 92.3%
Replacement rental capital expenditure (2,121.0) (1,380.8)
Payments for non-rental capital expenditure (685.6) (510.0)
Rental equipment disposal proceeds 831.7 573.6
Other property, plant and equipment disposal proceeds 47.5 41.4
Tax paid (245.8) (287.3)
Financing costs (513.1) (340.2)
Cash inflow before growth capex 1,854.7 2,170.3
Growth rental capital expenditure (1,638.2) (1,638.8)
Free cash flow 216.5 531.5
Business acquisitions (875.6) (1,083.2)
Business disposals 1.9 –
Financial asset investments (15.0) (42.4)
Total cash absorbed (672.2) (594.1)
Dividends (436.1) (357.8)
Purchase of own shares by the ESOT (29.9) (12.5)
Purchase of own shares by the Company (78.4) (264.4)
Increase in net debt due to cash flow (1,216.6) (1,228.8)
* Cash inflow from operations before changes in rental equipment as a percentage of EBITDA.
51Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
Dividends
The Company has a progressive dividend
policy, which considers both profitability
and cash generation, and results in a
dividend that is sustainable across the
cycle. Our intention has always been to
increase the dividend as profits increase
and be able to maintain it when profits
decline. In accordance with this policy, the
Board is recommending a final dividend
of 89.25¢ per share (2023: 85.0¢) making
105.0¢ for the year (2023: 100.0¢), an
increase of 5%. If approved at the
forthcoming Annual General Meeting,
the final dividend will be paid on
10 September 2024 to shareholders
on the register on 9 August 2024.
In determining the level of dividend in
any year, the Board considers a number
of factors that influence the proposed
dividend as detailed above. Ashtead Group
non-trading investment holding company
which derives its distributable reserves
from dividends paid by subsidiary
companies which are planned on a
regular basis to maintain a suitable
level of distributable reserves at the
parent company.
The Group intends to rebalance the split
between its interim and final dividend to
align with normal market practices, and
pay a greater proportion of the Group’s
dividend as part of the interim dividend,
commencing with the interim dividend
for 2024/25.
Net debt
Chart 05 shows how net debt (excluding
IFRS 16) and leverage (excluding IFRS 16),
measured at constant April 2024
exchange rates, has changed over the
cycle. Since 2010, we have stepped up our
capital expenditure as rental markets
improved. Net debt has increased in
absolute terms over the period due to
acquisitions, dividends and share
buybacks with free cash flow being more
than sufficient to fund the increased
capital expenditure. Since 2013 we have
been operating within our net debt to
EBITDA target leverage range of 1.5 to 2.0
times (excluding IFRS 16). As part of the
launch of Sunbelt 4.0, we have revised this
target leverage range to 1.0 to 2.0 times
(excluding IFRS 16). Furthermore, our
overall balance sheet strength continues
to improve with the second-hand value of
our fleet exceeding our total debt by $5.3bn.
In greater detail, closing net debt
(including IFRS 16) at 30 April 2024 is set
out in Table 06 on page 53.
Net debt at 30 April 2024 was $10,655m
with the increase since 30 April 2023
reflecting the cash outflow set out above
and additional lease commitments as we
continue our greenfield and bolt-on
expansion. The Group’s EBITDA for the
year ended 30 April 2024 was $4,893m.
Excluding the impact of IFRS 16, the ratio
of net debt to EBITDA was 1.7 times (2023:
1.6 times) on a constant currency and a
reported basis as at 30 April 2024.
Including the impact of IFRS 16, the ratio
of net debt to EBITDA was 2.2 times
(2023: 2.0 times) as at 30 April 2024.
Our debt package is well structured for
our business across the economic cycle.
We retain substantial headroom on
facilities which are committed for the
long-term, with an average of six years
remaining at 30 April 2024. The weighted
average interest cost of these facilities
(including non-cash amortisation of
deferred debt raising costs) is 5%.
Debt facilities
The Group’s principal debt facilities are
discussed below.
First priority senior secured
credit facility
At 30 April 2024, $4.5bn was committed
by our senior lenders under the asset-
based senior secured revolving credit
facility (‘ABL facility’) until August 2026.
The amount utilised was $1,941m
(including letters of credit totalling $93m).
The ABL facility is secured by a first
priority interest in substantially all of the
Group’s assets. Pricing for the $4.5bn
revolving credit facility is based on
average availability according to a grid,
varying from the applicable interest rate
plus 125bp to 150bp. The applicable
interest rate is based on SOFR for US
dollar loans, CDOR for Canadian dollar
loans and SONIA for sterling loans.
Subsequent to 30 April 2024, the Group
amended its ABL agreement to replace
CDOR with CORRA in line with the
replacement of CDOR in the market.
At 30 April 2024, the borrowing rate was
the applicable interest rate plus 150bp.
The only financial performance covenant
under the asset-based first priority senior
bank facility is a fixed charge ratio
(comprising LTM EBITDA before
exceptional items less LTM net capital
expenditure paid in cash over the sum of
scheduled debt repayments plus cash
interest, cash tax payments and dividends
paid in the last 12 months) which must
be equal to or greater than 1.0 times.
This covenant does not, however, apply
when availability (the difference between
the borrowing base and facility utilisation)
exceeds $450m. At 30 April 2024, the fixed
charge ratio exceeded the covenant
requirement. At 30 April 2024 availability
under the bank facility was $2,771m
($2,573m at 30 April 2023), with an
additional $6,740m of suppressed
availability meaning that the covenant
was not measured at 30 April 2024
and is unlikely to be measured in
forthcoming quarters.
FINANCIAL REVIEW CONTINUED
05 Net debt and leverage
Apr
14
Apr
15
Apr
16
Apr
17
Apr
18
Apr
19
Apr
20
Apr
21
Apr
22
Apr
23
Apr
24
400
1,400
2,400
3,400
4,400
5,400
6,400
7,4 00
8,400
Net debt (excluding IFRS 16) ($m)
Leverage, at constant currency (x)
1.0
1.5
2.0
2.5
3.0
3.5
4.0
52 Ashtead Group plc Annual Report & Accounts 2024
Senior notes
At 30 April 2024 the Group, through its
wholly owned subsidiary Ashtead Capital,
Inc., had nine series of senior notes
outstanding. The $550m 1.500% notes are
due on 12 August 2026, the $600m 4.375%
notes are due on 15 August 2027, the
$600m 4.000% notes are due on 1 May
2028, the $600m 4.250% notes are due
on 1 November 2029, the $750m 2.450%
notes are due on 12 August 2031,
the $750m 5.500% notes are due on
11 August 2032, the $750m 5.550% notes
are due on 30 May 2033, the $750m
5.950% senior notes mature on 15 October
2033 and the $850m 5.800% senior notes
mature on 15 April 2034.
Minimum contracted debt
commitments
Table 07 below summarises the maturity
of the Group’s borrowings at 30April 2024
by year of expiry.
Except for the Group’s $93m of standby
letters of credit issued at 30 April 2024
under the first priority senior debt facility
relating to the Group’s insurance
programmes and $11m of performance
bonds granted by Sunbelt, we have no
material commitments that we could be
obligated to pay in the future which are
not included in the Group’s consolidated
balance sheet.
Current trading and outlook
Our end markets in North America
remain robust with healthy demand,
supported in the US by the increasing
number of mega projects and recent
legislative acts. We are in a position of
strength, with the operational flexibility
and financial capacity to capitalise on the
opportunities arising from these market
conditions and ongoing structural
changes. Through the actionable
components of our new strategic growth
plan, Sunbelt 4.0, we will drive long-term
sustainable growth and returns for all
stakeholders and the Board looks to the
future with confidence.
06 Net debt
2024
$m
2023
$m
First priority senior secured bank debt 1,848.0 2,038.4
1.500% senior notes, due 2026 547.8 546.8
4.375% senior notes, due 2027 596.6 595.6
4.000% senior notes, due 2028 596.0 595.1
4.250% senior notes, due 2029 595.3 594.6
2.450% senior notes, due 2031 744.6 743.9
5.500% senior notes, due 2032 738.8 737.8
5.550% senior notes, due 2033 743.4 742.9
5.950% senior notes, due 2033 744.1 –
5.800% senior notes, due 2034 840.5 –
Total external borrowings 7,995.1 6,595.1
Lease liabilities 2,680.6 2,394.3
Total gross debt 10,675.7 8,989.4
Cash and cash equivalents (20.8) (29.9)
Total net debt 10,654.9 8,959.5
07 Minimum contracted debt commitments
2025
$m
2026
$m
2027
$m
2028
$m
2029
$m
Thereafter
$m
Total
$m
Bank and other debt – – 1,848.0 – – – 1,848.0
1.500% senior notes – – 550.0 – – – 550.0
4.375% senior notes – – – 600.0 – – 600.0
4.000% senior notes – – – – 600.0 – 600.0
4.250% senior notes – – – – – 600.0 600.0
2.450% senior notes – – – – – 750.0 750.0
5.500% senior notes – – – – – 750.0 750.0
5.550% senior notes – – – – – 750.0 750.0
5.950% senior notes – – – – – 750.0 750.0
5.800% senior notes – – – – – 850.0 850.0
– – 2,398.0 600.0 600.0 4,450.0 8,048.0
Deferred costs of raising finance – – (1.6) (3.4) (4.0) (29.9) (38.9)
Discount on issue of debt – – (0.7) – – (13.3) (14.0)
Cash at bank and in hand (20.8) – – – – – (20.8)
Net borrowings (20.8) – 2,395.7 596.6 596.0 4,406.8 7,974.3
53Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
SUSTAINABILITY
Advance our position
as a thriving, growing
enterprise to deliver
long-term sustainable
value for our people,
customers, communities
and investors.
ACTIONABLE
COMPONENT
4
Ashtead Group plc Annual Report & Accounts 202454
Net Zero by 2050
50% reduction in Scope 1 and 2 GHG
intensity by 2034 (compared to a
baseline of 2024)
Ongoing commitment to a highly
engaged workforce
KEY OBJECTIVES:
Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
55
Sustainability is at the heart of everything
we do. At Ashtead, we have always
prioritised our people and their safety,
while providing our customers with a
reliable alternative to ownership,
supporting the communities we serve
across our store network, limiting the
environmental impact of our operations
and ensuring a strong governance
framework. We are committed to
delivering long-term sustainable success
of the Group for the benefit of all our
stakeholders. After the progress
delivered through Sunbelt 3.0, our new
strategic plan, Sunbelt 4.0, increases the
focus on sustainability across the Group.
Sustainability under Sunbelt 4.0 is about
advancing our customer centric approach,
while also strengthening our operational
focus targeted to Sunbelt’s key impacts
and opportunities. The best way to engage
our people on the value of sustainability
is by connecting it to the organisational
principle of customer obsession. During
4.0, we will strengthen our sustainability
focus across four core areas:
− our operations: when it comes to our
direct operational impacts, we will
continue to focus on opportunities to
reduce our direct carbon footprint
(Scope 1 and 2) and our management
of waste and water;
− our customers: rental is inherently
a sustainable business model, but
through providing the linkage between
customers and original equipment
manufacturers (’OEMs’), we can drive
sustainable practices through the value
chain. Specifically, by leveraging our
platform, expert teams and unmatched
partnerships with OEMs, we will help
to accelerate the transition to lower-
carbon solutions;
− our people: health and safety remains
our key priority, but our people strategy
under Sunbelt 4.0 is centred around
attracting, developing and retaining
our team members while enhancing
our inclusive culture. Our employee
resource groups have progressed,
fostering our inclusion and belonging
activities across our operations; and
− our communities: we strive to drive
greater impact by investing more in our
community and finding new ways to
connect with our customers on shared
values. In addition to existing signature
charitable partnerships, we have
announced our new partnership with
the Leukaemia & Lymphoma Society.
This Responsible business report works
alongside the Group’s more detailed
disclosures within the Sustainability
report, to provide information for
stakeholders on our activities on
sustainability. We expect this year’s
Sustainability report to be published
in Autumn 2024.
Material topics
As part of our risk management process,
we assess regularly the most material
matters to the Group, including those
related to sustainability, and assess their
potential impact on our business and the
generation of long-term value.
In 2020, with support from external
consultants, we undertook a
comprehensive materiality assessment
to gain a deeper understanding of our
sustainability impacts, risks, and
opportunities across the short, medium,
and long-term. The materiality
assessment included:
− stakeholder engagement: collaborative
workshops and interviews were
conducted with key internal
stakeholders to gather their
perspectives on sustainability matters;
− benchmarking: industry trends and
peer practices were analysed to identify
relevant sustainability frameworks,
standards, and emerging market
issues; and
− strategic evaluation: review of our
sustainability strategy, targets, future
plans, programmes, and capabilities.
In evidencing our commitment to both the principles of the
United Nations Global Compact (‘UNGC’) and the 17 Sustainable
Development Goals (‘SDGs’), the Group is a signatory to the
UNGC. Our commitment requires us to uphold the UNGCs Ten
Principles on human rights, labour, environment and anti-
corruption, and incorporate those into the core of our strategy,
company culture, and daily operations.
The Group’s activities also help advance the United Nations
SDGs. To date we have identified eight goals to which we
believe we can make the most contribution through our focus
on recruitment and training, diversity, equity and inclusion,
the development of our products and management of
our operations. Further details are provided in our
Sustainability report.
RESPONSIBLE BUSINESS REPORT
SUSTAINABILITY
THROUGH THE
POWER OF RENTAL
OUR COMMITMENT TO THE UNGC AND SDGs
56 Ashtead Group plc Annual Report & Accounts 2024
We have refreshed this assessment,
and prioritised material topics based on
their potential impact on our business
operations and importance to our
stakeholders. It is important to note that
although some topics have been deemed
to have a ‘low’ impact on our business,
we recognise the importance to our
stakeholders and overall duty to doing
the right thing. For example, while our
business model inherently minimises
waste and water use, we acknowledge the
significance to our stakeholders and our
local communities in reducing waste and
water consumption and have a number of
initiatives in place.
We have segmented our material topics
into our four key sustainability areas: our
operations; our customers; our people;
and our communities.
We review these material topics on an
annual basis, taking into account any new
emerging risks, and they are considered
and approved by the Board together with
our annual report. In addition, we will look
to expand this process by undertaking a
double materiality assessment for the
Group. This will help us to articulate
better not only how our business impacts
society and the environment, but also the
financial risks and opportunities that
arise as a result.
How we monitor our work
A robust approach to corporate
governance is the foundation for
delivering our strategy and ensuring
our growth is both responsible and
sustainable. The tone from the top,
risk management and transparency
are all elements that are essential
to our business performance and its
sustainability. We understand that
identifying metrics in measuring our
performance is important and have a
number that we monitor, including health
and safety incident rates, employee
engagement, staff turnover and carbon
intensity. We report on these in this report.
The Group’s Board of directors is
responsible for monitoring the progress
we make against our strategic
sustainability objectives and the targets
we have set. The Board is assisted in this
function by the Group Risk Committee
which is chaired by our chief financial
officer. For further information on the
Group Risk Committee, its members and
priorities in current and forthcoming
years, please see pages 36 to 41.
Key: Linkage to
sustainability
strategy core
areas:
Current material topics
Topics Business impact
Low Medium High
Health and safety
Climate action
Waste and water
Sustainable value chains
Talent attraction and retention
Talent development
Diversity, equity and inclusion
Community engagement
Charitable giving
Veteran engagement
Corporate behaviour
Operations
Our people
Customers
Communities
57Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
assess the Group’s regulatory
compliance with relevant occupational
health and safety OHS legislation and
best-in-class practices;
− continuous identification and
assessment of occupational risks and
adoption of measures to control and
mitigate them;
− establishment of quantitative and
qualitative targets and close monitoring
of TRIR, as well as other leading and
lagging indicators relevant to the
Group’s operations;
− continuous provision of information
andtraining to personnel, business
partners and customers to ensure
competency, equipment quality and
safe working practices; and
− the maintenance and update of suitable
emergency preparedness plans.
We target safety improvement through
health and safety programmes and
encouraging employees to always keep
their own safety, and that of their team
mates, in mind. Our safety training for
employees, managers and leaders
reinforces the importance of a safety-first
mindset and we pay particular attention
tonear misses as a way of continuing to
understand and focus on safety risks.
Allincidents and near misses are
investigated and responded to swiftly.
Health and safety
Our success is built on a culture that
places health and safety at its core. We
are committed to improving continually
our safety performance, both in how we
operate and the equipment and services
we provide for customers. This year we
achieved our safest year yet in terms of
Total Recordable Incident Rate (‘TRIR’).
We believe that being known for excellence
in health and safety provides us with a
significant competitive advantage.
Health and safety is fundamental to our
operations and a primary business goal.
It is a line of responsibility that begins
with management and extends to all
stores across the Group. The Group
acknowledges its responsibility to provide
and maintain a suitable, safe and healthy
working environment, safe systems and
safe methods of work to employees,
contractors and customers.
The Group is committed to the following
basic principles across all of our operations:
− strict adherence to occupational
healthand safety (‘OHS’) legislation:
theGroup’s Health, Safety and
Environmental specialists, and our
operational audit teams, continually
Safety initiatives
We seek to engage our team members
in their safety and well-being every day.
We encourage staff to take responsibility
for their own safety and have core safety
processes across all our stores.
Theseinclude:
− our team members are trained
regularly on the safe use of relevant
equipment for their role;
− the near miss programme, which
provides insights into our exposures
across our business;
− weekly safety training videos on key
topics to improve engagement relative
to long safety presentations;
− the pre-task planning programme
(Take 10 Programme), which requires
everyone to take at least 10 seconds to
think through the job they are about to
do using a pre-task planning checklist.
Examples of tasks where this is applied
are loading/unloading, wash bay work,
checking equipment in, and technicians
repairing or conducting routine
maintenance on the equipment;
− the Safety Committee engagement
programme, which ensures stores hold
safety meetings and engage in topics
such as near miss reporting, being
more observant in looking for exposures,
corrective action closure, etc. Weekly
safety communications and briefings
ENGAGE FOR LIFE
Our Engage for Life programme forms the
backbone of our health and safety work and
is built on three pillars: culture, community
and commitment. We are building a culture
that eliminates serious injuries or fatalities
(‘SIFs’), aligns best practices, and ensures
we all have the right skills to complete work
safely. An important component of Engage
for Life is that we demonstrate our dedication
to the well-being of our team members, their
families and communities, while supporting
and encouraging team members’ safety
development. This is an area where we
will always strive to do more, and we are
committed to embedding the whole ethos
of Engage for Life ever deeper within
our culture.
At the heart of our Engage for Life
Programme lies a new initiative: the
Principles for Life. Launched alongside our
latest growth strategy, Sunbelt 4.0, these
principles target six critical areas where we
can have the greatest impact in reducing
health and safety incidence. Each principle
offers practical guidance for reducing
incidents in high-risk areas. This programme
will be important for continual reduction in
ourTRIR.
Controlling
hazardous energy
Working
at heights
Line of fire
Driving
Leading safely
Loading and
unloading
RESPONSIBLE BUSINESS REPORT CONTINUED
58 Ashtead Group plc Annual Report & Accounts 2024
This year, we took significant strides in
fortifying our commitment to workplace
safety by implementing upgraded head
protection measures across our North
American operations. We invested $2m
upgrading from hard hats to helmets
across our North America business.
Equipped with secure straps, helmets
provide added reassurance by ensuring
stability in the event of a fall, while also
offering crucial side impact protection
to safeguard against potential hazards.
In tandem with the adoption of helmets,
the business also expanded its head
protection standards by introducing
bump caps in key operational areas such
as shops, service areas, and yards.
Bump caps provide essential protection
from overhead hazards, particularly in
environments where team members are
working near equipment and machinery.
Designed to absorb and deflect impact,
bump caps offer an additional layer
of protection against potential head
injuries, enhancing further the safety
of our workforce.
HELMETS VS
HARD HATS
are also issued to all team members,
further encouraging continual dialogue
in relation to safety matters at all levels
of the organisation, via email and
through our employee engagement app;
− Regional Safety Managers present in
our business, who engage on a daily
basis with team members. Their role
includes truck inspections, facility
assessments, training and listening
to feedback from our people;
− introduction of critical control checks
as a foundational element of our
safety protocols. These checks involve
the systematic identification and
verification of critical controls
essential for preventing incidents
and minimising hazards;
− enhancing safety through investment
in innovative Personal Protective
Equipment and driver safety
technology; and
− a dedicated Safety Data and Analytics
Team focused on providing critical
information in near real time
leveraging industry-leading safety
management technology.
Our senior leadership teams have weekly
safety meetings to provide focus towards
developing solutions that can be
replicated across the Group. In addition,
we hold annual safety weeks designed to
increase awareness of the importance of
safety across the business. Safety Week
serves as a platform for promoting
collaboration and knowledge sharing
among employees, stakeholders, and
industry partners, reinforcing our
collective commitment to prioritising
safety as a core organisational value.
Driver safety programmes
We deliver to customers across all
50states in the US, eight provinces in
Canada and across the UK. Covering
thisdistance means safety on the road
for our drivers and other road users is
paramount. While we have one of the
safest fleets in the equipment rental
industry, we continue to focus on safety
through our commercial vehicle training
programme and defensive driving
courses so we can target ways in which
we can further reduce our incident rate.
We make use of technology in our driver
safety programme, known as RITA, such
as onboard telematics to help us prevent
unsafe behaviours on the road and dash
cameras enabling real-time feedback on
behaviours which could lead to vehicle
incidents (e.g., lane departures, critical
distance or in-cab behaviours). To date,
over 90% of our vehicle fleet in North
America is equipped with telematics and
c. 90% are equipped with cameras with
ambitions for our entire fleet to be
technology enabled. RITA also enables
recognition of positive actions, can assist
with exoneration in the event of an
incident and can assist with customer
safety. It can be used to coach drivers
to become more aware of their habits
through a system of vehicle alerts.
We have found that the improvements
cameras have enabled, have changed
perceptions of their use, and our drivers
now embrace them, rather than being
wary of feeling monitored. Onboard
technologies can also provide
incremental benefits through reduced
fuel use, enhanced engine and vehicle
maintenance, and route optimisation.
STRATEGIC REPORT
59Ashtead Group plc Annual Report & Accounts 2024
In addition to monitoring reportable
incidents, we have developed a set of
performance predictors. These are a set
of six leading indicators that monitor each
month’s activities supporting our safety
culture and performance. The leading
indicators are mostly centred on
engagement and include topics such
as safety meeting attendance, safety
committee participation and defensive
driving programmes. These are recorded
in our online safety reporting system.
Working on safety with our customers
and suppliers
Being a responsible business means
sharing and promoting our safety culture
with our customers and suppliers
whenever possible. We have the highest
safety expectations for all our equipment
suppliers. Our near miss reporting
programme mentioned above is an
important tool we use to feed back and
collaborate with suppliers and OEMs
based on what we find. For example, if we
identify any heightened risk in a particular
asset, we work with the OEMs to fix and
repair or to innovate their equipment.
Being in the middle between customers
and suppliers means we can influence
and innovate both ways. For our
customers, we have dedicated equipment
trainers and we offer customised training
programmes to meet their needs. We
work with customers’ safety teams to
develop customised training courses,
sometimes for a specific jobsite and
participate in training days for major
customers, demonstrating safe use of
equipment and running training seminars.
This is in addition to the routine safety
briefings that accompany equipment
rental. We offer dedicated full-time safety
trainers for our customers in 163 markets
across North America and have 35 training
centres in the UK.
How we monitor performance
This year, we had our safest year yet in
terms of Total Recordable Incident Rate
(‘TRIR’). We monitor and analyse health
and safety incidents and ‘near misses’,
investigating and analysing root causes to
help identify recurrent issues and risks,
and implement preventative controls.
The importance of health and safety is
reflected in the fact that the number of
reportable accidents is one of our
group-wide KPIs (see page 35).
We continue to develop and improve our
incident management system which
enables us to manage incidents while
allowing us to investigate, analyse root
causes and track corrective/preventative
actions. The tracking and reporting of
‘near misses’ is an area we are continually
improving as the lessons learnt are as
instructive or often more so than from
actual incidents.
Reportable incidents are measured
differently in North America and the UK
due to different regulatory frameworks. In
the US and Canada, reportable accidents
are reported in accordance with OSHA
(Occupational Safety and Health
Administration), referenced as a Total
Recordable Incident Rate (‘TRIR’) whereas
in the UK, reportable accidents are
reported in accordance with RIDDOR
(Reporting of Injuries, Diseases and
Dangerous Occurrences Regulations).
Under the different definitions, more
incidents are generally identified in North
America as being reportable than in the UK.
To compare performance between our
main operating countries we measure
incidents using RIDDOR, as shown in
Table 01. All safety and health reporting is
made through our online reporting system.
We remain committed to reducing these
rates as much as possible and continue
to see progress across the businesses.
In the UK we are increasing the number
of sustainability-related health and safety
customer courses for example domestic
and commercial electric vehicle charging
installation and site environmental
awareness training courses. This reflects
the strong link between health and safety
and advances in green technology and
regulation. We see this as an area of
added value and a way to enhance safety
with those we work with and across our
sector more widely.
01 Recordable accidents
2024 2023
TRIR RIDDOR TRIR RIDDOR
US Recordable accidents 212 68 253 73
Incident rate 0.76 0.12 0.97 0.15
Canada Recordable accidents 19 3 18 5
Incident rate 0.78 0.06 0.89 0.12
UK Recordable accidents n/a 19 n/a 23
Incident rate n/a 0.19 n/a 0.25
Our customer training covers a broad
range of topics including:
Operator training
− Mobile elevating work platforms,
boom lifts and scissor lifts
− Forklifts, warehouse and
telehandler rough terrain
− Earth moving equipment, loaders,
excavators, backhoes
− Fall protection
− Authorised User
− Competent Person
Train the trainer
− Mobile elevating work platforms
− Forklifts
− Earth moving equipment
− Fall protection
Scaffolding
− Scaffolding (Supported &
Suspended)
− Competent person
− User Awareness
− Trench Safety
− Confined Space Awareness
− Competent Person Excavation
− Evacuation Awareness
− Customised courses available
RESPONSIBLE BUSINESS REPORT CONTINUED
60 Ashtead Group plc Annual Report & Accounts 2024
Climate action
Advancing sustainability through the
power of rental
Protecting the environment is not just the
right thing to do; we believe rental has a
significant part to play in the transition
to a low-carbon economy and as such
sustainability is a key element of our
business strategy. The environmental
benefits of renting equipment rather than
ownership accrue when many customers
rent one piece of well-maintained and
safe equipment only when they need it, as
opposed to multiple customers purchasing
that same piece of equipment, using it a few
times, and then disposing of it.
Through our scale, processes and
technology, we believe that we are better
equipped to reduce the greenhouse gas
(‘GHG’) impact of equipment ownership,
operations and disposals than equipment
operators. Our scale and market reach
enable us to achieve a high utilisation rate
for each piece of equipment, reducing the
overall number of assets required to be
manufactured. Our large inventory of
rental assets means that our customers
can use the right equipment for the right
job. Furthermore, they can be given
training to operate those machines in the
most efficient way possible, minimising
fuel consumption and carbon emissions
during operation, and by positioning
our assets where they are required,
reducing transportation requirements.
Furthermore, our rigorous maintenance
programme ensures all equipment
performs at optimal capacity, maximising
efficiency, extending its useful life and
minimising environmental impact.
Finally, our investment in technology
including battery electric vehicles and
telematics combined with our geographic
reach, enable us to reduce transportation
emissions by maximising load capacity
and route optimisation.
Our commitments and progress
This year, as an important part of our
new strategy, Sunbelt 4.0, we have made
a commitment to be Net Zero within our
operations (Scope 1 and 2 emissions)
by 2050. We have a tangible pathway to
enable us to reach this goal, with a 2034
shorter-term target of a 50% reduction in
Scope 1 and 2 carbon intensity (from a
baseline of 2024).
During Sunbelt 4.0, we will focus on
expanding electric and hybrid solutions
applicable to light, medium and heavy-
duty fleet, leveraging clustered markets
to optimise deliveries and reduce miles
driven and increasingly using renewable
diesel, renewable electricity and
expanding our LED lighting programme.
We know that the pathway relies on
innovation, advancements and
refinements in technology, and
infrastructure to come to fruition. As such
our net zero road map is dynamic and
designed to be adapted as both known and
unknown factors develop, for example
evolving projections around the pace,
scale and cost of low-carbon technology
and infrastructure, and volatility in the
renewable energy credit (REC) markets
and associated costs. The pathway is
informed by the macro-outlook from a
range of key sources including OEMs, fuel
producers, governments, experts and
thought leaders like the International
Energy Agency (IEA), as well as our own
proprietary insights. Further details
onour commitments and progress
including a more detailed road map
willbe provided in the Group’s next
Sustainability report, which we expect
topublish in Autumn 2024.
Scope 1 and 2 greenhouse
gas emissions
The Group’s direct energy consumption
arises predominantly from the diesel and
petrol used in our vehicle fleet, the gas
consumption in our facilities and our
purchased electricity.
Our Scope 1 (fuel combustion and
operation of facilities) and Scope 2
(purchased electricity) GHG emissions are
reported in Table 02 on page 62, together
with details of the energy consumption
used to calculate those emissions.
In order to calculate the GHG emissions
and total energy consumption in mWh,
we have used a ‘market-based method’
in accordance with the GHG Protocol
Corporate Accounting and Reporting
Standard (revised edition), together
with emission factors from the UK
Government’s GHG Conversion Factors
for Company Reporting 2023, the latest
available emission factors from the US
Environmental Protection Agency and
the Environment and Climate Change
Canada. In addition:
− in the US and Canada, due to the size
of our operation and range of fuel and
electricity providers, we collect data
from the significant vendors and then
use this to estimate emissions
attributable to the balance. In addition,
we are required to estimate electricity
usage between the most recent meter
reading and the year-end date. As such,
for the year ended 30 April 2024,
approximately 10% of the North
American emissions balance was
estimated; and
− in the UK, we collect data from all
Scope 1 and 2 suppliers and hence,
there is no estimation involved.
However, we estimate an amount for
invoices not yet received and as such,
for the year ended 30 April 2024, 1% of
the UK emission balance was estimated.
Sunbelt 3.0
By 2030, 35% reduction in Scope 1
and 2 carbon intensity, with a
near-term target of 15% by 2024.
Sunbelt 4.0
Scope 1 and 2 Net Zero by 2050, with
a near-term target to reduce carbon
intensity by 50% by 2034 relative to
2024 baseline year.
Progress
31% reduction in Scope 1 and 2
carbon intensity from baseline year
of 2018.
Progress made from:
− increase in renewable electricity
procured in the US; and
− c. 60% of transportation fleet is
now equipped with telematics,
resulting in improved load capacity
and route optimisation.
New target
Tangible pathway identified to deliver
Net Zero by 2050, with flexibility
embedded to allow for different
pathways subject to available
technology.
In the nearer term, we are targeting
a 50% reduction in Scope 1 and 2
carbon intensity by 2034 (from a 2024
baseline).
61Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
In the current year, our total Scope 2
emissions resulting from our US
operations have been reduced by the
sourcing of electricity in certain locations
from renewable sources which are REC
backed (11% of our US consumption).
We will continue to explore the options
available to us to extend the sourcing of
purchased electricity from renewable
sources where market regulation allows.
In the UK, we source all electricity from
renewable sources which are REGO
(renewal energy guarantees of origin)
backed except for a small number of
locations where energy is sourced by a
third party.
Our level of GHG emissions vary with our
activity levels which are in part reflected
in our revenue levels. Accordingly, we
have concluded that the most appropriate
intensity ratio for Ashtead is on a
revenue basis.
tCO
2
e/$m 2024 2023
Carbon intensity ratio
– emissions per $m
of revenue 37.4 38.4
Carbon intensity ratio
– emissions per $m of
rental revenue 42.2 42.7
On a constant currency basis (using this
year’s exchange rates) our intensity ratio
has reduced 2% from 38.3 to 37.4.
Going forward, we will measure carbon
intensity based on rental revenue, rather
than total revenue, as we believe that this
better reflects progress made by the
Group without the potential for volatility
in the level of used equipment sales.
Over 80% of our Scope 1 and 2 carbon
emissions come from our vehicle fleet.
Tackling emissions from our vehicle fleet
is therefore a key area of focus for us and
we are doing this in two ways:
− using the vehicles we have in the most
efficient way possible using onboard
telematics; and
− shifting our vehicle fleet away from
traditional fossil fuels to alternative fuel
types. For example, we are working
with our manufacturers to test a range
of EVs for the business across our
sales, service and delivery fleet.
Scope 3 value chain emissions
Understanding the carbon footprint of
our entire value chain, both upstream
with suppliers and downstream with
customers, is key to unlocking energy
efficiencies and working towards a
low-carbon economy. In 2022/23, we
completed our preliminary Scope 3
assessment and disclosed emissions
across the 11 categories which we
identified as relevant to the Group in
our 2022/23 Sustainability report. In
calculating our Scope 3 emissions, we
have followed GHG Protocol guidance
but highlight that where data sources
are incomplete, we have sought to
extrapolate our emissions based on
the data available to us to reflect the
Group’s entire Scope 3 footprint.
The majority of our Scope 3 emissions
arise through our customers’ use of our
equipment on their sites and projects
(category 13), emissions from the use of
sold rental equipment subsequent to our
ownership (category 11), all of which are
required to be accounted for in the year of
disposal, and the embedded carbon in our
supply chain (category 2). Consequently,
they are based on broad assumptions
across a huge number of assets which
are inherently difficult to validate,
including annual hours of use, average
fuel consumption, average engine load
factor and, for category 11, the total
lifetime hours of use of assets subsequent
to our ownership. Accordingly, our Scope
3 emissions will always be subject to an
application of significant judgement and
hence a high degree of estimation
uncertainty.
We are working to refine our estimation
approach, including through the use of
ever greater amounts of machine
telematics data as it becomes more
readily available across our asset base.
We are also engaging with external
consultants to review our methodology
and approach and have participated in
an industry-wide initiative led by the
European Rental Association to develop
industry-specific guidance relating to
the measurement of Scope 3 emissions.
We therefore expect to publish updated
Scope 3 emissions in the Group’s 2024
Sustainability report in accordance with
this industry guidance.
As we look to the future, we recognise
that our Scope 3 emissions are likely to
increase in the short- to medium-term as
we continue to grow. Future reductions in
our Scope 3 emissions will be dependent
upon the development of technological
solutions to allow for current equipment
to be replaced by equipment with low- or
zero-carbon emissions, the availability
of renewable diesel, and the adoption
of these options by customers.
Nevertheless, during the period of
Sunbelt 4.0, we will continue to engage
with our rental equipment suppliers,
understanding their commitments to
reducing their own emissions, and
investigate the possibility of establishing
aScope 3 intensity target for the Group.
02 Greenhouse gas emissions
2024 2023
UK Total UK Total
Scope 1 tCO
2
e/year* 31,000 371,404 31,288 340,782
Scope 2 tCO
2
e/year* 748 34,544 776 30,380
Total tCO
2
e/year* 31,748 405,948 32,064 371,161
Energy consumption used to
calculate emissions mWh 145,344 1,646,300 148,497 1,511,320
* tCO
2
e/year defined as tonnes of CO
2
equivalent per year.
RESPONSIBLE BUSINESS REPORT CONTINUED
62 Ashtead Group plc Annual Report & Accounts 2024
Waste and water
Waste
Reducing waste going to landfill,
increasing recycling and reducing water
use are all important to our sustainability
efforts. We are strengthening our
processes in these areas and establishing
metrics and targets. Our business model
necessarily promotes less waste overall
going to landfill because we are renting
the same piece of equipment to many
customers and maintaining it to such
an extent that it has a long product life.
To assess more accurately the volume of
waste we generate and recycle, we work
with our waste contractors across each of
our locations and pursue programmes to
reduce the volume of waste we produce.
We work with suppliers to reduce the
packaging included with products we
procure and partner with them to develop
takeback programmes for equipment
packaging and protective materials. In
addition, we are working proactively with
our supply chain to increase the amount
of recycling of our equipment that can be
done to avoid even obsolete equipment
going to landfill. In addition, we continue
to develop our refurbishment programme
in conjunction with our suppliers, where
original equipment gets stripped down,
new components are added, and it
comes back into service. Several of our
suppliers have dedicated facilities for our
refurbishments. In the UK, we have been
working closely with waste providers to
collect all the rubber tracks and tyres that
were awaiting disposal across our depots.
As a result of this initiative all tracks
and tyres are now recycled, recovered
or reused.
Water
Our approach to water stewardship is to
focus our efforts where water is scarce.
We have used the World Resources
Institute’s Aqueduct tool to map where
we are operating in areas of water stress
or high-water stress. Across the Group,
c. 30% of our stores are in areas of water
stress or high-water stress, principally in
California and the southwest and central
states of the US. This provides a blueprint
for where we are targeting water-saving
initiatives by introducing technology to
help reduce water use in these areas.
Water saving initiatives available to us
include the use of closed loop wash
systems where we reuse water many
times over, as well as water recovery
systems where we capture water run-off
for use within wash-bays.
Sustainable value chains
Every year we invest millions of dollars in
new equipment and fleet which produces
less carbon, less particulate matter and
needs less maintenance and servicing.
Our investment in innovation is a key
driver in addressing Scope 3 emissions.
We work closely with our suppliers and
OEMs to develop the next generation of
equipment. Being perfectly positioned
between the OEM and the end consumer,
we are ideally placed to bring about change,
usually getting earlier access to sustainable
products than others.
We work closely with manufacturers to
help them design, develop, trial, and bring
to market innovative, environmentally
sustainable equipment, including electric
versions of the most widely used pieces of
rental equipment. At the same time, our
desire to invest in new and low-carbon
technology demonstrates there is demand
for these products. Finally, by bringing
new products to a wide audience of
customers in the rental market, we help
develop acceptance of new equipment
and drive further demand.
Chart 03 shows the composition of our
fleet today. While it will take time before
a significantly greater proportion of our
fleet moves away from diesel power,
approximately 20% of our rental fleet is
already powered by alternatives to
traditional diesel power, including battery,
electric and hybrid options. The large
majority of our diesel-powered fleet also
meets the most stringent North American
and European emissions standards and
we have one of the most modern fleets of
rental equipment in the industry. We have
focused on investing in next generation,
low- and zero-emission technology
including battery, electric, solar and
hybrid options, and are committed to
working closely with all our suppliers
to help them develop the most
environmentally sustainable equipment.
Consideration of maintenance and
servicing requirements as well as what
happens at the end of a product’s useful
life are a key part of this process, as we
believe that true sustainability needs to
consider a holistic, whole life-cycle
approach. We replace our rental assets
every seven to eight years and as we
retire older equipment, the new
equipment we buy delivers efficiency
improvements. But we do not simply rely
on these incremental improvements.
We have developed partnerships with
suppliers to introduce alternative energy
and fuel solutions for our customers. For
example, HVO (hydrotreated vegetable oil)
fuel can replace diesel with no changes
required to the engine or operational
infrastructure and is approved for road
and non-road use. In the UK, we have
received approval under the RFAS
(Renewable fuel assurance scheme) as
a recognised fuel supplier for HVO. By
joining the RFAS, we are demonstrating
our commitment to providing our
customers with sustainably sourced
renewable liquid fuels with credible GHG
emission savings.
Energy management as a service is one
of our important new offerings where we
consult with customers on how best to
manage their energy requirements. Last
year we helped power a remote island
with the most energy-efficient solution
during their peak summer season,
providing only the energy load needed
at the time it was needed, eliminating
wasted diesel and reducing carbon
emissions. If customers are reluctant to
try electric powered solutions, because of
charging concerns, for example, we can
offer them a hybrid charging solution,
combining our battery energy storage
system with diesel generation, resulting
in 75% less emissions than diesel alone.
03 Group fleet composition
1 Fossil fuel ............................................. 67%
2 Electric .................................................18%
3 Other, including non-powered ........... 15%
1
3
2
63Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
Approximately 9% of our workforce in
NorthAmerica are military veterans and
this is a number we are aiming to grow.
Our goal is for veterans to be able to find a
fulfilling workplace at Sunbelt where they
can enrich our culture and contribute to
achieving our goals. The skills gained
during active service match well with the
skills we are looking for in positions
across our business, from our skilled
trades to leadership roles.
We have developed a robust programme for
recruiting and retaining veteran employees
and we actively recruit members of the
armed forces through job fairs, strategic
partnerships, and programmes such as
the U.S. Chamber of Commerce’s Hiring
Our Heroes programme and our partner,
the US Department of Defense, where we
are an official Skillbridge provider. We were
honoured to be recognised as a 2024
Military Friendly Employer for the fourth
year in a row and to be awarded the highly
coveted VETS Index Employer Award for our
commitment to recruiting, hiring, retaining,
developing and supporting veterans and
the military-connected community.
Our commitment to employing military
service leavers and veterans is the same
in the UK as in the US and our businesses
work together on veteran recruitment
strategy, pooling our collective experience
and resources. We have an official
network of veteran ambassadors across
North America and the UK to support
existing veteran staff and help attract
more team members.
Talent attraction and retention
Our people are our priority. They give
us an enormous competitive advantage,
provide superior service to our
customers, and exemplify our exceptional
culture. Recruiting and retaining the
best talent is critical for supporting
our growth plans under Sunbelt 4.0.
Our people strategy is focused on accurate
recruitment which means finding the
right people for the right openings and
accurately communicating to candidates
what the job entails alongside the benefits
of working for Sunbelt. Once through the
door, our investments in safety and
well-being, personal and professional
growth, compensation and reward
structure and inclusion are important
retention enablers.
In the UK, a key component of our
recruitment at a junior level is our formal
apprenticeship programme. We took on
19 trainees into our UK apprenticeship
programme this year and we plan to
recruit more in the coming year. Our
apprentice programmes take between
one and three years to complete and
usually include outside training and a
formal NVQ qualification, in addition
to on-the-job training. We have six
apprentice streams – plant maintenance,
customer service, driver, electro
technical, mechanical engineering
and civil engineering.
We are also committed to supporting
veterans and aspire to be an employer
of choice for people leaving the military.
Pay and benefits
Pay and benefits is one of the most
significant factors in attracting and
retaining the best people.
Our employees’ pay and benefits are
made up of competitive fixed pay and
a range of benefits and incentive
programmes to motivate employees and
support our business’ success. In North
America we have adopted a Leading Wage
approach to ensure all employees are
paid an hourly rate more than the state
and federal recommended rates and at a
level which is competitive to the market.
Sunbelt UK is an accredited Living Wage
Employer. We recognise the strong link
between financial well-being and
employee engagement, including mental
health and well-being. Weclosely monitor
industry pay, and benchmark our salaries,
to ensure a competitive package is offered
to attract, retain and appropriately reward
our employees.
In addition, we provide a comprehensive
package of benefits ensuring they
represent affordable and smart choices
for employees. Each benefit offering has
been designed to work with another,
providing a financial safety net that serves
those employees in need, as well as
providing us all with a proper sense of
security. In the US we offer robust and
comprehensive medical coverage and
have limited increases in member
contribution rates despite the increasing
costs of healthcare. By continuing to
promote wellness, we intend to maintain
a fair and balanced health plan that is
considered one of the best in our industry.
Our retirement plans are well received
with an 85% enrolment rate in our US
401(k) plan, 96% enrolment rate in Canada
and 93% of UK employees participating
in the pension plan.
We recognise that mental health is
another vital part of overall well-being,
and as such we have an employee
assistance helpline which offers free
confidential support and advice to those
in need. We also have other benefits to
promote good health amongst our
employees. In the UK we have a flexible
holiday arrangement enabling employees
to purchase additional holiday entitlement
or sell unused or unwanted holiday
back to the company, giving the employee
more flexibility and choice in how
they use their contractual benefits.
RESPONSIBLE BUSINESS REPORT CONTINUED
64 Ashtead Group plc Annual Report & Accounts 2024
We offer paid parental leave group-wide
and in the US, employees can use pre-tax
money to contribute to health-related
purchases and dependent care expenses
– including the cost of childcare,
babysitters and after school programmes.
Employee engagement
and well-being
Getting ongoing feedback on how our staff
are feeling and then making any changes
necessary, is crucial to maintaining a
happy and fulfilled workforce. We pride
ourselves on having a strong culture,
with a strong sense of purpose amongst
our team members who take their
responsibilities to assist customers and
communities seriously. There is also a
strong sense of pride in a job well done,
such as when we are helping people get
back to normal after a natural disaster.
We conduct regular employee surveys in
North America and the UK, which have
received excellent levels of response. We
have been delighted with the results so
far, which show a high degree of employee
engagement and satisfaction but highlight
areas where we can improve.
In North America, our latest Express
Yourself Survey received a 75%
participation rate with an 88%
engagement score. In the UK,
participation in the latest survey was
86%with an 80% engagement rating.
Responses to the surveys are
overwhelmingly positive. We analyse
the results and identify areas for
improvement, developing action plans
down to a local level and report to the
Board on progress. Since the launch of
the Express Yourself Survey, we have put
in place a number of employee initiatives
as a result of this feedback and enhanced
our employee communication activities
to allow better two-way engagement
with our team members. We have seen
an increase in employee engagement
scores year-on-year highlighting the
effectiveness of measures taken.
When our staff are on top form, they
provide the best service to our customers.
We promote employee well-being on a
daily basis. We recognise the link between
mental health and well-being, flexible
working and managing work related
stress. That is why we offer remote work
opportunities where the role allows for it.
In some roles, remote work opportunities
may not be possible (for instance drivers
and technicians), but flexibility is still
possible through proactive shift
management. We take action to minimise
work related stress including supporting
our team in recognising stress triggers
and managing workloads. We are also
there to help when employees find
themselves in difficulties. We have mental
health support initiatives across the
Group and employees can get help quickly
via an app or through our employee
assistance programme as needed. For
example, in the UK our ‘Let’s Talk Mental
Health’ programme included an initiative
which saw volunteers completing a
two-day professional Mental Health
First Aider course (MHFA England) and
becoming mental health ambassadors
within the business.
In North America, the Sunbelt Rentals
Employee Relief Fund was created to
support employees who are facing
financial hardships after a natural
disaster or other life-changing events.
The fund was established initially to help
the victims of Hurricane Charley in 2004
and is now a part of our long-term
strategy to assist team members through
catastrophic financial hardship. Any
employee is eligible to receive relief from
this fund for the benefit of themselves or
their immediate family members living
in their household.
Workforce turnover
Our sector generally suffers from high
turnover rates, especially in some of
our skilled trades, such as drivers and
mechanics. Our voluntary staff turnover is
15% in the US (total staff turnover is 20%),
15% in Canada (total staff turnover is 21%)
and 19% in the UK (total staff turnover is
24%). Our analysis shows that around
two-thirds of turnover happens within the
first two years of an employee starting
to work for us. As a result, we continue
to focus on improving our recruitment
process, which means finding the right
employees for the right openings. We
prioritise our employee onboarding to
ensure new recruits get the support and
guidance they need from the very beginning
of their career with us. Beyond two years,
employee turnover drops drastically.
Talent development
Developing our people is crucial to our
success. The commitment and skills of
our workforce contribute directly to how
well we do. Whatever level an employee
is at in the business, we aim to train them
to improve their skills and give them
opportunities for career development
through clearly defined, but flexible
IMAGE: Master
Chief Shane McKenzie,
USN, Retired (Director,
Veteran and Impact
Programs)
Shane McKenzie is a retired U.S.
Navy SEAL Master Chief who
serves as our Director of Veteran
and Impact Programs. He spent
almost 30 years in the SEAL
teams, leading teams in combat
zones around the globe, starting
his military career as a SEAL
Operator and finishing as a
Command Master Chief. Under
Shane’s leadership, we have
developed our Veterans
programme around four key
pillars: resources, recruitment,
recognition and retention, and
have won multiple best-in-class
awards for our military recruitment.
VETERAN
SPOTLIGHT
We had a vision to build a
multi-national programme
geared to support the
unique challenges faced by
our veteran teammates and
their families. We now lead
one that exceeds industry
standards, is internationally
recognised as best-in-class
and that extends support
within every country in
which Sunbelt is located.”
65Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
career pathways. To keep the best talent
in the business, we need to match our
people’s career ambitions by providing a
clear route for progress and development.
We offer a wide range of technical, sales,
management and leadership training to
all employees.
For our largest group of employees,
skilled trades, we have two main
approaches to develop talent: career
pathing and career progression. Career
pathing is about providing employees
with a clear promotion pathway within
the business. For example, for a driver
or technician to become a store manager,
we have a career pathway with associated
training courses that provide the skills
needed for the next step on that particular
career pathway. With this option, a team
member can see the skills they need to
develop and demonstrate to progress in
their career towards a management role.
For those that want to progress within
their specific job area, we offer career
progression. For example, technicians
can achieve four skill levels, with each
level requiring progressively more
in-depth and expert skill and knowledge.
To pass from one level to the next, the
team member has to pass an evaluation
that shows their skills match the next step
on the ladder.
For frontline leaders in our store network
and other leaders in central operations,
we offer a range of leadership or senior
leadership training. These courses
ensure our leaders are equipped with the
skills to deliver on our business strategy.
These include inclusive leadership,
coaching, performance and financial
management, training skills and
customer experience.
Our career development and training
initiatives include:
− technician apprenticeship and training
programmes;
− paid apprenticeships for trade school
students approaching graduation;
− sales training;
− Manager In Training programme;
− intern programmes both in stores
and at the support office;
− a leadership curriculum for all store
managers;
− an Executive Leadership Development
programme;
− women in leadership development
apprenticeship programme (UK); and
− coaching skills training for store
managers to enable better coaching
and mentoring of staff.
To assess the effectiveness of our people
development programmes, we have
implemented a robust performance
management process. Our cyclical
performance management process
applies to all employees and provides a
standardised framework to help team
members with skill development and
career growth. Regular feedback and
evaluations enable team members to
track their progress, identify areas for
improvement, and receive recognition for
their achievements. We understand that
an employee’s ambition and priorities can
change over time for example to balance
family life, caring responsibilities or
health issues, and our career progression
and career pathing pathway enable
flexibility and tailoring to balance these
needs. We make every reasonable effort
to give disabled applicants and existing
employees becoming disabled,
opportunities for work, training and
career development in keeping with
their aptitudes and abilities.
RESPONSIBLE BUSINESS REPORT CONTINUED
66 Ashtead Group plc Annual Report & Accounts 2024
Diversity, equity and inclusion
Creating a diverse work environment
where everyone can thrive is crucial to
our business and culture. We prioritise
diversity, equity and inclusion and we are
working hard to create a more diverse
workplace. Providing equal opportunities
for all is a priority for the Group. We do
not discriminate based on a protected
status, such as sex, colour, race, religion,
native origin or age.
Despite working in a traditionally white
male-dominated sector, we are striving
to make our workforce more diverse
and want our people to reflect the
communities which we work in and
recruit from. With this in mind, we
continue to strengthen our approach to
diversity, with the rollout of a diversity,
equity and inclusion (‘DE&I’) playbook for
all team members in North America,
outlining our approach to diversity, what
it means and our plans in this area.
Training continues to be rolled out to all
employees. Our focus on inclusion has
been a key element of our sustainability
journey. We have launched nine employee
resource groups (‘ERGs’) between North
America and the UK, and their mission is
to help advance an inclusive culture that
empowers individuals and provides
equitable opportunity for team members
and the communities we serve. We
recognise that fostering diversity, equity
and inclusion leads to a better work
culture that supports employee
mental health.
In the US we are required by law to
monitor ethnicity in our workforce and
wemaintain a diverse workforce with
c.30% of the US workforce identifying
themselves as being non-white. We also
gather diversity data as part of the
recruitment process in the UK and seek
tomonitor our diversity, although the
information held is less complete than
data in North America where information
has been gathered over a longer period.
We are committed to providing
opportunities for people across our
organisation regardless of gender,
ethnicity or other characteristic.
Our goal is to respect our collective
experiences and unique perspectives
from across the Group.
Workforce by gender
We are focused on the gender
composition of our workforce but
recognise our workforce reflects the
nature of our business, the industry in
which we operate and the markets we
serve, with just 13% of the Group’s
workforce being female. A significant
proportion of our workforce are
mechanics, technicians and drivers,
virtually all of whom have been male
historically. Therefore, while across
our workforce we seek to promote an
increasing presence of women in the
business, and we have seen success
in some areas of our business such as
within professional functions, sales and
customer service, we recognise that
some roles will continue to attract
fewer women.
Nevertheless, while our industry has
traditionally had many more men than
women, we do have women at all levels of
the Group, from the Board to store level.
While four members of our Board (44%)
are female and we have women on our
senior management teams and as store
managers and sales executives, we
realise we have work to do to increase the
number of women throughout the business.
We continue to prioritise recruiting the
best people for every role and are working
to make it easier for more women to join
and remain with the organisation. We
believe that in doing so, we will move
towards achieving a greater level of
female representation across the Group
at all levels starting from the grassroots
of our organisation.
Ashtead pays men and women the same
salary for the same role with the actual
remuneration being based on skills,
experience and performance.
However, as a result of our mix of
employees and the roles they undertake,
the average pay of men and women differs
across the business. Summarised in
Table 05 is the amount by which average
pay for men exceeds that for women.
05 Pay gap
Pay gap
Sunbelt US 4%
Sunbelt Canada 7%
Sunbelt UK 2%
04 Workforce by gender
Number of employees Male Female Female %
Board directors 5 4 44%
Senior management 23 7 23%
All staff 22,711 3,254 13%
By region
US 17,093 2,158 11%
Canada 1,974 332 14%
UK 3,644 764 17%
Data presented as at 30 April 2024.
North American ERGs
Diversity, equity and inclusion
67Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
Community engagement
With approximately 1,500 stores, we
have a strong presence in a lot of local
communities. We strive to have a positive
impact in these communities through job
creation, charity support, volunteering
and responding to emergencies. Working
with local and national charities is
important to us, but the value we can
bring to communities is broader than just
supporting charitable causes. When we
open new stores, we bring opportunities
through recruitment, economic activity
and a new avenue for local support
into these communities. Both through
the service we provide and the goods
and services we procure, we help
entrepreneurs and small businesses
grow and, together with our customers,
we help build thriving communities.
Our stores are active in their local
communities supporting causes relevant
to their people. As an example, in Florida,
employees, vendors, and customers have
generously donated over 261,000 school
items including backpacks, notebooks,
folders and calculators.
We have always had a volunteering
allowance for staff, but under the Sunbelt
4.0 strategy, we are seeking to enhance
the employee uptake of volunteering
opportunities and improve coordination
of volunteering activities so as to have
the greatest impact on our communities.
We will do this through a new programme
for team members to give back to the
charities of their choice, elevated by
company matching. We are also
introducing a ‘Dollars for Doers’
programme where team members can
earn dollars for the organisations that
they volunteer with.
Supporting communities
in times of need
In the event of natural disasters or other
emergency situations, we are often
called in as a first responder. We provide
equipment and power to restore services
and support clean-up operations, with
the aim of getting communities up and
running again as fast as possible. In
North America, we have an emergency
response team (‘ERT’) which activates in
response to weather-related disasters,
such as hurricanes and tornadoes, fires,
floods and snowstorms, or other everyday
emergency situations where communities
need rapid support. Every emergency
situation is different and members of the
ERT are experts in their field and are able
to respond with the right quantity and type
of resources for the situation at hand.
Involvement in the ERT by our employees
is voluntary and all are ready to deploy
at a moment’s notice in the event of
an emergency.
Charitable giving
As part of our Sunbelt 4.0 strategy, we
have set an ambition to amplify our
community investment and have set a
target of 1% of profit after tax going to
community investment by 2028/29.
This community investment will be made
in a number of ways. Firstly, we will
continue to work closely with our
designated signature charitable partners:
the Gary Sinise Foundation, Habitat for
Humanity and our new partner, the
Leukaemia & Lymphoma Society. These
partnerships reflect causes which align
with causes which are important to us
and provide opportunities for long-term
relationships where we can make a
difference. For example, we are in the
ninth year of our partnership with the
Gary Sinise Foundation, which works to
honour America’s defenders, military
veterans, first responders, their families
and those in need. The Foundation does
this by creating unique programmes
designed to entertain, educate, inspire,
strengthen and build communities.
We support the Foundation’s R.I.S.E.
(Restoring Independence, Supporting
Empowerment) programme, which builds
100% mortgage-free, specially adapted
smart homes for severely wounded
heroes and their families. We also
support the Foundation’s First
Responders Outreach programme, which
provides critical funding for America’s
firefighters, police departments and
emergency medical teams, and Snowball
Express, a programme serving the
children and surviving spouses of fallen
military heroes. Our partnership includes
the Foundation’s Avalon Network, a
cognitive health and mental wellness
network that provides transformative
care to veterans and first responders
experiencing post-traumatic stress,
traumatic brain injuries and substance
abuse issues. This year we contributed
over $2m to the Foundation through
monetary and in-kind donations.
We also continue to work with other
designated charitable partners. In the US,
we work with the American Red Cross and
its affiliates such as the Second Harvest
Food Bank for which we have a food drive
every November in the US. In addition to
financial donations made to the American
Red Cross, we also often send equipment
and support to disaster-affected areas
within the US. In the UK, we also work
regularly with a number of charities.
Employee resource group activities
Our employee resource groups seek to
give back to our communities through
charitable activities. For example, our
WISE ERG works with Girls Inc., a
charitable organisation which seeks to
promote the rights of girls and provide
mentorship, safe spaces and
programming to help girls’ success, while
our BOLD ERG works with the Red Cross.
Veteran engagement
A big part of our community impact
comes from supporting veterans and the
military-connected community. The
mission of the Veterans programme is
toimplement innovative and valuable
solutions to improve the short-term and
long-term well-being of teammates and
their families. Creating a community
through which colleagues can connect
over their shared experiences is one of
the cornerstones of Sunbelt Rentals’
veteran retention efforts.
In addition to our partnership with the
Gary Sinise Foundation, our SERVE
employee resource group works with
specific charitable organisations. This
year, we have extended our partnership
with Wreaths Across America and
Wreaths Across Canada to reinforce
further our commitment to our veteran
community. In the UK, we work with
Walking with the Wounded, who support
armed forces veterans in many ways,
including finding sustainable employment.
RESPONSIBLE BUSINESS REPORT CONTINUED
68 Ashtead Group plc Annual Report & Accounts 2024
Human rights and modern slavery
At Ashtead we believe in the rights of
individuals and take our responsibilities
seriously to all our employees and those
who may be affected by our activities.
Our human rights policy is guided by the
principles contained within the United
Nations Universal Declaration of
Human Rights and the International
Labour Organization’s Declaration on
Fundamental Principles and Rights at
Work. We have group-wide policies in
place, all of which protect our employees
as they go about their work which relate
to our business and our suppliers. These
policies form part of our way of doing
business and are embedded in our
operations. Our ethical sourcing policy
addresses matters such as child and
forced labour, freedom of association,
working conditions, pay and hours,
discrimination and harsh or
inhumane treatment.
Modern slavery is an abuse of human
rights and we have a separate human
rights policy that commits the Group to
ensuring there is no modern slavery or
known breaches of human rights in our
business or our supply chain. The policy
applies to all employees across the group
and our subcontractors, and we expect
similar commitments from our suppliers.
Any suspicion that our policy is being
breached or at risk of being breached can
be reported through our anonymous
whistle-blowing lines in North America
and the UK.
In relation to our supply chain, while the
Group sources goods and services from
a wide range of suppliers, the Group
predominantly works with a small
number of major equipment suppliers,
of which the majority are based in North
America and Europe. The Group’s main
suppliers relate to its rental equipment
and have strong reputations for product
quality and reliability. Outside of the
Group’s expenditure on equipment, its key
expenditure relates to its workforce and
goods and services procured locally to
its stores.
In the UK, we have entered into a
partnership with the Slave-Free Alliance
to help us keep up-to-date with the
constantly evolving risks associated with
modern slavery and to help the Group
strengthen further actions taken in
relation to modern slavery risks.
Corporate behaviour
We have the same governance processes
for sustainability as for any other aspect
of the business. How these function and
how we have performed is disclosed
within the Corporate Governance Report
on page86.
Business ethics
Our commitment to the highest ethical
standards means that the Group Risk
Committee works to ensure these are
communicated and upheld throughout
the business. We believe in the rights of
individuals and take our responsibilities
to all our employees seriously and those
who may be affected by our activities.
During the year we updated the Group’s
modern slavery and human trafficking
policy, business ethics and conduct policy
and ethical sourcing policy, all of which
are available on the Group’s website.
These policies form part of our way of
doing business and are embedded in our
operations. They are also communicated
directly to employees through dedicated
communication and training programmes.
Senior employees across the Group
receive regular business ethics training to
ensure they are aware of their obligations
and responsibilities with regard to
competing fairly, the UK Bribery Act and
money laundering and, in the US, the
Foreign Corrupt Practices Act. This takes
place every two years in North America
with 2024/25 being a year of training,
while in the UK, it is undertaken annually.
Completion of training is monitored and
reported to the Group’s Risk Committee.
Anti-corruption and bribery policies are
maintained and reviewed on a regular
basis with relevant guidance incorporated
into our employee handbooks and
available on our intranet pages.
Building a responsible business means
considering environmental impact,
human rights, and modern slavery across
the entire value chain. Our commitment to
these values extends to how we engage
with suppliers. For more details on our
approach, including our due diligence
process, please refer to the Governance
section on page 80.
Whistle-blowing
Our confidential, third-party operated
whistle-blowing service is available to
all employees and third parties to raise
any concerns that they may have about
alleged unethical or illegal behaviour, or
potential breaches of our ethical policies.
All whistle-blowing matters are
investigated and outcomes are reported
to the Board together with any action
taken. Our approach is one of non-
retaliation and we confirm that no
employee will suffer any detriment
from raising genuine concerns about
ethical conduct.
Public affairs
The Group’s policy is to prohibit
donations of a political nature and hence
no political donations have been made
during the year (2023: none). In addition,
the Group does not participate in political
lobbying activities, either directly or
through intermediaries.
During the Group’s normal activities and
its participation in the rental industry, the
Group is a member of trade associations
that do in some cases conduct lobbying
campaigns with standardisation or
regulatory authorities. The most
significant of these trade associations are
the American Rental Association (‘ARA’) in
North America and the European Rental
Association (‘ERA’) in the UK. Our total
membership fees paid to the ARA, ERA
and other trade associations in 2023/24
was $154,907, including a non tax-exempt
portion of $15,276.
Cyber security
As the world continues to move online,
accelerated due to the pandemic and
increasingly connected technologies,
at least in the short- to medium-term,
awareness, monitoring and adaptability
to cyber security issues is ever more
crucial for us. We are prioritising the
monitoring of any potential cyber security
vulnerabilities and working to ensure
business continuity under all potential
scenarios. This year we held our fifth
annual cyber security month. While
securing hardware is an important facet
of information security, protecting the
data on our assets is critical to our
success. We have encrypted email for all
team members and our Information
Security SharePoint site is also available
for all team members. For more on
cybersecurity, see page 39.
69Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
in our Sustainability report to provide
increased insight into our material
sustainability topics, including in relation
to the potential impact of climate change
on the Group. Developments in the
current year include:
− disclosure of Scope 3 emissions: in
January 2024, we disclosed the Group’s
Scope 3 emissions for the first time,
and we will update these disclosures
for 2023/24 in the Group’s 2024
Sustainability report. In completing this
work, we undertook an assessment of
our Scope 3 footprint and identified 11
Scope 3 categories which are relevant
to the Group’s operations and which
we have therefore estimated; and
− scenario analysis: previously, the
Group has provided qualitative scenario
analysis with narrative discussion of
key risks and opportunities, and how
these may be relevant to the Group in
different scenarios. In the current year,
we have sought to develop our analysis
further by expanding our disclosure to
include some quantitative analysis in
relation to specific scenarios. The
scenarios we have considered are
impact of extreme heat on our store
productivity; impact of the transition of
technology to low-carbon alternatives;
impact of increased cost of energy on
transportation and logistics; and impact
of increase in demand for rental as a
result of changing customer behaviours
arising from climate conscious
behaviours. The scenarios selected for
disclosure are illustrative only and are
not intended to be fully exhaustive in
terms of the ways in which climate
change may impact the Group.
Governance
The Group’s Board of directors is
responsible for setting the Group’s
strategy, taking into account all relevant
risks and opportunities, including those
related to climate matters. The Group’s
rigorous risk management framework
is designed to identify and assess the
likelihood and consequences of risks
and to manage the actions necessary to
mitigate their impact, including those
related to climate-related matters,
and is detailed on pages 40 and 41.
The Group launched its latest strategic
growth plan, Sunbelt 4.0, in April 2024
which enhanced our focus on climate-
related considerations as part of the
‘Sustainability’ actionable component,
including a commitment to reduce our
Scope 1 and 2 carbon intensity by 50%
by 2034 (from a baseline of 2024) on a
journey to Net Zero by 2050. Further
details as to how climate-related
considerations are incorporated into the
The Task Force on Climate-related
Financial Disclosures (‘TCFD’) provides a
disclosure framework for companies to
explain how they are responding to the
risks and opportunities arising from
climate change. UK Listing Rules require
premium listed companies to make
disclosures consistent with the
recommendations of the TCFD and,
where they have not complied, provide an
explanation including details of the steps
being taken to ensure future compliance.
Responding to the risks and opportunities
arising from climate change is an integral
part of our business and is embedded
throughout the Group and discussed
throughout this Annual Report. We set
out below our climate-related financial
disclosures consistent with the TCFD
recommendations across all four pillars
and 11 recommendations, including
guidance provided in the TCFD Annexes
and the requirements of Listing Rule
9.8.6R, except in the following area:
− metrics and targets: the Group’s
disclosures are not fully consistent with
the recommended disclosures relating
to metrics and targets.
Scope 3 emissions are a material
component of the Group’s carbon
footprint, with the most significant
components arising from category 2
(capital goods), category 11 (use of sold
products) and category 13 (downstream
leased assets). In 2023/24, we
completed our preliminary Scope 3
assessment and disclosed emissions
across the 11 categories which we
identified as relevant to the Group in our
2023 Sustainability report. However
as commented on page 62, our
quantification of Scope 3 emissions for
2023/24 is ongoing and hence we have
not disclosed Scope 3 emissions for
2023/24 as required by recommended
disclosure (b).
We expect to publish updated Scope 3
emissions in the Group’s 2024
Sustainability report, taking into
account industry specific guidance,
with our objective being to disclose
Scope 3 data with our Annual Report
in future years.
These disclosures also address the
requirements set out under the Companies
(Strategic Report) (Climate-related
Financial Disclosure) Regulations 2022.
Developments in the
current year
We continue to evolve the Group’s
sustainability disclosures through the
Group’s Annual Report and Accounts and
the supplementary disclosures provided
strategy are on page 30 and in our
Responsible business report on page 61.
The Board receives updates at each
Board meeting as to the Group’s progress
against our strategic goals, with a formal
strategic review undertaken on an annual
basis. In addition, sustainability metrics
have been embedded in the Group’s
remuneration arrangements, initially
through the Strategic Plan Award, and
moving forward, it is intended to include
them as part of the annual Long-Term
Incentive Plan award criteria. This is
overseen by the Remuneration
Committee, as detailed on page 100.
The Board of directors is assisted
in monitoring the success of our
sustainability initiatives through the work
of the Group Risk Committee, which
monitors the progress we make against
our strategic sustainability objectives and
the targets we have set. The Group Risk
Committee is chaired by our chief
financial officer and reports formally to
the Audit Committee on an annual basis.
One of the principal risks and
opportunities faced by the business
relates to environmental matters,
including those contributing to climate
change. On a day-to-day basis, the
Group’s response to climate-related risks
and opportunities is led by Brendan
Horgan, the Group’s chief executive, who
has over 25 years’ experience in the rental
industry through which he has developed
an in-depth knowledge and understanding
of current and emerging technologies as
they apply to our business, including their
environmental impact. Activities include
overseeing the Group’s work with
suppliers and customers on developing
and bringing more environmentally
friendly equipment options to market
as discussed in more detail on page 63,
directing the business in relation to
reducing emissions through direct
operations and approving associated
capital expenditure plans.
Our actions across each of these areas
are embedded within our operational
activities across the business, supported
by the Group’s SVP of Sustainability and
dedicated specialists in North America
and the UK. The Group’s sustainability
working group, which includes
representation from the Group’s core
sustainability team as well as from across
the business, monitors progress of our
sustainability-related initiatives and
performance against the targets we
have set for ourselves. This includes
developing a clear and dynamic strategy
to support the Group’s transition to a
low-carbon economy.
70 Ashtead Group plc Annual Report & Accounts 2024
These primary roles and responsibilities for the assessment and management of climate-related risks can be summarised
as follows:
Frequency of review Roles and responsibilities Areas of focus in 2023/24
The Board
Regularly, as
required, formally on
a bi-annual basis.
− Oversight of risks and opportunities
and how these are reflected in the
Group’s strategy
− Assessment of the Group’s risks related
to climate and actions taken to mitigate
− Approval of the Group’s budget, including
fleet and other capital expenditure plans
necessary to progress sustainability
priorities
− Review of Group strategy and progress
against actionable components of
Sunbelt 3.0 and launch of Sunbelt 4.0,
including our Net Zero commitment
− Review of the Group’s key performance
indicators and progress against the
sustainability targets established by
the Group
− Review and approval of TCFD and other
sustainability-related disclosures
− Approval of the Group’s budget
Remuneration
Committee
As required. − Assessment of remuneration policies
and targets to ensure that they
appropriately incorporate sustainability
elements
− Review of performance against
existing sustainability-related targets
− Assessment of future sustainability-
related targets for remuneration plans
Nomination
Committee
As required. − Ensuring the Board composition reflects
the skills and experience required,
including those related to climate-
related matters
− Continued consideration of board
composition
Audit Committee
Formal annual review
of Group risk register
with periodic detailed
reviews of specific
risks. Formally
reports to the
Board after each
Board meeting.
− Oversight of the Group’s corporate
financial reporting, including
sustainability-related disclosures
− Oversees risk management processing,
including oversight of the work of the
Group Risk Committee
− Oversight of the Group’s assurance
framework, including in relation to
sustainability metrics and reporting
− Review of TCFD and other
sustainability-related disclosures
− Consideration of the impact of
climate-related matters in the Group’s
financial reporting
Risk Committee
Bi-annual review of
key and emerging
risks. Reports
annually through the
Audit Committee to
the Board.
− Responsible for oversight of the Group’s
approach to risk management, including
review of the identification and
management of significant risks,
including those related to climate matters
− Local Risk Committees in North America
and the UK include sustainability experts
and report on local sustainability issues
to the Group Risk Committee
− Consideration of the impact of
climate-related matters on the
Group’s risk landscape
Management teams involved day-to-day in managing climate-related matters include:
− sustainability working group: development and implementation of company-wide net zero strategies and initiatives including
oversight over data gathering and reporting process. Areas of work include detailed modelling to support the Group’s carbon
reduction plans;
− environmental specialists: supporting broader management teams in the development of strategies to deliver the Group’s
sustainability priorities, and considering transition plans to support a low-carbon economy. In addition, supporting operational
activities to respond to new and emerging legislation relating to carbon reduction;
− fleet management: engagement with our key fleet suppliers in the development and bringing to market of new technologies,
as well as promoting new alternative technologies across the business;
− customer engagement: working with customers to deliver low- or zero-carbon solutions;
− vehicle procurement: developing vehicle procurement plans which reflect transition to low- or zero-carbon solutions, including
the use of alternative fuels and battery or other power sources;
− property and utilities: assessment of property standards and implementation of energy improvement programmes (e.g. LED
retrofit programme) and management of energy procurement; and
− finance: supporting the measurement and reporting of climate-related matters, including assessment of risks and opportunities
and consideration of the impact on accounting matters.
71Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
− short-term – over the next three years:
this timeframe coincides with our
annual budgeting and planning time
horizon. We would expect to see
ongoing technological development
and legislative changes associated
with emissions may develop;
− medium-term – three to five years:
ongoing market and technology
developments, increasing customer
focus on environmentally friendly
solutions and increased availability
of alternative fuels; and
− long-term – beyond five years: while we
believe there is far greater uncertainty,
but in addition to those risks and
opportunities arising in the short to
medium-term, there is greater scope
for technological advancement in
battery technology, alternative power
sources, alternative fuels and
commercial production enabling a
more rapid move towards a lower-
carbon environment.
Each risk and opportunity considered,
regardless of the applicable time horizon,
is factored into the Group’s strategic
planning on an ongoing basis. As
commented above, given the nature in
which these risks and opportunities
are intrinsically linked to the Group’s
day-to-day operations, they form part of
our financial planning and budgeting
processes, instead of being assessed as a
standalone matter. For example, the costs
associated with the purchase of battery
powered rental fleet, or the property
upgrades as part of the LED retrofit
programme, form part of the Group’s
capital expenditure plans.
Physical risk (medium and long-term)
Overall, we believe that the climate-
related risks relevant to the Group are
those associated primarily with transition
risks rather than physical (acute and
chronic) risks, brought about by extreme
weather events or changing weather
patterns. Physical risks are mitigated
by the diverse nature of the Group’s
operations. The Group operates from over
1,500 stores across the US (where we are
present in all 50 states), Canada (where
we are present in eight provinces) and the
UK. Our largest store has c. $140m of
rental fleet at cost (c. 1% of the Group’s
fleet) while c. 98% of our locations have
less than $50m of rental fleet at cost, the
majority of which is out on rent at any
particular time. As a result, no one store
is material to the Group such that a
natural disaster or other physical risk
would have a significant impact on the
Group’s ability to operate.
Strategy
Climate-related risks and
opportunities
The Group’s rigorous risk management
framework is designed to identify and
assess the likelihood and consequences
of risks and to manage the actions
necessary to mitigate their impact,
including those related to climate-related
matters, and is detailed on pages 40 and
41. We do not consider the risk arising
from climate change to represent a
separate principal risk for the Group as it
is intrinsically linked to the Group’s other
principal risks and the day-to-day
management of the Group.
As part of the Group’s risk management
process, the Group reviews its material
issues on an annual basis, including
consideration of any emerging risks,
further details of which are provided
on page 41. The results of our material
issues assessment are detailed on
pages 56 and 57 within our Responsible
business report. We have aligned
climate-related matters including fleet
electrification and GHG emission
reporting, within ‘the operations’ area but
importantly the Group believes climate-
related matters represent significant
opportunities as well as posing certain
risks for the Group across all four key
areas. The Group believes that its market
position and financial strength brings it
significant competitive advantage in
responding to these risks and maximising
the opportunities. Specifically, the Group
has identified opportunities arising from
the development of new products,
solutions and services which support the
transition to a lower-carbon economy,
the shift in customer preference from
ownership to rental and the overall
benefits to the environment as a whole
which arise from sharing assets over their
life cycle, described in more detail on
page 61 within the Responsible business
report. The transition to a lower carbon
economy also poses certain risks to the
Group including an increase in capital
expenditure for low- or zero-emission
technologies and an increase in operating
expense associated with transportation
cost and staff cost as a result of rising
energy prices and long-term heat stress,
respectively.
The Group considers the range of climate-
related risks and opportunities over
the short, medium and long-term. In
assessing these time horizons, the Group
has defined the following time horizons:
Acute physical risks
Acute physical risks are physical risks
arising from an increased severity of
extreme weather events in the future,
such as hurricanes or tornadoes. Our
business growth model considers
adaptation to a changing climate, which
we believe presents both challenges and
opportunities. In the event of natural
disasters or other emergency situations,
we are often called upon as a first
responder. We provide equipment and
power to restore services and support
clean-up operations and our highly
experienced Emergency Response Team
are equipped to get communities back
on their feet quickly.
Furthermore, while we believe the direct
impact of physical risks on the Group are
mitigated by its diverse operations, they
could have a more significant impact on
the Group’s supply chain. If a supplier was
disrupted due to an acute weather event,
it may affect our ability to acquire new
fleet. However, we have inherent flexibility
within the Group’s business model with a
rental fleet of c. $18bn (original equipment
cost) and could continue to operate
although it may affect our ability to grow
as planned. In this scenario, we would
delay equipment disposals in the
short-term.
Chronic physical risks
Chronic physical risks are physical
risks arising from long-term changes
in climate, such as rising mean
temperatures or rising sea levels.
In relation to temperature increases, in
the medium- to long-term, increased
temperatures may give rise to general
heat stress concerns across the
communities in which we operate,
resulting in a decrease in possible
labour working time for those team
members which are based in the field –
predominantly our technicians within our
store network. While there are actions
we would take, the unmitigated impact
on our business may be an increase in
labour costs as a result of lower labour
productivity, as well as the need to invest
further in employee health and well-being
programmes.
We have also considered the impact of
water scarcity and temperature increases
on our business. We are not a water
intensive business but do utilise water for
cleaning and maintenance activities and
are mindful of our water consumption,
in particular in water stressed areas.
Our impact is mitigated by our water
saving initiatives in place, further details
of which are provided on page 63.
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72 Ashtead Group plc Annual Report & Accounts 2024
the same manner as we managed the
transition from Tier 0 to Tier 4/5 diesel
engines from 1994 to 2018. On average,
we own assets for seven to eight years
and therefore expect the full transition
of our fleet will only occur over the
longer-term as projected in our net zero
road map.
We believe the shift to low or zero
emission technologies will also increase
the cost of rental assets. As an example,
we have experienced costs which are
three times greater for a battery version
of a diesel machine in early phase of
production. However, over time, we expect
the cost of greener technology to reduce
as production volumes increase and
reach commercial levels.
We are working closely with suppliers and
customers to develop new technology,
including investment in partners to assist
in the development of battery, solar and
other technology. We also believe the
development of R99/HVO or other
environmentally friendly alternative fuels
will provide an alternative to the reliance
on diesel today, particularly in the
transition period as alternative
technologies are developed.
Our strategy is to ensure we have a
sustainable business over the long-term.
This is an integral part of Sunbelt 4.0,
particularly within the actionable
components, ‘Sustainability’ and
‘Performance’. Through our
‘Sustainability’ component, we are looking
to drive environmental efficiencies in our
transportation fleet and the facilities we
operate. The costs of this transition are
included in our financial plans. This will
be underpinned by the foundational
elements ‘Platform’ and ‘Innovation’
which will deliver a leading technology
platform, capturing the benefits of scale
and enhancing customer service.
Market risk (medium to long-term)
Emerging market developments are
monitored, using both third-party risk
analysis, as well as internal views of
emerging trends. Specifically, these
market factors include changing
customer requirements as a result of
the environmental standards to which
they operate to support their own
low-carbon objectives.
Furthermore, we believe that market risk
arises from potential changes in the cost
of transportation and logistics associated
with changes in energy prices and
availability of alternative energy sources.
Higher fossil fuel prices over the medium-
term may promote global investment in
Policy and legal risk (short, medium
and long-term)
Legal compliance covers matters such
as wastewater, storm water, solid and
hazardous wastes and materials, and
air quality. Breaches potentially create
litigation for the Group which may result
in fines and penalties for non-compliance.
The Group’s Health, Safety and
Environmental departments and our
operational audit teams continually
assess the Group’s regulatory
environmental compliance. These audits
have a built-in corrective action process
to ensure any identified non-compliance
is addressed in a timely manner.
The Group monitors current and
emerging regulation to ensure our
policies and practices remain appropriate.
Specific examples of current regulation
which impacts the Group relate to
ensuring our rental and vehicle fleet is
compliant with engine emission standards
such as the Californian Air Emissions
Standards or the London Ultra-low
Emission Zone requirements. We believe
that regulation will increase over time and
the potential for government-imposed
restrictions on greenhouse gas
emissions, through carbon taxes and
import carbon pricing mechanisms, could
lead to higher operating and capital costs
for the Group in the future. However,
these costs are associated with the use
of an asset, whether it is owned or rented,
and so we expect these costs to be borne
by the user of the asset and hence, in the
case of rental, be reflected in rental rates.
Technology risk (short, medium and
long-term)
A significant proportion of our fleet today
contains a diesel engine, further details of
which are provided on page 63. While we
will seek to replace these assets with
assets using alternative fuel sources as
they become available, this will take time.
Indeed, there are a lack of alternative
assets available today and limited
manufacturing capacity and so we expect
any transition to happen gradually and
to incur higher costs in the short- to
medium-term. Compared to internal
combustion engines (‘ICE’), we have
experienced a 10% premium for light
weight battery electric vehicles (‘BEVs’),
213% premium for medium duty BEVs
and 100% premium for heavy duty BEVs.
Over time, we expect the cost of greener
technology to reduce, but the rate of
this decline and the inflection point at
which ICE prices exceed those of EVs
will depend on battery technology
development in addition to the level of
policy ambition, timing and coordination.
We will seek to manage this transition in
green technology and renewable energy,
but this could also put pressure on prices
for renewable electricity and renewable
diesel, increasing our transportation cost.
Our net zero model which we developed
in support of our net zero commitment is
dynamic and designed to be adapted as
key known and unknown factors develop
– for example, the financial impacts
arising as electric power displaces
petroleum fuel and evolving projections
around pace, scale and cost of low-
carbon technology and infrastructure.
To optimise costs and performance, we
are working closely with fleet specialists
to improve the efficiency of our current
fossil-fuel rental and transportation
fleet through:
− transport route optimisation and
equipment loading, reducing miles
travelled to deliver the same amount
of fleet, resulting in lower costs and
carbon emissions; and
− increased asset utilisation, through use
of enhanced telematics to maximise
asset uptime, reducing the number
of assets required for a certain
activity level.
Reputation risk (short, medium and
long-term)
Breaches of environmental regulation
potentially create hazards to our
employees, damage to our reputation and
expose the Group to, among other things,
the cost of investigation and remediating
contamination and also fines and
penalties for non-compliance.
Failure to meet the Group’s climate-
related commitments, or breach of
environmental regulation, could result
in loss of revenue or financial penalty.
In relation to the Group’s Scope 1 and 2
carbon intensity reduction targets which
form part of the Group’s Sunbelt 4.0
actionable components, the associated
costs are reflected within our financial
performance and plans.
Management of the impact of these
climate-related transition risks and
opportunities forms part of the day-to-day
operational activities of the Group and our
financial planning reflects the financial
impacts and investments anticipated with
examples of their activities provided in the
Responsible business report on pages 61
and 63.
73Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
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a larger rental market, from which we are
well positioned to benefit.
Furthermore, recent legislative Acts in
the US, such as the Inflation Reduction
Act, are providing incentives for clean
energy production and manufacturing,
including solar and wind farms and
battery manufacture. We believe that
rental will play a significant role in
supporting the initial construction and
future maintenance of these facilities.
Resilience of the Group’s strategy
The Group has a business model that is
both resilient and adaptable to change.
Furthermore, it benefits from a
distributed operating structure such that
it is not reliant on any particular location.
The Group’s strategy seeks to take
advantage of these benefits of the
business model, while recognising
the risks inherent in the business and
the environment in which we operate,
whether that be economic factors,
competitor actions, cyber threats or
environmental considerations such as
climate change. We discuss our thinking
on climate-related matters on a regular
basis assessing how changes may affect
the business and how the business would
respond. While we consider a wide range
of scenarios, we have outlined our
thinking below under three climate
scenarios: an increase in average
temperatures by 1.5˚C, 2˚C and over 3˚C.
Scenario analysis
In evolving our analysis of the potential
impact of alternative climate-related
scenarios on the Group, the Group
has considered certain risks and
opportunities as identified above. We
used the Group’s net zero road map as
a foundation for our analysis but have
overlaid alternative climate scenarios
to test the resilience of our strategy.
In line with TCFD recommendations,
our analysis considered three plausible
climate scenarios:
− current policies (>3°C rise in
temperatures by 2100, aligning with
RCP 8.5 pathway) – this scenario
considers our resilience in an
environment with high global warming
and physical climate change;
− delayed transition (<2°C rise in
temperatures by 2100, aligning with
RCP 4.5 pathway) – this scenario
considers our resilience in an
environment where delayed transition
means that rapid policy change is
required in the longer-term to mitigate
the extent of global warming and
physical climate change; and
Opportunities (short, medium and
long-term)
While we believe physical risks brought
about by extreme weather events or
changing weather patterns are mitigated
by the diverse nature of the Group’s
operations, our products are in high
demand to respond to the consequences
of events such as hurricanes, wildfires
and flooding. Increased frequency of
extreme weather events brought about
by climate change will result in increased
demand for our products and services.
As environmental regulations
surrounding GHG emissions and waste
tighten, this will promote a shift from
ownership to rental. The rental sector
supports many of the principles of a
circular economy. These include shared
use, efficient and reduced use of
resources, high levels of maintenance
and repair, and ensuring further use or
recycling of equipment at the end of its
useful life. At the end of its service life
with us, our equipment has many years of
use remaining and, as such, we sell it in
the secondary market. This results in:
− lower emissions generated in the
manufacturing phase and fewer natural
resources being utilised;
− lower emissions through transportation
of equipment, as relevant equipment
is located locally to job-sites;
− more efficient use of assets as the
optimal asset can be used for a
customer’s job with assets maintained
to a higher standard; and
− consequently, fewer assets reaching
end of life and requiring disposal.
Increasingly, we are providing lower
carbon solutions using existing
technologies as customers seek to reduce
their carbon footprint. As an example,
we are able to reduce emissions by using
battery storage technology combined with
diesel generators so that the generator
operates at optimum efficiency for a
shorter period of time and hence, uses
less fuel. This combination of equipment
also provides the benefit of lower
noise pollution.
The increasing level and pace of
regulatory requirements make it more
complicated and expensive for customers
to maintain compliance. Emerging
technology is more complicated, requires
a different skill-set to maintain, and is
more expensive, at least initially, than
existing technology. As such, it will be
more efficient for customers to rent
rather than buy a new asset, providing
an additional impetus to the shift from
ownership to rental. This will contribute to
− net zero (1.5°C rise in temperatures by
2100, aligning with RCP 2.6 pathway)
– this scenario considers our resilience
in an environment where policy change
is implemented immediately and
therefore global temperature rises
are contained.
For transition risks, we have used the
Network for Greening the Financial
System (NGFS) as a basis for our scenario
analysis, while for physical risks, we
used the Intergovernmental Panel
on Climate Change Representative
Concentration Pathways (RCPs) and
research from the International Labour
Organization database.
Climate-related risks and opportunities
have been evaluated based on our
assessment of their likelihood as well as
based on our assessment of the potential
impact on our business operations,
including the financial impact in relation
to capital expenditure, operating
expenditure or revenue. However, we
highlight that in relation to operational
and financial impacts, we expect the
Group to be able to implement a range
of mitigating actions against the impact
of the risks identified. Specifically,
as commented above, we expect the
transition to low-carbon assets to be
undertaken in an orderly manner and, as
these risks are reflective of broad societal
impacts, we expect to be able to increase
rental rates and delivery charges to
reflect the increase in the cost of assets
and higher transportation costs.
Nevertheless, we recognise the inherent
uncertainty in assessing these scenarios,
including the likelihood of risks, the
potential for emerging opportunities and
technology, and our ability to capitalise on
them fully. We therefore consider this
uncertainty when assessing our strategic
resilience to these climate-related risks
and opportunities. We have quantified the
potential operational and financial impact
using illustrative financial data together
with available third-party data relevant to
the risks and opportunities considered.
However, in general, the financial impacts
on the Group are mitigated by the breadth
and nature of the Group’s products and
the fact that our rental product range
adapts to meet the requirements of our
end markets in the ordinary course of
business. Furthermore, as we have
defined short-term as being over the next
three years, we believe that the potential
impact over that time horizon is very low
in all scenarios.
74 Ashtead Group plc Annual Report & Accounts 2024
Illustration of our scenario analysis relating to risks and opportunities:
Type of risk or
opportunity
Description of risk
or opportunity Potential operational and financial impact Potential mitigating actions
Physical risk
Chronic risk
– impact of heat
stress
Heat stress may
significantly impact
worker health, safety,
and productivity,
potentially leading to
higher costs associated
with increased staffing
requirements and
medical coverage.
Approximately 25% of our workforce are field based
technicians, and it is this workforce which we believe
would be most impacted by heat stress. The International
Labour Organization has estimated the there will be a 1%
greater loss of worker productivity in the US in a >3°C
scenario compared with a 1.5°C scenario. If we were to
assume a 1% increase in labour costs for technicians in
the US, the incremental cost to the Group today would be
approximately $4m per annum.
Over the medium- to long-term, we
believe that we would seek to recover
incremental costs arising in our
business due to heat stress through
rental rate, although recognise that it
may not be possible to fully cover these
costs. Nevertheless, we expect the
impact to be low.
1.5°C In a 1.5°C scenario, there would be no
incremental costs to the Group.
<2°C In a <2°C scenario, while there would be some
impact in the long-term, we do not believe that
this is significant and estimate that it would
represent the mid-point between the 1.5°C and
the >3°C scenario.
>3°C In a >3°C scenario, in the long-term,
incremental costs could arise due to lost labour
productivity as well as increased energy costs
associated with cooling and staff medical costs.
In addition, we may need to upgrade our
locations to provide enhanced facilities for
team members. Nevertheless, based on the
analysis above, we do not believe that this would
be significant.
Transition risks
Technology risk
– transition to
low-carbon
assets
Transitioning to a
low-carbon economy
will require significant
capital investment in
our rental and
transportation fleet.
Our current rental fleet has an original equipment cost of
c. $18bn with a seven to eight-year replacement cycle.
Thus, on average, we replace $2.2bn per year (using eight
years) of which c. 70% ($1.5bn) is reliant on fossil fuels. If
we were to assume the cost of a lower-carbon asset to be
c. 25% greater than its diesel equivalent, the incremental
cost would be $375m, with a resultant higher depreciation
charge arising over the life of the asset. It should be noted
that this is an illustrative figure only.
This cost is embedded within our capital expenditure
plans going forward and will not be a discrete one-off
item of capital expenditure. Furthermore, it is unlikely
that any individual year would see an immediate shift
away from diesel assets but instead will be a more
progressive transition.
Given the long-term nature of our
assets, we believe that the transition of
our rental and non-rental fleet will be
undertaken in an orderly fashion.
Furthermore, we would expect rental
rates to increase to reflect the changing
asset cost base, and therefore to have a
limited net financial impact on the
Group. Based on the incremental capital
expenditure figure we have identified,
we would estimate incremental annual
rental revenue of $225m (based on an
assumption of 60% dollar utilisation), or
$1.8bn over an asset’s life (assuming an
eight-year life).
1.5°C In a 1.5°C scenario, in the short-term we believe
the impact would be insignificant as while the
cost of alternative assets today is higher than
their diesel equivalents, there is a lack of
production capacity which limits transition. In
the medium- to longer-term, we expect the cost
of lower-carbon assets to reduce as technology
develops and production capacity shifts to
facilitate their manufacture.
<2°C In a <2°C scenario, we expect transition to
low-carbon assets to be slower and therefore
any incremental costs arising to be incurred
over a longer period of time when compared to a
1.5°C scenario.
>3°C In a >3°C scenario, transition to alternative asset
types would be limited and therefore no
incremental cost to the business.
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Type of risk or
opportunity
Description of risk
or opportunity Potential operational and financial impact Potential mitigating actions
Market risk
– impact on
transportation
cost
Increased cost of
transportation and
logistics associated
with the cost of energy.
Based on the cost of fuel and transportation services
purchased by the Group today, a 1% change in the cost
due to the transition to alternative fuel types, the
incremental cost or saving to the Group would be $6m.
In the medium term, availability of
alternative fuels is likely to result in a
premium for substitute fuels, but we
believe that this will normalise as
greater volume becomes available.
Nevertheless, we expect to continue to
recover all our transportation costs
through delivery charges.
1.5°C In a 1.5°C scenario, we would expect
incremental transportation costs to arise in
the medium-term while production volumes
of alternative fuels remains limited. In the
longer-term, we would expect these to
moderate as production volumes increase and
alternative technologies become available.
<2°C In a <2°C scenario, we would expect some
impact to the Group, but that this would be less
than that arising from the 1.5°C scenario.
>3°C In a >3°C scenario, there would be no
incremental costs to the Group as the transition
to alternative fuels and technologies is not
implemented. We note that this scenario is
not in line with the Group’s net zero pathway.
Transition opportunity
Market
opportunity
– change in
customer
behaviour
The shift to a low- or
zero-carbon economy
will promote a shift
from ownership to
rental. This could see
an expansion in our
customer base in the
medium- to long-term.
We believe that it is difficult to quantify the market
opportunity due to changes in customer behaviour as it is
embedded within the ongoing trend of a shift to rental.
Today, rental makes up approximately 55% of the US
market but that the transition to lower-carbon assets
will accelerate the shift from ownership to rental. The US
rental market is estimated as $72bn
1
, and therefore a 1%
increase in rental penetration would increase the size of
the rental market by $1.3bn – with an 11% market share
in the US, would equate to c. $145m of incremental
rental revenue.
Not applicable.
1.5°C
It is difficult to analyse the opportunity from a shift
in customer behaviour across different climate
scenarios. However, we believe that the transition
to lower-carbon assets provides a further
incentive for customers to rent rather than own.
<2°C
>3°C
1 Dodge Data and Analytics (May 2024) – market size estimate for 2023
In a 2°C or less scenario, we believe that
the risks and opportunities faced by the
Group will be related principally to
transition risks (e.g., the application of
policy or regulatory initiatives including
increased pricing of GHG emissions,
changes in technology and changes in
customer preferences). In this scenario,
as we, our suppliers and our customers
look to reduce GHG emissions, we are
likely to face increasing costs whether
that be through increased cost of our
rental fleet, or the cost associated with
the pricing of GHG emissions. While we
believe these factors will crystallise over
the medium to longer-term as new
technologies develop, we are working
with our suppliers and other parties to
advance these technologies. In the
near- to medium-term, the availability of
new technology will be constrained by
production capacity, and we would expect
to transition our rental fleet to the latest
technology gradually as we replace c. 15%
of our rental fleet every year. We believe
that increased costs and complexity will
provide additional impetus to the shift
from ownership to rental, increasing our
addressable market. We expect rental
and transportation rates to reflect
the increased cost of rental and
transportation equipment, enabling us to
maintain similar levels of dollar utilisation
and therefore returns. We expect to
continue to dispose of old rental fleet in
the used equipment market, replacing
other organisations’ older, less
environmentally friendly equipment.
In a 3°C and over scenario, in addition
to the transition risks discussed above
we would expect to see an increase in
physical risks (e.g., increased instances
of extreme weather events, rising mean
temperatures and rising sea levels).
As discussed above, the diversified nature
of the Group’s operations means that
no location is material to the Group,
mitigating the immediate impact of
physical risks on our operations and
enabling us to plan for the longer-term.
We recognise the impact heat stress may
have on our people and infrastructure
and this will be a key consideration in
our people and growth strategy.
In any scenario, the speed of the transition
of assets will be constrained by the
availability of new technologies and
manufacturing capacity. Given our
partnership with key suppliers and our
regular replacement cycle, we expect to
be able to transition our fleet more quickly
than many other organisations. These
discussions and considerations are
factored into our routine financial
planning activities – for example,
through our capital allocation decisions.
In considering the impact of the above
risks and opportunities on the Group’s
financial statements for 2023/24, we do
not believe that there are any specific
adjustments required. Specifically, the
Group has considered if there is any
potential impact on rental asset lives and
residual values. The Group assesses
asset lives and residual values on an
76 Ashtead Group plc Annual Report & Accounts 2024
annual basis to determine that the
Group’s estimates remain appropriate.
In doing so, the Group has considered
the impact of transition to alternative
technologies on its existing rental fleet,
or the introduction of legislation in
relation to emissions. However, as we
note above under the ‘technology’ risk, we
believe that any transition in technologies
will be gradual and therefore asset lives
and residual values remain appropriate.
Risk management
The process for identifying, assessing
and managing climate-related risks is
the same as for all the risks faced by the
Group and is described on pages 36 and
41, including our description of the Group’s
overall risk management framework on
page 37 and our assessment in relation
to emerging risks on page 41.
As discussed above, our response to these
risks and our actions are embedded within
our operational activities, supported by
dedicated specialists in North America
and the UK. Our sustainability working
group, with oversight from the Group’s
Risk Committee, monitors progress of
our sustainability-related initiatives and
performance against the targets we have
set ourselves.
The Board has overall responsibility for
risk management, setting risk appetite
and implementation of the risk
management policy – this includes
responsibility for climate-related risks
and actions taken to manage those risks
where relevant. This approach is designed
to enable the Group to take advantage
of attractive opportunities, yet to do so
within the risk appetite of the Board,
mindful of risks which have been
identified and any emerging risks which
may impact the Group. The Group’s Risk
Committee monitors the actions taken
across the Group to manage the Group’s
risk and ensure that adequate assurance
is obtained over them. In addition, the
Group’s Risk Committee ensures that
risks have been appropriately assessed
in relation to risk rating.
The Board recognises that climate-
related risks present significant new
and emerging risks to organisations
and therefore are mindful of the need to
continuously consider developments in
this area, both in terms of new risks which
have emerged as well as the change in
their relative significance. Included within
the Group’s considerations is the impact
of existing and emerging regulatory
requirements on the Group, such as
potential future limits on emissions,
further details of which we have detailed
within the strategy section above.
Metrics and targets
Our KPI associated with environmental
risk is that of carbon intensity for our
Scope 1 and 2 GHG emissions. Under
Sunbelt 3.0, the Group set a target to
reduce our carbon intensity by 35% by
2030, with a shorter-term target to
reduce our carbon intensity by 15% by
2024 from the level in 2018. By 2024, we
reduced carbon intensity by over 30%,
ahead of our by 15% short-term target
and this enabled us to advance our carbon
ambitions under our latest strategy,
Sunbelt 4.0. We set a new commitment to
reduce our Scope 1 and 2 carbon intensity
by 50% by 2034 (compared to a base year
of 2023/24) and to be Scope 1 and 2 Net
Zero by 2050. Details as to how we plan
to achieve these commitments, our
performance in the current year and
progress over the prior years can be
found on pages 61 and 62 within our
Responsible business report.
Furthermore, our carbon intensity KPI,
specifically delivering a carbon intensity
reduction formed part of the Group’s
remuneration arrangements as one of the
performance measures for the Group’s
Strategic Plan Award. Going forward, we
are incorporating performance against
our carbon intensity reduction targets
into our annual long-term incentive plan.
Further details are set out in our
Remuneration report on pages 125
and 126.
Greenhouse gas (GHG) emissions
Our Scope 1 and 2 GHG emissions are
disclosed on page 62 of this report and
have been determined in line with the
GHG Protocol methodology. Unlike many
organisations, the nature of the Group’s
operations is that the majority of our
Scope 1 and 2 emissions arise from
Scope 1 emissions, relating to the
transportation and delivery of our rental
fleet to customers.
Our Scope 3 GHG emissions are disclosed
in the Group’s Sustainability report. The
most significant components of our Scope
3 emissions relate to our customers’ use
of our assets during the rental period, the
use of sold product (principally the use of
used equipment after our ownership) and
the embedded carbon in our supply chain.
This is discussed in more detail within the
Responsible business report on page 62.
Measuring Scope 3 emissions involves a
significant application of judgement, in
particular in relation to the use of sold
assets when we dispose of rental assets
to the used equipment market and
end of life treatment of these assets.
Accordingly, our Scope 3 emissions will
always be subject to a significant degree
of estimation uncertainty.
Other metrics
We have considered what other metrics
and targets may be relevant to the Group.
In doing so, we have considered internal
areas of focus, the risks and opportunities
analysis summarised above and external
reporting frameworks, such as the
Industrial Machinery & Goods SASB
standard applicable to the Group, which
we report against within the Group’s
Sustainability report. In addition to the
metrics provided within this report, we
report on water consumption within the
Group’s Sustainability report. However,
as part of our ongoing focus on the
environmental impact of the Group
more broadly, we are in the process of
developing metrics and targets to monitor
and measure our impact in other areas
which are less material to the Group.
These include the diversion rate of waste
from landfill. While we have several
programmes in place to manage waste
across the business and have reliable
data in the UK relating to waste diversion
given the legislative environment, we are
undertaking a waste mapping exercise in
North America to understand our waste
composition in more detail and working
with our waste management suppliers to
gain greater visibility in our diversion rate
of waste from landfill. This will enable us
to better track our progress in the future.
Details as to our work in these areas is
discussed on page 63.
77Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
5
INVESTMENT
Disciplined capital
allocation driving
profitable growth,
strong cash generation
and enhanced
shareholder value.
ACTIONABLE
COMPONENT
Ashtead Group plc Annual Report & Accounts 202478
New target leverage range of 1.0
to 2.0 times net debt to EBITDA
(excluding IFRS16)
Strong free cash flow will fund 100%
ofambitious Sunbelt 4.0 organic
growthplans
Significant flexibility and optionality
to allocate capital in accordance with
our long-term priorities
KEY OBJECTIVES:
Ashtead Group plc Annual Report & Accounts 2024
STRATEGIC REPORT
79
The non-financial and sustainability
reporting regulations in section 414CA
and 414CB of the Companies Act 2006
require the disclosure of specific
information relating to environmental
matters, the Company’s employees,
social matters, respect for human rights
and anti-corruption and anti-bribery
matters, a summary of which is set
out below.
Environmental matters
We seek to minimise the environmental
impact of everything we do. In addition,
our commitment to improving energy
performance is intended to reduce our
impact on the environment and could
deliver significant cost savings over time.
Further details of our policies, including
disclosure of carbon emission and energy
usage data, is provided on pages 61 to 63.
A summary of our climate-related
financial disclosure approach is included
in our TCFD statement on pages 70 to 77,
which includes details on governance,
strategy (including responding to the risks
and opportunities arising from climate
change), risk management and
measuring performance.
Related principal risks: see
‘environmental’ risk on page 40
Employees
Our employee policies are designed to
ensure that we recruit the best people,
train them well and look after them
so that they provide the best possible
service for our customers, suppliers and
communities. Furthermore, health and
safety policies are core to our operations
and we maintain and continuously
seek toenhance our health and safety
programmes to minimise any risk to
ourpeople.
Specific policies provide equal
opportunities to all of our staff and ensure
that we maintain an inclusive culture.
Employee policies are available to all
employees through the employee
handbooks and on our employee intranet.
Further details of our policies, including
details on our safety programmes,
training and recruitment activities, is
provided on pages 58 to 60 and pages 64
to 67.
Related principal risks: see ‘people
and culture’ risk on page 39
Social matters
Playing a big role in our local
communities is of crucial importance to
our business. As we expand our market
share, particularly in the US and Canada,
we have ever more impact and influence
over the communities where we hire staff
and make an economic contribution.
Our responsibility to those communities
increases likewise. The Group has
policies to support employee volunteering
for programmes which positively impact
our communities.
Further details of our contribution to
society and the communities in which we
operate is provided on page 68.
Related principal risks: while social
matters are not considered a principal
risk to the Group, we believe there is an
important link between social matters
and the risk identified in relation to our
people and culture as outlined on page 39.
Human rights
We believe in the rights of individuals and
take our responsibilities seriously to all
our employees and those who may be
affected by our activities and, this year,
adopted a formal human rights policy.
While we do not manage human rights
matters separately, we continue to assess
potential risks and do not believe they
raise particular issues for the business.
Further details of our policies are
provided on page 69. Our human rights
policy, business ethics and conduct policy,
modern slavery and human trafficking
policy and modern slavery and human
trafficking statement are available on
our website.
Related principal risks: see ‘laws and
regulations’ risk on page 40
Anti-corruption and
anti-bribery
Anti-corruption and bribery policies are
maintained and reviewed on a regular
basis with relevant guidance included in
employee handbooks and available on our
employee intranet. These policies include
matters relating to money laundering and
anti-competitive behaviour.
Further details of our policies, including
details on training required to be
undertaken by our employees, is provided
on page 67.
Related principal risks: see ‘laws and
regulations’ risk on page 40
In addition, information required in
relation to the Group’s business model,
principal risks, including those which
relate to the matters above, and key
performance indicators are provided
on pages 20 to 25 and 36 to 41 of the
Annual Report.
NON-FINANCIAL AND SUSTAINABILITY
INFORMATION STATEMENT
APPROVAL OF THE STRATEGIC REPORT
The Strategic report set out on pages 1 to 80 was approved by the Board
on 17 June 2024 and has been signed on its behalf by:
Brendan Horgan Michael Pratt
Chief executive Chief financial officer
17 June 2024 17 June 2024
80 Ashtead Group plc Annual Report & Accounts 2024
DIRECTORS’
REPORT
CONTENTS
82 Chair’s introduction to Corporate Governance
84 Our Board of directors
86 Corporate governance report
94 Audit Committee report
99 Nomination Committee report
100 Remuneration report
128 Other statutory disclosures
130 Statement of directors’ responsibilities
DIRECTORS’ REPORT
81Ashtead Group plc Annual Report & Accounts 2024
STRONG
CORPORATE
GOVERNANCE
CHAIR’S INTRODUCTION TO CORPORATE GOVERNANCE
Dear Shareholder
As chair, it is my role to ensure that the
governance regime remains appropriately
robust and that the Board operates
effectively. I am, therefore, pleased to
introduce the corporate governance
report for 2023/24. This report details
the matters addressed by the Board
and its committees during the year.
The Group has delivered against its
Sunbelt 3.0 strategic plan and has
launched Sunbelt 4.0, the next iteration
of the Group’s strategy. The business
continues to perform well and in
executing against the Group’s strategy,
the Board continues to consider all the
Group’s stakeholders and seeks to take
actions that support the Group’s overall
purpose of providing a reliable alternative
to ownership for our customers while
providing sustainable returns to all
our stakeholders. I believe that our
Sunbelt 4.0 strategic actionable
components, underpinned by our culture
and foundational elements, will provide
the Group with the basis for continuing
development and growth in the years
to come.
In particular, the Board is focused on
ensuring the sustainable success of the
Group over the longer-term, through its
business model, strategy and governance
structures. We recognise that good
governance is essential in promoting the
success of the business for the benefit
of its members as a whole and that our
governance environment is underpinned
by the culture of our Group, led by the
‘tone from the top’ of the organisation
through the actions of the Board and
senior leadership teams. Ensuring a
robust corporate governance
environment is key in supporting the
delivery of our strategy and as such, it is
crucial that our governance structures
keep pace with changes in the Group
so that we can ensure our development
and growth is both responsible and
sustainable. We need to manage our risks
efficiently and ensure transparency
across the business. I am confident that
your Board is well placed to do that and
we remain committed to maintaining the
highest standards of governance.
In executing our responsibilities,
we recognise that good stakeholder
engagement is important in ensuring
a broad range of views is considered by
the Board. During the year, the Board
had the opportunity to meet with team
members across the organisation and
I met with a number of investors to
discuss a range of topics. In addition,
the chief executive updates the Board
regularly on operational matters,
including relationships with customers
and suppliers.
Areas of Board focus
The Board has played an active role in
the Group’s delivery against its strategic
objectives, as well as the development of
the Group’s new strategy, further details
of which are set out within the Strategic
review. In addition, the Board has invested
significant time over the last year in
reviewing and assessing:
− our operating model and structure
to ensure they remain fit for purpose
as the business grows and markets
change;
− the effectiveness of our health and
safety practices and identifying areas
for improvement;
− our key management resource to
ensure it remains motivated and
appropriately rewarded;
− succession planning and ongoing
senior recruitment;
− the effectiveness of our capital
structure and capital allocation
priorities;
− the importance of good corporate
governance in the long-term
sustainable success of a company; and
− our cyber security policies and
procedures to ensure they remain fit
for purpose.
Compliance
We endeavour to monitor and comply with
ongoing changes in corporate governance
and evolving best practice in this area.
I am pleased to report that the Company
has complied in full throughout the year
with the provisions set out in the Code,
issued by the Financial Reporting Council
(‘FRC’) and available to view at www.frc.
org.uk. A summary of how we have
applied the principles set out in the Code
is presented in the table. In addition,
I can confirm this report provides a fair,
balanced and understandable view of
the Group’s position and prospects.
PAUL WALKER
Chair
PAUL WALKER
Chair
Ashtead Group plc Annual Report & Accounts 202482
The 2018 UK Corporate Governance Code
The governance section has been set out to illustrate how we have applied the
principles of the Code together with information contained elsewhere in the Annual
Report. Further information can be found as follows:
Board leadership and company purpose Further information
A. Effective and entrepreneurial board Pages 86 and 87
B. Purpose, values and culture Page 86
C. Board framework and resources Page 90
D. Board engagement with stakeholders Page 87
E. Workforce policies and practices Page 87
Division of responsibilities
F. Board roles Page 88
G. Division of responsibilities Pages 88 and 89
H. Commitment to the Board Page 90
I. Operation of the Board Page 90
Composition, succession and evaluation
J. Appointments to the Board Pages 90 and 91
K. Board skills, experience and knowledge Page 90
L. Board evaluation of effectiveness Page 92
Audit, risk and internal control
M. Independence and effectiveness of internal and external audit Pages 96 to 98
Integrity of financial and narrative statements
N. Fair, balanced and understandable assignment Page 97
O. Internal control framework and risk management Pages 97 and 98
Remuneration
P. Remuneration designed to support purpose and strategy Pages 100 to 106
Q. Remuneration policy Page 109
R. Remuneration outcomes Page 100
Ashtead Group plc Annual Report & Accounts 2024 83
DIRECTORS’ REPORT
A
N
R
JILL
EASTERBROOK, 53
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
OUR BOARD OF DIRECTORS
Appointed to Board – July 2018
Appointment to current role
Paul Walker was appointed as a non-executive director
in July 2018 and non-executive chair in September 2018.
Skills
Paul spent 16 years as chief executive officer of The
Sage Group plc (‘Sage’), giving him a deep insight of the
challenges of running a global business. He has a strong
financial background and high-level non-executive
experience, which adds to the Board’s strength.
Experience
Paul’s roles at Sage included chief executive officer,
finance director and financial controller. He has
alsobeen a non-executive director at Diageo plc,
Experian plc, Halma plc, Sophos Group plc and
MyTravel Group plc.
Qualifications
– Graduated in economics from York University
– Chartered accountant (UK)
Other roles
Non-executive chair of RELX plc.
Nationality – British
Appointed to Board – January 2011
Appointment to current role
Brendan Horgan was appointed as chief executive in
May 2019, having served as chief operating officer of the
Group since January 2018 and as the chief executive of
Sunbelt US and a director since January 2011.
Skills
Brendan has worked in the business for more than
25 years and has a detailed knowledge of the operations
and brings strong leadership and management skills to
his role.
Experience
Brendan joined Sunbelt in 1996 and has held a number
of senior management positions including chief sales
officer and chief operating officer.
Qualifications
– Graduated in business from Radford University
Other roles
None
Nationality – American
Appointed to Board – April 2018
Appointment to current role
Michael Pratt was appointed as chief financial officer in
April 2018.
Skills
Michael is a qualified accountant with 20 years’
experience with Ashtead within finance roles giving
him a detailed understanding of the Group’s business.
He has played a key role in defining the Group’s
capital structure.
Experience
Michael was deputy group finance director and group
treasurer from 2012 having joined the Group from PwC
in 2003.
Qualifications
– Graduated in civil engineering from the University of
Birmingham
– Chartered accountant (UK)
Other roles
None
Nationality – British
Appointed to Board – October 2018
Appointment to current role
Angus Cockburn was appointed as a non-executive
director in October 2018 and as senior independent
non-executive director in January 2019.
Skills
Angus brings knowledge of the rental market and
specialty businesses, along with a good understanding
of the associated strategic and financial issues of
operating an international business with a substantial
North American presence.
Experience
Angus was chief financial officer of Serco Group plc
between October 2014 and April 2021. He has also
been a non-executive director of GKN plc and Howden
Joinery Group plc, as well as chief financial officer and
interim chief executive of Aggreko plc.
Qualifications
– Graduated in business studies and accounting from
the University of Edinburgh and an MBA from IMD
Business School
– Chartered accountant (UK)
Other roles
Non-executive chair of James Fisher and Sons plc and
non-executive director of BAE Systems plc, Securities
Trust of Scotland plc and Edrington Group Limited.
Nationality – British
Appointed to Board – January 2020
Appointment to current role
Jill Easterbrook was appointed as a non-executive
director in January 2020.
Skills
Jill brings strong digital experience within retail
environments to the Board.
Experience
Jill was previously the chief executive officer of JP
Boden & Co and formerly held a number of senior
positions with Tesco PLC.
Qualifications
– Graduated in economics from Leeds University
Other roles
Non-executive chair of Headland Consultancy and
Tracsis PLC and non-executive director of Auto Trader
plc and UP Global Sourcing Holdings plc.
Nationality – British
N
F
PAUL WALKER,
67
INDEPENDENT
NON-EXECUTIVE
CHAIR
F
BRENDAN
HORGAN, 50
CHIEF
EXECUTIVE
F
G
MICHAEL
PRATT, 60
CHIEF FINANCIAL
OFFICER
Details of the directors’ contracts,
emoluments and share interests can be
found in the Directors’ remuneration report.
Committee membership
A
Audit
N
Nomination
R
Remuneration
F
Finance and Administration
G
Group Risk Denotes chair
A
N
R
ANGUS
COCKBURN, 61
SENIOR
INDEPENDENT
DIRECTOR
Ashtead Group plc Annual Report & Accounts 202484
Appointed to Board – July 2016
Appointment to current role
Tanya Fratto was appointed as a non-executive director
in July 2016.
Skills
Tanya has wide experience in product innovation, sales
and marketing and engineering in a range of sectors
and has extensive knowledge of operating in the US.
Experience
Tanya enjoyed a 20-year career with General Electric
where she ran a number of businesses. Previously a
non-executive director of Smiths Group plc and
Mondi Group.
Qualifications
– Graduated in electrical engineering from the
University of South Alabama
Other roles
Non-executive director of Advanced Drainage
Systems Inc.
Nationality – American
Appointed to Board – January 2022
Appointment to current role
Renata Ribeiro was appointed as a non-executive
director in January 2022.
Skills
Renata brings strong commercial and digital
experience to the Board.
Experience
Renata is currently Senior Vice President, Operations
Strategy for Carnival Corporation & plc where she has
worked since 2008.
Qualifications
– Graduated in business administration from Fundação
Getuilo Vargas, São Paulo and an MBA in business
administration from Wake Forest University
Other roles
Senior Vice President, Operations Strategy for Carnival
Corporation & plc.
Nationality – Brazilian and American
Appointed to Board – June 2016
Appointment to current role
Lucinda Riches was appointed as a non-executive
director in June 2016.
Skills
Lucinda has extensive investment banking and capital
markets experience.
Experience
Lucinda was formerly global head of Equity Capital
Markets and a member of the board of UBS Investment
Bank. She has held a range of non-executive roles with
public companies.
Qualifications
– Graduated in philosophy, politics and economics from
Oxford University and a Masters in political science
from the University of Pennsylvania
Other roles
Non-executive chair of Peel Hunt Limited and
Greencoat UK Wind Plc and non-executive director of
LGT Capital Partners.
Nationality – British
Appointed to Board – May 2019
Appointment to current role
Lindsley Ruth was appointed as a non-executive
director in May 2019.
Skills
Lindsley brings extensive knowledge of our end
markets to the Board, particularly North America.
Experience
Lindsley was previously chief executive officer of RS
Group plc. He has also held senior positions with TTI
Inc. and Solectron Corporation.
Qualifications
– Graduated in engineering from Texas A&M University
Other roles
Member of the CBI’s International Trade Council.
Nationality – American
Appointed to Board – June 2024
Appointment to current role
Roy Twite was appointed as a non-executive director in
June 2024.
Skills
Roy brings wide-ranging knowledge of the global
industrial sector along with extensive strategic,
management and operational experience.
Experience
Roy is currently chief executive of IMI plc where he has
worked in a variety of senior roles including leading the
Automation, Climate Control, Retail Dispense and
Automotive sectors. In addition, Roy was previously a
non-executive director of Halma plc.
Qualifications
– Graduated in engineering from the University of
Nottingham and a Masters degree from the
University of Cambridge
Other roles
Chief executive of IMI plc.
Nationality – British
A
N
R
TANYA
FRATTO, 63
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
A
N
R
RENATA
RIBEIRO, 52
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
A
N
R
ROY TWITE, 57
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
A
N
R
LUCINDA
RICHES, 62
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
A
N
R
LINDSLEY
RUTH, 53
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
Ashtead Group plc Annual Report & Accounts 2024 85
DIRECTORS’ REPORT
CORPORATE GOVERNANCE REPORT
The principal matters considered by the Board during 2023/24 were:
Strategic and financial review Further information
Review of Group performance See strategic review on pages 8 to 11
and financial review on pages 47 to 53
Review of health and safety See health and safety review on
pages 58 to 60
Review of the strategic plan See pages 26 to 31
Review of the Group’s succession plans See page 99
Review of M&A opportunities Acquisitions completed in year
detailed in Note 27 of the financial
statements
Review of the Group’s share
buyback programme
See pages 10 and 31
Received updates on the Group’s diversity,
equity and inclusion initiatives
See page 67
Review and approval of the Group’s tax strategy See www.ashtead-group.com
Review and approval of the Group’s Modern
Slavery Act statement and related policies
See www.ashtead-group.com
Risks
Ongoing monitoring of risks See pages 36 to 41
Received updates from Group Risk Committee See page 36
Completed formal annual review of Group’s
risk register
See page 36
Completed annual insurance review See page 50
Governance
Shareholder analysis
Review of feedback from shareholders
and analysts
Shareholder engagement following AGM See page 106
Reports from committees
Review of results announcements All results announcements available
on the Group’s website
Board evaluation undertaken See page 92
Board leadership and
company purpose
Role of the Board
The Board is responsible for setting
the Group’s strategy and ensuring the
necessary resources and capabilities are
in place to deliver its strategic aims and
objectives. It determines the Group’s key
policies and reviews management and
financial performance. The Group’s
governance framework is designed to
facilitate a combination of effective,
entrepreneurial and prudent
management of the business.
The Group’s risk management
framework, as detailed on pages 36 to 41,
ensures that the Board considers risks
on an ongoing basis and that it reviews
formally the Group’s risk register on an
annual basis including consideration of
emerging risks.
The Group’s key performance indicators,
as detailed on pages 34 and 35, also
enable the Board to have visibility as to
the progress the Group is making against
our strategic priorities.
Company purpose, values and culture
One of the primary responsibilities of the
Board is to ensure that the Group delivers
against its purpose, which is “to provide
a reliable alternative to ownership for
our customers across a wide range of
applications and markets”.
In setting, reviewing and ensuring the
implementation of the Group’s strategy,
the Board ensures that the objectives of
our purpose are met while taking into
account risks and opportunities facing the
Group and its long-term sustainability.
These activities are underpinned by the
Group’s values and culture. We believe
that there are four key cornerstones of
our culture which drive the success of our
Group: a priority on safety; ensuring the
best levels of customer service; working
in partnership with our customers,
suppliers and communities to make it
happen; and being innovative in our
approach both in relation to products
andmarkets.
The Board is responsible for the culture of
the Group, with its role being to influence
and monitor culture to ensure that
our policy, practices and behaviour
throughout our entire organisation are
aligned with the Group’s purpose, values
and strategy. This is reflected in the
Group’s strategy and its foundational
element, but also in the value we ascribe
to the Group’s culture of investing in
our people, fostering a culture of
entrepreneurialism with scale and
continuously delivering on our customer
promise of Availability, Reliability and
Ease. Where issues are identified, it is
the Board’s responsibility to ensure
corrective action is taken.
During the year, the Board has monitored
culture in a number of ways, including:
− attending the Group’s Powerhouse
event in April 2024 to launch
Sunbelt 4.0;
− receiving health and safety statistics
at all Board meetings, together with
regular updates on the Group’s
activities to enhance further the
culture of safety within the business;
− through the Group’s employee
engagement activities including
employee surveys, feedback on the
Group’s diversity, equity and inclusion
programmes and through direct
engagement with employees during
the course of the year;
− monitoring findings from the Group’s
external audit, internal audit and
performance standards functions;
− receiving regular updates on whistle-
blowing matters; and
− reviewing key policies including the
annual updates to the Group’s business
ethics and conduct policy.
Summary of the Board’s work
during the year
At each Board meeting, the Board
receives:
− a report from the chief executive
providing an update on strategic,
operational, business development and
health and safety matters, supported
by reports from the businesses;
− a report from the chief financial officer
on the financial performance and
position of the Group, including
treasury matters; and
− an update from the committees of
the Board on matters discussed at
their meetings.
Ashtead Group plc Annual Report & Accounts 202486
Engagement with our stakeholders
An overview of the nature and extent of
our engagement with stakeholders is
provided on pages 44 and 45 of the
Strategic report. In relation to the Board’s
activities, these are discussed below.
Workforce engagement
The Group employs c. 26,000 individuals
in North America, the UK and Europe
and as such, ensuring efficient, two-way
workforce engagement is critical to the
success of the business. Our workforce is
central to the decisions the Board makes
in relation to our employment policies,
our culture and our strategy.
We have considered the methods of
workforce engagement proposed under
the Code in conjunction with our existing
methods of engagement. Given the nature
and extent of our workforce and its
geographical distribution across a large
number of locations, we have concluded
that no single method of engagement
is suitable to ensure that we engage
appropriately across the entire workforce
and ensured the feedback received is
reflective of the whole of the organisation.
Instead we believe that a combination of
methods of engagement is appropriate,
consistent with the approach we have
taken previously, including:
− regular update calls – business unit
level calls are held on a regular basis
to provide employees with insight into
the performance of the business and
ongoing business initiatives, led by
senior executives of the North
American and UK businesses. These
calls provide employees with the
opportunity to raise any questions or
concerns in person or virtually and
are held at least quarterly, following
the announcement of the Group’s
quarterly results;
− employee surveys – the Board received
updates on the actions taken as a result
of and feedback from employee
surveys. The latest employee survey
inNorth America received a 75%
participation rate with an 88%
engagement score, while the UK survey
received a participation rate of 86%
with an 80% engagement score.
− ‘town hall’ events – throughout the year,
a series of ‘town hall’ events were
held in North America and the UK
which provided employees with the
opportunity to be briefed on the
latest developments by executive
management across the business and
raise any questions or concerns;
− annual strategic review – in October
2023, approximately 100 members
of senior North American and UK
management attended the Group’s
strategy review meeting providing the
Board with the opportunity to meet
individuals, discuss the business and
strategic initiatives in detail and obtain
detailed insight into market dynamics;
and
− Powerhouse event – in April 2024, the
Group’s Powerhouse event gathered
c. 5,000 of the Group’s leaders from the
US, Canada and the UK in Atlanta for
the launch of the Group’s Sunbelt 4.0
strategy and AnyTown exhibit. Team
members represented included store
managers, sales representatives and
market-based field leadership.
In addition, a rolling programme of
presentations from management across
the Group, on a range of topics, ensures
the Board has exposure to different
employees and business functions during
the year. Furthermore, any matters
highlighted through the Group’s employee
whistle-blowing hotlines are reported
to the Board to enable the Group to
understand matters arising, including
any concentration of matters or
emerging trends.
Engagement with our customers
and suppliers
We have a range of key customer and
supplier stakeholders which the Board
considers when taking important
decisions. Engaging with these
stakeholders is therefore critical to the
Group and a key priority of the Board, and
is achieved through a variety of means.
Details of our engagement with our
customers and suppliers is provided in
the Strategic report on pages 44 and 45,
the Responsible business report on pages
60 and 69 and throughout this Corporate
governance report. The chief executive
updates the Board on a regular basis on
operational matters, including feedback
from customers and suppliers and
further information is provided through
strategic updates. In addition, the wider
Board had an opportunity to engage
directly with customers and suppliers
atthe Group’s Powerhouse event in
April2024.
Engagement with our communities
We seek to make a positive contribution
to the communities in which we operate,
both through our economic impact but
also as a result of our community
initiatives and the way in which we are
involved in our communities and the
support we can provide in a time of need.
Accordingly, it is important that the Board
considers our communities in developing
and implementing our strategy.
Details of our engagement with
communities is provided in the Strategic
report on pages 44 and 45 and within the
Responsible business report on page 68.
Dialogue with shareholders
We engage actively with analysts and
investors and are open and transparent in
our communications. This enables us to
understand what analysts and investors
think about our strategy and performance
as we drive the business forward. The
Board is updated regularly on the views
of shareholders through briefings and
reports from those who have had
interaction with shareholders including
the directors and the Company’s brokers.
Regular dialogue is maintained with
analysts and investors through telephone
calls, meetings, presentations,
conferences, site visits and ad hoc events.
During the year, senior management
conducted over 450 virtual and in-person
meetings and calls and attended three
broker conferences, with investors across
all geographies. This includes regular
interaction with private investors who
often contact the Group with questions.
The chair and the senior independent
non-executive director are available to
meet institutional shareholders to discuss
any issues or concerns in relation to
the Group’s governance and strategy.
During the current year, the chair and
the chair of the Remuneration Committee
engaged with shareholders as part
of the Group’s consultation on the
proposed Remuneration policy with
16 investors consulted.
In addition, c. 160 of the Group’s investors
and analysts attended the Group’s
Powerhouse event in Atlanta in April 2024
and were provided the opportunity to
engage with both executive management,
Sunbelt team members and non-
executive directors throughout the event.
The Group’s results and other news
releases are published via the London
Stock Exchange’s Regulatory News
Service. In addition, these news releases
are published in the Investor Relations
section of the Group’s website at
www.ashtead-group.com. Shareholders
and other interested parties can
subscribe to receive these news updates
by email through registering online via the
website. In addition, all results and capital
markets presentations are webcast live
(and for playback) on the website for
shareholders, analysts, employees and
other interested stakeholders who are
unable to attend in person.
Ashtead Group plc Annual Report & Accounts 2024 87
DIRECTORS’ REPORT
Division of responsibilities
Board roles and division of responsibilities
An appropriate division of responsibilities between Board members is critical in delivering the Group’s strategic objectives. A key
element in delivering this is a strong working relationship between the directors and, in particular, the chair, chief executive and
chief financial officer.
A summary of the roles of the Board members is set out below:
Chair Paul Walker Independent non-executive chair, responsible for leadership of the Board and acts as a
sounding board for the chief executive. Agrees Board agendas and ensures its effectiveness
by requiring the provision of timely, accurate and clear information on all aspects of the
Group’s business, to enable the Board to take sound decisions and promote the success
of the business.
Chief executive Brendan Horgan Responsible for developing the strategy for the business, in conjunction with the Board,
ensuring it is implemented, and the operational management of the business.
Chief financial officer Michael Pratt Supports the chief executive in developing and implementing the strategy and is responsible
for the reporting of the financial and operational performance of the business.
Senior independent
non-executive director
Angus Cockburn Provides a sounding board for the chair and is available to shareholders, if they have reason
for concern that contact through the normal channels of chair or chief executive has failed
to resolve.
Independent non-
executive directors
Jill Easterbrook
Tanya Fratto
Renata Ribeiro
Lucinda Riches
Lindsley Ruth
Roy Twite
Provide a constructive contribution to the Board by providing objective challenge and
critique for executive management based on insights drawn from their broad experience.
CORPORATE GOVERNANCE REPORT CONTINUED
THE ANNUAL GENERAL MEETING
The 2024 AGM will be held in London on Wednesday,
4 September 2024. An update on first quarter trading will be
provided during the meeting.
We continue to recognise the importance of ongoing
engagement with our shareholders who will be encouraged to
raise questions on the business at the AGM. Shareholders are
encouraged to submit questions in advance of the meeting
via our website (www.ashtead-group.com) and where
appropriate we will provide written answers to questions
and will publish answers to frequently asked questions on
the website.
All resolutions at the AGM will be put to a vote on a poll,
rather than being decided on a show of hands. The Board
believes that this results in a more accurate reflection of
the views of shareholders and ensures that their votes are
recognised whether or not they are able to attend the
meeting. On a poll, each shareholder has one vote for every
share held. The results of the voting on the resolutions will be
announced to the London Stock Exchange and published on
our website as soon as possible after the conclusion of the
meeting. Notice of the AGM will be sent to shareholders at
least 20 working days before the meeting.
DIALOGUE WITH SHAREHOLDERS
Ongoing shareholder engagement between chair and chair of Remuneration Committee in relation to the Group’s Remuneration policy
JUNE
2023
SEPTEMBER
2023
DECEMBER
2023
MARCH
2024
APRIL
2024
− Annual results
announcement and
presentation
− Bondholder call
− Investor roadshow
following annual
results presentation
− First quarter results
announcement and
presentation
− Bondholder call
− Annual General
Meeting
− Conference calls
with investors
following Q1results
− Half-year results
announcement and
presentation
− Bondholder call
− Investor roadshow
following half-year
results presentation
− Third quarter results
announcement and
presentation
− Bondholder call
− Conference calls
with investors
following Q3 results
− Capital Markets Day
event in Atlanta
Ashtead Group plc Annual Report & Accounts 202488
Delegated authority
There is a schedule of matters reserved
for the Board for decision while other
matters are delegated to Board
committees. Matters reserved for the
Board include:
− treasury policy;
− acquisitions and disposals;
− appointment and removal of directors
or the company secretary;
− appointment and removal of the auditor;
− approval of the annual accounts and
the quarterly financial reports to
shareholders;
− approval of the annual budget;
− approval of the issue of shares and
debentures;
− the setting of dividend policy; and
− the buyback of shares.
Board committees
The Board has standing Audit, Nomination
and Remuneration Committees. The
membership, roles and activities of the
Audit and Nomination Committees are
detailed on pages 94 to 99 and the
Remuneration Committee in the report on
pages 100 to 127. Each committee reports
to, and has its terms of reference agreed
by, the Board. The terms of reference
of these committees are available on
our website.
Finance and Administration
Committee
The Finance and Administration
Committee comprises Brendan Horgan
(chair), Michael Pratt and Paul Walker.
The Board of directors has delegated
authority to this committee to deal with
routine financial and administrative
matters between Board meetings.
The Committee meets as necessary
to perform its role and has a quorum
requirement of two members with certain
matters requiring the participation of the
chair of the Board, including, for example,
the approval of material announcements
to the London Stock Exchange.
Group Risk Committee
The Group Risk Committee is chaired
by Michael Pratt and comprises
representatives from Sunbelt in North
America and the UK, as well as the Group
head of internal audit and risk officer and
Group company secretary. The work of
the Group Risk Committee is supported
by the Risk Committees of Sunbelt in
North America and the UK, which meet
regularly to ensure continued focus on
risks and mitigating actions. Further
details of the work of the Group Risk
Committee are provided in the
Responsible business report on page 57.
THE BOARD AND ITS COMMITTEES
THE BOARD
The Board is responsible for setting the Group’s strategy and ensuring the necessary resources
and capabilities are in place to deliver the strategic aims and objectives.
AUDIT
COMMITTEE
NOMINATION
COMMITTEE
REMUNERATION
COMMITTEE
FINANCE AND
ADMINISTRATION
COMMITTEE
GROUP RISK
COMMITTEE
Chaired by Angus
Cockburn. Monitors and
reviews the Group’s
financial reporting,
relationship with the
external auditor, internal
control, internal audit
and risk management.
Chaired by Paul Walker.
Monitors and reviews the
Board’s structure, size,
composition and balance
and oversees the
appointment and
reappointment of
directors.
Chaired by Lucinda
Riches. Responsible for
determining the Group’s
Remuneration policy and
its application, with
specific responsibility for
the remuneration of the
chair and executive
directors.
Chaired by Brendan
Horgan. Responsible for
routine finance and
administrative matters
between Board meetings
subject to clearly defined
limits delegated by the
Board.
Chaired by Michael Pratt.
Responsible for
monitoring of risk
across the Group, the
implementation of our risk
framework and reporting
of Group risk and
mitigating actions.
See Audit Committee
report on page 94 for
further details.
See Nomination
Committee report
onpage 99 for
furtherdetails.
See Remuneration
Committee report
onpage 100 for
furtherdetails.
See below for
furtherdetails.
See below for
furtherdetails.
Board committee Non-Board committee
Ashtead Group plc Annual Report & Accounts 2024 89
DIRECTORS’ REPORT
Commitment to the Board
As part of the appointment process,
prospective directors are required to
confirm that they will be able to devote
sufficient time to the Company to
discharge their responsibilities effectively.
Furthermore, all directors are required to
inform the Company of changes in their
commitments to ensure that they
continue to be able to devote sufficient
time to the Company.
Operation of the Board
The principal activities of the Board are
conducted at regular scheduled meetings
of the Board and its committees. The
Board normally meets six times a year,
with at least two of these meetings being
held in North America. The Board and its
committees conducted successfully all
itsroutine and non-routine business
throughout the year. Additional ad hoc
meetings and calls are arranged outside
the scheduled meetings to take decisions
or receive updates as required. In the
current year, the Board met five times as
all non-executive directors also attended
the Group’s Sunbelt 4.0 launch event
in Atlanta in April 2024 in place of a
formalmeeting.
The chair and chief executive maintain
regular contact with the other directors
to discuss matters relating to the Group
and the Board receives regular reports
and briefings to ensure the directors
are suitably briefed to fulfil their roles.
Additionally, detailed management
accounts are sent monthly to all Board
members and, in advance of all Board
meetings, an agenda and appropriate
documentation in respect of each item
tobe discussed is circulated.
The company secretary is responsible
for ensuring compliance with board and
committee procedures and advising the
Board on all governance-related matters.
The company secretary also supports
the chair in the delivery of information
to directors in advance of board and
committee meetings and acts as a key
point of contact for the chair and non-
executive directors.
Each director has access to the company
secretary and is able to seek independent
advice at the Company’s expense.
The appointment and removal of the
company secretary is a matter reserved
for the Board.
Composition, succession
and evaluation
Composition of the Board
The Board comprises the chair, the chief
executive, the chief financial officer,
the senior independent non-executive
director and the other independent
non-executive directors.
Each member of the Board must be able
to demonstrate the skills, experience
and knowledge required to contribute to
the effectiveness of the Board. Short
biographies of the directors are given
on pages 84 and 85 detailing the skills,
experience and knowledge of each of the
Board members. The directors are of the
view that the Board and its committees
consist of directors with the appropriate
balance of skills, experience,
independence and knowledge of the
Group to discharge their duties and
responsibilities effectively.
Board attendance table
Board Audit Nomination Remuneration
Chair
Paul Walker 5/5 5/5
1
1/1 –
Executive
Brendan Horgan 5/5 5/5
1
– –
Michael Pratt 5/5 5/5
1
– –
Non-executive
Angus Cockburn 5/5 5/5 1/1 5/5
Jill Easterbrook 5/5 5/5 1/1 5/5
Tanya Fratto 5/5 5/5 1/1 5/5
Renata Ribeiro 5/5 5/5 1/1 5/5
Lindsley Ruth
2
4/5 4/5 1/1 4/5
Lucinda Riches 5/5 5/5 1/1 5/5
1 While not members of the Audit Committee, Paul Walker, Brendan Horgan and Michael Pratt attended all
meetings during the year.
2 Lindsley Ruth was unable to attend one Board, Audit and Remuneration Committee meeting during the year
due to ill health.
Maintaining the appropriate mixture
of skills, experience and knowledge
is important to the Board, including
ensuring that we address issues of
diversity in terms of skills, gender,
ethnicity and experience relevant to our
business. The Nomination Committee is
responsible for reviewing the structure,
size and composition of the Board and
making recommendations to the Board
on any changes required.
Details of the work of the Nomination
Committee in relation to the composition
of the Board are provided in the
Nomination Committee report on page 99.
Non-executive directors
In the recruitment of non-executive
directors, it is the Company’s practice to
utilise the services of an external search
consultancy. The Board engaged Lygon
Group to assist with the recruitment of
Roy Twite. Lygon Group is independent
of the Company and the directors.
Non-executive directors are appointed for
specified terms not exceeding three years
and are subject to annual re-election and
the provisions of the Companies Act 2006
relating to the removal of a director.
The approval of the Board is required
before a non-executive can take on other
non-executive director roles.
Board diversity policy
Across the Group, we aim to ensure that
our workforce has a broad range of skills,
backgrounds and experience, while
ensuring that we appoint the best people
for the relevant roles. At Board level,
under the direction of the chair, the
Group applies these same principles.
As a result, the Group seeks to maintain
a board where the skills, backgrounds
and experiences of the non-executive
directors complement those of the
executive directors. In this way, we aim to
ensure that the skills, backgrounds and
experiences represented on the Board
and its committees reflect the business
environments in which we operate and
bring experience of areas of development
for the Group, such as in the areas of
technology and logistics.
We do not have formal targets or
quotas associated with diversity for the
composition of the Board, but instead
focus on ensuring the best individuals
are appointed who meet the Group’s
needs from as wide a range of
backgrounds as possible to facilitate the
formulation and implementation of the
Group’s strategy, while benefitting from
the long-term industry experience of
our executive directors.
CORPORATE GOVERNANCE REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 202490
Nevertheless, we are mindful of the
recommendations of the FTSE Women
Leaders Review on gender diversity and
the Parker Review on ethnic diversity
and believe that over time, greater
diversity will be reflected throughout our
organisation, including at Board level. Our
current position is set out in the Board
diversity and inclusion statement below.
Board diversity and inclusion
statement
As shown in the tables opposite as at
30 April 2024, we had 44% female Board
members, compared with a target set out
in the FTSE Women Leaders Review of
40%, and one member of the Board is
from a minority ethnic background, in line
with the target set out by the Parker
Review. Nevertheless, we recognise that
there is further progress to be made, as
none of the senior positions on the Board
(chair, senior independent director, chief
executive or chief financial officer) is held
by a woman. The individuals within these
roles were appointed with a focus on
ensuring the best individuals who met
the Group’s needs were selected. As part
of the Group’s succession planning
activities, the Group is focused on
ensuring a broad and diverse talent pool
is in place, while being sympathetic to
female representation in one of the senior
positions on the Board.
In preparing the data opposite, we
surveyed individual Board members
on a self-identifying basis via a written
questionnaire. This data is used for
statistical reporting purposes and
provided with consent. Board members
are asked to identify their gender and
ethnicity based on the categories set out
in the tables opposite.
Election of directors
As he was appointed in June 2024, Roy
Twite will offer himself for election at this
year’s AGM. All directors will retire at this
year’s AGM and each will offer themselves
for re-election in accordance with the
Code except for Lindsley Ruth who has
notified the Board of his intention not to
seek re-election at the AGM.
Reporting table on gender identity representation
Number
of Board
members
Percentage of
the Board
Number of
senior
positions
on the Board
Number in
executive
management
Percentage
of executive
management
Men 5 56% 4 9 82%
Women 4 44% – 2 18%
Not specified/
prefer not to say – –% – – –%
Reporting table on ethnicity representation
Number
of Board
members
Percentage
of the Board
Number of
senior
positions
on the Board
Number in
executive
management
Percentage
of executive
management
White British or other white 8 89% 4 10 91%
Mixed/multiple ethnic
groups – –% – – –%
Asian/Asian British – –% – – –%
Black/African Caribbean/
Black British – –% – 1 9%
Other ethnic group,
including Arab 1 11% – – –%
Not specified/
prefer not to say – –% – – –%
Ashtead Group plc Annual Report & Accounts 2024 91
DIRECTORS’ REPORT
Board evaluation
The performance of the chair, chief
executive, the Board and its committees
is evaluated formally annually against,
amongst other things, their respective
role profiles and terms of reference.
The executive directors are evaluated
additionally against the agreed budget
for the generation of revenue, profit and
value to stakeholders.
In accordance with the Code, the Board
and its committees’ performance is
evaluated by an external third party every
three years. The next external Board
evaluation will be conducted in 2026.
The 2023/24 Board evaluation was
conducted by way of directors’
questionnaires. The results of the
questionnaires were collated by the
company secretary and presented to the
Group’s chair who subsequently held
individual meetings with each of the
directors. The conclusion from the
questionnaires and meetings was that the
Board and its committees had performed
satisfactorily. Succession planning,
health and safety and cyber security will
continue to be specific areas of focus for
the Board in the coming year.
In accordance with the Code, the
non-executive directors (including the
chair) met in the absence of the executive
directors to appraise the performance of
the executive directors and management
and the non-executive directors, led by
the senior independent director, met in
the absence of the chair to appraise
his performance.
Audit, risk and internal control
Audit Committee
The Board has delegated responsibility
for oversight of corporate reporting, risk
management and internal control and
maintaining an appropriate relationship
with the Group’s internal and external
auditors to the Audit Committee. The
Audit Committee report on pages 94 to 98
contains full details of the role and
activities of the Audit Committee.
Financial and business reporting
The Board is committed to providing
stakeholders with a fair, balanced and
understandable assessment of the
Group’s position and prospects. This is
achieved through the Strategic report,
which includes an explanation of the
Group’s business model, and other
information included within this Annual
Report. The responsibilities of the
directors in respect of the preparation of
this Annual Report are set out on page
130 and the Auditor’s report on page 132
includes a statement by PwC about its
reporting responsibilities. As set out on
page 129, the directors are of the opinion
that the Group is a going concern.
Internal control framework and risk
management
The Board is responsible for the Group’s
internal control framework and risk
management. It has established a
process for identifying, evaluating and
managing the principal risks faced by the
Group and in identifying and responding to
emerging risks. This robust process has
been in place for the full financial year, is
ongoing and is consistent with the FRC’s
‘Guidance on Risk Management, Internal
Control and Related Financial and
Business Reporting’ published in 2014.
Under its terms of reference, the Group
Risk Committee meets semi-annually
or more frequently if required.
As described more fully on pages 36 to 41,
the Group reviews and assesses the
risks it faces in its business, changes
in principal risks facing the Group and
how these risks are managed, with
consideration given to the Board’s
assessment of risk appetite. These
reviews are conducted throughout the
year in conjunction with the management
teams of each of the Group’s businesses
and are documented in an annual risk
assessment, including the updated risk
register. The reviews consider whether
any matters have arisen since the last
report was prepared which might indicate
omissions or inadequacies in that
assessment. It also considers whether, as
a result of changes in either the internal
or external environment, any significant
CORPORATE GOVERNANCE REPORT CONTINUED
Board
induction and
development
Visits to profit
centres and
support offices
Detailed induction
meetings with
Group, North
American and UK
management
teams
Detailed
presentations by
and meetings
with management
Access to
external advisers
including on a
one-to-one basis
Training
requirements
assessed
and provided
Regular update on
responsibilities,
corporate
governance
policies
and Board
procedures
BOARD DEVELOPMENT AND TRAINING
All newly appointed directors undertake an induction to
all parts of the Group’s business. This includes visits to
the North American and UK businesses and meetings
with their management teams. The company secretary
also provides directors with an overview of their
responsibilities as directors, corporate governance
policies and Board policies and procedures.
The chair and chief executive assess regularly
the development needs of the Board as a whole
with the intention of identifying any additional
training requirements.
Ashtead Group plc Annual Report & Accounts 202492
new risks have arisen or whether there
are any emerging risks which may impact
the Group. The Group Risk Committee
report for 2024 was presented to,
discussed and endorsed by the Audit
Committee on 12 June 2024 and the
Group Board on 13 June 2024.
The Board monitors the risk management
framework and internal control systems
on an ongoing basis and reviews their
effectiveness formally each year.
The Group follows a three lines of defence
approach to risk management with
executive management responsible for
the oversight and management of the
first and second lines of defence while
the Audit Committee takes primary
responsibility for the third line of defence.
The Audit Committee is supported in
this activity by the Group’s performance
standards function and outsourced
internal audit.
The Board reassesses continually the
effectiveness of the Group’s control
framework and seeks to identify ways
in which to further improve and
strengthen it.
As detailed further on pages 97 and 98,
as part of the Board’s monitoring, through
the Audit Committee, it received reports
from the Group’s assurance function,
operational audit teams and the head of
internal audit and risk officer as to the
existence and operation of controls, and
how those controls have been monitored
throughout the year. Furthermore, the
Audit Committee considered the internal
control improvement recommendations
made by the Group’s internal auditors
and its external auditor and the resultant
implementation plans of management.
The control system includes written
policies and control procedures,
clearly drawn lines of accountability
and delegation of authority, and
comprehensive reporting and analysis
against budgets and latest forecasts.
In a group of the size, complexity and
geographical diversity of Ashtead, minor
breakdowns in established control
procedures can occur. There are
supporting policies and procedures for
investigation and management of control
breakdowns at any of the Group’s stores
or elsewhere. The Audit Committee also
meets regularly with the internal and
external auditor to discuss their work.
The Board considers that the Group’s
internal control systems are designed
appropriately to manage, rather than
eliminate, the risk of failure to achieve its
business objectives. Any such control
system, however, can only provide
reasonable and not absolute assurance
against material misstatement or loss.
Remuneration
Remuneration Committee
The Board has delegated responsibility
for developing Remuneration policy and
fixing the remuneration packages of
individual directors to the Remuneration
Committee. The Remuneration
Committee report on pages 100 to 127
contains full details of the role and
activities of the Remuneration Committee.
THREE LINES OF DEFENCE IN RISK MANAGEMENT
1 2 3
FIRST LINE
OF DEFENCE
SECOND LINE
OF DEFENCE
THIRD LINE
OF DEFENCE
Business operations
− Implementation of policies and
procedures
− Operational control activities
Corporate oversight
− Establishment of policies and
procedures
− Monitoring of control activities
− Internal financial and non-financial
reporting assurance function
− Group Risk Committee
Independent assurance
− Internal audit
− Operational audit (Performance
Standards)
− Other third-party specialist assurance
providers
Ashtead Group plc Annual Report & Accounts 2024 93
DIRECTORS’ REPORT
I am pleased to introduce the report
of the Audit Committee for 2023/24.
The Committee assists the Board in
discharging its responsibility for oversight
and monitoring of financial reporting,
risk management and internal control.
As chair of the Committee, it is my
responsibility to ensure that the
Committee fulfils its responsibilities
in a rigorous and effective manner.
The Committee’s agenda is designed,
in conjunction with the Board’s, to
ensure that all significant areas of risk
are covered and to enable it to provide
timely input to Board deliberations.
In 2023/24, the Committee’s main
activities related to ensuring the integrity
of financial reporting, the continued
effectiveness of the Group’s financial
controls and assurance programme,
reviewing the work of the Group’s internal
audit function, and receiving both reports
from the Group Risk Committee and
detailed presentations on specific
Group risks.
In addition, the Committee has maintained
regular dialogue with the senior
management team throughout the year to
understand how business processes and
controls continue to operate effectively
to ensure the timely and accurate
preparation of financial information.
Members of the Audit Committee are:
Angus Cockburn (chair)
Jill Easterbrook
Tanya Fratto
Renata Ribeiro
Lucinda Riches
Lindsley Ruth
Roy Twite (appointed 10 June 2024)
Details of meeting attendance are
provided on page 90. The Audit
Committee’s terms of reference are
available on the Group’s website.
I am satisfied that the Committee was
provided with high quality and timely
material to allow proper consideration
to be given to the topics under review.
I am also satisfied that the meetings were
scheduled to allow sufficient time to
ensure all matters were considered fully.
For the forthcoming year, the Committee
will continue to focus on the integrity of
financial reporting and the effectiveness
of the Group’s controls and assurance
programme. It will also consider the
updated Corporate Governance Code
which was issued by the FRC in January
2024 and any necessary refinements
required to the Group’s existing
processes and controls in preparation
for full compliance.
One of the Code’s principles is that the
Board should present a fair, balanced
and understandable assessment of the
Company’s position and prospects
through its financial reporting. We have
always sought to ensure our financial and
other external reporting is fair, balanced
and understandable. The Committee has
kept this principle at the forefront of its
thought process as it reviewed all the
Company’s financial reports in advance
of publication and is satisfied that
they provide a fair, balanced and
understandable assessment of the
Company’s position and prospects.
ANGUS COCKBURN
Chair, Audit Committee
ANGUS
COCKBURN
AUDIT
COMMITTEE
CHAIR
AUDIT COMMITTEE REPORT
Ashtead Group plc Annual Report & Accounts 202494
Role of the Audit Committee
The Audit Committee assists the Board
inits oversight and monitoring of financial
reporting, risk management and
internalcontrols.
The principal responsibilities of the
Committee are to:
− monitor the integrity of the quarterly
and annual results, including a review
of the significant financial reporting
judgements contained therein;
− establish and oversee the Company’s
relationship with the external auditor,
including the external audit process,
their audit and non-audit fees and
independence and make
recommendations to the Board on the
appointment of the external auditor;
− consider the Company’s assessment of
emerging and principal risks, including
understanding and monitoring the way
in which these are being managed;
− review and assess the effectiveness
of the Company’s internal financial
controls and internal control and
risk management systems;
− oversee the nature, scope and
effectiveness of the internal audit
work undertaken; and
− monitor the Company’s policies and
procedures for handling allegations
from whistle-blowers.
The Committee reports to the Board on
its activities and minutes of meetings are
available to the Board.
Composition of the Audit
Committee
The members of the Committee, each
of whom is independent, provide the
wide range of financial and commercial
experience needed for the Committee to
undertake its duties and each member
brings an appropriate mix of senior
financial and commercial experience,
combined with a thorough understanding
of the Group’s business. As chair of the
Committee, Angus Cockburn has recent
and relevant financial experience, having
held a number of senior international
finance roles. Details of the experience
of each member of the Committee is
provided on pages 84 and 85.
The company secretary is secretary to
theCommittee. Paul Walker, Brendan
Horgan, Michael Pratt, the Group’s
director of group finance, the Group’s
head of internal audit and risk officer
and the Group’s external audit partner
routinely attend meetings by invitation. In
addition, the Committee meets formally
with the chief financial officer of the
North American business and the finance
director of the UK business on an annual
basis, as well as other subject matter
experts where the agenda requires.
Main activities of the Audit
Committee during the year
The Committee met on five occasions
during the year. Meetings are scheduled
to coincide with our financial reporting
cycle, with four regular meetings
scheduled prior to our quarterly, half-year
and annual results announcements and
the fifth meeting scheduled outside this
timetable to enable a formal annual
review of the Group’s risk register and the
work undertaken by the Board throughout
the year in reviewing these risks.
At each meeting, the Committee receives
papers from management which
comment on the principal balances in the
financial statements and discusses any
significant judgements and matters of a
financial reporting nature arising since
the last meeting. In the current year,
these have included consideration of:
− the application of routine period-end
accounting policies and procedures;
and
− the going concern and viability
statement to ensure that they are
appropriate, are based upon suitable
assumptions and consider the risks to
which the Group is exposed appropriately.
The Committee typically receives reports
from the external auditor at three of the
meetings. The first, in December, contains
the results of the external auditor’s review
of our half-year results. The half-year
review also informs the external auditor’s
planning for the annual audit. Their full
audit plan and proposed audit fee is
presented to the February/March meeting
of the Committee. The external auditor’s
final report of the year is presented at the
June Committee meeting when we review
the draft Annual Report. The external
auditor’s report contains the findings
from their audit work, including
comments on the draft Annual Report.
The Committee is responsible for the
Group’s relationship with the external
auditors, including assessing the audit
plan, setting the audit fee, monitoring
independence and reviewing
effectiveness.
Following the appointment of an in-house
head of internal audit and risk officer in
September 2022, the Audit Committee
has focused in the current year on the
development of the Group’s internal audit
activities, including the development of an
updated risk and assurance map, as well
as reassessing the scope of work for
the Group’s internal audit activities.
Furthermore, the effectiveness of the
Group’s financial controls and assurance
programme has been a continued area
of focus in the current year.
Further details of the activities of the
Audit Committee during the year are set
out on the next page.
Ashtead Group plc Annual Report & Accounts 2024 95
DIRECTORS’ REPORT
AUDIT COMMITTEE REPORT CONTINUED
Integrity of financial reporting
We reviewed the integrity of the quarterly and annual financial statements of the Company. This included the review and discussion of
papers prepared by management and took account of the views of the external auditors. The key areas reviewed in the current year
are set out below.
Key area Response Audit Committee conclusion
Carrying value of rental fleet
The carrying value of the
Group’s rental fleet of $11,451m
(2023: $9,649m) makes up 53%
(2023: 52%) of the Group’s gross
assets. Both the useful lives
and residual values assigned
requires the exercise of
judgement by management.
Management undertakes an annual review
of the appropriateness of the useful lives
and residual values assigned to property,
plant and equipment and assesses whether
they continue to be appropriate and whether
there are any indications of impairment.
Among other things this review considers
the level of gains on disposal and age of
assets at the date of disposal along with the
level of second-hand values, while taking into
account the impact of the economic cycle.
The Committee reviewed management’s
assessment of the carrying value of rental
assets and judgements associated with the
application of useful lives and residual values.
The Committee took into account the findings
of the external auditor and is satisfied that
the judgements taken by management are
appropriate and that these are consistent with
prior years.
Going concern and financing
activities
The Group requires ongoing
access to its financing
arrangements to enable it to
benefit from growth
opportunities.
Management reviewed the appropriateness
of the going concern assumption in
preparing the financial statements. The
Committee reviewed a paper prepared by
management which considered the Group’s
internal budgets and forecasts of future
performance, available financing facilities
and facility headroom. In addition, we
reviewed scenario planning in assessing the
Group’s viability over the medium-term.
Taking account of reasonably possible
changes in trading performance, used
equipment values and other factors that
might affect availability, the Group expects
to maintain significant headroom under its
borrowing facilities for the forthcoming year.
The Committee reviewed the assessment of
the going concern assumption and long-term
viability, including understanding the
scenario analysis performed in relation
to the potential impact of any economic
downturn. The Committee is satisfied that
the going concern basis of preparation
continues to be appropriate in preparing
the financial statements.
Goodwill impairment review
The Group’s strategy includes
growth through bolt-on M&A
activity, as a result of which,
goodwill arises. The carrying
value of goodwill at 30 April 2024
is $3,211m (2023: $2,866m).
The Group undertakes a formal goodwill
impairment review as at 30 April each year.
This is based on the latest approved budget
and three-year plans for the US, UK and
Canadian businesses. The Group classifies
certain specialty businesses as separate
cash-generating units (‘CGUs’), due to them
generating separately identifiable cash flows.
Following the review undertaken, and in
light of the Group’s current and forecast
performance, the Committee is satisfied that
the CGUs are appropriate to the Group and that
there is no impairment of the carrying value of
goodwill in the CGUs of the US, UK or Canada.
Further details are provided in Note 15 to the
financial statements.
In addition, the Committee also
considered the following matters during
the course of the year:
− the use of alternative performance
measures, ensuring these are fair,
balanced and understandable;
− the effectiveness of the Group’s internal
financial controls, as detailed further
on the next page;
− the work of the Group’s second-line
assurance team, which includes
monitoring of the Group’s control
self-certification process, management
of financial control documentation and,
in the current year, ongoing work to
refresh the documentation of our
technology processes and controls,
asthey relate to financial reporting,
andthe documentation of controls
associated with automated controls
andsystem-generated reports;
− the internal audit work and reviewing
the Group’s approach to internal audit,
further details of which are set
out below;
− the approach taken to ensure material
climate-related matters are considered
and the disclosure made in accordance
with the requirements of the task
force on climate-related financial
disclosures; and
− the Group’s tax strategy and received
an update on tax compliance matters.
Ashtead Group plc Annual Report & Accounts 202496
FAIR, BALANCED AND
UNDERSTANDABLE
As part of its responsibilities, the Board
has requested that the Audit Committee
assess whether, in its opinion, the
Annual Report & Accounts 2024, taken
as a whole, are a fair, balanced and
understandable presentation of the
Group’s position and prospects.
In making its assessment, the Audit
Committee considered a number of
factors, including:
− whether the narrative reporting on
the performance of the business
is consistent with the financial
statements presented;
− whether the information presented is
complete with no information omitted
that should have been included to
enable a user to understand the
business, its performance and its
prospects;
− considering the KPIs utilised by
the Group, including alternative
performance measures, to ensure
that these best reflect its strategic
priorities and fairly present business
performance;
− assessing areas of judgement
which were considered by the
Audit Committee during the year
and whether these are highlighted
appropriately within the Annual Report;
− the outcome of meetings held during
the year with PwC as external auditor
and the head of internal audit to
discuss qualitative accounting
judgements and overall controls.
Themeetings cover suitability,
consistency of application in-year
and across periods and accounting
practices of industry peers; and
− assessing whether the report is clear
and understandable, with appropriate
narrative given to present the
whole story.
Following its review, the Committee
concluded that the Annual Report &
Accounts 2024 are representative of the
Group and its performance during the
year and that the Annual Report &
Accounts 2024 present a fair, balanced
and understandable overview.
Financial control and risk
management
The Company’s objective is to maintain
a strong control environment which
minimises the financial risk faced by
the business. It is the Committee’s
responsibility to review and assess
the effectiveness of the Company’s
internal financial controls and risk
management processes.
The Group’s control and monitoring
procedures include:
− the maintenance and production
of accurate and timely financial
management information, including
a monthly profit and loss account
and selected balance sheet data for
each store;
− the control of key financial risks
through clearly laid down authority
levels and proper segregation of
accounting duties at the Group’s
accounting support centres;
− the preparation of a monthly financial
report to the Board;
− the preparation of an annual budget
and periodic update forecasts which
are reviewed by the executive directors
and then by the Board;
− a programme of rental equipment
inventories and full inventory counts
conducted at each store by equipment
type and independently checked on
a sample basis by our operational
auditors and external auditor;
− comprehensive audits at each store
generally carried out at least every
two years by internal operational audit.
A summary of this work is provided
semi-annually to the Audit Committee;
− comprehensive financial assurance
activities including routine ‘second-line’
controls testing to monitor control
activities and a controls self-
certification programme;
− detailed internal audits at the Group’s
major accounting centres undertaken
by internal audit specialists;
− review of the effectiveness of internal
audit; and
− whistle-blowing procedures by which
staff may, in confidence, raise concerns
about possible improprieties or breaches
of company policy or procedure.
The Committee receives regular reports
from the Group’s head of financial
assurance, the head of internal audit and
risk officer, internal operational audit and
the Group Risk Committee. The Group’s
risk management processes are an area
of focus as they adapt to reflect changes
to our risk profile as a result of our
significant growth, both organic and
through bolt-on acquisitions.
Financial assurance
The Group follows a ‘three lines of
defence’ approach to risk management
and control. As such, as noted above, the
Audit Committee receives regular
updates on the activities and findings of
the Group’s financial assurance team.
Specific areas of focus in the current year
have included:
− monitoring and expanding the
Group’s financial control self-
certification process;
− updating the Group’s control
documentation in relation to technology
controls, specifically in relation to
automated controls and system
generated reports, as well as in relation
to the Group’s ongoing technology
investments; and
− undertaking routine design and
implementation testing of the Group’s
financial control environment in both
North America and the UK.
Internal audit
The Committee is responsible for the
Group’s overall assurance framework,
including ensuring the nature and scope
of internal audit activities are appropriate
for the Group and that internal audit
findings are considered and actioned
appropriately.
This year, internal audit work has focused
on the design, implementation and
operating effectiveness of core financial
and general IT controls, as well as the
effectiveness of the Group’s business
transformation governance process.
The scope of the work undertaken by
our internal audit function is designed
to provide coverage of our key controls,
working alongside the Group’s
management assurance processes
and the work of the external auditor.
This work found that an effective control
environment was in operation and
identified a small number of control
enhancement opportunities.
Ashtead Group plc Annual Report & Accounts 2024 97
DIRECTORS’ REPORT
Internal audit prepares detailed reports
which are discussed with management
and against which detailed action plans
are agreed. Key matters are highlighted
to the Audit Committee through reports
presented at Audit Committee meetings
and the Audit Committee receives
regular updates as to the status of open
recommendations. In 2024/25, the
Group’s internal audit function will focus
on key financial controls, cyber security
and compliance matters.
In addition, the internal operational audit
teams in the businesses undertake
operational audits across the store
network using a risk-based methodology.
Each year the Committee agrees the
scope of work and the coverage in the
audit plan at the start of the year and
receives formal reports on the results of
the work at the half-year and full-year.
During the year c. 640 audits were
completed. The audits are scored
and action plans agreed with store
management to remedy identified
weaknesses. This continual process of
reinforcement is key to the store level
control environment.
Internal audit effectiveness
The Audit Committee conducts an annual
assessment of the scope of internal audit
and the effectiveness of the internal
auditor’s work. The review is based on
the Committee’s engagement with the
internal auditor and feedback from
management. As a result of the review
of internal audit effectiveness, the
Committee is satisfied that the scope of
work and its effectiveness is appropriate.
Going concern and viability
statement
The Committee discussed management’s
approach to the going concern and
viability statements and reviewed the
work undertaken by management and
reviewed a paper summarising their
conclusions and proposed statement.
In undertaking their work, management
considered the Group’s three-year budget
and plan, as well as potential downside
scenarios and their potential impact on
the Group’s viability.
Following review and challenge, the
Committee agreed with management’s
assessment and the statements were
agreed at the June meeting and are
included on pages 41 and 129.
External audit
External auditor
The Audit Committee manages the
relationship with the Group’s external
auditor on behalf of the Board and is
responsible for making recommendations
on the appointment of the external
auditor, determining their independence
from the Group and its management
team, and agreeing the scope and fee
for the audit.
Following an audit tender process
completed previously,
PricewaterhouseCoopers LLP (‘PwC’)
was appointed external auditor in
September 2023 following the completion
of the prior year’s audit. Our previous
auditor, Deloitte LLP, had completed
20 years of audit and therefore were
subject to mandatory rotation. The
external auditor is required to rotate the
audit partner responsible for the Group
audit every five years and this year is
Darryl Phillips’ first year as lead
auditpartner.
The Committee considers the
reappointment of the external auditor
each year and is recommending to the
Board that a proposal be put to
shareholders at the 2024 AGM for the
re-appointment of PwC. There are no
contractual restrictions on the Company’s
choice of external auditor and in making
its recommendation the Committee took
into account, amongst other matters, the
tenure, objectivity and independence of
PwC, as noted above, and its continuing
effectiveness and cost.
The Company has complied with the
provisions of the Competition and Market
Authority’s Order on audit tendering and
rotation for the financial year under review.
External audit effectiveness
The Committee conducted an assessment
of the effectiveness of the audit of the
2023/24 financial statements, based on
its own experience and drawing on input
from senior corporate management and
senior finance management across
the Group. The review was based on
questionnaires completed by the
members of the Committee and senior
management. The questionnaires focused
on the quality and experience of the team
assigned to the audit, the robustness of
the audit process, the quality of delivery
and communication and governance
and independence of the audit firm.
This review also considers the role of
management in the audit process and
therefore enables the Audit Committee
to form a view of management’s role
in ensuring the effectiveness of the
external audit.
The questionnaires used enable the Audit
Committee to gain a thorough insight into
the audit process with sufficient detail to
establish an informed view of the audit
process across the business and as such
form a view as to the effectiveness of the
external audit.
Recognising the complexities associated
with a first-time audit, the feedback
received was positive and acknowledged
an appropriate focus on the principal
risks. Furthermore, the audit work was
completed in a rigorous and sceptical
manner. At its meeting in June, the
Committee discussed the results from
the questionnaires and the audit process
more generally. As a result of these
considerations, the Committee is satisfied
that the audit process and strategy for the
audit of the 2023/24 financial statements
was effective.
Non-audit services and external
auditor independence
The Committee monitors the nature and
extent of non-audit services on a regular
basis to ensure the provision of non-audit
services is within the Group’s policy and
does not impair the auditor’s objectivity or
independence. While the use of the
Group’s auditor for non-audit services is
not prohibited, the Group typically elects
to use an alternative adviser but accepts
that certain work of a non-audit nature is
best undertaken by the external auditor.
We are satisfied that non-audit services
were in line with our policy and did not
detract from the objectivity and
independence of the external auditor.
The non-audit fees paid to the Company’s
auditor, PwC, for the year relate
principally to their review of the
Company’s interim results and the issue
of comfort letters provided in connection
with the Group’s financings, work typically
undertaken by the auditor. Details of the
fees payable to the external auditor
are given in Note 4 to the financial
statements. Non-audit fees represented
11% of the audit fee in the year.
AUDIT COMMITTEE REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 202498
PAUL
WALKER
NOMINATION
COMMITTEE
CHAIR
Role of the Nomination
Committee
The principal duties of the Committee are
making recommendations to the Board on:
− the Board’s structure, size, composition
and balance; and
− the appointment, reappointment,
retirement or continuation of any director.
The chair of the Board chairs the
Nomination Committee but is not
permitted to participate in the
appointment of their successor.
Main activities of the
Nomination Committee during
the year
Appointment of directors
Following a rigorous search process,
assisted by Lygon Group an independent
search firm with no other connection
to the Company, we were delighted to
appoint Roy Twite as a non-executive
director of the Company in June 2024.
Royhas also joined the Audit, Nomination
and Remuneration Committees.
Reappointment of directors
Following five years of service, Lindsley
Ruth has notified the Board that he does
not intend to seek re-election to the Board
at the Group’s AGM in September 2024.
In relation to the Group’s other directors,
the Committee unanimously recommends
the election/re-election of each of the
directors at the 2024 AGM. In making this
recommendation, the Committee evaluated
each director in terms of their performance,
commitment to the role, and capacity to
discharge their responsibilities effectively,
given their other external time
commitments and responsibilities.
Board composition and diversity
Our objective is to have a broad range of
skills, background and experience within
the Board as we believe that this ensures
the Board is best placed to serve the
Group. While we will continue to ensure
that we appoint the best people for the
relevant roles, we recognise the benefits
of diversity in ensuring a mix of views and
providing a broad perspective.
The Group’s gender diversity statistics are
set out within our Responsible business
report including details of its approach to
diversity and equal opportunities across
the Group. At board level, four out of 10 of
our Board roles are held by women but
we note that diversity extends beyond
the measurable statistics of gender and
ethnicity. As such, while we do not set any
particular targets, we continue to take
diversity in its wider context into account
when considering any particular
appointment.
Succession planning
Succession planning for the Board and
senior management continues to be an
area of focus for the Board, ensuring
that appropriate succession plans are
reviewed and updated on a regular basis
and that Board rotation is managed so
that it is distributed across a number of
years. The Board, facilitated by the chief
executive, undertook a detailed review of
succession plans for the business at its
meeting in October 2023.
The tenure of non-executive directors
is illustrated in the graph below:
Tenure
1 41 2
Less than 1 year 3–6 years
1–3 years 6–9 years
Board appointment process
When considering the recruitment of a
new director, the Committee considers
the required balance of skills, knowledge,
experience and diversity to ensure that
any new appointment adds to the overall
board composition. The Committee
utilises the services of independent
external advisers to facilitate the search
based on the criteria determined by the
Committee for the role.
PAUL WALKER
Chair, Nomination Committee
NOMINATION COMMITTEE REPORT
Members of the Nomination
Committee are:
Paul Walker (chair)
Angus Cockburn
Jill Easterbrook
Tanya Fratto
Renata Ribeiro
Lucinda Riches
Lindsley Ruth
Roy Twite (appointed 10 June 2024)
Details of meeting attendance are
provided on page 90. The Nomination
Committee’s terms of reference are
available on the Group’s website.
Ashtead Group plc Annual Report & Accounts 2024 99
DIRECTORS’ REPORT
LUCINDA RICHES
REMUNERATION
COMMITTEE
CHAIR
Members of the Remuneration
Committee are:
Lucinda Riches (chair)
Angus Cockburn
Jill Easterbrook
Renata Ribeiro
Tanya Fratto
Lindsley Ruth
Roy Twite (appointed 10 June 2024)
Details of meeting attendance are
provided on page 90. The Remuneration
Committee’s terms of reference are
available on the Group’s website.
Dear Shareholder
I am pleased to present the Remuneration
report for 2023/24, following another year
of strong operational delivery in which the
Group achieved the objectives set out for
Sunbelt 3.0 and continued its track record
of delivering for shareholders. As Ashtead
embarks on Sunbelt 4.0, the team is
well positioned to build on the significant
progress made during Sunbelt 3.0, and
leverage Ashtead’s increased scale and
customer focus to drive growth and
returns for years to come. As a Board
and Committee, we were delighted with
the very supportive feedback that the
management team received from
shareholders and other attendees at our
recent Capital Markets Event in Atlanta;
it is testament to the Group’s strong
culture and the exceptional talent
demonstrated by Brendan and the
wider leadership team.
The launch of the Sunbelt 4.0 strategic
plan also coincides with the triennial
requirement for Ashtead to submit its
Remuneration policy to shareholders for
approval. The Remuneration Committee
has conducted a thorough review of the
policy to ensure our offering at all levels
of the Group remains aligned with our pay
philosophy and is credible in the markets
in which we operate. In doing so, the
Committee has been aware of the many
and often competing influences on pay
design that are highly specific to the
unique circumstances of Ashtead.
These are described in further detail in
this report, as important context for
the Committee’s decision-making.
2023/24 is the latest year in a sustained
period of transformation for Ashtead.
Over the last 10 years, the Group has
doubled its US market share, generated
above-market compounded rates of
earnings growth and delivered
consistently high Return on investment
through the cycle. Ashtead has a track
record of outperformance through
organic growth and strategic bolt-on
acquisitions, and shareholders continue
to enjoy significant benefits from
exposure to our North American markets;
over that period, the Group has created
c. £30bn of shareholder value
(significantly ahead of the performance
of both of the FTSE 100 and S&P 500
Industrials indices over that timeframe).
A business transformed – Ashtead over the past 10 years
KPI 2014 % change
2019
(Brendan Horgan
appointed CEO) % change 2024
# employees 9,934 +79% 17,803 +46% 25,958
# locations 556 +86% 1,036 +46% 1,511
US market share 6% +50% 9% +22% 11%
Revenue ($m) 2,619 +124% 5,870 +85% 10,859
% of revenue from North America 83.6% n/a 89.4% n/a 91.8%
Adjusted operating profit ($m) 655 +152% 1,648 +68% 2,775
Adjusted EPS (cents) 74.6¢ +205% 227.2¢ +70% 386.5¢
RoI 18.6% n/a 17.8% n/a 16.3%
TSR (£100 invested 30 April 2014) 100 +163% 263 +195% 776
Shareholder value created – n/a £7.3bn n/a £30.3bn
REMUNERATION REPORT
Ashtead Group plc Annual Report & Accounts 2024100
Over the last three years, Ashtead has also delivered fully against its Sunbelt 3.0 strategic priorities:
Actionable Component How we delivered
Grow General Tool and
Advance Our Clusters
Grew General Tool revenue at 17% CAGR
Expanded our North American footprint by 401 locations: 230 in Specialty and 171 in General Tool
Now present in all US states and eight Canadian provinces
Progressed our top 100 US clusters from 31 to 58
Amplify Specialty
Amplified Specialty by growing revenue at 24% CAGR to $2.9bn and adding three new business lines
Extracted the power of cross-selling our unique mix of products and services to a broadened customer
base by 30%
Advance Technology
Embedded our order capture and dynamic pricing systems enabling overperformance in volume
and pricing
Developed comprehensive and powerful technology ecosystem, with implementation roadmap in place
for these domains:
− Sales, Logistics, Service, Connected, Frontline enabling:
- Enhanced order capture
- Improved customer experience
- Efficiencies for next chapter of growth
- Market share gains
Lead With ESG
Reduced carbon intensity by 31%, ahead of our 15% target
Rental penetration increased, thereby reducing embedded carbon
Our ‘Engage for Life’ health and safety programme and culture delivered record-low incident rates
Continued strength demonstrated through our team member engagement surveys –
87% engagement score
Dynamic Capital
Allocation
Consistent application of our capital allocation policy to optimise capital deployment for the benefit
of all stakeholders
$10.5bn invested in the business
231 greenfields opened in North America
$3.3bn spent on bolt-ons with 170 locations added in North America
Returned $1.8bn to shareholders through dividends ($1.1bn) and share buybacks ($0.7bn)
Underpinned by target net debt to EBITDA leverage range of 1.5 to 2.0 times; 1.7 times at 30 April 2024
Revenue:
a 3x increase since 2014
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
$12bn
$10bn
$8bn
$6bn
$4bn
$2bn
CAGR: +15%
Year ending 30 April
$0bn
Adjusted operating profit:
a 3x increase since 2014
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
$3.0bn
$2.0bn
$2.5bn
$1.0bn
$1.5bn
$0bn
$0.5bn
Year ending 30 April
CAGR: +16%
Total Shareholder Return:
Value of £100 invested on 30 April 2014
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
900
500
600
700
800
100
200
300
400
0
Ashtead
FTSE 100
S&P 500 Industrials
Source: Bloomberg
Ashtead has performed exceptionally well and created £30bn of shareholder value in 10 years
A strong and sustained performance track record
Ashtead Group plc Annual Report & Accounts 2024 101
DIRECTORS’ REPORT
Aligning performance and
reward in 2023/24 across
the organisation
In line with our philosophy that all team
members should share in Ashtead’s
success in a meaningful and aligned
manner, the Group’s performance last
year – and over the Sunbelt 3.0 period
more generally – has resulted in the
following remuneration outcomes
for 2023/24:
Annual bonus
All staff participate in annual bonus
arrangements relevant to the nature of
their role. Brendan Horgan and Michael
Pratt participate in the deferred bonus
plan (‘DBP’), where performance is
measured by reference to Group
adjusted pre-tax profit and free cash
flow generation. The bonus targets for
2023/24, which were achieved at 36.6% of
maximum reflecting the stretching nature
of the targets, are set out on page 118.
2021 Performance Share Unit (‘PSU’)
awards under the Performance Share
Plan (‘PSP’)
Over 350 executives and senior leaders
participated in the 2021 PSP. The
long-term performance of the Group is
reflected in the strong vesting outcome of
93.4% for this award cycle on completion
of its three-year vesting period in July
2024 (awards held by Brendan Horgan
and Michael Pratt will remain subject to
an additional two-year post-vesting
holding period). The measures, targets
and performance outcomes against these
and the resulting levels of vesting are set
out on page 119.
Sunbelt 3.0 Strategic Plan Award
(‘SPA’) under the Long-Term Incentive
Plan (‘LTIP’)
In 2021, we introduced tailored incentives
linked to the delivery of Sunbelt 3.0 for
each level of the organisation. c.13,000
employees and 1,200 branch managers
received additional cash bonuses in each
of the past three years linked to annual
targets aligned to progress against our
Sunbelt 3.0 strategy. Approximately
450 individuals (including our district
managers, executive vice presidents
and executive directors) were awarded
separate share-based incentives with
vesting based on the achievement of
ambitious three-year goals set for each
area of the business in relation to our
strategic objectives. Awards made to
Sunbelt UK participants (c. 60 individuals)
will vest at 70.8% of maximum. Awards
will vest in full for Group participants
(including Brendan Horgan and Michael
Pratt, for which vested awards again
remain subject to a further two-year
REMUNERATION REPORT CONTINUED
post-vesting holding period) and Sunbelt
US and Sunbelt Canada participants. The
measures and targets for the executive
directors, the performance outcomes
against these and the resulting levels of
vesting are set out on page 120.
The Committee reviewed the outcomes
under the incentive awards in the context
of the underlying performance of the
Group and the stakeholder experience
more broadly. It concluded that no
discretion to adjust the formulaic
outcomes was required, noting the strong
performance of the Group over the period
and successful delivery of an ambitious
three-year strategy that lays the
foundations for Ashtead’s future success.
2024 Remuneration policy
Introduction
In my introduction to last year’s
Remuneration report, I described the risk
posed by the remuneration environment
in the UK on the Group’s ability to attract,
motivate and retain key talent. This
concern is heightened by the particular
context for Ashtead which, whilst listed
in the UK, is essentially a US business.
The Group generated 92% of revenue and
99% of adjusted operating profit in North
America in 2023/24, and our growth has
been and continues to be driven by our
US market share.
Ashtead’s US market share is 11%,
second only to United Rentals…
1
2
3
4
5
6
1 United Rentals ........................................ 15%
2 Ashtead ................................................ 11%
3 Herc Rentals ............................................. 4%
4 Top 4–10 .....................................................8%
5 Top 11–100 ...............................................20%
6 Others ......................................................42%
… with an ambition to continue
to grow this
4%
2%
11%
6%
Target
2024
2014
2007
2002
20%
Unlike other FTSE companies, our
leadership team is almost entirely
US-based:
1
2
1 US: 75% of Senior Leadership roles
(including our CEO) are held by
US citizens and based in the US ............ 75%
2 UK: only three Senior Leadership
roles are UK-based ................................ 25%
The Group’s success therefore relies
on continuing to attract and retain high
calibre individuals (including at executive
and Board levels), who are citizens of and
reside in the US. It is this market, not the
UK, that is our primary competitive
landscape for executive remuneration.
It is in this context that the Committee
has spent significant time developing its
proposals for Remuneration policy design
to ensure they are credible in the relevant
markets in which we operate and compete
for talent.
The many and often competing influences
on pay design at Ashtead are described in
further detail on page 103. This important
context frames the Committee’s
proposals, which seek to balance
delicately these considerations through
careful remuneration policy design,
in a manner that is in the interests of all
stakeholders and consistent with the pay
principles adopted for our wider workforce.
Ashtead Group plc Annual Report & Accounts 2024102
OUR REMUNERATION PRINCIPLES:
− Support the Group strategy
− Clear link between remuneration outcomes and overall corporate performance
− Alignment between the structures of executive and employee remuneration, reinforcing Ashtead’s culture
− Ensure remuneration is competitive against companies of similar size and complexity
− A policy that reflects best practice governance for a FTSE company whilst being cognisant of the relevant market for
executive talent
Workforce remuneration policies
and practices
As we approached the end of Sunbelt 3.0,
our workforce remuneration policies and
practices have undergone an in-depth
review to ensure our offering at all levels
of the Group remains aligned with our
pay philosophy, is suitably competitive
and reinforces the objectives set for
Sunbelt 4.0.
Alignment between executive and
employee remuneration is one of the
Committee’s key principles. We operate a
consistent approach to fixed pay (salary,
benefits, pension) across the Group,
setting these at levels that enable
Ashtead to compete effectively in relevant
talent markets. Rather than succeeding
our Sunbelt 3.0 incentives with a new
one-off plan, we are reverting to a
cadence of rolling, annual awards.
Reflecting US practice for longer-term
variable pay to comprise both
performance- and time-based awards,
we are rolling out Restricted Stock Unit
(‘RSU’) awards to c. 400 US colleagues,
tooperate alongside our usual
performance-based (‘PSU’) awards under
the LTIP. The changes to workforce
remuneration outlined above will also
be applied to all leadership roles below
the Board level, to ensure continued
alignment within the organisation.
The market context for executive
director reward
The remuneration framework for the
executive directors at Ashtead has
remained broadly unchanged since 2011
when the deferred bonus plan was
introduced. The current opportunity under
the deferred bonus plan (200% of salary
for the chief executive) was set in 2011
and, prior to the opportunity increase in
2021 to begin to bridge the gap that the
Committee observed at that time,
long-term incentive award levels had
remained unchanged since 2015.
Adopting the same principles used to
review workforce remuneration, during
2023/24 the Committee reviewed
executive director remuneration in the
relevant talent market for each role.
For Brendan (who is based in the US),
we looked at remuneration practices at
our closest peers and other related US
companies of comparable scale, industry
and geographical footprint. For Michael
(who is UK based), and as a secondary
reference point for the chief executive role
given Ashtead’s UK-listed status, we
assessed our proposals in the context of
FTSE 50 practice (Ashtead’s rank at the
time of writing is c. 25).
This review highlighted that, while the
positioning of Michael’s remuneration is
broadly appropriate, there continues to
exist a material disconnect between the
remuneration opportunity we are able to
offer to Brendan under our policy relative
to the competitive landscape in the US
(see page 105). Taking into account the
transformation in Ashtead’s scale and its
track record of performance relative to
peers, there is now a material business
risk for Ashtead that remuneration
becomes a barrier to, rather than enabler
of, retaining, attracting and motivating
critical talent. In the case of Brendan
specifically, the existing framework
enabled us to structure a credible
package on his appointment as chief
executive in 2019. However, persisting
with a significant discount of his current
package to the competitive range for
his role against US comparators (and,
to a lesser extent, FTSE 50 norms)
runs counter to our core remuneration
principle of offering a competitive
package for relevant markets that
reflects the performance and contribution
of the individual.
Therefore, the Committee concluded
that our Remuneration policy needs to
be brought more into line with relevant
competitive market norms to be credible
in the landscape in which we compete for
talent and, for Brendan, to reflect his
experience and proven track record over
the five years since his appointment as
chief executive. This perspective has
been echoed by a number of the Group’s
largest shareholders during our recent
consultation process (described in more
detail on page 106), who have made it
clear to the Board that remuneration
should support – rather than undermine
– the retention of a high-performing
leadership team and our highly-regarded
chief executive in particular.
Our proposals
Reflecting feedback from shareholders on
the use of the Strategic Plan Award at the
time of the 2021 policy, we will not be
continuing with further one-off awards.
However, we are proposing material
revisions to the policy to ensure that our
remuneration remains credible in the
markets in which we operate, while
seeking to balance sensitively the
governance expectations of Ashtead as
a FTSE-listed company. A summary of
the proposed changes is set out below.
What is not changing
We are proposing no change to our policy
on fixed pay (salary, benefits, pension):
− on a standalone basis, Brendan’s salary
is median for US peers and bottom
quartile for comparable FTSE size
peers. However, this positioning
underpins an appropriately competitive
total package when considered in
aggregate with our other proposals and
we believe it is appropriate to maintain
strong discipline on fixed pay levels.
The salary for Michael, our UK-based
chief financial officer, is broadly aligned
with competitive UK practices,
following the adjustment implemented
in 2021. Salary increases for Brendan
and Michael in 2024 will be below the
average workforce rate (see page 125);
− our policy on pensions and benefits
already aligns our executive directors
with the wider workforce in the relevant
local market. This adheres to our key
principle that executive remuneration
should be aligned with broader
workforce practices, and the UK
Corporate Governance Code; and
− all incentive awards remain subject to
existing malus and clawback provisions.
Ashtead Group plc Annual Report & Accounts 2024 103
DIRECTORS’ REPORT
We are also proposing only minor
changes to the annual bonus:
− our bonus is broadly competitive in
terms of the opportunity on offer.
However, as set out in the table on
page 107, we are proposing changes
to the award opportunity for the chief
executive and chief financial officer
within existing policy headroom
limits; and
− we will continue to require one-third of
earned bonus to be deferred under the
Deferred Bonus Plan (which remains
subject to forfeiture until vesting). While
bonus deferral is uncommon in the US,
we recognise the expectations of us as
a FTSE 50 company and support the
principle of using deferral to reinforce
an ownership mindset.
What is changing
The following changes are proposed
to our policy for longer-term variable
remuneration:
− we are increasing the long-term
incentive opportunity for the chief
executive, to bridge the pay opportunity
gap and improve the credibility of the
package by delivering a total
remuneration fair value that better
reflects competitive norms in the
relevant talent market for the role.
This approach is considered to be more
appropriate than material increases in
short-term variable or fixed pay.
It is also consistent with Ashtead’s
performance culture and our stated
remuneration principles;
− to ensure a competitive package
structure that aligns with conventional
practice in the US, it is proposed that
US-based executive directors will
be eligible to receive RSU awards
alongside other eligible colleagues.
For our chief executive, the maximum
annual RSU award opportunity will be
150% of salary. UK-based executive
directors, such as our current chief
financial officer, will not be eligible to
participate in this element of the policy;
they will receive PSU awards under the
LTIP only.
Introducing RSU awards alongside PSU
awards is the key structural change
proposed to the policy. The Committee
recognises this runs counter to current
FTSE norms. However:
- it reflects competitive practice in the
US market (see below);
- it aligns with the pay philosophy and
framework developed below Board
level; and
- it enables pay to be set at a
competitive level while adhering to
our philosophy to set cash salary in
line with local market norms (which,
in the US, are generally lower than for
the FTSE).
− the balance of the annual long-term
incentive opportunity will continue to
be delivered through PSU awards, with
the following maximum award levels:
- chief executive: 700% of salary (2023:
467%, including the annualised 3.0
award); and
- chief financial officer: 300% of salary
(2023: 308%, including the annualised
3.0 award).
The proposed PSU award levels have
been calibrated to bring the fair value
of the total package more into line with
competitive market norms. For the
chief executive, this has been set taking
account of the proposed RSU award
opportunity (valued on the basis of PSU
equivalence in doing so);
− the threshold vesting level for PSU
awards will also be reduced, from
32.5% to 25% of maximum, in line with
our previous commitment, as well as
typical US and FTSE norms; and
− increase the minimum in-post
shareholding for the chief executive,
to 850% of salary.
Incentive vehicle mix prevalence, US comparators
Prevalence
80% use RSUs alongside PSUs
40% use these two vehicles 40% also grant share options
Ashtead proposal Ashtead FY24
10% use
PSUs only
10% grant
options
alongside
PSUs
0%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024104
The proposals help to bridge the gap to the US market for the chief executive by bringing the package into line with the market lower
quartile (see below) but, recognising the secondary context of Ashtead’s UK listing, do not seek to close it fully. The Committee
also reflected on the UK market context in its decision-making, in particular the proposed aggregate LTIP award opportunity as a
percentage of salary (which, in the narrow context of FTSE practice, appears high). However, the Committee also recognises that the
high incentive opportunity is offset by a bottom quartile cash salary, to deliver a total remuneration fair value that is around upper
quartile for other FTSE 50 companies (where lower percentage of salary LTIP opportunities are typically offset by higher salaries):
Comparative assessment of proposals vs market norms
0% 25% 50% 75% 100%
0% 25% 50% 75% 100%
Base salary
Incentive opportunity
1
(% salary)
Incentive opportunity
1
($)
Package fair value
2
($)
US comparators FTSE 50 (xFS)
Percentile rank Percentile rank
1 Maximum bonus + maximum long-term incentive opportunity (valued on the basis of PSU equivalents).
2 Base salary + target bonus + fair value of long-term incentives.
For the chief financial officer, the incremental revisions to the package seek to maintain the current relative positioning of the
package against the UK (the reference talent market for the incumbent presently), by replacing the annualised award opportunity
under the 2021 Strategic Plan Award with a higher annual opportunity under the bonus and LTIP.
The proposed Remuneration policy retains a strong emphasis on performance-related pay and long-term, share-based awards.
A significant proportion of the package remains at risk (80% of the package at target for Brendan and 91% at maximum, including in
the at-risk element the RSUs, which are subject to an underpin) and long-term in nature. This ensures that the maximum opportunity
is realised only if Ashtead continues its track record as a consistent outperformer.
Other solutions considered
The proposals reflect the culmination of an in-depth review by the Committee, during which multiple alternative solutions were
evaluated. These are described below:
Possible solution Rationale for our preferred approach
Increase only the PSU award
opportunity
− Delivering the equivalent increase through a PSU award alone requires the annual
award opportunity to be 10x salary. This would significantly increase the leverage of
the package vs market norms in the US and the UK
− Awarding RSUs alongside PSUs better reflects US market norms, where use of a
single vehicle is uncommon
Increase cash salary to be more in line
with FTSE 50 norms, instead of
adopting RSUs alongside PSUs
− Does not reinforce our pay-for-performance philosophy
− Is misaligned with our pay philosophy below Board level
− Misaligns with our principle that remuneration should reflect relevant competitive
norms (cash salaries are typically lower in the US)
A larger increase in the bonus
opportunity to offset some of the
proposed long-term incentive
opportunity and/or the use of RSUs
− Ashtead is a long-cycle business. The Committee supports the principle that the
structure of the remuneration package – both for executives but also deeper in the
organisation – should reinforce long-term sustainable performance not a focus on
short-term gains
− The current policy limit for bonus, while slightly below US norms, is not significantly
out of line with competitive practice in that market
Phase the proposed increases − Perpetuates the business risk of an existing material competitive gap
− As the proposed increase is being delivered through long-term share-based awards,
the impact on realised pay is already staggered and will not be fully achieved until 2028
Propose a lower overall opportunity − Is misaligned to our pay positioning philosophy below Board level
− Does not reflect the chief executive’s experience, performance and track record
Ashtead Group plc Annual Report & Accounts 2024 105
DIRECTORS’ REPORT
Shareholder engagement
The Committee has engaged extensively
with shareholders in developing and
formalising these proposals. We
contacted 40 of the Group’s largest
shareholders (covering >55% of the
shareholder register) to consult on the
proposed changes to the Remuneration
policy and solicit feedback. Paul Walker
and I held 16 meetings with shareholders
and exchanged correspondence with
a further 24. We are very grateful for
the level of engagement on this
important topic and the constructive
feedback received.
All of the shareholders that we spoke with
recognised that Ashtead’s approach to
remuneration needs to be credible in our
relevant talent markets (and accept this is
the US for most senior leadership roles,
including our chief executive). We received
broad indications of support for the
direction of travel represented by the
proposals, including general acceptance
of the proposal to introduce RSU awards
alongside the PSU awards for US-based
directors, where such practice is in line
with competitive norms. In response
to feedback received during the
consultation, we introduced a
performance underpin at vesting on RSU
awards for the chief executive, to mitigate
the risk of rewarding for failure. We also
extended the RSU time horizon beyond
the rateable vesting originally proposed
and introduced a post-vesting holding
period and further increased the
shareholding guideline for the chief
executive. While these revisions depart
slightly from competitive US practices,
the Committee recognises the need
to be sensitive to generally-accepted
remuneration governance norms in
Ashtead’s UK listing environment.
Shareholders also sought reassurance
that the measures selected and targets
set for the PSU awards would be aligned
to Sunbelt 4.0 and suitably stretching, to
ensure a strong linkage between pay and
performance. The measures and targets
for the 2024 PSU awards (full details on
which are set out on page 125) reflect the
ambition of Sunbelt 4.0. The performance
criteria will comprise adjusted EPS (30%),
RoI (30%), relative TSR (30%) and
sustainability (10%), reflecting the key
components of Sunbelt 4.0. The higher
weighting on RoI relative to previous
award cycles reflects its importance as
a key measure of business strength for
Ashtead and the weighting on EPS has
been aligned to that of RoI, to maintain the
balance between growth and returns. The
target ranges for RoI and EPS have also
been increased relative to previous award
cycles to reflect the degree of stretch in
Sunbelt 4.0 and to support the higher
award opportunity. Reflecting feedback
from shareholders and the importance
of the US market to Ashtead, the relative
TSR measure for 2024 awards onwards
will be assessed against two comparator
groups (50% versus FTSE 100 excluding
investment trusts and 50% versus the
constituents of the S&P 500 Industrials
index, representing recognised market
indices from which our pay comparators
are largely drawn). Finally, a carbon
intensity reduction target has been
incorporated into the PSU scorecard
(replacing the previous leverage target)
to support our roadmap to net zero.
Conclusion
Ashtead is unique. It is a US business
that is listed in the UK. As a result,
shareholders have enjoyed significant
benefits by being exposed to the North
American markets. However,
shareholders must recognise that the
competitive context for executive talent
for Ashtead differs materially from typical
UK norms. Our Remuneration policy
needs to enable us to attract, motivate
and retain citizens of and residents in the
US, to achieve our strategic ambitions.
We are seeking to balance opposing
forces on competitive remuneration
design. While unconventional in the
narrow context of FTSE norms, we believe
the proposed Remuneration policy is in
stakeholders’ interests. The current
competitive disadvantage we face is a key
risk for the Group.
Our proposals:
− reinforce our key principles of fairness
and alignment of pay and performance
outcomes;
− better reflect competitive practices in
relevant talent markets for each key
leadership role;
− continue to reflect prevailing FTSE
governance best practice; and
− will support Ashtead in retaining
and recruiting the best talent in the
right market.
The decisions made by the Committee
also build directly on the constructive
dialogue we have had with – and input
received from – our shareholders. On
behalf of the Committee, I hope you will
be able to support the 2024 Remuneration
policy and this year’s Remuneration report.
LUCINDA RICHES
Chair of the Remuneration Committee
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024106
Remuneration at a glance
Summary of the proposed policy:
Element Proposed policy Rationale
Base salary
No change. Inflationary increases set by reference to
those for the wider workforce
Chief executive cash salary in line with US norms
(low vs FTSE)
Chief financial officer is appropriately positioned vs
FTSE norms
Pension
CEO: 401(k)
CFO: 6% of salary
Aligns with wider workforce in relevant market
Benefits
No change Aligns with wider workforce in relevant market
Annual bonus
Policy limit: 225% of salary
CEO FY25: 225% of salary Uses existing headroom to align more closely with
US norms, without being excessive vs FTSE practice
CFO FY25: 175% of salary Brings opportunity more into line with primary talent market
norms for the role (presently this is the UK)
Deferral: 1/3 of earned bonus Not common in US market but aligns with FTSE norms
PSU awards
Policy limit: 700% of salary
CEO FY25: 700% of salary Helps bridge some of the gap to competitive US norms;
but through long-term, performance-based equity pay
CFO FY25: 300% of salary Maintains aggregate long-term incentive opportunity at
current level; overall package fair value is lower quartile vs
UK norms
Measures: Relative TSR (30%)
– 15% v FTSE 100 excluding investment
trusts
– 15% v S&P 500 industrials
Adjusted EPS (30%)
RoI (30%)
Sustainability (10%)
TSR benchmarks reflect established market indices from
which our pay comparators are largely drawn (introduced
in response to investor feedback)
Same weighting as RoI balances growth and returns
Slight upweighting reflects RoI is a KPI for Ashtead
Replaces Leverage. Targets will align to Sunbelt 4.0
EPS and RoI targets have been set to be more stretching
and go beyond our existing target ranges
PSU vesting
threshold
25% of maximum Lowered from 32.5% of maximum as previously committed,
bringing it into line with US/FTSE norms
Strategic Plan
(legacy plan)
n/a In line with our stated commitment, no one-off awards will
be made to EDs under the 2024 policy
RSU awards
(new for 2024)
Policy limit: 150% of salary Aligns to competitive US practice; supports retention
CEO FY25: 150% of salary Opportunity supports delivery of more credible total
package in US context (broadly lower quartile)
CFO FY25: Not eligible Reflects typical practice in primary (UK) talent market
Vesting: Phased over two, three, four years
One-year post-vesting holding
Extended in response to investor feedback for a longer
retention/vesting period at Board level (initial proposal:
phased over one, two, three years and no holding, to align
with approach being taken for wider workforce)
Underpin: based on a defined set of minimum
acceptable performance levels in relation to RoI,
delivery of the dividend policy, balance sheet health,
sustainability and corporate governance. Details of the
underpin attaching to each cycle, and the assessment
of it when determining vesting of each tranche, will be
set out in the relevant Remuneration report
Introduced in response to investor feedback
Shareholding
guidelines
CEO: 850% of salary Ahead of US norms; reflects PSU + RSU opportunity
(increased further following investor feedback; initial
proposal was to increase this to 600% of salary)
CFO: 300% of salary Aligns to proposed PSU opportunity (and FTSE norms)
Ashtead Group plc Annual Report & Accounts 2024 107
DIRECTORS’ REPORT
Chief executive target total remuneration
1
: Ashtead vs US comparators
(market data as available at 31 May 2024)
0
5
10
15
20
Ashtead (FY24)
Waste Connections
Herc Holdings
Cintas
WillScot Mobile Mini
Ashtead (proposed)
Ryder System
JB Hunt Transport
WW Grainger
Xylem
United Rentals
Republic Services
Parker-Hannifin
Masco
WESCO
CH Robinson
Stanley Black & Decker
Rockwell Automation
Waste Management
Trane Technologies
Fortive
Dover Corp
$m
Lower quartile Median Upper quartile
The proposed target total remuneration opportunity for Brendan Horgan is
around 25
th
percentile vs US comparators; Ashtead’s market cap is median
1 Target total remuneration = base salary + target annual bonus + long-term incentive fair value.
Chief executive target total remuneration
1
: Ashtead vs FTSE 50 (excluding financial services)
(market data as available at 31 May 2024)
0
5
10
15
20
Segro
Next
SSE
Coca-Cola HBC
Smurfit Kappa
Sage Group
Halma
Informa
Bunzl
ABF
Ashtead (FY24)
Rentokil Initial
Experian
Antofagasta
BT Group
National Grid
IHG
Compass Group
Anglo American
WPP
Rolls-Royce
Reckitt
BAE Systems
Rio Tinto
Imperial Brands
Tesco
Vodafone
Haleon
Flutter
Diageo
Smith & Nephew
Ashtead (proposed)
Glencore
RELX
BAT
BP
LSEG
GSK
Unilever
Shell
AstraZeneca
$m
Lower quartile Median Upper quartile
The chief executive's target total remuneration opportunity is currently around 25
th
percentile;
the proposed package is around upper quartile. Ashtead's market cap is around median
1 Target total remuneration = base salary + target annual bonus + long-term incentive fair value.
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024108
Introduction
This report has been prepared in
accordance with the Listing Rules of the
Financial Conduct Authority, the relevant
sections of the Companies Act 2006 and
The Large and Medium-sized Companies
and Groups (Accounts and Reports)
Regulations 2008 (as amended) (‘the
Regulations’). It explains how the Board
has applied the Principles of Good
Governance relating to directors’
remuneration, as set out in the UK
Corporate Governance Code. The
Regulations require the auditor to report
to the Company’s members on elements
of the Directors’ remuneration report and
to state whether, in their opinion, that part
of the report has been properly prepared
in accordance with the Companies Act
2006. The audited information is included
on pages 117 to 122.
Three ordinary resolutions concerning
the Directors’ remuneration report will
be put to shareholders at the AGM on
4 September 2024. The first resolution is
in respect of the implementation of the
2021 Remuneration policy for the year
ended 30 April 2024. The second
resolution seeks shareholders’ approval
for the 2024 Remuneration policy which,
if approved, is intended to apply for three
years from the AGM. The third resolution
seeks shareholder approval to amend the
maximum individual award limit under the
rules of the Ashtead Group Long-Term
Incentive Plan 2021 (under which it is
proposed to grant both PSU and RSU
awards going forward) to align with the
aggregate award limit set out in the
2024 policy.
Remuneration policy
As described in detail in the introductory
letter from the chair of the Remuneration
Committee, the Committee conducted a
comprehensive review of the
Remuneration policy during the 2023/24
financial year. In particular, the
Committee considered how best to
structure remuneration following the end
of the Sunbelt 3.0 strategic plan, to ensure
it continues to reflect appropriately the
specific context for Ashtead, including our
track record of cascading a consistent pay
philosophy across all levels of the
organisation, competitive practices in
relevant key talent markets, and
Ashtead’s performance culture.
The proposed Remuneration policy is
set out in this section of the Directors’
remuneration report and will be
submitted to shareholders for approval
at the 2024 AGM. In summary, the key
changes are to:
− make no further one-off awards;
− increase the maximum annual PSU
award opportunity face value to 700%
of salary;
− introduce flexibility to make annual RSU
awards to US-based executive directors
under the Ashtead Long-Term Incentive
Plan 2021 with a maximum annual
award level of 150% of salary; and
− increase the minimum in-post
shareholding for the chief executive
to 850% of salary.
The Committee has engaged extensively
on its proposals. We wrote to 40
shareholders (representing >55% of
issued share capital) inviting feedback
and offering meetings to discuss our
proposals – and, importantly, the
rationale for these – in more detail.
As well as indications of support,
shareholders provided valuable input
during this process. As explained in the
introductory letter prefacing this report,
the Committee has reflected this
feedback in the revised proposals
now being tabled for approval.
In keeping with the provisions of the
UK Corporate Governance Code,
the Committee also evaluated the
Remuneration policy and practices and
concluded they address appropriately
the six pillars of: clarity; simplicity; risk;
predictability; proportionality; and
alignment to culture:
− clarity: the Remuneration policy is
transparent and its implementation
is disclosed in a straightforward
and consistent manner both to
shareholders and employees using the
Group’s annual report and via a range
of employee engagement mechanisms,
details of which are provided within
this report;
− simplicity: the Group adopts
remuneration structures for executive
directors which are not complex and
which are typical for the markets in
which Ashtead competes for talent.
Executive director remuneration
comprises a base salary, benefit and
pension arrangements which are in line
with the wider workforce, and an
annual bonus and long-term share
awards which are aligned with the
Group’s financial performance and
strategic plans. Details of the operation
of this remuneration structure are
provided within this report;
− risk: the Remuneration policy has been
designed to discourage inappropriate
risk-taking with an appropriate mix
of fixed and variable remuneration.
Variable elements are focused on the
long-term success of the Group, with
awards under the deferred bonus plan
and long-term share plans subject
to malus and clawback provisions.
Performance conditions are reviewed
regularly to ensure they remain
sufficiently stretching to ensure poor
performance is not rewarded, but
without being so stretching as to
encourage and incentivise excessive
risk taking;
− predictability: the illustration on
page13 provides detail of the potential
future reward based on different
performance scenarios under the
application of the Remuneration policy
for 2024/25. Incentive arrangements
are applied consistently over time and
subject to clearly defined pay-out
schedules, deferral requirements
and shareholding policies;
− proportionality: the link between each
element of the Remuneration policy
and the Group’s strategy is detailed in
the policy table below, with a range
of short and long-term components.
Furthermore, the Committee retains
appropriate discretion to adjust
formulaic bonus and long-term
incentive outcomes, where these would
otherwise result in outcomes that
are not aligned with stakeholders’
experience; and
− alignment to culture: remuneration
practices are aligned with the Group’s
purpose, values and strategy.
Ashtead Group plc Annual Report & Accounts 2024 109
DIRECTORS’ REPORT
The Group’s Remuneration policy
Element Link to strategy Operation Maximum potential value
Performance conditions
and assessment
Base salary
The purpose of the base
salary is to attract and
retain directors of the
high calibre needed to
deliver the long-term
success of the Group
without paying more
than is necessary to fill
the role.
Ordinarily, base salary is set
annually and is payable on a
monthly basis.
An executive director’s base
salary is determined by the
Committee. In deciding
appropriate levels, the
Committee considers the
experience and performance
of individuals and
relationships across the
Board and seeks to be
competitive using information
drawn from both internal and
external sources and taking
account of pay and conditions
elsewhere in the Company.
The comparator groups
currently used to inform
pay decisions comprise
organisations of similar size,
business model and
geographic footprint. The
Committee considers US and
FTSE listed companies in its
assessment, weighting the
relevance of these markets
depending on the location of
the executive and the talent
market for the role.
Individuals who are recruited
or promoted to the Board may,
on occasion, have their
salaries set below the policy
level until they become
established in their role.
In such cases subsequent
increases in salary may
be higher until the target
positioning is achieved.
While there is no maximum
salary level, salaries are
typically positioned around
the median level for
comparable positions in the
relevant market for talent.
Increases will normally
be no higher than the
typical increases for
other employees in the
relevant geography.
Higher increases may
be awarded in certain
circumstances at the
Committee’s discretion. For
example, these may include,
but are not limited to:
− increase in the scope
and/or responsibility of
the individual’s role; and
− development of the
individual within the role.
A full explanation will be
provided in the relevant
Remuneration report should
increases above the level of
local employee wage inflation
be awarded.
Details of the executive
directors’ salaries, and
any increases awarded
are set out in the
Remuneration report.
N/A
Benefits
To provide competitive
employment benefits.
The executive directors’
benefits will generally include
medical insurance, life cover,
car allowance and travel and
accommodation allowances.
The type and level of benefits
provided is reviewed
periodically to ensure they
remain market competitive.
The maximum will be set
at the cost of providing the
listed benefits.
N/A
Pension
To provide a competitive
retirement benefit.
The Company makes pension
contributions (or pays a
salary supplement in lieu of
pension contributions) equal
to the average available
for the workforce in the
relevant geography.
The maximum pension
contribution for all directors
is aligned with the average
employee contribution in the
respective geographies.
N/A
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024110
Element Link to strategy Operation Maximum potential value
Performance conditions
and assessment
Deferred
Bonus Plan
(‘DBP’)
The purpose of the DBP
is to incentivise
executives to deliver
stretching annual
financial performance
while aligning short-term
and long-term reward
through compulsory
deferral of a proportion
into share equivalents.
This promotes the
alignment of executive
and shareholder interests.
The DBP runs for consecutive
three-year periods with a
significant proportion of
any earned bonus being
compulsorily deferred into
share equivalents. Based
on achievement of annual
performance targets,
participants receive two-
thirds of the combined total of
their earned bonus for the
current year and the value of
any share equivalent awards
brought forward from the
previous year at the then
share price. The other
one-third is compulsorily
deferred into a new award of
share equivalents evaluated
at the then share price.
Deferred share equivalents
are subject to 50% forfeiture
for each subsequent year
of the plan period where
performance falls below the
forfeiture threshold set by
the Committee.
At the expiration of each
three-year period, participants
will, subject to attainment of
the performance conditions
for that year, receive in cash
their bonus for that year plus
any brought forward deferral
at its then value.
Dividend equivalents may
be provided on deferred
share equivalents.
Malus and clawback
provisions apply as detailed
in the notes to this table.
The maximum annual bonus
opportunity under the DBP is
225% of base salary.
Target performance earns
50% of the maximum
bonus opportunity.
The current DBP
performance conditions are
Group adjusted pre-tax profit
and free cash flow.
Stretching financial targets
are set by the Committee
at the start of each
financial year.
The Company operates in a
rapidly changing sector and
therefore the Committee may
change the balance of the
measures, or use different
measures, for subsequent
financial years, as appropriate.
The Committee has the
discretion to adjust measures,
targets or weightings for any
exceptional events that may
occur during the year.
The Committee is of the
opinion that given the
commercial sensitivity
arising in relation to the
detailed financial targets
used for the DBP, disclosing
precise targets for the bonus
plan in advance would not be
in shareholders’ interests.
Actual targets, performance
achieved and awards made
will be published at the end of
the performance periods so
shareholders can assess fully
the basis for any pay-outs
under the plan.
Performance
Stock Unit
(‘PSU’)
awards
The purpose is to attract,
retain and incentivise
executives to optimise
business performance
through the economic
cycle and hence, build
a stronger underlying
business with sustainable
long-term shareholder
value creation.
This is an inherently
cyclical business
with high capital
requirements. The
performance conditions
have been chosen to
ensure that there is an
appropriate dynamic
tension between growing
earnings ahead of market
rates, delivering strong
RoI, creating shareholder
value, and achieving the
sustainability objectives
underpinning our
corporate purpose.
Awards are granted annually
and vesting is dependent on
the achievement of
performance conditions.
Performance is measured
over a three-year period.
The operation of the plan is
reviewed annually to ensure
that grant levels, performance
criteria and other features
remain appropriate to
the Company’s current
circumstances.
Dividend equivalents may be
provided on vested shares.
Awards are subject to a
three-year performance
period and vested shares (net
of taxes) are required to be
held for a further two-year
period post-vesting.
Malus and clawback
provisions apply as detailed
in the notes to this table.
The maximum annual PSU
award has a market value at
the grant date of 700% of
base salary.
At target performance 25%
of the award vests.
In 2024/25, PSU award levels
will be 700% of base salary
for Brendan Horgan, and
300% of base salary for
Michael Pratt.
Awards are subject to
continued employment and
achievement of a range of
stretching, balanced and
holistic performance
conditions. The performance
criteria are set out on
page 119.
Ashtead Group plc Annual Report & Accounts 2024 111
DIRECTORS’ REPORT
Element Link to strategy Operation Maximum potential value
Performance conditions
and assessment
Restricted
Stock Unit
(‘RSU’)
awards
(US-based
directors
only)
The purpose is to attract
and retain executive
directors in talent
markets for which
hybrid equity incentive
arrangements reflect
typical competitive
norms, to build a
stronger underlying
business with sustainable
long-term shareholder
value creation.
Awards are granted annually
and usually vest, subject to
achievement of an underpin, in
equal tranches over two, three
and four years.
Vested shares (net of taxes)
are required to be held for a
further year post-vesting.
Dividend equivalents may be
provided on vested shares.
Malus and clawback
provisions apply as detailed
in the notes to this table.
The maximum annual RSU
award has a market value
at the grant date of 150%
of base salary.
RSUs will vest to the extent
the Committee determines,
in its absolute discretion, that
the underpin has been met.
In determining the extent to
which an award will vest,
the Committee will consider
multiple factors. These will
be disclosed at the time of
grant and may include, but
are not limited to, a minimum
acceptable level of RoI,
delivery of the dividend policy,
balance sheet health,
sustainability and corporate
governance.
Shareholding
policy
Ensures a long-term
locked-in alignment
between the executive
directors and
shareholders.
The Committee requires the
executive directors to build
and maintain a material
shareholding in the Company
over a reasonable time frame,
which would normally be
five years.
The Committee has discretion
to increase the shareholding
requirement.
Minimum shareholding
requirement:
− Chief executive: 850% of
base salary
− Other executive directors:
300% of base salary
N/A
Post-
cessation
shareholding
requirement
Strengthens the
alignment between the
long-term interests of
executive directors
and shareholders.
The Committee requires the
executive directors to maintain
the minimum shareholding
requirement for two years
post-cessation.
Minimum shareholding
requirement:
− Chief executive: 300% of
base salary
− Other executive directors:
200% of base salary
N/A
Notes to the policy table:
1 Performance targets are set by the Committee to be stretching, taking into account the Group’s strategic plans and the market landscape. The Committee reviews
the measures, weightings and targets for the annual bonus and PSU awards prior to the commencement of each award cycle to ensure their continued suitability and
to ensure they are appropriately stretching. In relation to the PSU awards, awards to be granted in 2024 will be based on TSR, adjusted EPS, RoI and sustainability:
a Total shareholder return measures the relative return from Ashtead against two comparator groups comprising constituents of the FTSE 100 excluding investment
trusts (to reflect Ashtead’s listing environment) and constituents of the S&P 500 Industrials index (to reflect the geographic footprint of Ashtead’s business
landscape). This provides alignment with shareholders’ interests as well as the talent markets against which remuneration opportunities are benchmarked.
b Earnings per share is a key measure ensuring sustainable profit generation over the longer-term. It is a key pillar of Ashtead’s strategy and is a measure which is
aligned with shareholders’ interests.
c Return on investment is a key internal measure to ensure the effective use of capital in the business which is cyclical and has high capital requirements.
d Sustainability is a core component of Sunbelt 4.0 and carbon reduction targets have been included in the PSU scorecard to reflect our pathway to Net Zero by 2050.
2 In relation to the DBP and LTIP (under which it is proposed to make the PSU and RSU awards proposed in the policy), malus and clawback provisions exist which enable
the Committee to reduce or eliminate the number of shares, notional shares or unvested shares held or reduce the amount of any money payable or potentially payable
and/or to require the transfer to the Company of all or some of the shares acquired or to pay to the Company an amount equal to all or part of any benefit or value derived
from, or attributable to, the plans in case of material misstatement of accounts, an error in the assessment process, the use of inaccurate or misleading information,
action or conduct of an award holder or award holders which in the reasonable opinion of the Board, amounts to fraud or gross misconduct, censure by a regulatory
body or a significant detrimental impact to the Group’s reputation (where the participant was responsible for, or had management oversight over, the actions, omissions
or behaviour that gave rise to that censure or detrimental impact) or corporate failure. The recovery provisions in the DBP apply for up to two years following the date of
payment. The recovery provisions in the LTIP extend for five years from the date of grant.
3 The Committee will operate the Company’s incentive plans according to their respective rules and consistent with normal market practice, the Listing Rules and HMRC
rules where relevant, including flexibility in a number of regards. These include making awards and setting performance criteria and targets for new cycles each year,
dealing with leavers, and adjustments to awards and performance criteria following acquisitions, disposals, changes in share capital and to take account of the impact
of other merger and acquisition activity. The Committee retains discretion, in exceptional circumstances, under the rules of the DBP and LTIP to adjust performance
conditions to ensure that the awards fulfil their original purposes. All assessments of performance are ultimately subject to the Committee’s judgement. Any discretion
exercised, and the rationale for doing so, will be disclosed in the Directors’ remuneration report.
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024112
Remuneration policy on new hires
When hiring a new executive director, the Committee will seek to align the remuneration package with the Remuneration policy
summarised above (including the maximum limits contained therein). For a US-based executive director, this may include the
granting of RSU awards. In addition, where the executive has to relocate, the level of relocation package will be assessed on a
case-by-case basis. Although it is not the Committee’s policy to buy-out former incentive arrangements as a matter of course, it will
consider compensating an incoming executive with like-kind incentive arrangements for foregone incentives with their previous
employer, taking into account the length of the period they were held and an assessment of the likely vesting value. The Committee
will ensure that such arrangements are in the best interests of both the Company and the shareholders without paying more than
is necessary.
Total remuneration opportunity
Our remuneration arrangements are designed so that a significant proportion of pay is dependent on the delivery of short and
long-term objectives designed to create shareholder value.
The graphs below illustrate the potential future reward opportunity for each of the executive directors in 2024/25, and the base salary
at 1 May 2024 and the sterling/dollar exchange rate at 30 April 2024.
Chief executive – Brendan Horgan ($’000) Chief financial officer – Michael Pratt (£’000)
2%
1%
1%
0 5,000 10,000 15,000
20,000
32% 27%
59% 13%
68% 10%
Target
Minimum
Maximum
Share price
growth
18%
91%
8%
6%
9%
21%
19%
15%
0
1,000 2,000 3,000 4,000
5,000
Target
Minimum
Maximum
Share price
growth
37%
93%
17%
14%
7%
3%
1%
1%
28%
30%
32%
52%
24% 61%
Salary Pension and benefits DBP PSP RSU
In illustrating potential reward opportunities, the following assumptions have been made:
Base salary, benefits, pension DBP RSU awards PSU awards
Minimum Base salary, benefits
and pension or cash
in lieu ofpension
No payment No vesting No vesting
Target On target (50% of maximum) Full vesting 25% vesting
Maximum Maximum Full vesting
Share price growth Full vesting with 50% share
price growth
The impact of share price movements on the value of PSU awards has been excluded for the minimum, target and maximum
scenario. The impact of share price changes on the value of the RSUs and mandatory bonus deferrals into the DBP has been
excluded from all scenarios.
Service contracts
The Company’s policy is that executive directors have rolling contracts terminable by either party giving the other 12 months’ notice,
which are available for inspection at the Company’s registered office. The service contracts for each of the executive directors all
contain non-compete provisions appropriate to their roles.
Ashtead Group plc Annual Report & Accounts 2024 113
DIRECTORS’ REPORT
Policy on payment for loss of office
Upon the termination of employment of any executive director, any compensation will be determined in accordance with the relevant
provisions of the director’s employment contract and the rules of any incentive scheme, which are summarised below.
Element Approach Application of Committee discretion
Base salary
and benefits
In the event of termination by the Company, there will be no
compensation for loss of office due to misconduct or normal
resignation.
In other circumstances, executive directors may be entitled
to receive compensation for loss of office which will be a
maximum of 12 months’ salary.
Such payments will be equivalent to the monthly salary
and benefits that the executive would have received if still in
employment with the Company. Executive directors will be
expected to mitigate their loss within a 12-month period of
their departure from the Company.
The Committee has discretion to make a lump sum
payment in lieu.
Pension
Pension contributions or payments in lieu of pension
contribution will be made during the notice period. No
additional payments will be made in respect of pension
contributions for loss of office.
The Committee has discretion to make a lump sum
payment in lieu.
Deferred
Bonus Plan
The treatment of the Deferred Bonus Plan is governed by the
rules of the plan.
Cessation of employment
If a participant ceases to be employed by a Group company for
any reason, an award that has not vested shall lapse unless
the Committee in its absolute discretion determines otherwise
for ‘good leaver’ reasons (including, but not limited to, injury,
disability, ill health, retirement, redundancy or transfer of
the business).
If the Committee determines that deferred awards held in
a participant’s plan account shall not lapse on cessation of
employment, all deferred awards held in the participant’s
plan account shall vest immediately and the Committee
shall determine:
(a) whether the measurement date for that plan year is
brought forward to the date of cessation or remains at the
end of the plan year; and
(b) whether a reduction is applied to the payment to take
account of the proportion of the plan year elapsed and the
contribution to the Group.
If the Committee determines that the measurement date
is the date of cessation, the Committee shall pro-rate the
performance conditions to the date of cessation.
The Committee has the discretion to determine that an
executive director is a good leaver.
The Committee retains discretion to set the
measurement date for the purposes of determining
performance measurement and whether to pro-rate
the contribution for that plan year. It should be noted that
it is the Committee’s policy to apply such discretions
only if the circumstances at the time are, in its opinion,
sufficiently exceptional, and to provide a full explanation
to shareholders where discretion is exercised.
Change of control
On a change of control, all deferred awards held in a
participant’s plan account shall vest immediately and the
Committee shall determine:
(a) that the measurement date is the date of the change of
control; and
(b) whether a reduction is applied to the payment to take
account of the proportion of the plan year elapsed and the
participant’s contribution to the Group.
The Committee shall pro-rate the performance conditions to
the measurement date.
In the event of an internal reorganisation, the Committee may
determine that awards are replaced by equivalent awards.
The Committee retains discretion to pro-rate the
contribution for that plan year. It is the Committee’s
policy in normal circumstances to pro-rate to time;
however, in exceptional circumstances where the nature
of the transaction produces exceptional value for
shareholders and, provided the performance targets are
met, the Committee will consider whether pro-rating
is equitable.
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024114
Element Approach Application of Committee discretion
LTIP
(including
PSU and
RSU awards)
The treatment of awards is governed by the rules of the
Long-Term Incentive Plan.
Cessation of employment
If a participant ceases to be employed by a Group company for
any reason, an award that has not vested shall lapse unless
the Committee in its absolute discretion determines otherwise
for ‘good leaver’ reasons (including, injury, disability, ill health,
redundancy or transfer of the business and any other reason
at the discretion of the Committee).
Where the participant is a good leaver, and at the discretion of
the Committee, awards may continue until the normal time of
vesting and with any applicable performance targets and other
conditions considered at the time of vesting. If the participant’s
awards vest, the proportion of the awards which shall vest will
be determined by the Committee in its absolute discretion
taking into account such factors as the Committee may
consider relevant including, but not limited to, the time the
award has been held by the participant and having regard to
any applicable performance targets and further conditions
imposed under the rules of the relevant plan.
Alternatively, the Committee may decide that the award may
vest on the date of cessation taking into account such factors
as the Committee may consider relevant including, but not
limited to, the time the award has been held by the participant
and having regard to any applicable performance targets
and further conditions imposed under the rules of the
relevant plan.
Awards will remain subject to any holding period after its
vests, unless the Committee, in its absolute discretion,
determines otherwise.
The Committee has the discretion to determine that an
executive director is a good leaver.
The Committee retains discretion to set the vesting date.
It should be noted that it is the Committee’s policy only to
apply such discretions if the circumstances at the time
are, in its opinion, sufficiently exceptional, and to provide
a full explanation to shareholders where discretion
is exercised.
Change of control
The proportion of the awards which shall vest will be
determined by the Committee in its absolute discretion taking
into account such factors as the Committee may consider
relevant including, but not limited to, the time the award
has been held by the participant and having regard to any
applicable performance targets and further conditions
imposed under the rules of the relevant plan.
It is the Committee’s policy to measure the level of
satisfaction of applicable performance targets (for
performance-based awards) on a change of control.
It is the Committee’s policy in normal circumstances to
pro-rate to time; however, in exceptional circumstances
where the nature of the transaction produces exceptional
value for shareholders and provided any applicable
performance targets are met, the Committee will
consider whether pro-rating is equitable.
There is no agreement between the Company and its directors or employees, providing for compensation for loss of office or
employment that occurs as a result of a takeover bid. The Committee reserves the right to make payments where such payments are
made in good faith in discharge of a legal obligation (or by way of damages for breach of such an obligation); or by way of settlement
or compromise of any claim arising in connection with the termination of an executive director’s office or employment.
When determining any loss of office payment for a departing individual the Committee will always seek to minimise the cost to the
Company whilst seeking to address the circumstances at the time.
Ashtead Group plc Annual Report & Accounts 2024 115
DIRECTORS’ REPORT
Consideration of conditions elsewhere in the Group
Alignment between executive and employee remuneration is one of the Committee’s key principles. Therefore, the remuneration
philosophy and frameworks applying to the wider workforce (and any changes to these over time) are primary inputs to the
Committee’s decisions regarding executive director remuneration.
Ashtead operates a consistent approach to fixed pay (salary, benefits and pension) across the Group, setting these at levels that
enable Ashtead to compete effectively in relevant talent markets. All staff are eligible for a cash bonus linked to their contribution to
our success, and performance-based incentives are an important component of the package that help to support staff retention and
motivation over the longer-term. All PSU awards are subject to the same performance measures/targets as set for the executive
directors, to foster a collaborative mindset and reward all eligible participants equitably for the Group’s continued success.
Reflecting competitive practice in the US (the primary market for talent for the majority of our workforce), longer-term variable
pay from 2024/25 will comprise both performance and time-based vehicles. Restricted Stock Unit (‘RSU’) awards will be made to
c.400 US colleagues, to supplement the existing PSU award opportunity for eligible colleagues (and consistent with the proposed
Remuneration policy for executive directors). However, the RSUs awarded below the Board level will vest rateably over three years in
line with competitive local market norms. These changes to wider workforce remuneration will also be applied to all leadership roles
below the Board level, to ensure Ashtead’s offering is consistent across the organisation and to reflect competitive practices for the
talent market for these more senior levels.
When considering executive compensation, the Committee is advised of, and takes into account, changes to the remuneration of
employees within the Group and feedback from engagement with employee forums. Executives engaged with team members
throughout the year. Regular ‘town hall’ and employee briefings are held during which updates are provided to the workforce on the
Group’s performance and strategic initiatives, and how these correlate to remuneration plans. During 2023/24, these have included
specific consideration of fixed elements of remuneration, considering the broader economic environment, as well as the structure
of variable elements of remuneration, in light of the Group’s progress against its strategic plans. The workforce is encouraged to
raise questions and share feedback either during or after the town hall events and employee briefings and we find a high level of
engagement. Additionally, regular updates are provided to employees of Company performance via email and through the Group’s
employee engagement apps.
Employees are also able to provide feedback through the Group’s employee surveys on an anonymous basis, with employees and the
Board provided with updates as to action taken to respond to employee matters raised.
Our Remuneration policy is applied consistently throughout the organisation and as such enables our employees to understand the
Remuneration policy as it applies to them, and enables alignment between the executive directors and the wider workforce. This
includes our policy on setting fixed pay levels, the depth of participation in our short- and long-term incentives, and the measures
and targets set to determine the pay-out of these. The Committee (and the Board as a whole) continues to keep under review our
approach to consulting employees on all matters – including remuneration – and is committed to evolving further its approach over
time, as appropriate.
Managing potential conflicts of interest
In order to avoid any conflict of interest, remuneration is managed through well-defined processes ensuring that no individual is
involved in the decision-making process related to their own remuneration. In particular, the remuneration of all executive directors
is set and approved by the Committee; none of the executive directors is involved in the determination of their own remuneration
arrangements.
The Committee also receives support from external advisers and evaluates the support provided by those advisers annually to
ensure that advice is independent and appropriate.
Remuneration policy for non-executive directors
The remuneration of the non-executive chair is determined by the Committee within its terms of reference. The remuneration of the
non-executive directors is determined by the Board within limits set out in the Articles of Association. None of the non-executive
directors has a service contract with the Company and their appointment is therefore terminable by the Board or the director at any
time. When recruiting a non-executive director, the remuneration arrangements offered will be in line with the policy table below:
Approach to fees Basis of fees
Fees are set at a level to attract and retain high calibre
non-executive directors.
Each non-executive director is paid a basic fee for undertaking
non-executive director and board responsibilities.
Fees are reviewed on a regular basis to ensure they reflect the
time commitment required and practice in companies of a
similar size and complexity.
The Company pays any reasonable expenses that a non-
executive director incurs in carrying out their duties as a
director (including any tax arising thereon) and other modest
benefits as appropriate.
Additional fees are paid in relation to extra responsibilities
undertaken, such as to the non-executive chair and the chairs
of the Audit and Remuneration Committees and the senior
independent director.
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024116
Annual report on remuneration
Single total figure for remuneration (audited information)
Executive directors
The single figure for the total remuneration received by each executive director for the year ended 30 April 2024 and the prior year is
shown in the table below:
Brendan Horgan
1
Michael Pratt
1
Total
1
2024
$’000
2023
$’000
2024
£’000
2023
£’000
2024
$’000
2023
$’000
Fixed remuneration Salary 1,125 1,082 612 588 1,894 1,788
Benefits
2
82 21 7 6 90 28
Pension
3
30 23 37 35 76 65
Total fixed 1,237 1,126 656 629 2,060 1,881
Variable remuneration DBP
4
549 3,120 224 1,266 829 4,711
PSU
5
2,293 4,309 1,095 1,432 3,670 6,141
SPA
6
3,181 – 1,354 – 4,884 –
Total variable 6,023 7,429 2,673 2,698 9,383 10,852
Total 7,260 8,555 3,329 3,327 11,443 12,733
Notes
1 Brendan Horgan’s salary is denominated in US dollars whereas Michael Pratt’s salary is denominated in sterling. For the purpose of this disclosure, amounts have been
shown in the currency in which salary is denominated, while the total remuneration amount is shown in US dollars translated at the average exchange rate for the year.
2 Benefits include the taxable benefit of company owned cars, private medical insurance and subscriptions and other taxable allowances. Other taxable allowances
include car, travel and accommodation allowances.
3 The amount for Michael Pratt represents cash payments in lieu of pension contributions at 6% (2023: 6%) of salary, in line with the pension contribution offered to the UK
workforce. The amount included for Brendan Horgan represents the co-match under Sunbelt’s 401K defined contribution pension plan and 409A deferred compensation
plan and is in line with the pension arrangements offered to our US workforce.
4 DBP includes the cash received by each director from the DBP for 2023/24 performance as explained on page 118, which is 67% of this year’s bonus for each director.
5 The PSU value is calculated as the number of performance-based shares vesting, valued at the market value of those shares, plus the payment in lieu of dividends paid
during the vesting period. Market value is the market value on the day the awards vest (if they vest before the date the financial statements are approved) or the average
market value for the last three months of the financial year (if the awards vest after the date the financial statements are approved). The 2021 award will vest at 93.4% on
5 July 2024 and has been valued at an average market value of 5,477p for the three months ended 30 April 2024, plus 193.4p per share in lieu of dividends paid during the
vesting period. The PSU value for 2023 has been adjusted to reflect the actual market value on the date of vesting of 5,374p.
6 The SPA value is calculated as the number of Strategic Plan Award shares vesting, valued at market value of those shares, plus the payment in lieu of dividends paid
during the vesting period. Market value is the average market value for the last three months of the financial year (as awards vest after the date the financial statements
are approved). The SPA award will vest at 100% on 5 July 2024 and has been valued at an average market value of 5,477p for the three months ended 30 April 2024,
plus 158.4p per share in lieu of dividends paid during the vesting period.
The value attributable to the 2020 and 2021 PSU awards and Strategic Plan Award within the single total figure for remuneration
reflects the movement of the share price since the awards were granted. This is illustrated as follows:
Chief executive – Brendan Horgan ($’000) Chief financial officer – Michael Pratt (£’000)
0
500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
PSU 2020
PSU 2021
PSU 2021
SPA
SPA
0
500 1,000 1,500 2,000 2,500 3,000
2,132 2,177
2,190 103
3,181 199
709 723
1,046 49
1,354 85
PSU 2020
Share price element based on share price at date of grant
Share price appreciation element since grant date plus cash in lieu ofdividends
Share price depreciation element since grant date less cash in lieu ofdividends
The Company believes that the charts above show the strong alignment of interests between the executive directors and
shareholders reflected in the share price movement over the performance period.
Ashtead Group plc Annual Report & Accounts 2024 117
DIRECTORS’ REPORT
Directors’ pension benefits (audited information)
Brendan Horgan is a member of the Sunbelt 401K defined contribution pension plan and the 409A deferred compensation plan. He is
entitled to a company co-match conditional on contributing into the 401K plan or deferring into the 409A plan. The co-match is limited
to amounts permitted by regulatory agencies and is affected either by a company payment into the 401K plan or an enhanced deferral
into the 409A plan and was $30,173 in 2023/24.
At 30 April 2024, the total amount available to Brendan Horgan but deferred under the Sunbelt deferred compensation plan was
$1,182,246. This includes an allocated investment gain of $132,813 (2023: $10,943).
Michael Pratt received a cash payment in lieu of pension contributions of 6% of base salary, in line with the wider UK workforce.
The Deferred Bonus Plan (audited information)
The performance targets for the DBP for the year, which were equally weighted, were as follows:
Group
adjusted
pre-tax profit
Free
cash flow
1
Entry 10% $2,200m $850m
Threshold 30% $2,260m $910m
Target 50% $2,325m $965m
Maximum 100% $2,585m $1,135m
Actual – reported $2,230m $975m
Actual – budget exchange rates $2,230m $976m
1 Free cash flow before interest and taxation
For the year to 30 April 2024, the adjusted pre-tax profit for Ashtead Group plc was $2,230m and free cash flow was $976m, both
atbudget exchange rates. As a result, Brendan Horgan and Michael Pratt earned 36.6% of their maximum bonus entitlements.
Theseare equivalent to 73.2% of base salary for Brendan Horgan ($823,324) and 54.9% of base salary for Michael Pratt (£335,724).
2023/24 is the first year of the current three-year DBP. Two-thirds of the earned bonus disclosed above is paid out and one-third has
been compulsorily deferred into an award of share equivalents summarised below:
Notional
shares brought
forward
Value
Notional
shares carried
forward
2
Brought
forward Contribution
Amount
paid out
1
Carried
forward
Brendan Horgan – – $823,324 $548,883 $274,441 3,752
Michael Pratt – – £335,724 £223,816 £111,908 1,916
Notes
1 Amount paid out reflects the cash received by each director from the DBP for 2023/24 performance, being 67% of the amount contributed in the year.
2 Amount carried forward has been compulsorily deferred into an award of share equivalents based on the year-end share price (being 5,842p as at 30 April 2024) and,
for Brendan Horgan, the closing USD/GBP exchange rate ($1.2520).
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024118
PSU awards made under the Performance Share Plan/LTIP (audited information)
The performance criteria represent a balanced and holistic approach involving four measures selected because delivery of them
through the cycle is a significant challenge and the achievement of them will deliver optimum sustainable performance and
shareholder value creation over the long term. The performance criteria are as follows:
Award date Financial year
Performance criteria (measured over three years)
StatusTSR (40%) Adjusted EPS (25%) RoI (25%) Leverage (10%)
19/06/20 2020/21 25% of this element
of this award will
vest for median
performance with
full vesting at the
upper quartile.
TSR is measured
against the FTSE
350 companies
ranked 50th to
100th by market
capitalisation from
1 May of the year
of grant.
25% of this element
of the award will vest
if adjusted EPS
compound growth
for the three years
ending 30 April
immediately prior to
the vesting date is
6% per annum,
rising to 100%
vesting if adjusted
EPS compound
growth is equal to,
or exceeds, 12%
per annum.
25% of this element
of the award will vest
at an RoI of 10% with
100% vesting with an
RoI of 15% (excluding
IFRS 16).
100% of this element
of the award will vest
if the ratio of net
debt to EBITDA is
equal to, or is less
than, 2 times
(2.4 times post
IFRS 16).
2020 award
100% vested in
June2023.
06/07/21 2021/22 As above, except TSR
is measured against
the constituents of
the FTSE 100
(excluding investment
funds) from 1 May of
the year of grant.
2021 award
93.4% will vest in
July2024.
04/07/22 2022/23
2022 award
TSR performance is
in the first quartile,
EPS increased by
12%, RoI of 16% and
leverage of 1.7 times.
19/06/23 2023/24
2023 award
TSR performance is
in the first quartile,
EPS decreased by
1%, RoI of 16% and
leverage of 1.7 times.
For performance between the lower and upper target ranges, vesting of the award is scaled on a straight-line basis.
The 2020 PSU award vested in full on 19 June 2023 with EPS compound growth for the three years ended 30 April 2023 of 21%,
exceeding the upper threshold of 12%, and the Company’s TSR performance ranked it first within the FTSE 350 companies ranked
50th to 100th by market capitalisation (excluding investment trusts). RoI was 19% and average leverage was 1.6 times.
The 2021 PSU award will vest at 93.4% on 5 July 2024 with EPS compound growth for the three years ended 30 April 2024 of 21%,
exceeding the upper threshold of 12%, and the Company’s TSR performance ranked it 29 within the FTSE 100 companies (excluding
investment trusts). RoI was 16% and average leverage was 1.7 times.
EPS is based on adjusted profit after taxation stated in US dollars. TSR performance is measured relative to FTSE companies of
comparable market capitalisation (excluding investment trusts) rather than a specific comparator group of companies because there
are few direct comparators to the Company listed in London. The Company’s TSR performance relative to the FTSE 100 is shown on
page 122.
It is a condition of PSU awards that directors at the time of the award are required to hold any vested shares (net of taxes) for a
further two-year period following the vesting date.
Ashtead Group plc Annual Report & Accounts 2024 119
DIRECTORS’ REPORT
The Strategic Plan Award (audited information)
Strategic Plan Awards were made in 2021/22. The performance criteria represent the stretching financial and operational aspirations
of Sunbelt 3.0, balanced by linkage to measures that ensure growth is delivered in a sustainable and responsible fashion.
Weighting Measure
Targets
OutcomeThreshold Stretch
1
Grow General
Tool and advance
our clusters
50%
Increase in EBITDA: measured at
constant currency plan rates
$820m $1,150m Increase in EBITDA of $1,856m
delivered. As such, component
vesting in full.
2
Amplify Specialty
3
Advance
technology
15%
Operational improvement:
improvement in ‘cap factor’ (rental
only revenue/average original
equipment cost) in North America
4.0%
by FY24
6.0%
by FY24
Cap factor improvement of 6%.
As such, component vesting
in full.
15%
Customer: ‘Deliver the Perfect
Rental’: targeting a reduction
in dispute resolution time over
the three-year period ending
30 April 2024
6.0%
reduction
12.0%
reduction
Dispute resolution time
reduction of 14% over the
three-year period ended
30 April 2024. As such,
component vesting in full.
4
Lead with ESG
10%
Environment: reduce carbon
intensity: aligned directly to our
‘35x30’ goal
11.0%
reduction
15.0%
reduction
Carbon intensity reduction of
31% compared with baseline
year of 2018. As such,
component vesting in full.
10%
Employee: engagement in 2023/24:
maintaining our excellent level of
engagement in the US, and expecting
other geographies to match it
75% 85% Average employee survey
engagement score of 87%
for the Group. As such,
component vesting in full.
5
Dynamic capital
allocation
A consistent application of our capital allocation policy to optimise deployment for the benefit of all
stakeholders. Sunbelt 3.0 underpins our focus on value creation for our people, our customers, our
communities and our investors.
25% of each element of the Strategic Plan Award will vest at the threshold target and 100% will vest at the stretch target,
subject to achieving the EBITDA threshold target. For performance between the threshold and stretch the award is scaled on
a straight-line basis.
The Strategic Plan Award will vest in full on 5 July 2024 for the Group’s executive directors. Targets for relevant North American team
members were set in line with the Group’s targets and will therefore also vest in full. For UK team members, targets were set in
accordance with the Sunbelt UK strategic objectives for the period and will vest at 70.8% of maximum.
Single total figure of remuneration (audited information)
Non-executive directors
Fees Benefits
1
Total
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Angus Cockburn 120 120 5 2 125 122
Jill Easterbrook 80 80 4 – 84 80
Tanya Fratto 80 80 23 11 103 91
Renata Ribeiro 80 80 9 23 89 103
Lucinda Riches 100 100 – – 100 100
Lindsley Ruth 80 80 – 7 80 87
Paul Walker 450 450 12 10 462 460
990 990 53 53 1,043 1,043
Note
1 Benefits relate to taxable travel, accommodation and subsistence expenditure met by the Company for Board members to attend meetings of the Board and undertake
other activities on behalf of the Company. The benefits figures above include those amounts where such taxable expenditure has been reimbursed in attending the
Group’s head office location in London.
The non-executive directors did not receive any remuneration from the Company in addition to the fees detailed above.
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024120
Scheme interests awarded between 1 May 2023 and 30 April 2024 (audited information)
Deferred bonus plan
Under the DBP, one-third of each participant’s bonus for 2023/24 was compulsorily deferred into share equivalents. Share equivalent
awards made under the DBP on 30 April 2024 are summarised below. These awards are subject to continued service (or the director being
granted ‘good leaver’ status) and the achievement of conditions as set out on page 111 over the remaining deferred bonus plan period.
Number
Face value
of award
1
Brendan Horgan 3,752 $274,441
Michael Pratt 1,916 £111,908
Note
1 The face value of the award of share equivalents is based on the year-end share price (being 5,842p as at 30 April 2024) and, for Brendan Horgan, the closing USD/GBP
exchange rate ($1.2520).
PSU awards under the Long-Term Incentive Plan
PSU awards were made on 19 June 2023 at nil cost and are subject to the rules of the LTIP and the achievement of stretching
performance conditions, which are set out on page 119, over a three-year period to 30 April 2026. The awards are summarised below:
Number
Face value
of award
1
Face value of
award as %
of base salary
% of award vesting
for target
performance
Brendan Horgan 57,247 $3,936,630 350% 32.5%
Michael Pratt 25,603 £1,375,905 225% 32.5%
Note
1 Awards were allocated on 19 June 2023 using the closing mid-market share price (5,374p) of Ashtead Group plc on that day and for Brendan Horgan, the closing
USD/GBP exchange rate ($1.2796).
Payments to past directors (audited information)
No payments were made in the current year to past directors of the Company.
Payments for loss of office (audited information)
During the year there have been no payments made to directors for loss of office.
Statement of executive directors’ shareholdings and share interests (audited information)
The executive directors are subject to a minimum shareholding obligation. For 2023/24, the chief executive is expected to hold shares
at least equal to 500% of base salary and the chief financial officer is expected to hold shares at least equal to 300% of base salary.
Asshown below, the executive directors comply with these shareholding requirements.
Shares held
outright at
30 April
2024
1
Shares held
outright at
30 April 2024
as a % of
salary
2
Outstanding unvested
plan interests
subject to
performance
measures
3
Total of all share
interests and
outstanding
plan interests
at 30 April 2024
Brendan Horgan 355,000 2,081% 226,506 581,506
Michael Pratt 328,000 2,825% 108,397 436,397
Notes
1 Interests in shares held at 30 April 2024 include shares held by connected persons.
2 In calculating shareholding as a percentage of salary, the average share price for the three months ended 30 April 2024, the sterling/dollar exchange rate at 30 April
2024, and the directors’ salaries at 1 May 2024, have been used.
3 All outstanding plan interests take the form of nil cost awards.
There have been no changes in the outstanding share interests of executive directors as of the date of this report.
PSU awards under the Performance Share Plan and Long-term Incentive Plan
PSU awards made under the PSP and LTIP (excluding the Strategic Plan Award detailed below), and those which remain outstanding
at 30 April 2024, are shown in the table below:
Date of
grant
Held at
30 April 2023
Exercised
during the year
Granted
during the year
Held at
30 April 2024
Brendan Horgan 19.06.20 60,911 (60,911) – –
06.07.21 34,435 – – 34,435
04.07.22 89,923 – – 89,923
19.06.23 – – 57,247 57,247
Michael Pratt 19.06.20 25,905 (25,905) – –
06.07.21 20,679 – – 20,679
04.07.22 38,083 – – 38,083
19.06.23 – – 25,603 25,603
Ashtead Group plc Annual Report & Accounts 2024 121
DIRECTORS’ REPORT
The performance conditions attaching to the awards are detailed on page 119. It is a condition of the awards that directors at the time
of the award are required to hold any vested shares for a further two-year period following the vesting date. The market price of the
awards granted during the year was 5,374p on the date of grant.
Strategic Plan Award
Awards under the LTIP with respect to the Strategic Plan Award, and those which remain outstanding at 30 April 2024, are shown in
the table below:
Date of grant
Held at 30 April
2023 and 2024
Brendan Horgan 17.09.21 44,901
Michael Pratt 17.09.21 24,032
The performance conditions attaching to the Strategic Plan Award are detailed on page 120. It is a condition of the awards that
directors at the time of the award are required to hold any vested shares for a further two-year period following the vesting date.
Statement of non-executive directors’ shareholding (audited information)
As at 30 April 2024, the non-executive directors’ interests in ordinary shares of the Company were:
Number
Paul Walker 14,000
Angus Cockburn 1,000
Jill Easterbrook –
Tanya Fratto 1,000
Renata Ribeiro 140
Lucinda Riches 5,000
Lindsley Ruth 2,250
Roy Twite
1
1,550
Notes
1 Roy Twite was appointed as non-executive director on 10 June 2024. The shareholding listed above was acquired prior to 30 April 2024.
The market price of the Company’s shares at the end of the financial year was 5,842p and the highest and lowest closing prices
during the financial year were 6,104p and 4,566p respectively.
There have been no changes in the outstanding share interests of the non-executive directors as of the date of this report.
Performance graph and table
Over the last 10 years the Company has generated an eight-fold total shareholder return (‘TSR’) which is shown below. The FTSE 100 is
the Stock Exchange index the Committee considers to be the most appropriate to the size and scale of the Company’s operations over
that period.
Total shareholder return
100
0
200
300
400
500
600
700
900
800
Ashtead
FTSE 100
April
14
April
15
April
16
April
17
April
18
April
19
April
20
April
21
April
22
April
23
April
24
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024122
During the same period, the total remuneration received by the Group chief executive has reflected the strong performance of
the business:
2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
$’000 £’000
Total remuneration 7,260 8,555 5,909 7,085 4,281 6,084 5,144 5,461 3,321 4,165
Adjusted profit before tax 2,230 2,273 1,824 1,316 1,343 1,110 927 793 645 490
Proportion of maximum annual bonus
potential awarded 36.6% 100% 100% 100% nil% 100% 100% 100% 98% 100%
Proportion of PSU vesting 93.4% 100% 98.7% 94.7% 100% 100% 100% 100% 97.5% 100%
Proportion of SPA vesting 100% n/a n/a n/a n/a n/a n/a n/a n/a n/a
In 2019/20, Brendan Horgan was appointed as Group chief executive. The figures for 2015 to 2019 are for the then chief executive,
Geoff Drabble. Amounts have been presented in the currency in which the chief executive’s pay was denominated.
Percentage change in remuneration of all directors
The table below summarises the percentage change in the annualised remuneration of the Board and the employees of the Group.
This information will build up to display a five-year history. For Michael Pratt and the non-executive directors, the percentage change
in remuneration is calculated in sterling so as to remove the impact of exchange rate movements.
Brendan Horgan and Michael Pratt both participate in the Deferred Bonus Plan and their annual bonus reflects payments under this
plan. Details are provided on page 118.
% change in salary or fees % change in benefits
3
% change in annual bonuses
2024 2023 2022 2021 2024 2023 2022 2021 2024 2023 2022 2021
Executive directors
Brendan Horgan 4% 5% – % – % 290% –51% –4% 1% –82% 76% 29% 70%
Michael Pratt 4% 5% 18% – % 17% –45% –48% – % –82% 80% 48% 64%
Non-executive directors
Angus Cockburn – % 20% 11% – % 116% –45% Note 3 – % n/a n/a n/a n/a
Jill Easterbrook
1
– % 20% 11% – % 656% –52% Note 3 – % n/a n/a n/a n/a
Tanya Fratto – % 20% 11% – % 100% Note 3 – % –100% n/a n/a n/a n/a
Renata Ribeiro
1
– % –% n/a n/a –59% 75% n/a n/a n/a n/a n/a n/a
Lucinda Riches – % 20% 11% – % 62% – % – % – % n/a n/a n/a n/a
Lindsley Ruth – % 20% 11% – % –100% Note 3 – % – % n/a n/a n/a n/a
Paul Walker – % 17% 10% – % 15% 250% Note 3 –100% n/a n/a n/a n/a
Employees of the Group
2
5% 7% 5% 2% – % – % – % – % –41% –1% 26% 45%
Notes
1 Jill Easterbrook joined the Board in January 2020 and therefore fees relating to 2020/21 have been annualised. Renata Ribeiro joined the Board in January 2022 and
therefore fees relating to 2021/22 have been annualised.
2 As required under The Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019, the legislative requirement is to provide a
comparison to employees of the parent company. The Group’s employees are primarily employed through the Group’s main trading companies and as such the analysis
above has been prepared on a group-wide basis as this is a more closely aligned comparative group considering the global nature of the Group’s business. For the
employees of the parent company, the percentage change in salary is 5% (2023: 6%, 2022: 10%, 2021: nil%), the percentage change in benefits is nil% (2023: nil%,
2022: nil%, 2021: nil%) and the percentage change in annual bonus is -65% (2023: 29%, 2022: 21%, 2021: 41%).
3 Travel, accommodation and subsistence expenditure is met by the Company for Board members to attend meetings of the Board and undertake other activities on behalf
of the Company. Amounts for non-executive directors within the benefits figure includes those amounts where such expenditure has been reimbursed in relation to
amounts incurred in attending the Group’s head office location in London and which give rise to a taxable benefit, details of which are provided in the single total figure
of remuneration table for non-executive directors on page 120. Where there were no comparative figures, a percentage change in benefits cannot be determined.
Ashtead Group plc Annual Report & Accounts 2024 123
DIRECTORS’ REPORT
Relative importance of spend on pay
The following table shows the year-on-year change in returns to shareholders and aggregate staff costs (see Note 4 of the
financial statements).
2023/24
$m
2022/23
$m
Change
%
Aggregate staff costs 2,485 2,222 12%
Returns to shareholders 536 694 -23%
Returns to shareholders include dividends of $458m (2023: $433m) and share buybacks of $78m (2023: $261m). The Group declared
a dividend of 105.0 cents per share (2023: 100.0 cents per share).
Chief executive pay compared to pay of Group employees
Ashtead is a decentralised, store-based business employing c. 26,000 people including drivers, mechanics, yard operatives and sales
personnel. We apply the same reward principles across the business. Our overall remuneration packages have to be competitive
when compared with similar roles in other organisations against which we compete for talent. Thus, not only do we compete against
other rental companies but also, for example, distribution businesses for drivers and mechanics. Accordingly, we consider both
rental and other similar businesses when referencing our remuneration levels. For our chief executive, we are referencing a small
group of chief executives of major organisations with the skillset to manage a fast-growing, multi-location and international business.
Given this business profile, all the pay ratio reference points compare our chief executive’s remuneration with that of store-based
employees. Year-to-year movements in the pay ratio will be driven largely by changes in our chief executive’s variable pay. These
movements will outweigh significantly any other changes in pay across the Group. Whatever the chief executive pay ratio, the Group
is committed to continuing to invest in leading remuneration packages for all our employees.
The total pay and benefits of group-wide employees at the 25th, 50th and 75th percentile, and the ratios between the chief executive
and these employees using the chief executive’s single total remuneration figure for 2023/24 of $7,260,000 are as follows:
Group-wide employees
1
Year Method
25th percentile pay ratio 50th percentile pay ratio 75th percentile pay ratio
Total pay and
benefits Ratio
Total pay and
benefits Ratio
Total pay and
benefits Ratio
2023/24 B $66,167 110:1 $89,424 81:1 $149,238 49:1
2022/23 B $55,031 14 8:1 $71,075 115:1 $119,646 6 8:1
2021/22 B $63,588 119:1 $71,210 107:1 $91,994 8 3:1
2020/21 B $37,338 162:1 $80,427 75:1 $92,354 65:1
2019/20 B $4 3,661 86:1 $59,362 6 3:1 $109,167 34:1
UK employees
Year Method
25th percentile pay ratio 50th percentile pay ratio 75th percentile pay ratio
Total pay and
benefits Ratio
Total pay and
benefits Ratio
Total pay and
benefits Ratio
2023/24 B £24,539 236:1 £38,966 149:1 £48,939 118:1
2022/23 B £25,719 26 3:1 £31,403 216:1 £53,664 126:1
2021/22 B £24,819 225:1 £31,114 179:1 £35,885 156:1
2020/21 B £21,14 3 217:1 £24,763 185:1 £28,297 162:1
2019/20 B £20,566 14 4:1 £23,199 127:1 £32,041 92:1
Notes
1 Given the nature of the Group’s business, with c. 85% of employees based outside of the UK, the Group has additionally prepared the analysis on a group-wide basis.
2 The relevant employees at the 25th, 50th and 75th percentile were identified using existing gender pay data (option B) prepared using the latest available data in each
year. Due to the nature of the roles undertaken by the identified employees, and based on a review of their pay and benefits, the Company believes that the individuals
identified in each year are representative of the 25th, 50th and 75th percentile employees and further that option B is the most appropriate and practical approach
to follow.
3 In calculating the total pay and benefits for the employees at the 25th, 50th and 75th percentile, total pay and benefits for each year ended 30 April were calculated with
adjustments made to working hours to reflect a full-time equivalent employee.
4 The relevant salary components of total pay and benefits for group-wide employees at the 25th, 50th and 75th percentile are $44,163, $55,681 and $75,277 respectively.
The relevant salary components of total pay and benefits for UK employees at the 25th, 50th and 75th percentile are £24,206, £38,799 and £48,500 respectively.
The Group chief executive’s remuneration has a significant weighting towards variable pay to align his remuneration with Company
performance and as such, his total single figure may vary considerably from year to year depending on the performance of the Group.
Consequently, the decrease in the chief executive pay ratios between 2022/23 and 2023/24 is primarily a result of the decrease in the
chief executive’s variable remuneration due to the Group’s share price impacting the value of the PSUs and SPAs vesting, a partial
achievement of DBP performance targets in the year and 2023/24 being the first year of the DBP cycle.
Further details as to how we seek to reward our employees are provided on page 64.
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024124
External appointments
The Company recognises that executive directors may be invited to become non-executive directors of other companies and that
these appointments can broaden their knowledge and experience to the benefit of the Company. Subject to Board approval,
executive directors may take up external appointments and the Group policy is for the individual director to retain any fee.
During the year under review, neither executive director held an external Board appointment.
Remuneration for the year commencing 1 May 2024
Basic salary
Salary with effect from 1 May 2024:
Brendan Horgan $1,169,750
Michael Pratt £635,980
The salary increases awarded to Brendan Horgan (+4%) and Michael Pratt (+4%) are slightly below the average increase awarded to
the wider workforce (+5%).
Benefits
Benefits will continue to be applied as per the policy and as in previous years.
Retirement benefits
Retirement benefits will be applied in accordance with the policy.
Deferred Bonus Plan
Brendan Horgan and Michael Pratt participate in the DBP. The maximum annual bonus opportunities for 2024/25 as a percentage of
salary will be 225% for Brendan Horgan and 175% for Michael Pratt. The performance measures are unchanged and remain adjusted
Group profit before tax and free cash flow. The specific targets set are deemed to be commercially sensitive but full disclosure will be
provided on a retrospective basis at the year-end.
Performance Stock Units
PSU awards are expected to be granted to Brendan Horgan and Michael Pratt in July 2024. The PSU award granted to Brendan
Horgan will be equivalent to 350% of his salary as at 1 May 2024 and that for Michael Pratt will be 225% of his salary as at 1 May 2024.
Subject to the approval of our proposed Remuneration policy and amended rules of the LTIP at the Company’s AGM on 4 September
2024, further PSU awards will be granted to Brendan Horgan of 350% of his salary as at 1 May 2024 and to Michael Pratt of 75% of
his salary as at 1 May 2024, bringing their total PSU award opportunities for 2024 in line with the maximum opportunity under the
Remuneration policy.
The performance targets are aligned with the proposed Remuneration policy and will be as follows:
Measure Weighting
Threshold
(25% vesting)
Stretch
(100% vesting)
TSR vs FTSE 100 ex. investment trusts 15% Median Upper quartile
TSR vs S&P Industrials index constituents 15% Median Upper quartile
Three-year growth in adjusted EPS 30% 7% per annum 13% per annum
RoI 30% 13% 18%
Reduction in carbon emission intensity from a 2023/24 baseline 10% 9% 15%
The RoI and EPS targets have been set to be more stretching and go beyond the target ranges that have applied to recent award
cycles, and to align with our Sunbelt 4.0 ambition. In response to feedback from shareholders during the consultation process on the
proposed Remuneration policy, the relative TSR element has been split to measure performance against both a UK benchmark (the
FTSE 100 excluding investment trusts, as for the 2023 LTIP) and a US benchmark (the S&P 500 Industrials index, from which our US
comparators for pay benchmarking purposes are largely drawn). We have also replaced leverage with a carbon intensity reduction
measure, with the targets for this set with the same rigour as the financial targets to align with our Sunbelt 4.0 roadmap to Net Zero.
Ashtead Group plc Annual Report & Accounts 2024 125
DIRECTORS’ REPORT
Restricted Stock Units
Subject to approval of the proposed Remuneration policy and amended rules of the LTIP at the AGM on 4 September 2024,
an RSU award will be granted to Brendan Horgan of 150% of his salary at 1 May 2024, in accordance with the terms set out in the
Remuneration policy. The vesting of RSU awards will be subject to an underpin at vesting. The Committee will consider at that time
whether a discretionary adjustment should be applied to reduce the number of RSUs vesting based on the following key indicators
of underlying business performance:
Category Underpin
Investor returns − Maintain RoI above the cost of capital.
− Maintain delivery of stated dividend policy.
Balance sheet health − Maintain leverage in accordance with the Group’s policy from time to time.
− No breach of debt covenants or renegotiation of covenant terms outside of a normal refinancing cycle.
ESG − No ESG issues which result in material reputational damage for the Group.
Corporate governance − No material failure in governance or negligent acts resulting in significant reputational damage and/or material
loss to the Group.
Non-executive fees
Annual fees for the chair and non-executive directors with effect from 1 May 2024 are as follows:
Paul Walker £475,000
Angus Cockburn £140,000
Jill Easterbrook £90,000
Tanya Fratto £90,000
Renata Ribeiro £90,000
Lucinda Riches £115,000
Lindsley Ruth £90,000
In addition, Roy Twite was appointed to the Board on 10 June 2024 and will receive an annual fee of £90,000, in line with other
Board members.
For non-executive directors, fees comprise a base fee of £90,000, with a supplemental fee of £25,000 for each committee chair and
a supplemental fee of £25,000 for the senior independent director.
Consideration by the directors of matters relating to directors’ remuneration
The Company has established a Remuneration Committee (‘the Committee’) in accordance with the recommendations of the UK
Corporate Governance Code.
None of the Committee members has any personal financial interests, other than as shareholders, in the matters to be decided.
None of the members of the Committee is or has been at any time one of the Company’s executive directors or an employee. None of
the executive directors serves, or has served, as a member of the Board of directors of any other company which has one or more of
its executive directors serving on the Company’s Board or Remuneration Committee.
The Group’s chief executive normally attends the meetings of the Committee to advise on operational aspects of the implementation of
existing policies and policy proposals, except where his own remuneration is concerned, as does the non-executive chair, Paul Walker.
Alan Porter acts as secretary to the Committee. Under Lucinda Riches’ direction, the company secretary and Group chief executive
have responsibility for ensuring the Committee has the information relevant to its deliberations.
In formulating its policies, the Committee has access to professional advice from outside the Company, as required, and to publicly
available reports and statistics. The Committee’s independent remuneration advisers are Ellason LLP (‘Ellason’). Following a
competitive tender process in 2019/20, the Committee appointed Mercer Limited (‘Mercer’) to provide independent remuneration
advice. Following the departure of its remuneration advisers from Mercer to Ellason LLP (‘Ellason’), the Committee appointed
Ellason as its independent remuneration advisers with effect from 1 January 2021. Ellason is a member of the Remuneration
Consultants Group and adheres to its code in relation to executive remuneration in the UK. The fees paid to Ellason for professional
advice on remuneration during the year totalled £117,053 and were charged on a time incurred basis. Ellason does not provide
any other services to the Company and the Committee is satisfied that Ellason is independent of both the Company and
individual directors.
REMUNERATION REPORT CONTINUED
Ashtead Group plc Annual Report & Accounts 2024126
Main responsibilities of the Remuneration Committee
The principal duties of the Committee are:
− determining and agreeing with the Board the framework and policy for the remuneration of the chair, executive directors and
senior employees;
− ensuring that executive management is provided with appropriate incentives to encourage enhanced performance in a fair and
responsible manner;
− reviewing and determining the total remuneration packages for each executive director including bonuses and incentive plans;
− determining the policy for the scope of pension arrangements, service agreements, termination payments and compensation
commitments for each of the executive directors; and
− ensuring compliance with all statutory and regulatory provisions.
Summary of the Committee’s work during the year
The principal matters addressed during the year were:
− determining and agreeing with the Board the framework and policy for the remuneration of the executive directors and
senior employees;
− assessment of the achievement of the executive directors against their Deferred Bonus Plan objectives;
− setting Deferred Bonus Plan performance targets for the year;
− assessment of performance for the vesting of the 2020 PSU awards;
− granting 2023 PSU awards and setting the performance targets attaching thereto;
− reviewing executive base salaries; and
− approving the Directors’ remuneration report for the year ended 30 April 2023.
Shareholder voting
Three ordinary resolutions concerning the Directors’ remuneration report will be put to shareholders at the AGM on 4 September
2024. The first resolution is in respect of the implementation of the 2021 Remuneration policy for the year ended 30 April 2024. The
second resolution seeks shareholders’ approval for the 2024 Remuneration policy which, if approved, is intended to apply for three
years from the AGM. The third resolution seeks shareholder approval to amend the maximum individual award limit under the rules
of the Ashtead Group Long-Term Incentive Plan 2021 (under which it is proposed to grant both LTIP and RSU awards going forward)
to align with the aggregate award limit set out in the 2024 policy.
Ashtead is committed to ongoing shareholder dialogue and considers carefully voting outcomes. The Committee gained a full
understanding of the views of shareholders and the main shareholder representative bodies through an extensive consultation
process around the 2024 Remuneration policy. The feedback on the Committee’s policy proposals has been taken into account in the
final policy and its intended implementation for the next three years.
The voting results of the most recent remuneration resolutions are set out below:
AGM For Against
2022/23 Directors’ annual report on remuneration
1
2023 96.6% 3.4%
2020/21 Directors’ remuneration policy
2
2021 60.7% 39.3%
Notes
1 475,734 votes were withheld out of total votes cast of 331,014,615 in relation to the 2022/23 Directors’ remuneration report (excluding the Remuneration Policy) at
the 2023 AGM.
2 34,868,385 votes were withheld out of total votes cast of 303,715,038 in relation to the 2020/21 Directors’ remuneration policy at the 2021 AGM.
This report has been approved by the Remuneration Committee and is signed on its behalf by:
LUCINDA RICHES
Chair, Remuneration Committee
17 June 2024
Ashtead Group plc Annual Report & Accounts 2024 127
DIRECTORS’ REPORT
Pages 82 to 130 inclusive (together with the sections of the
Annual Report incorporated by reference) form part of the
Directors’ report.
Other information, which forms part of the Directors’ report,
can be found in the following sections of the Annual Report:
Location
Acquisitions Financial statements – Note 27
Audit Committee report Pages 94 to 98
Board and Committee
membership
Pages 84 and 85
Corporate governance report Pages 86 to 93
Directors’ biographies Pages 94 to 98
Directors’ responsibility
statement
Page 130
Events after the balance
sheet date
Financial statements – Note 29
Financial risk management Financial statements – Note 25
Future developments Page 53
Greenhouse gas emissions Pages 61 and 62
Nomination Committee report Page 99
Other statutory disclosures Pages 128 and 129
Our people Pages 64 to 67
Pension schemes Financial statements – Note 24
Results and dividends Pages 47 to 53
Share capital Financial statements – Note 22
Social responsibility Page 68
Share capital and major shareholders
Details of the Company’s share capital are given in Note 22 to the
financial statements.
Acquisition of own shares
At the 2023 AGM, the Company was authorised to make market
purchases of up to c. 66m ordinary shares. The Company
acquired 1.2m (0.3% of total issued share capital) shares under
this authority during the year. This authority will expire on the
earlier of the next annual general meeting of the Company or
6December 2024.
A special resolution will be proposed at this year’s AGM to
authorise the Company to make market purchases of up to 65m
ordinary shares.
Voting rights
Subject to the Articles of Association, every member who is
present in person at a general meeting shall have one vote and
on a poll every member who is present in person or by proxy
shall have one vote for every share of which he or she is the
holder. The Trustees of the Employee Share Ownership Trust
ordinarily follow the guidelines issued by the Association of
British Insurers and do not exercise their right to vote at
generalmeetings.
Under the Companies Act 2006, members are entitled to appoint
a proxy, who need not be a member of the Company, to exercise
all or any of their rights to attend and speak and vote on their
behalf at a general meeting or any class of meeting. A member
may appoint more than one proxy provided that each proxy is
appointed to exercise the rights attached to a different share or
shares held by that member. A corporate member may appoint
one or more individuals to act on its behalf at a general meeting
or any class of meeting as a corporate representative. The
deadline for the exercise of voting rights is as stated in the notice
of the relevant meeting.
Transfer of shares
Certified shares
(i) Transfers may be in favour of more than four joint holders,
but the directors can refuse to register such a transfer.
(ii) The share transfer form must be delivered to the registered
office, or any other place decided on by the directors. The
transfer form must be accompanied by the share certificate
relating to the shares being transferred, unless the transfer
is being made by a person to whom the Company was not
required to, and did not send, a certificate. The directors can
also ask (acting reasonably) for any other evidence to show that
the person wishing to transfer the shares is entitled to do so.
CREST shares
(i) Registration of CREST shares can be refused in
the circumstances set out in the Uncertificated
Securities Regulations.
(ii) Transfers cannot be in favour of more than four joint holders.
Significant shareholders
Based on notifications received, the holdings of 5% or more
of the issued share capital of the Company as at 13 June 2024
(the latest practicable date before approval of the financial
statements) are as follows:
%
BlackRock, Inc. 5%
Details of directors’ interests in the Company’s ordinary share
capital and in options over that share capital are given in the
Directors’ remuneration report on pages 100 to 127. Details of all
shares subject to option are given in the notes to the financial
statements on page 162.
Change of control provisions in loan agreements
A change in control of the Company (defined, inter alia, as a
person or a group of persons acting in concert gaining control
of more than 30% of the Company’s voting rights) leads to an
immediate event of default under the Company’s asset-based
senior lending facility. In such circumstances, the agent for the
lending group may, and if so directed by more than 50% of the
lenders shall, declare the amounts outstanding under the facility
immediately due and payable.
Such a change of control also leads to an obligation, within
30 days of the change in control, for the Group to make an offer
to the holders of the Group’s $550m senior secured notes, due
2026, $600m senior secured notes, due 2027, $600m senior
secured notes, due 2028, $600m senior secured notes, due 2029,
$750m senior secured notes, due 2031, $750m senior secured
notes, due 2032, $750m senior secured notes, due May 2033,
$750m senior secured notes, due October 2033 and $850m
senior secured notes, due April 2034, to redeem them at 101%
of their face value.
Appointment and removal of directors
Unless determined otherwise by ordinary resolution, the
Company is required to have a minimum of two directors and
a maximum of 15 directors (disregarding alternate directors).
The directors are not required to hold any shares in the Company
by the Articles of Association.
The Board can appoint any person to be a director. Any person
appointed as a director by the Board must retire from office at
the first annual general meeting after appointment. A director
who retires in this way is then eligible for re-appointment.
OTHER STATUTORY DISCLOSURES
Ashtead Group plc Annual Report & Accounts 2024128
The Articles state that each director must retire from office if
he held office at the time of the two preceding annual general
meetings and did not retire at either of them. In accordance with
the UK Corporate Governance Code, all directors are subject to
annual election by the shareholders.
In addition to any power to remove directors conferred by
legislation, the Company can pass a special resolution to remove
a director from office even though his time in office has not
ended and can appoint a person to replace a director who has
been removed in this way by passing an ordinary resolution.
Any director stops being a director if (i) he gives the Company
written notice of his resignation; (ii) he gives the Company
written notice in which he offers to resign and the directors
decide to accept this offer; (iii) all the other directors (who must
comprise at least three people) pass a resolution or sign a
written notice requiring the director to resign; (iv) a registered
medical practitioner who is treating that person gives a written
opinion to the Company stating that that person has become
physically or mentally incapable of acting as a director and may
remain so for more than three months; (v) by reason of that
person’s mental health, a court makes an order which wholly
or partly prevents that person from personally exercising any
powers or rights which that person would otherwise have;
(vi) he has missed directors’ meetings (whether or not an
alternate director appointed by him attends those meetings)
for a continuous period of six months without permission from
the directors and the directors pass a resolution removing the
director from office; (vii) a bankruptcy order is made against him
or he makes any arrangement or composition with his creditors
generally; (viii) he is prohibited from being a director under the
legislation; or (ix) he ceases to be a director under the legislation
or he is removed from office under the Articles of Association.
Powers of the directors
Subject to the legislation, the Articles of Association and any
authority given to the Company in a general meeting by special
resolution, the business of the Company is managed by the
Board of directors that can use all of the Company’s powers
to borrow money and to mortgage or charge all or any of the
Company’s undertaking, property and assets (present and
future) and uncalled capital of the Company and to issue
debentures and other security and to give security, either
outright or as collateral security, for any debt, liability or
obligation of the Company or of any third party.
Directors and directors’ insurance
Details of the directors of the Company are given on pages 84
and 85. The policies related to their appointment and
replacement are detailed on pages 90, 99 and 128. Each of the
directors as at the date of approval of this report confirms, as
required by section 418 of the Companies Act 2006 that to the
best of their knowledge and belief:
(1) there is no relevant audit information of which the Company’s
auditor is unaware; and
(2) each director has taken all the steps that he ought to have
taken to make himself aware of such information and to
establish that the Company’s auditor is aware of it.
The Company has maintained insurance throughout the year to
cover all directors against liabilities in relation to the Company
and its subsidiary undertakings.
Amendment of Articles of Association
The Articles of Association of the Company may be amended
by a special resolution.
Policy on payment of suppliers
Suppliers are paid in accordance with the individual payment
terms agreed with each of them. The number of Group creditor
days at 30 April 2024 was 60 days (2023: 43 days) which reflects
the terms agreed with individual suppliers. There were no trade
creditors in the Company’s balance sheet at any time during the
past two years.
Political and charitable donations
Charitable donations in the year amounted to $3,577,331 in total
(2023: $3,079,336).
The Group’s policy is to prohibit donations of a political nature
and hence no political donations have been made in either
year. In addition, the Group does not participate in political
lobbying activities.
Disclosures required by Listing Rule 9.8.4R
The relevant disclosure concerning dividend waiver can be found
on page 162. The remaining disclosures required by Listing Rule
9.8.4R are not applicable to the Company.
Going concern
After making appropriate enquiries, the directors have a
reasonable expectation that the Company and the Group have
adequate resources to continue in operation for the foreseeable
future and consequently, that it is appropriate to adopt the going
concern basis in preparing the financial statements.
Auditor
PricewaterhouseCoopers LLP has indicated its willingness
to continue in office and in accordance with section 489 of the
Companies Act 2006, a resolution concerning its reappointment
and authorising the directors to fix its remuneration, will be
proposed at the AGM.
Annual General Meeting
The AGM will be held at 11.30am on Wednesday, 4 September
2024 at Wax Chandlers Hall, 6 Gresham Street, London,
EC2V 7AD. An explanation of the business to be transacted at
the AGM will be circulated to shareholders and will be available
on the Company’s corporate website.
Approval of the Directors’ report
The Directors’ report set out on pages 82 to 130 was approved by
the Board on 17 June 2024 and has been signed by the company
secretary on its behalf.
ALAN PORTER
Company secretary
17 June 2024
Ashtead Group plc Annual Report & Accounts 2024 129
DIRECTORS’ REPORT
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law
and regulations. Company law requires the directors to prepare
financial statements for each financial year. Under that law the
directors have prepared the Group and Company financial
statements in accordance with international accounting
standards in conformity with the requirements of the Companies
Act 2006.
Under company law the directors must not approve the accounts
unless they are satisfied that they give a true and fair view of
the state of affairs of the Company and of the profit or loss of
the Company for that period. In preparing these financial
statements, International Accounting Standard 1 requires
that directors:
− properly select and apply accounting policies;
− present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
− provide additional disclosures when compliance with the
specific requirements in UK-adopted International Accounting
Standards (‘IFRS’) is insufficient to enable users to understand
the impact of particular transactions, other events and
conditions on the entity’s financial position and financial
performance; and
− make an assessment of the Company’s ability to continue as a
going concern.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure
that the financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets
and hence, for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Responsibility statement
We confirm to the best of our knowledge:
− the consolidated financial statements, prepared in accordance
with IFRS in conformity with the requirements of the
Companies Act 2006, give a true and fair view of the assets,
liabilities, financial position and profit of the Group;
− the Strategic report includes a fair review of the development
and performance of the business and the position of the
Group, together with a description of the principal risks and
uncertainties that it faces; and
− the Annual Report and financial statements, taken as a whole,
are fair, balanced and understandable and provide information
necessary for shareholders to assess the Group’s position,
performance, business model and strategy.
By order of the Board:
ALAN PORTER
Company secretary
17 June 2024
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
Ashtead Group plc Annual Report & Accounts 2024130
Contents
132 Independent Auditors’ report to the members of
Ashtead Group plc
Consolidated financial statements
138 Consolidated income statement
138 Consolidated statement of comprehensive income
139 Consolidated balance sheet
140 Consolidated statement of changes in equity
141 Consolidated cash flow statement
Notes to the consolidated
financial statements
142 1. General information
142 2. Accounting policies
148 3. Segmental analysis
150 4. Operating costs
151 5. Amortisation
151 6. Net financing costs
152 7. Taxation
153 8. Earnings per share
153 9. Dividends
153 10. Inventories
154 11. Trade and other receivables
154 12. Cash and cash equivalents
155 13. Property, plant and equipment
156 14. Right-of-use assets
157 15. Intangible assets including goodwill
158 16. Other non-current assets
159 17. Trade and other payables
159 18. Lease liabilities
160 19. Borrowings
161 20. Provisions
161 21. Deferred tax
162 22. Share capital and reserves
162 23. Share-based payments
163 24. Pensions
165 25. Financial risk management
168 26. Notes to the cash flow statement
170 27. Acquisitions
172 28. Contingent liabilities
173 29. Events after the balance sheet date
173 30. Related party transactions
173 31. Capital commitments
173 32. Employees
174 33. Parent company information
FINANCIAL
STATEMENTS
Ashtead Group plc Annual Report & Accounts 2024 131
FINANCIAL STATEMENTS
Report on the audit of the financial statements
Opinion
In our opinion, Ashtead Group plc’s Group financial statements and Company financial statements (the “financial statements”):
− give a true and fair view of the state of the Group’s and of the Company’s affairs as at 30 April 2024 and of the Group’s profit and the
Group’s and Company’s cash flows for the year then ended;
− have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance with the
provisions of the Companies Act 2006; and
− have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts 2024 (the ‘Annual Report’), which
comprise: the Consolidated and Company balance sheets as at 30 April 2024; the Consolidated income statement; the Consolidated
statement of comprehensive income; the Consolidated and Company statements of changes in equity and the Consolidated and
Company cash flow statements for the year then ended; and the notes to the financial statements, which include a description of the
accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not
provided.
Other than those disclosed in Note 4, we have provided no non-audit services to the Company or its controlled undertakings in the
period under audit.
Our audit approach
Context
The context of our audit is set by 2024 being our first year as auditors of the Group. As part of our audit transition, we shadowed
the 2023 audit undertaken by the predecessor auditors, reviewed the predecessor auditors’ working papers and re-evaluated
the predecessor auditors’ conclusions in respect of key accounting judgements in the opening balance sheet at 1 May 2023. We
performed a review of the half year financial information in accordance with International Standard on Review Engagements (UK)
2410 and performed process walkthroughs to understand and evaluate the key financial processes and controls across the Group.
We also performed early audit procedures in advance of the year-end in our in-scope territories. These procedures served to inform
the determination of our final 2024 Group audit scope, areas of focus and audit approach.
Overview
Audit scope
− We performed full scope audits at three components being Sunbelt US, Sunbelt UK and the Company. We have identified Sunbelt
US as a financially significant component. We have also performed audit work over the Group consolidation, financial statement
disclosures and corporate functions.
− The territories where we conducted audit procedures, together with work performed at the Group level, accounted for
approximately: 94% of the Group’s revenue and 99% of the Group’s profit on ordinary activities before taxation.
Key audit matters
− Carrying value of rental equipment (Group).
− Recoverability of amounts due from subsidiary undertakings (Company).
Materiality
− Overall Group materiality: $107,000,000 based on approximately 5% of the Group’s profit on ordinary activities before taxation.
− Overall Company materiality: £14,000,000 based on 1% of total assets.
− Performance materiality: $80,000,000 (Group) and £10,500,000 (Company).
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF ASHTEAD GROUP PLC
132 Ashtead Group plc Annual Report & Accounts 2024
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results
of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Key audit matter How our audit addressed the key audit matter
Carrying value of rental equipment (Group)
Refer to the Audit Committee report and Note 13 in the financial
statements.
The Group holds rental equipment with a net book value (“NBV”)
of $11,450.8m at 30 April 2024 (30 April 2023: $9,649.1m).
As required by IAS 36, management has assessed if there is any
indication that the rental equipment balance may be impaired at
the reporting date. If any such indication exists, the entity shall
estimate the recoverable amount of the asset.
The assessment of potential impairment indicators involves
management judgement. A number of factors are considered by
management in performing this trigger assessment, including
the level of return on investment each asset class generates,
the length of period over which individual assets have not been
rented and the length of the period any assets have been down
for repair.
Our audit procedures centred on management’s identification of
indicators of impairment, specifically in the US given its relative
contribution to the Group balance sheet.
We obtained management’s assessment of impairment indicators.
We considered whether the criteria used by management to
determine impairment indicators was appropriate and consistent
with prior years given our understanding of the business. We
challenged management whether management considered
relevant internal and external indicators.
Part of our procedures to assess the completeness of impairment
indicators was to confirm that the information used was complete
and accurate. This included:
− assessing the completeness and accuracy of the income and
cost figures used to calculate the return on investment – one
of the key indicators – and also recalculated the return on
investment; and
− directly obtaining the net book value to fair value assessment
prepared by management’s third party expert.
We obtained management’s impairment reserve calculation and
recalculated the reserve.
We challenged management regarding the conclusion that there
are no significant estimates or judgements involved in assessing
the carrying value of rental equipment and that no further
disclosure is required in line with IAS 1.
We have assessed whether the accounting for rental equipment
and associated disclosures in Note 13 is in line with the Group’s
accounting policy and IAS 36.
Based on the procedures performed, we noted no material issues
arising from our work.
Recoverability of amounts due from subsidiary undertakings
(Company)
Refer to Note f of the Company financial statements.
The Company has amounts due from subsidiary undertakings
amounting to £1,028.0m (30 April 2023 £843.3m). This is the
largest financial statement line item in the Company financial
statements and is repayable on demand. The receivable
is a trading balance as a result of regular operations and is
settled regularly.
As required by IFRS 9, management has applied a general
expected credit losses model and concluded that the expected
credit losses are immaterial.
Whilst this is not a significant risk for the audit, in the context of
the audit of the Company it is the area of highest audit effort.
We tested the outcome of the Group’s going concern model, in
particular the expected cash flow forecast and confirmed there
were no liquidity issues in the Group that would impact the ability
of the subsidiaries to repay the amount due. The way the Group is
structured allows us to consider the overall position of the Group in
determining the ability of the subsidiaries to repay the amount due.
In addition we verified that there is sufficient financing available
to the subsidiaries of the Group to repay the receivable.
As required by IFRS 9, we have considered the likelihood of
multiple scenarios (including a downside scenario) to confirm the
appropriateness of management’s assessment that any expected
credit losses are immaterial.
Based on the procedures performed, we noted no material issues
arising from our work.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry
in which they operate.
We performed full scope audits at three components being Sunbelt US, Sunbelt UK and the Company. We have identified Sunbelt US
as a financially significant component. Sunbelt UK was included in Group audit scope to achieve appropriate audit coverage. The
Company was identified as a full scope component and audited to its standalone materiality which was less than Group materiality.
133Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed by us, as the
Group engagement team, or by component auditors within PwC US and PwC UK operating under our instruction. Where the work
was performed by component auditors, we determined the level of involvement we needed to have in the audit work at those
components to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion
on the Consolidated financial statements as a whole.
In addition to instructing and reviewing the reporting from our component audit teams, we conducted a file review for the financially
significant component and participated in key meetings with local management. We also had regular dialogue with component teams
throughout the year.
The Group consolidation, financial statement disclosures and corporate functions were audited by the Group engagement team.
This included our work over senior notes outstanding, goodwill, acquisition accounting and the buy-in of the Group’s defined benefit
pension plan. Taken together, the components and corporate functions where we conducted audit procedures accounted for 94% of
the Group’s revenue and 99% of the Group’s profit on ordinary activities before taxation. This provided the evidence we needed for our
opinion on the Consolidated financial statements taken as a whole. This was before considering the contribution to our audit evidence
from performing audit work at the Group level, including disaggregated analytical review procedures, which covered certain of the
Group’s smaller and lower risk components that were not directly included in our Group audit scope.
Our audit of the Company financial statements was undertaken in the UK and included substantive procedures over all material
balances and transactions.
The impact of climate risk on our audit
As part of our audit, we inquired of management to understand and evaluate the Group’s risk assessment process in relation to
climate change. In evaluating the completeness of the risks identified, we engaged our internal climate change experts and
challenged management on how they considered the potential financial impacts of the Group’s commitment to reduce Scope 1 and 2
carbon intensity by 50% by 2034 and Scope 1 and 2 Net Zero by 2050 in their assessment. We considered the principal risk to relate
to the assumptions made in the forecasts prepared by management and used in their assessment of the carrying value of goodwill.
In responding to the risks identified, we specifically considered how climate change risk would impact these assumptions and costs
of compliance with current legal requirements. We also read the disclosures in relation to climate change made in the Responsible
business report and Task Force on Climate-related Financial Disclosures of the Annual Report to ascertain whether the disclosures
are materially consistent with the financial statements and our knowledge from our audit. Our responsibility over other information
is further described in the reporting on other information section of this report.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of
our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group Financial statements – Company
Overall materiality $107,000,000 £14,000,000
How we determined it Approximately 5% of the Group’s profit on ordinary
activities beforetaxation
1% of total assets
Rationale for
benchmark applied
The Group’s principal measure of performance is profit
on ordinary activities before taxation. We have utilised
this measure in determining our materiality as it is the
metric against which the performance of the Group is
most commonly assessed by management and reported
to shareholders.
Ashtead Group plc is the ultimate parent company which
holds the Group’s investments. Therefore the entity is not
in itself profit-oriented. The strength of the balance sheet
is the key measure of financial health that is important to
shareholders, since the primary concern for the Company
is the payment of dividends. We therefore consider total
assets to be an appropriate benchmark.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality.
The range of materiality allocated across components was $17m – $99m.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of
our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% of overall materiality, amounting to $80,000,000 for the Group
financial statements and £10,500,000 for the Company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls – and concluded that an amount in the middle of our normal range was appropriate.
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF ASHTEAD GROUP PLC CONTINUED
134 Ashtead Group plc Annual Report & Accounts 2024
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above $5,000,000 (Group audit)
and £600,000 (Company audit) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern basis of
accounting included:
− evaluation of management’s base case and understanding and evaluating the key assumptions;
− validation that the cash flow forecasts used to support management’s impairment, going concern and viability assessments were
consistent;
− assessment of the historical accuracy and reasonableness of management’s forecasting;
− consideration of the Group’s available financing, debt maturity profile and related financial covenants;
− testing of the mathematical integrity of management’s liquidity headroom;
− independent calculation of severe but plausible downside scenario as well as reverse stress; and
− a review of the related disclosures in the Annual Report.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern for
a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s and the
Company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the
other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this
report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’
report for the year ended 30 April 2024 is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report.
135Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we
have nothing material to add or draw attention to in relation to:
− the directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
− the disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks
and an explanation of how these are being managed or mitigated;
− the directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of any material uncertainties to the Group’s and Company’s ability
to continue to do so over a period of at least twelve months from the date of approval of the financial statements;
− the directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment covers
and why the period is appropriate; and
− the directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Group and Company was substantially less in scope
than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking
that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the
statement is consistent with the financial statements and our knowledge and understanding of the Group and Company and their
environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
− the directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides
the information necessary for the members to assess the Group’s and Company’s position, performance, business model
and strategy;
− the section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
− the section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the Company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing
Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the
financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view.
The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but
to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to the UK Listing Rules, health and safety regulations, adherence to data protection requirements in the
jurisdictions in which the Group operates and holds data and compliance with anti-bribery and corruption legislation in the
jurisdictions in which the Group operates, and we considered the extent to which non-compliance might have a material effect on
the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such
as the Companies Act 2006 and taxation. We evaluated management’s incentives and opportunities for fraudulent manipulation of
the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF ASHTEAD GROUP PLC CONTINUED
136 Ashtead Group plc Annual Report & Accounts 2024
inappropriate journal entries to manipulate the financial performance of the Group. The Group engagement team shared this risk
assessment with the component auditors so that they could include appropriate audit procedures in response to such risks in their
work. Audit procedures performed by the Group engagement team and/or component auditors included:
− discussions with management, Internal Audit, the Group’s legal counsel and the Audit Committee, including consideration of
known or suspected instances of non-compliance with laws and regulation and fraud;
− evaluation of the effectiveness of management’s controls designed to prevent and detect irregularities;
− identification and testing of significant unusual journal entries;
− assessment of matters reported on the Group’s whistle-blowing helpline and the results of management’s investigation of such matters;
− reviewing management’s identification of critical estimates and judgements and consideration of any evidence of bias; and
− reviewing financial statement disclosures and testing to supporting documentation.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements.
Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.
uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
− we have not obtained all the information and explanations we require for our audit; or
− adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from
branches not visited by us; or
− certain disclosures of directors’ remuneration specified by law are not made; or
− the Company financial statements and the part of the Remuneration report to be audited are not in agreement with the accounting
records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 6 September 2023 to audit the
financial statements for the year ended 30 April 2024 and subsequent financial periods. This is therefore our first year of
uninterrupted engagement.
Other matter
The Company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these financial
statements in an annual financial report prepared under the structured digital format required by DTR 4.1.15R – 4.1.18R and filed on
the National Storage Mechanism of the Financial Conduct Authority. This auditors’ report provides no assurance over whether the
structured digital format annual financial report has been prepared in accordance with those requirements.
DARRYL PHILLIPS (SENIOR STATUTORY AUDITOR)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
17 June 2024
137Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
for the year ended 30 April 2024
2024 | 2023 | ||||||
| Before | Before | ||||||
| amortisation | Amortisation | Total | amortisation | Amortisation | Total | ||
| Notes | $m | $m | $m | $m | $m | $m | |
| Revenue | |||||||
Rental revenue | 3 | ||||||
Sale of new equipment, merchandise and consumables | 3 | ||||||
Sale of used rental equipment | 3 | ||||||
| Operating costs | |||||||
Staff costs | 4 | ( | ( | ( | ( | ||
Other operating costs | 4 | ( | ( | ( | ( | ||
Used rental equipment sold | 4 | ( | ( | ( | ( | ||
( | ( | ( | ( | ||||
EBITDA¹ | |||||||
Depreciation | 4 | ( | ( | ( | ( | ||
Amortisation of intangibles | 4, 5 | ( | ( | ( | ( | ||
Operating profit | 3, 4 | ( | ( | ||||
Interest income | 6 | ||||||
Interest expense | 6 | ( | ( | ( | ( | ||
Profit on ordinary activities before taxation | ( | ( | |||||
Taxation | 7, 21 | ( | ( | ( | ( | ||
Profit attributable to equity holders of the Company | ( | ( | |||||
Basic earnings per share | 8 | ( | ( | ||||
Diluted earnings per share | 8 | ( | ( |
1 EBITDA is presented here as an alternative performance measure as it is commonly used by investors and lenders. Further details are provided in the Glossary of terms
on page 181.
All revenue and profit for the year is generated from continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 April 2024
| 2024 | 2023 | ||
| Note | $m | $m | |
Profit attributable to equity holders of the Company for the financial year | |||
| Items that will not be reclassified to profit or loss: | |||
Movements on equity instruments held at fair value | ( | ||
Remeasurement of the defined benefit pension plan | 24 | ( | ( |
Tax on defined benefit pension plan | |||
( | ( | ||
| Items that may be reclassified subsequently to profit or loss: | |||
Foreign currency translation differences | ( | ( | |
Loss on cash flow hedge | ( | ||
( | ( | ||
Total other comprehensive loss for the year | ( | ( | |
Total comprehensive income for the year |
138 Ashtead Group plc Annual Report & Accounts 2024
CONSOLIDATED BALANCE SHEET
at 30 April 2024
| 2024 | 2023 | ||
| Notes | $m | $m | |
| Current assets | |||
Inventories | 10 | ||
Trade and other receivables | 11 | ||
Current tax asset | |||
Cash and cash equivalents | 12 | ||
| Non-current assets | |||
| Property, plant and equipment | |||
– rental equipment | 13 | ||
– other assets | 13 | ||
Right-of-use assets | 14 | ||
Goodwill | 15 | ||
Other intangible assets | 15 | ||
Other non-current assets | 16 | ||
Current tax asset | |||
Net defined benefit pension plan asset | 24 | ||
Total assets | |||
| Current liabilities | |||
Trade and other payables | 17 | ||
Current tax liability | |||
Lease liabilities | 18 | ||
Provisions | 20 | ||
| Non-current liabilities | |||
Lease liabilities | 18 | ||
Long-term borrowings | 19 | ||
Provisions | 20 | ||
Deferred tax liabilities | 21 | ||
Other non-current liabilities | |||
Net defined benefit pension plan liability | 24 | ||
Total liabilities | |||
| Equity | |||
Share capital | 22 | ||
Share premium account | |||
Capital redemption reserve | |||
Own shares held by the Company | 22 | ( | ( |
Own shares held by the ESOT | 22 | ( | ( |
Cumulative foreign exchange translation differences | ( | ( | |
Retained reserves | |||
Equity attributable to equity holders of the Company | |||
Total liabilities and equity |
The current tax asset balance shown in non-current assets has been re-classified from other non-current assets in comparative periods. Contingent consideration
liabilities have been re-classified from current and non-current provisions to trade and other payables and other non-current liabilities in comparative periods.
139Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 April 2024
| Own | Own | Cumulative | ||||||
| shares | shares | foreign | ||||||
| Share | Capital | held by | held | exchange | ||||
| Share | premium | redemption | the | by | translation | Retained | ||
| capital | account | reserve | Company | the ESOT | differences | reserves | Total | |
| $m | $m | $m | $m | $m | $m | $m | $m | |
At 1 May 2022 | ( | ( | ( | |||||
Profit for the year | ||||||||
| Other comprehensive income: | ||||||||
Movement on equity instruments held at fair value | ( | ( | ||||||
Foreign currency translation differences | ( | ( | ||||||
Loss on cash flow hedge | ( | ( | ||||||
| Remeasurement of the defined benefit pension | ||||||||
plan (note 24) | ( | ( | ||||||
Tax on defined benefit pension scheme | ||||||||
Total comprehensive income for the year | ( | |||||||
Dividends paid (note 9) | ( | ( | ||||||
Own shares purchased by the ESOT (note 22) | ( | ( | ||||||
Own shares purchased by the Company (note 22) | ( | ( | ||||||
Share-based payments (note 23) | ||||||||
Tax on share-based payments | ||||||||
At 30 April 2023 | ( | ( | ( | |||||
Profit for the year | ||||||||
| Other comprehensive income: | ||||||||
Foreign currency translation differences | ( | ( | ||||||
Loss on cash flow hedge | ||||||||
| Remeasurement of the defined benefit pension | ||||||||
plan (note 24) | ( | ( | ||||||
Tax on defined benefit pension scheme | ||||||||
Total comprehensive income for the year | ( | |||||||
Dividends paid (note 9) | ( | ( | ||||||
Own shares purchased by the ESOT (note 22) | ( | ( | ||||||
Own shares purchased by the Company (note 22) | ( | ( | ||||||
Share-based payments (note 23) | ||||||||
Tax on share-based payments | ||||||||
At 30 April 2024 | ( | ( | ( |
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
140 Ashtead Group plc Annual Report & Accounts 2024
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 April 2024
| 2024 | 2023 | ||
| Notes | $m | $m | |
| Cash flows from operating activities | |||
Cash generated from operations before changes in rental equipment | 26(a) | ||
Payments for rental property, plant and equipment | ( | ( | |
Proceeds from disposal of rental property, plant and equipment | |||
Cash generated from operations | |||
Financing costs paid | ( | ( | |
Tax paid | ( | ( | |
Net cash generated from operating activities | |||
| Cash flows from investing activities | |||
Acquisition of businesses | 26(c) | ( | ( |
Disposal of businesses | |||
Financial asset investments | 25 | ( | ( |
Payments for non-rental property, plant and equipment | ( | ( | |
Proceeds from disposal of non-rental property, plant and equipment | |||
Net cash used in investing activities | ( | ( | |
| Cash flows from financing activities | |||
Drawdown of loans | |||
Redemption of loans | ( | ( | |
Repayment of principal under lease liabilities | 18 | ( | ( |
Dividends paid | 9 | ( | ( |
Purchase of own shares by the ESOT | ( | ( | |
Purchase of own shares by the Company | ( | ( | |
Net cash generated from financing activities | |||
(Decrease)/increase in cash and cash equivalents | ( | ||
Opening cash and cash equivalents | |||
Effect of exchange rate differences | ( | ( | |
Closing cash and cash equivalents | 12 |
| 2024 | 2023 | ||
| Notes | $m | $m | |
| Reconciliation of net cash flows to net debt | |||
Decrease/(increase) in cash and cash equivalents in the year | ( | ||
Increase in debt through cash flow | |||
Change in net debt from cash flows | |||
Exchange differences | ( | ( | |
Debt acquired | 27 | ||
Deferred costs of debt raising | |||
New lease liabilities | |||
Increase in net debt in the year | |||
Net debt at 1 May | |||
Net debt at 30 April | 26(b) |
141Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
2 Accounting policies
The principal accounting policies adopted in the preparation of
these financial statements are set out below. These policies have
been applied consistently to all the years presented, unless
otherwise stated.
Pound sterling | Canadian dollar | |||
2024 | 2023 | 2024 | 2023 | |
| Average for the year | ||||
ended 30 April | 1.26 | 1.20 | 0.74 | 0.75 |
At 30 April | 1.25 | 1.26 | 0.73 | 0.74 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
142 Ashtead Group plc Annual Report & Accounts 2024
143Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
2 Accounting policies (continued)
| Per annum | |
Freehold property | 2% |
Rental equipment | 4% to 33% |
Motor vehicles | 7% to 25% |
Office and workshop equipment | 20% |
| Per annum | |
Brand names | 7% to 100% |
Customer lists | 7% to 50% |
Contract related | 14% to 50% |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
144 Ashtead Group plc Annual Report & Accounts 2024
145Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
2 Accounting policies (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
146 Ashtead Group plc Annual Report & Accounts 2024
147Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
| Corporate | |||||
| US | Canada | UK | items | Group | |
| Year ended 30 April 2024 | $m | $m | $m | $m | $m |
| Revenue | |||||
Rental revenue | 8,320.8 | 567.0 | 742.4 | – | 9,630.2 |
| Sale of new equipment, merchandise | |||||
and consumables | 244.5 | 45.4 | 79.8 | – | 369.7 |
Sale of used rental equipment | 741.4 | 52.0 | 65.4 | – | 858.8 |
9,306.7 | 664.4 | 887.6 | – | 10,858.7 | |
EBITDA | 4,405.5 | 268.9 | 250.1 | (31.9) | 4,892.6 |
Depreciation | (1,772.6) | (166.8) | (177.3) | (1.0) | (2,117.7) |
Segment result | 2,632.9 | 102.1 | 72.8 | (32.9) | 2,774.9 |
Amortisation | (120.9) | ||||
Net financing costs | (544.5) | ||||
Profit before taxation | 2,109.5 | ||||
Taxation | (511.1) | ||||
Profit attributable to equity shareholders | 1,598.4 | ||||
Segment assets | 18,148.4 | 1,901.0 | 1,517.1 | 6.5 | 21,573.0 |
Cash | 20.8 | ||||
Taxation assets | 57.5 | ||||
Total assets | 21,651.3 | ||||
Segment liabilities | 3,519.4 | 419.0 | 301.2 | 15.1 | 4,254.7 |
Corporate borrowings and accrued interest | 8,077.7 | ||||
Taxation liabilities | 2,234.3 | ||||
Total liabilities | 14,566.7 | ||||
Other non-cash expenditure – share-based payments | 33.4 | 2.1 | 3.9 | 8.1 | 47.5 |
Capital expenditure | 4,411.7 | 536.0 | 270.2 | – | 5,217.9 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
148 Ashtead Group plc Annual Report & Accounts 2024
| Corporate | |||||
| US | Canada | UK | items | Group | |
| Year ended 30 April 2023 | $m | $m | $m | $m | $m |
| Revenue | |||||
Rental revenue | 7,502.6 | 523.8 | 671.8 | – | 8,698.2 |
Sale of new equipment, merchandise and consumables | 186.1 | 66.2 | 89.4 | – | 341.7 |
Sale of used rental equipment | 533.7 | 32.1 | 61.6 | – | 627.4 |
8,222.4 | 622.1 | 822.8 | – | 9,667.3 | |
EBITDA | 3,955.3 | 253.5 | 231.0 | (28.0) | 4,411.8 |
Depreciation | (1,490.6) | (127.6) | (152.9) | (1.0) | (1,772.1) |
Segment result | 2,464.7 | 125.9 | 78.1 | (29.0) | 2,639.7 |
Amortisation | (117.7) | ||||
Net financing costs | (366.2) | ||||
Profit before taxation | 2,155.8 | ||||
Taxation | (538.1) | ||||
Profit attributable to equity shareholders | 1,617.7 | ||||
Segment assets | 15,637.5 | 1,567.3 | 1,427.8 | 7.5 | 18,640.1 |
Cash | 29.9 | ||||
Taxation assets | 59.3 | ||||
Total assets | 18,729.3 | ||||
Segment liabilities | 3,382.1 | 380.2 | 276.0 | 19.4 | 4,057.7 |
Corporate borrowings and accrued interest | 6,655.9 | ||||
Taxation liabilities | 2,007.7 | ||||
Total liabilities | 12,721.3 | ||||
Other non-cash expenditure – share-based payments | 32.5 | 2.2 | 3.1 | 7.0 | 44.8 |
Capital expenditure | 4,062.7 | 496.4 | 413.7 | – | 4,972.8 |
Revenue | Segment assets | Capital expenditure | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| $m | $m | $m | $m | $m | $m | |
United States | 9,306.7 | 8,222.4 | 16,426.3 | 14,085.2 | 4,411.7 | 4,062.7 |
Canada | 664.4 | 622.1 | 1,767.9 | 1,441.6 | 536.0 | 496.4 |
United Kingdom | 887.6 | 822.8 | 1,309.5 | 1,257.8 | 270.2 | 413.7 |
10,858.7 | 9,667.3 | 19,503.7 | 16,784.6 | 5,217.9 | 4,972.8 |
149Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
2024 | 2023 | |||||
| Before | Before | |||||
| amortisation | Amortisation | Total | amortisation | Amortisation | Total | |
| $m | $m | $m | $m | $m | $m | |
| Staff costs: | ||||||
Salaries | 2,265.1 | – | 2,265.1 | 2,026.0 | – | 2,026.0 |
Social security costs | 172.3 | – | 172.3 | 155.9 | – | 155.9 |
Other pension costs | 47.7 | – | 47.7 | 40.2 | – | 40.2 |
2,485.1 | – | 2,485.1 | 2,222.1 | – | 2,222.1 | |
| Other operating costs: | ||||||
Vehicle costs | 658.0 | – | 658.0 | 620.3 | – | 620.3 |
Spares, consumables and external repairs | 547.8 | – | 547.8 | 488.8 | – | 488.8 |
Facility costs | 115.7 | – | 115.7 | 112.3 | – | 112.3 |
Other external charges | 1,523.7 | – | 1,523.7 | 1,369.7 | – | 1,369.7 |
2,845.2 | – | 2,845.2 | 2,591.1 | – | 2,591.1 | |
Used rental equipment sold | 635.8 | – | 635.8 | 442.3 | – | 442.3 |
| Depreciation and amortisation: | ||||||
Depreciation of tangible assets | 1,913.6 | – | 1,913.6 | 1,600.5 | – | 1,600.5 |
Depreciation of right-of-use assets | 204.1 | – | 204.1 | 171.6 | – | 171.6 |
Amortisation of intangibles | – | 120.9 | 120.9 | – | 117.7 | 117.7 |
2,117.7 | 120.9 | 2,238.6 | 1,772.1 | 117.7 | 1,889.8 | |
8,083.8 | 120.9 | 8,204.7 | 7,027.6 | 117.7 | 7,145.3 |
| 2024 | 2023 | |
| $m | $m | |
Cost of inventories recognised as expense | 1,010.8 | 826.5 |
Net charge of allowance on trade receivables | 83.7 | 47.3 |
| 2024 | 2023 | |
| $’000 | $’000 | |
Salaries and short-term employee benefits | 4,173 | 7,825 |
Post-employment benefits | 30 | 23 |
National insurance and social security | 800 | 804 |
Share-based payments | 5,287 | 4,632 |
10,290 | 13,284 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
150 Ashtead Group plc Annual Report & Accounts 2024
| 2024 | 2023 | |
| $’000 | $’000 | |
Fees payable for the audit of the Group’s annual accounts | 2,780 | 1,543 |
| Fees payable for other services to the Group: | ||
– the audit of the Group’s UK subsidiaries pursuant to legislation | 48 | 29 |
– audit-related assurance services | 113 | 108 |
– other assurance services | 190 | 238 |
3,131 | 1,918 |
| 2024 | 2023 | |
| $m | $m | |
Amortisation of intangibles | 120.9 | 117.7 |
Taxation | (30.2) | (29.6) |
90.7 | 88.1 |
| 2024 | 2023 | |
| $m | $m | |
| Interest income: | ||
Net income on the defined benefit pension plan asset | 0.9 | 0.6 |
Other interest | 0.9 | 2.0 |
Total interest income | 1.8 | 2.6 |
| Interest expense: | ||
Bank interest payable | 175.1 | 116.7 |
Interest payable on senior notes | 232.3 | 142.8 |
Interest payable on lease liabilities | 128.0 | 100.9 |
Non-cash unwind of discount on liabilities | 2.2 | 1.2 |
Amortisation of deferred debt raising costs | 8.7 | 7.2 |
Total interest expense | 546.3 | 368.8 |
151Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
7 Taxation
The tax charge for the year has been computed using the tax rates in force for the year ended 30 April 2024 of 25% in the US (2023:
25%), 25% in Canada (2023: 26%) and 25% in the UK (2023: 19%). This results in a blended effective rate for the Group as a whole of
25% (2023: 25%) for the year before adjustments to prior period state taxes and 24% (2023: 25%) after these adjustments. The Group’s
future effective tax rate will depend on the mix of profits amongst the territories in which it operates and their respective tax rates.
On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate of
15%. The legislation implements a domestic top-up tax and a multinational top-up tax, effective for accounting periods starting on or
after 31 December 2023. Accordingly, the first accounting period to which these rules will apply to the Group will be the year ending
30 April 2025 and hence, the Group is applying the exception under the IAS 12 amendment to recognising and disclosing information
about deferred tax assets and liabilities related to top-up income taxes for the year ended 30 April 2024. We do not expect that the
15% global minimum tax rate will affect materially the amount of tax the Group pays, as corporation tax rates in the principal
jurisdictions in which the Group operates exceed 15%.
| 2024 | 2023 | |
| $m | $m | |
| Analysis of the tax charge | ||
| Current tax | ||
– current tax on income for the year | 294.9 | 282.6 |
– adjustments to prior year | (3.9) | (7.6) |
291.0 | 275.0 | |
| Deferred tax | ||
– origination and reversal of temporary differences | 236.1 | 261.3 |
– adjustments to prior year | (16.0) | 1.8 |
220.1 | 263.1 | |
Total taxation charge | 511.1 | 538.1 |
| Comprising: | ||
– United States | 504.1 | 499.5 |
– Canada | 3.7 | 13.3 |
– United Kingdom | 3.3 | 25.3 |
511.1 | 538.1 |
The tax charge comprises a charge of $541m (2023: $568m) relating to tax on the profit before amortisation of $2,230m
(2023: $2,273m), together with a credit of $30m (2023: $30m) on amortisation of $121m (2023: $118m).
The differences between the tax charge for the year of 24% and the standard rate of corporation tax in the UK of 25% are
explained below:
| 2024 | 2023 | |
| $m | $m | |
Profit on ordinary activities before tax | 2,109.5 | 2,155.8 |
Profit on ordinary activities multiplied by the rate of corporation tax in the UK of 25% (2023: 19.5%) | 527.4 | 420.2 |
| Effects of: | ||
Use of foreign tax rates on overseas income | 9.9 | 123.2 |
Adjustments to prior years | (19.9) | (5.8) |
Enhanced tax deductions for fixed asset purchases, research and development and other activities | (16.4) | (3.7) |
Expenses not allowable for tax | 9.7 | 4.4 |
Other | 0.4 | (0.2) |
Total taxation charge | 511.1 | 538.1 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
152 Ashtead Group plc Annual Report & Accounts 2024
8 Earnings per share
2024 | 2023 | |||||
| Weighted | Per | Weighted | Per | |||
| average no. | share | average no. | share | |||
| Earnings | of shares | amount | Earnings | of shares | amount | |
| $m | million | cents | $m | million | cents | |
Basic earnings per share | 1,598.4 | 437.0 | 365.8 | 1,617.7 | 439.1 | 368.4 |
Share options and share plan awards | – | 2.5 | (2.1) | – | 2.8 | (2.3) |
Diluted earnings per share | 1,598.4 | 439.5 | 363.7 | 1,617.7 | 441.9 | 366.1 |
Adjusted earnings per share may be reconciled to earnings per share as follows:
Basic | Diluted | |||
| 2024 | 2023 | 2024 | 2023 | |
| cents | cents | cents | cents | |
Basic earnings per share | 365.8 | 368.4 | 363.7 | 366.1 |
Amortisation of intangibles | 27.6 | 26.8 | 27.5 | 26.6 |
Tax on amortisation | (6.9) | (6.7) | (6.9) | (6.7) |
Adjusted earnings per share | 386.5 | 388.5 | 384.3 | 386.0 |
9 Dividends
| 2024 | 2023 | |
| $m | $m | |
Final dividend paid on 12 September 2023 of | 368.2 | 291.7 |
Interim dividend paid on 8 February 2024 of 15.75¢ (2023: 15.00¢) per 10p ordinary share | 68.4 | 64.9 |
436.6 | 356.6 | |
| Reconciliation to consolidated cash flow statement | ||
Dividends declared (recognised in the consolidated statement of changes in equity) | 436.6 | 356.6 |
Translation adjustment | (0.5) | 1.2 |
Dividends paid | 436.1 | 357.8 |
In addition, the directors are proposing a final dividend in respect of the year ended 30 April 2024 of 8 9.2 5 ¢ (2023: 8 5.0 ¢) per share
which will absorb $390m of shareholders’ funds, based on the 436m shares qualifying for dividend on 17 June 2024. Subject to
approval by shareholders, it will be paid on 10 September 2024 to shareholders who are on the register of members on 9 August
2024. Dividends are declared in US dollars and paid in sterling unless shareholders elect to receive their dividend in US dollars.
The exchange rate used to determine the sterling dividend is set based on the average exchange rate for the five working days prior
to the dividend currency exchange rate announcement.
Dividends are recognised in the consolidated statement of changes in equity on the date in which the liability arises. Dividends are
included in the consolidated statement of cash flows on the date of payment. As dividends are paid in both sterling as well as US
dollars, a translation adjustment arises when the date at which the liability arose differs from the payment date.
10 Inventories
| 2024 | 2023 | |
| $m | $m | |
Raw materials, consumables and spares | 87.3 | 102.5 |
Goods for resale | 74.7 | 78.8 |
162.0 | 181.3 |
153Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
| 2024 | 2023 | |
| $m | $m | |
Trade receivables | 1,668.8 | 1,492.0 |
Less: loss allowance | (140.7) | (107.2) |
1,528.1 | 1,384.8 | |
| Other receivables | ||
– Accrued revenue | 121.4 | 109.6 |
– Other | 200.7 | 164.8 |
1,850.2 | 1,659.2 |
| Trade receivables past due by: | ||||||
| Less than | 30–60 | 60–90 | More than | |||
| Current | 30 days | days | days | 90 days | Total | |
| $m | $m | $m | $m | $m | $m | |
Carrying value at 30 April 2024 | 870.9 | 396.2 | 150.6 | 73.1 | 178.0 | 1,668.8 |
Carrying value at 30 April 2023 | 787.9 | 395.1 | 153.1 | 51.8 | 104.1 | 1,492.0 |
| 2024 | 2023 | |
| $m | $m | |
At 1 May | 107.2 | 85.6 |
Amounts written off or recovered during the year | (50.1) | (25.4) |
Increase in allowance recognised in income statement | 83.7 | 47.3 |
Currency movements | (0.1) | (0.3) |
At 30 April | 140.7 | 107.2 |
12 Cash and cash equivalents
| 2024 | 2023 | |
| $m | $m | |
Cash and cash equivalents | 20.8 | 29.9 |
The carrying amount of cash and cash equivalents approximates to their fair value.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
154 Ashtead Group plc Annual Report & Accounts 2024
13 Property, plant and equipment
| Office and | |||||
| Land and | Rental | workshop | Motor | ||
| buildings | equipment | equipment | vehicles | Total | |
| $m | $m | $m | $m | $m | |
| Cost or valuation | |||||
At 1 May 2022 | 548.8 | 13,538.8 | 403.1 | 1,066.3 | 15,557.0 |
Exchange differences | (3.1) | (48.1) | (1.1) | (3.7) | (56.0) |
Acquisitions | 25.6 | 618.6 | (2.5) | 39.8 | 681.5 |
Reclassifications | – | (2.0) | 2.0 | – | – |
Additions | 164.5 | 3,262.1 | 113.5 | 232.0 | 3,772.1 |
Disposals | (7.5) | (1,543.8) | (12.7) | (108.5) | (1,672.5) |
At 30 April 2023 | 728.3 | 15,825.6 | 502.3 | 1,225.9 | 18,282.1 |
Exchange differences | (2.1) | (22.5) | (0.8) | (1.6) | (27.0) |
Acquisitions | 2.0 | 533.4 | 1.0 | 35.9 | 572.3 |
Reclassifications | 0.5 | 2.0 | 1.9 | (4.4) | – |
Additions | 268.4 | 3,624.0 | 131.2 | 287.1 | 4,310.7 |
Disposals | (11.7) | (2,217.3) | (17.2) | (139.6) | (2,385.8) |
At 30 April 2024 | 985.4 | 17,745.2 | 618.4 | 1,403.3 | 20,752.3 |
| Depreciation | |||||
At 1 May 2022 | 194.9 | 5,724.5 | 267.7 | 477.3 | 6,664.4 |
Exchange differences | (1.0) | (22.2) | (0.7) | (1.4) | (25.3) |
Acquisitions | 0.7 | 207.8 | 0.5 | 16.4 | 225.4 |
Reclassifications | – | (0.3) | 0.3 | – | – |
Charge for the period | 35.4 | 1,384.0 | 60.7 | 120.4 | 1,600.5 |
Disposals | (7.1) | (1,117.3) | (9.9) | (89.7) | (1,224.0) |
At 30 April 2023 | 222.9 | 6,176.5 | 318.6 | 523.0 | 7,241.0 |
Exchange differences | (0.7) | (9.1) | (0.6) | (0.6) | (11.0) |
Acquisitions | – | 92.6 | 0.4 | 12.4 | 105.4 |
Reclassifications | 0.2 | 0.9 | 0.9 | (2.0) | – |
Charge for the period | 48.7 | 1,640.8 | 75.7 | 148.4 | 1,913.6 |
Disposals | (10.1) | (1,607.3) | (14.3) | (113.5) | (1,745.2) |
At 30 April 2024 | 261.0 | 6,294.4 | 380.7 | 567.7 | 7,503.8 |
| Net book value | |||||
At 30 April 2024 | 724.4 | 11,450.8 | 237.7 | 835.6 | 13,248.5 |
At 30 April 2023 | 505.4 | 9,649.1 | 183.7 | 702.9 | 11,041.1 |
$27m of rebuild costs were capitalised in the year (2023: $13m).
155Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
| Property | Other | ||
| leases | leases | Total | |
| $m | $m | $m | |
| Cost or valuation | |||
At 1 May 2022 | 2,245.9 | 20.3 | 2,266.2 |
Exchange differences | (16.7) | – | (16.7) |
Additions | 324.5 | 10.4 | 334.9 |
Acquisitions | 151.5 | – | 151.5 |
Remeasurement | 53.4 | – | 53.4 |
Disposals | (15.1) | (2.6) | (17.7) |
At 30 April 2023 | 2,743.5 | 28.1 | 2,771.6 |
Exchange differences | (5.7) | (0.1) | (5.8) |
Additions | 294.6 | 21.8 | 316.4 |
Acquisitions | 99.2 | – | 99.2 |
Remeasurement | 71.8 | – | 71.8 |
Disposals | (63.4) | (2.3) | (65.7) |
At 30 April 2024 | 3,140.0 | 47.5 | 3,187.5 |
| Depreciation | |||
At 1 May 2022 | 396.8 | 4.6 | 401.4 |
Exchange differences | (2.7) | – | (2.7) |
Charge for the period | 167.8 | 3.8 | 171.6 |
Disposals | (3.2) | (1.5) | (4.7) |
At 30 April 2023 | 558.7 | 6.9 | 565.6 |
Exchange differences | (1.6) | – | (1.6) |
Charge for the period | 197.3 | 6.8 | 204.1 |
Disposals | (4.9) | (1.3) | (6.2) |
At 30 April 2024 | 749.5 | 12.4 | 761.9 |
| Net book value | |||
At 30 April 2024 | 2,390.5 | 35.1 | 2,425.6 |
At 30 April 2023 | 2,184.8 | 21.2 | 2,206.0 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
156 Ashtead Group plc Annual Report & Accounts 2024
| Other intangible assets | ||||||
| Brand | Customer | Contract | ||||
| Goodwill | names | lists | related | Total | Total | |
| $m | $m | $m | $m | $m | $m | |
| Cost or valuation | ||||||
At 1 May 2022 | 2,300.0 | 29.0 | 901.3 | 108.9 | 1,039.2 | 3,339.2 |
Recognised on acquisition | 574.0 | 0.5 | 166.0 | 4.1 | 170.6 | 744.6 |
Exchange differences | (8.5) | (0.1) | (9.3) | (0.5) | (9.9) | (18.4) |
At 30 April 2023 | 2,865.5 | 29.4 | 1,058.0 | 112.5 | 1,199.9 | 4,065.4 |
Recognised on acquisition | 353.4 | – | 76.6 | 9.6 | 86.2 | 439.6 |
Additions | – | – | 0.7 | – | 0.7 | 0.7 |
Disposals | – | – | (1.9) | – | (1.9) | (1.9) |
Exchange differences | (7.4) | – | (3.5) | (0.2) | (3.7) | (11.1) |
At 30 April 2024 | 3,211.5 | 29.4 | 1,129.9 | 121.9 | 1,281.2 | 4,492.7 |
| Amortisation | ||||||
At 1 May 2022 | – | 28.3 | 4 37.3 | 98.3 | 563.9 | 563.9 |
Charge for the period | – | 0.7 | 110.0 | 7.0 | 117.7 | 117.7 |
Exchange differences | – | (0.1) | (4.7) | (0.3) | (5.1) | (5.1) |
At 30 April 2023 | – | 28.9 | 542.6 | 105.0 | 676.5 | 676.5 |
Charge for the period | – | 0.4 | 115.6 | 4.9 | 120.9 | 120.9 |
Exchange differences | – | – | (1.9) | (0.2) | (2.1) | (2.1) |
At 30 April 2024 | – | 29.3 | 656.3 | 109.7 | 795.3 | 795.3 |
| Net book value | ||||||
At 30 April 2024 | 3,211.5 | 0.1 | 473.6 | 12.2 | 485.9 | 3,697.4 |
At 30 April 2023 | 2,865.5 | 0.5 | 515.4 | 7.5 | 523.4 | 3,388.9 |
| 2024 | 2023 | |
| $m | $m | |
| Sunbelt US | ||
Power and HVAC | 292.7 | 292.3 |
Climate Control | 90.3 | 85.3 |
General equipment and related businesses | 2,150.7 | 1,927.0 |
2,533.7 | 2,304.6 | |
| Sunbelt Canada | ||
General equipment and related businesses | 460.9 | 346.1 |
| Sunbelt UK | ||
Engineered Access | 32.4 | 32.4 |
General equipment and related businesses | 184.5 | 182.4 |
216.9 | 214.8 | |
Total goodwill | 3,211.5 | 2,865.5 |
157Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
15 Intangible assets including goodwill (continued)
| 2024 | 2023 | |
| $m | $m | |
Financial asset investments | 57.0 | 41.3 |
Insurance receivable | 11.9 | 13.1 |
Other | 120.4 | 90.8 |
189.3 | 145.2 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
158 Ashtead Group plc Annual Report & Accounts 2024
| 2024 | 2023 | |
| $m | $m | |
Trade payables | 521.7 | 581.6 |
Other taxes and social security | 91.4 | 71.3 |
Accruals and deferred income | 844.1 | 880.7 |
Contingent consideration | 25.7 | 38.7 |
1,482.9 | 1,572.3 |
18 Lease liabilities
The Group leases various properties and vehicles, typically for periods between one and 20 years. Ordinarily, leases comprise an
initial term of five years, with two to three five-year extension options available.
Amounts recognised in the balance sheet
| 2024 | 2023 | |
| $m | $m | |
| Maturity analysis – undiscounted cash flows: | ||
Less than one year | 281.9 | 240.2 |
One to two years | 278.7 | 239.4 |
Two to three years | 273.6 | 236.2 |
Three to four years | 266.7 | 231.2 |
Four to five years | 259.1 | 224.1 |
More than five years | 2,686.6 | 2,339.1 |
Total undiscounted lease liabilities at 30 April | 4,046.6 | 3,510.2 |
Impact of discounting | (1,366.0) | (1,115.9) |
Lease liabilities included in the balance sheet | 2,680.6 | 2,394.3 |
Included in current liabilities | 273.8 | 233.2 |
Included in non-current liabilities | 2,406.8 | 2,161.1 |
2,680.6 | 2,394.3 |
Amounts recognised in the income statement
| 2024 | 2023 | |
| $m | $m | |
Depreciation of right-of-use assets | 204.1 | 171.6 |
Interest on lease liabilities | 128.0 | 100.9 |
Expense relating to short-term leases | 1.9 | 1.7 |
Expense relating to variable lease payments | 23.3 | 17.7 |
357.3 | 291.9 | |
Income from sub-leasing right-of-use assets | (11.9) | (27.9) |
345.4 | 264.0 |
Amounts recognised in the statement of cash flows
| 2024 | 2023 | |
| $m | $m | |
Expense relating to short-term leases | 1.9 | 1.7 |
Expense relating to variable lease payments | 23.3 | 17.7 |
Financing costs paid in relation to lease liabilities | 128.0 | 100.9 |
Repayment of principal under lease liabilities | 133.7 | 109.5 |
Total cash outflow for leases | 286.9 | 229.8 |
159Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
| 2024 | 2023 | |
| $m | $m | |
| Non-current | ||
First priority senior secured bank debt | 1,848.0 | 2,038.4 |
1.500% senior notes, due August 2026 | 547.8 | 546.8 |
4.375% senior notes, due August 2027 | 596.6 | 595.6 |
4.000% senior notes, due May 2028 | 596.0 | 595.1 |
4.250% senior notes, due November 2029 | 595.3 | 594.6 |
2.450% senior notes, due August 2031 | 744.6 | 743.9 |
5.500% senior notes, due August 2032 | 738.8 | 737.8 |
5.550% senior notes, due May 2033 | 743.4 | 742.9 |
5.950% senior notes, due October 2033 | 744.1 | – |
5.800% senior notes, due April 2034 | 840.5 | – |
7,995.1 | 6,595.1 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
160 Ashtead Group plc Annual Report & Accounts 2024
20 Provisions
| Insurance | Other | Total | |
| $m | $m | $m | |
At 1 May 2023 | 101.9 | 5.9 | 107.8 |
Acquired businesses | – | 1.3 | 1.3 |
Utilised | (78.3) | (3.3) | (81.6) |
Charged in the year | 87.6 | 1.8 | 89.4 |
Amortisation of discount | 1.0 | – | 1.0 |
At 30 April 2024 | 112.2 | 5.7 | 117.9 |
| 2024 | 2023 | |
| $m | $m | |
Included in current liabilities | 42.5 | 39.9 |
Included in non-current liabilities | 75.4 | 67.9 |
117.9 | 107.8 |
Insurance provisions relate to the discounted estimated gross liability in respect of claims, including automotive, workers’
compensation and general liability, to be incurred for events occurring up to the year-end and covered under the Group’s insurance
programmes, which are expected to be utilised over a period of approximately 12 years. The provision is established based on advice
received from independent actuaries of the estimated total cost of the insured risk based on historical claims experience. $20m
(2023: $21m) of this total liability is due from insurers and is included within ‘other receivables’.
| Other | Other | ||||||
| assets from | liabilities from | ||||||
| Accelerated tax | Right-of-use | Lease | temporary | temporary | |||
| depreciation | assets | Tax losses | liabilities | differences | differences | Total | |
| $m | $m | $m | $m | $m | $m | $m | |
At 1 May 2023 | 2,149.2 | – | (22.7) | – | (258.9) | 127.7 | 1,995.3 |
Reclassification of opening balances | – | 539.1 | – | (590.4) | 51.3 | – | – |
Reclassified at 1 May 2023 | 2,149.2 | 539.1 | (22.7) | (590.4) | (207.6) | 127.7 | 1,995.3 |
Exchange differences | (1.6) | (0.7) | 0.2 | 0.8 | 0.2 | (0.4) | (1.7) |
Charged/(credited) to income statement | 286.3 | (45.0) | (17.4) | 27.2 | (40.7) | 9.7 | 220.1 |
Credited to equity | (0.7) | – | (0.6) | – | (3.0) | (5.6) | (9.9) |
Acquisitions | 15.5 | 25.3 | 0.1 | (25.3) | 0.5 | 4.1 | 20.2 |
Additions to ROU asset/(liability) | – | 65.8 | – | (65.8) | – | – | – |
At 30 April 2024 | 2,448.7 | 584.5 | (40.4) | (653.5) | (250.6) | 135.5 | 2,224.2 |
161Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
| 30 April | 30 April | 30 April | 30 April | |
| 2024 | 2023 | 2024 | 2023 | |
| Number | Number | $m | $m | |
Issued and fully paid | 451,354,833 | 451,354,833 | 81.8 | 81.8 |
23 Share-based payments
The ESOT facilitates the provision of shares under the Group’s long-term incentive plans. It holds a beneficial interest in 853,869
ordinary shares of the Company acquired at an average cost of 3,822p (5,092¢) per share. The shares had a market value of $62m
(£50m) at 30 April 2024. The ESOT has waived the right to receive dividends on the shares it holds. The costs of operating the ESOT
are borne by the Group but are not significant.
The Group operates a Long-Term Incentive Plan (‘LTIP’), an equity settled share incentive scheme designed to reward and incentivise
the most senior members of the Group. Awards are granted annually with vesting dependent on the achievement of certain
performance conditions as well as the employee remaining with the Group until the end of the performance period, typically three
years. Prior to 2022/23, the awards were issued under the Performance Share Plan (‘PSP’) which operates in a similar manner to
the LTIP scheme. The conditions applicable to the PSP and LTIP awards relate to the achievement of adjusted EPS (25%), RoI (25%),
leverage (25%) and relative Total Shareholder Return (40%).
In addition to the annual award, the Strategic Plan Award was granted in 2021 as a one-off award to coincide with the Sunbelt 3.0
strategic plan. The conditions applicable to this plan are financial performance (50%), operational performance (15%), customer
(15%) and ESG (20%) with the performance period being three years, in line with the strategic plan.
Further details of the awards and associated performance conditions are given on pages 119 and 120. The costs of these schemes are
charged to the income statement over the vesting period, based on the fair value of the award at the grant date and the likelihood of
allocations vesting under the schemes. In 2024, there was a net charge to pre-tax profit in respect of the long-term incentive awards
of $47m (2023: $45m). After tax, the total charge was $35m (2023: $35m).
The fair value of awards granted during the year is estimated using a Black-Scholes option pricing model with the following
assumptions:
| June 2023 | |
Share price at grant date | 5,374p |
Exercise price | – |
Dividend yield | 1.59% |
Volatility | 86.43% |
Risk-free rate | 4.94% |
Expected life | 36 months |
Expected volatility was determined by calculating the historical volatility over the previous three years. The expected life used in the
model is based on the terms of the plan.
2024 | 2023 | |||
| Weighted | Weighted | |||
| average fair | average fair | |||
| value at | value at | |||
| Number | grant date | Number | grant date | |
Outstanding at 1 May | 3,214,031 | 4,005p | 2,986,439 | 3,871p |
Granted | 527,059 | 5,374p | 822,191 | 3,272p |
Exercised | (567,398) | 2,592p | (542,004) | 2,223p |
Expired/lapsed | (98,453) | 4,357p | (52,595) | 3,849p |
Outstanding at 30 April | 3,075,239 | 4,487p | 3,214,031 | 4,005p |
Exercisable at 30 April | – | n/a | – | n/a |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
162 Ashtead Group plc Annual Report & Accounts 2024
24 Pensions
2024 | 2023 | |
Discount rate | 5.2% | 4.8% |
Inflation assumption – RPI | 3.2% | 3.2% |
– CPI | 2.7% | 2.3% |
Rate of increase in pensions in payment | 3.0% | 3.0% |
2024 | 2023 | |
| Life expectancy of pensioners currently aged 65 | ||
Male | 85.4 | 85.9 |
Female | 87.3 | 87.7 |
| Life expectancy at age 65 for future pensioner currently aged 45 | ||
Male | 86.6 | 87.2 |
Female | 88.8 | 89.3 |
| Fair value | ||
| 2024 | 2023 | |
| $m | $m | |
Buy and maintain fund | – | 17.5 |
Liability driven investment funds | – | 77.2 |
Insurance policies | 83.9 | – |
Cash and cash equivalents | 0.4 | 11.2 |
84.3 | 105.9 |
163Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
24 Pensions (continued)
| 2024 | 2023 | |
| $m | $m | |
Fair value of plan assets | 84.3 | 105.9 |
Present value of funded defined benefit obligation | (84.7) | (87.5) |
Net (liability)/asset recognised in the balance sheet | (0.4) | 18.4 |
| 2024 | 2023 | |
| $m | $m | |
Net interest on the net defined benefit plan | 0.9 | 0.6 |
Net income in the income statement | 0.9 | 0.6 |
| 2024 | 2023 | |
| $m | $m | |
Actuarial gain due to changes in financial assumptions | 3.7 | 33.6 |
Actuarial gain due to changes in demographic assumptions | 1.0 | 1.4 |
Actuarial loss arising from experience adjustments | (2.2) | (1.6) |
Loss on plan assets excluding amounts recognised in net interest | (25.1) | (36.3) |
Remeasurement of the defined benefit pension plan | (22.6) | (2.9) |
| 2024 | 2023 | |
| $m | $m | |
At 1 May | 87.5 | 122.7 |
Interest cost | 4.1 | 3.6 |
| Remeasurements | ||
– Actuarial gain due to changes in financial assumptions | (3.7) | (33.6) |
– Actuarial gain due to changes in demographic assumptions | (1.0) | (1.4) |
– Actuarial loss arising from experience adjustments | 2.2 | 1.6 |
Benefits paid | (4.1) | (3.9) |
Exchange differences | (0.3) | (1.5) |
At 30 April | 84.7 | 87.5 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
164 Ashtead Group plc Annual Report & Accounts 2024
| 2024 | 2023 | |
| $m | $m | |
At 1 May | 105.9 | 141.2 |
Interest income | 5.0 | 4.2 |
Remeasurement – loss on plan assets excluding amounts recognised in net interest | (25.1) | (36.3) |
Employer contributions | 2.9 | 2.2 |
Benefits paid | (4.1) | (3.9) |
Exchange differences | (0.3) | (1.5) |
At 30 April | 84.3 | 105.9 |
165Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
25 Financial risk management (continued)
| Undiscounted cash flows – year to 30 April | |||||||
| 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | Total | |
| $m | $m | $m | $m | $m | $m | $m | |
Bank and other debt | – | – | 1,848.0 | – | – | – | 1,848.0 |
1.500% senior notes | – | – | 550.0 | – | – | – | 550.0 |
4.375% senior notes | – | – | – | 600.0 | – | – | 600.0 |
4.000% senior notes | – | – | – | – | 600.0 | – | 600.0 |
4.250% senior notes | – | – | – | – | – | 600.0 | 600.0 |
2.450% senior notes | – | – | – | – | – | 750.0 | 750.0 |
5.500% senior notes | – | – | – | – | – | 750.0 | 750.0 |
5.550% senior notes | – | – | – | – | – | 750.0 | 750.0 |
5.950% senior notes | – | – | – | – | – | 750.0 | 750.0 |
5.800% senior notes | – | – | – | – | – | 850.0 | 850.0 |
– | – | 2,398.0 | 600.0 | 600.0 | 4,450.0 | 8,048.0 | |
Interest payments | 405.8 | 405.8 | 312.1 | 252.3 | 220.7 | 803.7 | 2,400.4 |
405.8 | 405.8 | 2,710.1 | 852.3 | 820.7 | 5,253.7 | 10,448.4 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
166 Ashtead Group plc Annual Report & Accounts 2024
| Undiscounted cash flows – year to 30 April | |||||||
| 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | Total | |
| $m | $m | $m | $m | $m | $m | $m | |
Bank and other debt | – | – | – | 2,038.4 | – | – | 2,038.4 |
1.500% senior notes | – | – | – | 550.0 | – | – | 550.0 |
4.375% senior notes | – | – | – | – | 600.0 | – | 600.0 |
4.000% senior notes | – | – | – | – | – | 600.0 | 600.0 |
4.250% senior notes | – | – | – | – | – | 600.0 | 600.0 |
2.450% senior notes | – | – | – | – | – | 750.0 | 750.0 |
5.500% senior notes | – | – | – | – | – | 750.0 | 750.0 |
5.550% senior notes | – | – | – | – | – | 750.0 | 750.0 |
– | – | – | 2,588.4 | 600.0 | 3,450.0 | 6,638.4 | |
Interest payments | 316.0 | 316.0 | 316.0 | 219.5 | 158.4 | 487.0 | 1,812.9 |
316.0 | 316.0 | 316.0 | 2,807.9 | 758.4 | 3,937.0 | 8,451.3 |
At 30 April 2024 | At 30 April 2023 | ||||
| Book value | Fair value | Book value | Fair value | ||
| $m | $m | $m | $m | ||
| Long-term borrowings | |||||
– first priority senior secured bank debt | Level 1 | 1,848.0 | 1,848.0 | 2,038.4 | 2,038.4 |
– 1.500% senior notes | Level 1 | 550.0 | 498.1 | 550.0 | 486.1 |
– 4.375% senior notes | Level 1 | 600.0 | 571.5 | 600.0 | 573.0 |
– 4.000% senior notes | Level 1 | 600.0 | 559.9 | 600.0 | 560.3 |
– 4.250% senior notes | Level 1 | 600.0 | 549.9 | 600.0 | 556.5 |
– 2.450% senior notes | Level 1 | 750.0 | 596.5 | 750.0 | 595.3 |
– 5.500% senior notes | Level 1 | 750.0 | 719.9 | 750.0 | 741.6 |
– 5.550% senior notes | Level 1 | 750.0 | 719.2 | 750.0 | 744.4 |
– 5.950% senior notes | Level 1 | 750.0 | 739.7 | – | – |
– 5.800% senior notes | Level 1 | 850.0 | 828.3 | – | – |
Total long-term borrowings | 8,048.0 | 7,631.0 | 6,638.4 | 6,295.6 | |
Discount on issue of debt | (14.0) | – | (11.3) | – | |
Deferred costs of raising finance | (38.9) | – | (32.0) | – | |
7,995.1 | 7,631.0 | 6,595.1 | 6,295.6 | ||
| Other financial instruments | |||||
Contingent consideration | Level 3 | 31.4 | 31.4 | 46.7 | 46.7 |
Financial asset investments | Level 3 | 57.0 | 57.0 | 41.3 | 41.3 |
Cash and cash equivalents | Level 1 | 20.8 | 20.8 | 29.9 | 29.9 |
167Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
25 Financial risk management (continued)
| 2024 | 2023 | |
| $m | $m | |
At 1 May | 46.7 | 33.4 |
Acquired businesses | 15.5 | 35.8 |
Exchange differences | (0.9) | 1.1 |
Settled | (30.0) | (21.9) |
Released | (1.1) | (2.5) |
Amortisation of discount | 1.2 | 0.8 |
At 30 April | 31.4 | 46.7 |
| 2024 | 2023 | |
| $m | $m | |
At 1 May | 41.3 | 40.0 |
Additions | 15.0 | 42.4 |
Foreign exchange movement | – | (0.6) |
Interest | 0.7 | 1.3 |
Loss for the year | – | (41.8) |
At 30 April | 57.0 | 41.3 |
26 Notes to the cash flow statement
a) Cash flow from operating activities
| 2024 | 2023 | |
| $m | $m | |
Operating profit | 2,654.0 | 2,522.0 |
Depreciation | 2,117.7 | 1,772.1 |
Amortisation | 120.9 | 117.7 |
EBITDA | 4,892.6 | 4,411.8 |
Profit on disposal of rental equipment | (223.0) | (185.1) |
Profit on disposal of other property, plant and equipment | (22.0) | (19.0) |
Decrease/(increase) in inventories | 21.2 | (4.7) |
Increase in trade and other receivables | (177.1) | (209.6) |
Increase in trade and other payables | 2.5 | 34.2 |
Exchange differences | (0.7) | 1.2 |
Other non-cash movement | 47.5 | 44.8 |
Cash generated from operations before changes in rental equipment | 4,541.0 | 4,073.6 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
168 Ashtead Group plc Annual Report & Accounts 2024
| Non-cash movements | |||||||
| 1 May | Cash | Exchange | Debt | New lease | Other | 30 April | |
| 2023 | flow | movement | acquired | liabilities | movements | 2024 | |
| $m | $m | $m | $m | $m | $m | $m | |
Long-term borrowings | 6,595.1 | 1,341.3 | (5.3) | 55.3 | – | 8.7 | 7,995.1 |
Lease liabilities | 2,394.3 | (133.7) | (4.5) | 99.2 | 325.3 | – | 2,680.6 |
Total liabilities from financing activities | 8,989.4 | 1,207.6 | (9.8) | 154.5 | 325.3 | 8.7 | 10,675.7 |
Cash and cash equivalents | (29.9) | 9.0 | 0.1 | – | – | – | (20.8) |
Net debt | 8,959.5 | 1,216.6 | (9.7) | 154.5 | 325.3 | 8.7 | 10,654.9 |
| Non-cash movements | |||||||
| 1 May | Cash | Exchange | Debt | New lease | Other | 30 April | |
| 2022 | flow | movement | acquired | liabilities | movements | 2023 | |
| $m | $m | $m | $m | $m | $m | $m | |
Long-term borrowings | 5,180.1 | 1,353.5 | (23.6) | 77.9 | – | 7.2 | 6,595.1 |
Lease liabilities | 1,995.2 | (109.5) | (14.8) | 150.0 | 373.4 | – | 2,394.3 |
Total liabilities from financing activities | 7,175.3 | 1,244.0 | (38.4) | 227.9 | 373.4 | 7.2 | 8,989.4 |
Cash and cash equivalents | (15.3) | (15.2) | 0.6 | – | – | – | (29.9) |
Net debt | 7,160.0 | 1,228.8 | (37.8) | 227.9 | 373.4 | 7.2 | 8,959.5 |
c) Acquisitions
| 2024 | 2023 | |
| $m | $m | |
| Cash consideration paid | ||
– acquisitions in the period (net of cash acquired) | 845.6 | 1,061.3 |
– contingent consideration | 30.0 | 21.9 |
875.6 | 1,083.2 |
During the year, 26 acquisitions were made for a total cash consideration of $846m (2023: $1,061m), after taking account net cash
acquired of $6m (2023: $32m). Further details are provided in Note 27.
Payments for contingent consideration on prior-year acquisitions were also made of $30m (2023: $22m).
169Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
27 Acquisitions
The Group undertakes bolt-on acquisitions to complement its organic growth strategy. During the year, the following acquisitions
were completed:
i) On 17 May 2023, Sunbelt US acquired the business and assets of Beattie Construction Services, LLC (‘Beattie’). Beattie is a
specialty business operating in Michigan.
ii) On 24 May 2023, Sunbelt US acquired the business and assets of Jones & Hollands, Inc. (‘Jones’). Jones is a general tool
business operating in Michigan.
iii) On 24 May 2023, Sunbelt US acquired the business and assets of West Coast Equipment, LLC (‘West Coast’). West Coast is a
general tool business operating in California.
iv) On 1 June 2023, Sunbelt Canada acquired the entire share capital of Loue Froid, Inc. (‘Loue Froid’). Loue Froid is a specialty
business operating in Quebec, Ontario, Alberta and British Columbia.
v) On 14 June 2023, Sunbelt US acquired the business and assets of American Covers Incorporated (‘American Covers’).
American Covers is a specialty business operating in Louisiana.
vi) On 16 June 2023, Sunbelt US acquired the business and assets of AGF Machinery, LLC (‘AGF’). AGF is a general tool business
operating in Alabama.
vii) On 23 June 2023, Sunbelt US acquired the business and assets of Miele Central Equipment, LLC (‘CEC’). CEC is a general tool
business operating in Pennsylvania.
viii) On 28 June 2023, Sunbelt US acquired the business and assets of J & J Equipment Rentals, Inc. (‘J&J’). J&J is a general tool
business operating in Virginia.
ix) On 31 July 2023, Sunbelt US acquired the entire membership interest of Runyon Equipment Rental Co., LLC (‘Runyon’).
Runyon is a general tool business operating in Indiana.
x) On 9 August 2023, Sunbelt US acquired the business and assets of A-One Rental, Inc. and Holmes A-One Inc. (together
‘A-One’). A-One is a general tool business operating in Wyoming.
xi) On 25 August 2023, Sunbelt US acquired the business and assets of Caribbean Rentals & Sales Ltd and International Rental
Services, Inc. (together ‘CRS’). CRS is a general tool business operating in the Bahamas.
xii) On 30 August 2023, Sunbelt US acquired the business and assets of Timp Rental Center, Inc. (‘Timp’). Timp is a general tool
business operating in Utah.
xiii) On 30 August 2023, Sunbelt Canada acquired the business and assets of 688768 NB Inc., trading as Modu-Loc Maritimes
Fence Rentals (‘Modu-Loc Maritimes’). Modu-Loc Maritimes is a specialty business operating in Nova Scotia and
New Brunswick.
xiv) On 15 September 2023, Sunbelt US acquired the business and assets of 2-C Equipment, L.L.C. (‘2C’). 2C is a general tool
business operating in Texas.
xv) On 22 September 2023, Sunbelt US acquired the business and assets of Casale Rent-All, LLC (‘Casale’). Casale is a general
tool business operating in New York.
xvi) On 25 October 2023, Sunbelt Canada acquired the business and assets of Able Rental & Supply (Sudbury), Inc. (‘Able’).
Able is a general tool business operating in Ontario.
xvii) On 3 November 2023, Sunbelt US acquired the business and assets of EFFEM Corporation, trading as A to Z Equipment
Rentals & Sales (‘A to Z’). A to Z is a general tool business operating in Arizona.
xviii) On 3 November 2023, Sunbelt UK acquired the entire share capital of Acorn Film & Video Ltd (‘Acorn’). Acorn is a
specialty business.
xix) On 8 November 2023, Sunbelt US acquired the business and assets of Farmers Rental & Power Equipment, Inc. (‘Farmers’).
Farmers is a general tool business operating in North Carolina.
xx) On 14 November 2023, Sunbelt US acquired the business and assets of Southwest Ohio Temporary Heat, LLC, trading as
Temporary Heating Solutions Cincinnati (‘THS’). THS is a specialty business operating in Ohio.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
170 Ashtead Group plc Annual Report & Accounts 2024
xxi) On 1 December 2023, Sunbelt Canada acquired the entire share capital of Nor-Val Rentals, Ltd. (‘Nor-Val’). Nor-Val is a
general tool business operating in British Columbia.
xxii) On 13 December 2023, Sunbelt US acquired the business and assets of Freedom Scaffold, LLC (‘Freedom’). Freedom is a
specialty business operating in Oklahoma.
xxiii) On 10 January 2024, Sunbelt US acquired the business and assets of Falcon Shoring Company, LLC (‘Falcon’). Falcon is a
specialty business operating in Oregon.
xxiv) On 17 January 2024, Sunbelt US acquired the business and assets of Root Rents, Inc. (‘Root Rents’). Root Rents is a general
tool business operating in Idaho.
xxv) On 19 January 2024, Sunbelt US acquired the business and assets of ABC Equipment Rental, Inc. (‘ABC’). ABC is a general
tool business operating in Maryland.
xxvi) On 31 January 2024, Sunbelt US acquired the business and assets of Bosk Equipment Rental, Inc. (‘Bosk’). Bosk is a general
tool business operating in Michigan.
The following table sets out the fair value of the identifiable assets and liabilities acquired by the Group. The fair values have been
determined provisionally at the balance sheet date.
| Fair value | |
| to the Group | |
| $m | |
| Net assets acquired | |
Trade and other receivables | 44.4 |
Inventory | 2.3 |
| Property, plant and equipment | |
– rental equipment | 440.8 |
– other assets | 26.1 |
Right-of-use assets | 99.2 |
Creditors | (12.4) |
Current tax | (0.1) |
Deferred tax | (20.2) |
Debt | (55.3) |
Lease liabilities | (99.2) |
Intangible assets (non-compete agreements and customer relationships) | 86.2 |
| 511.8 | |
| Consideration: | |
– cash paid and due to be paid (net of cash acquired) | 8 49.7 |
– contingent consideration | 15.5 |
| 865.2 | |
Goodwill | 353.4 |
The goodwill arising can be attributed to the key management personnel and workforce of the acquired businesses, the benefits
through advancing our clusters and leveraging cross-selling opportunities, and to the synergies and other benefits the Group expects
to derive from the acquisitions. The synergies and other benefits include elimination of duplicate costs, improving utilisation of the
acquired rental fleet, using the Group’s financial strength to invest in the acquired business and drive improved returns through
a semi-fixed cost base and the application of the Group’s proprietary software to optimise revenue opportunities. $232m of the
goodwill is expected to be deductible for income tax purposes.
Contingent consideration is the fair value of consideration that is payable, based on the post-acquisition performance of certain
acquired businesses.
The gross value and the fair value of trade receivables at acquisition was $44m.
Due to the operational integration of acquired businesses post-acquisition, in particular due to the merger of some stores, the
movement of rental equipment between stores and investment in the rental fleet, it is not practical to report the revenue and profit
of the acquired businesses post-acquisition.
The revenue and operating profit of these acquisitions from 1 May 2023 to their date of acquisition was not material.
171Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
172 Ashtead Group plc Annual Report & Accounts 2024
29 Events after the balance sheet date
On 21 May 2024, Sunbelt US acquired the business and assets of RentalMax, LLC (‘RentalMax’). RentalMax is a general tool business
operating in Illinois.
The initial accounting for this acquisition is incomplete given the proximity to the year end. Had this acquisition taken place on 1 May
2023, its contribution to revenue and operating profit would not have been material.
32 Employees
The average number of employees, including directors, during the year was as follows:
| 2024 | 2023 | |
| Number | Number | |
United States | 20,064 | 17,902 |
Canada | 2,173 | 1,879 |
United Kingdom | 4,405 | 4,262 |
26,642 | 24,043 |
173Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
33 Parent company information
a) Balance sheet of the Company at 30 April 2024 (Company number: 01807982)
Notes
2024
£m
2023
£m
Current assets
Prepayments and accrued income 1.1 1.2
Amounts due from subsidiary undertakings (f) 1,028.0 843.3
1,029.1 844.5
Non-current assets
Right-of-use assets (g) 4.0 4.7
Investments in Group companies (h) 363.7 363.7
Deferred tax asset 13.7 14.4
381.4 382.8
Total assets 1,410.5 1,227.3
Current liabilities
Accruals and deferred income 8.2 10.9
Lease liabilities (i) 0.8 0.8
9.0 11.7
Non-current liabilities
Lease liabilities (i) 3.5 4.1
Total liabilities 12.5 15.8
Equity
Share capital (b) 45.1 45.1
Share premium account (b) 3.6 3.6
Capital redemption reserve (b) 11.1 11.1
Own shares held by the Company (b) (636.1) (574.1)
Own shares held through the ESOT (b) (32.6) (29.0)
Retained reserves (b) 2,006.9 1,754.8
Equity attributable to equity holders of the Company 1,398.0 1,211.5
Total liabilities and equity 1,410.5 1,227.3
The Company reported a profit for the financial year ended 30 April 2024 of £583m (2023: £733m).
These financial statements were approved by the Board on 17 June 2024.
BRENDAN HORGAN MICHAEL PRATT
Chief executive Chief financial officer
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
174 Ashtead Group plc Annual Report & Accounts 2024
b) Statement of changes in equity of the Company for the year ended 30 April 2024
Share
capital
£m
Share
premium
account
£m
Capital
redemption
reserve
£m
Own
shares
held by the
Company
£m
Own
shares
held
through
the ESOT
£m
Retained
reserves
£m
Total
£m
At 1 May 2022 45.1 3.6 11.1 (355.9) (34.0) 1,305.8 975.7
Profit for the year – – – – – 733.2 733.2
Total comprehensive income for the year – – – – – 733.2 733.2
Dividends paid – – – – – (306.6) (306.6)
Own shares purchased by the ESOT – – – – (10.4) – (10.4)
Own shares purchased by the Company – – – (218.2) – – (218.2)
Share-based payments – – – – 15.4 22.0 37.4
Tax on share-based payments – – – – – 0.4 0.4
At 30 April 2023 45.1 3.6 11.1 (574.1) (29.0) 1,754.8 1,211.5
Profit for the year – – – – – 582.6 582.6
Total comprehensive income for the year – – – – – 582.6 582.6
Dividends paid – – – – – (349.1) (349.1)
Own shares purchased by the ESOT – – – – (23.3) – (23.3)
Own shares purchased by the Company – – – (62.0) – – (62.0)
Share-based payments – – – – 19.7 18.0 37.7
Tax on share-based payments – – – – – 0.6 0.6
At 30 April 2024 45.1 3.6 11.1 (636.1) (32.6) 2,006.9 1,398.0
c) Cash flow statement of the Company for the year ended 30 April 2024
Note
2024
£m
2023
£m
Cash flows from operating activities
Cash from operations (k) (159.9) (206.7)
Financing costs paid (4.1) (4.6)
Dividends received from Ashtead Holdings PLC 600.0 750.0
Net cash from operating activities 436.0 538.7
Cash flows from financing activities
Repayment of principal under lease liabilities (0.6) (0.6)
Purchase of own shares by the ESOT (23.3) (10.4)
Purchase of own shares by the Company (62.5) (221.1)
Dividends paid (349.6) (306.6)
Net cash used in financing activities (436.0) (538.7)
Change in cash and cash equivalents – –
175Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
33 Parent company information (continued)
d) Accounting policies
The Company financial statements have been prepared on the basis of the accounting policies set out in Note 2 above, supplemented
by the policy on investments set out below.
The Company financial statements are presented in pounds sterling, the functional currency of the Company. Investments in
subsidiary undertakings are stated at cost less any necessary provision for impairment in the parent company balance sheet.
e) Income statement
Ashtead Group plc has not presented its own profit and loss account as permitted by section 408 of the Companies Act 2006.
The profit attributable to the Company is disclosed in the footnote to the Company’s balance sheet. There were no other amounts
of comprehensive income in the financial year.
The average number of employees, including directors, during the year was as follows:
2024
Number
2023
Number
Employees 23 20
Their aggregate remuneration comprised:
2024
£m
2023
£m
Salaries 14.0 15.5
Social security costs 1.7 1.5
Other pension costs 0.3 0.3
16.0 17.3
Staff costs include key management personnel. For more information on key management personnel remuneration see page 150.
f) Amounts due from subsidiary undertakings
2024
£m
2023
£m
Due within one year:
Ashtead Holdings PLC 1,027.4 843.3
Ashtead Financing Ltd 0.6 –
1,028.0 843.3
The amounts due from subsidiary undertakings are considered to be Stage 1 under the general expected credit losses model and any
expected credit losses are immaterial.
g) Right-of-use asset
Property
leases
£m
Cost or valuation
At 1 May 2022, 30 April 2023 and 30 April 2024 7.5
Depreciation
At 1 May 2022 2.1
Charge for the period 0.7
At 30 April 2023 2.8
Charge for the period 0.7
At 30 April 2024 3.5
Net book value
At 30 April 2024 4.0
At 30 April 2023 4.7
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
176 Ashtead Group plc Annual Report & Accounts 2024
h) Investments
Shares in Group companies
2024
£m
2023
£m
At 30 April 363.7 363.7
Details of the Company’s investments at 30 April 2024 are as follows:
Name Address of registered office Principal activity
USA
Ashtead US Holdings, Inc. The Corporation Trust Company,
1209 Orange St., Wilmington, DE 19801
Investment holding company
Ashtead Holdings, LLC The Corporation Trust Company,
1209 Orange St., Wilmington, DE 19801
Investment holding company
Sunbelt Rentals, Inc. CT Corporation System, 160 Mine Lake Ct,
Ste 200, Raleigh, NC 27615-6417
Equipment rental and related services
Sunbelt Rentals Industrial Services, LLC The Corporation Trust Company,
1209 Orange St., Wilmington, DE 19801
Equipment rental and related services
Sunbelt Rentals Scaffold Services, Inc. CT Corporation System, 160 Mine Lake Ct.,
Ste. 200, Raleigh, NC 27615-6417
Equipment rental and related services
Sunbelt Rentals Scaffold Services, LLC CT Corporation System, 3867 Plaza Tower Dr.,
East Baton Rouge Parish, Baton Rouge, LA 70816
Equipment rental and related services
Pride Corporation CT Corporation System, 28 Liberty Street,
New York, NY 10005
Equipment rental and related services
Ashtead Capital, Inc. The Corporation Trust Company,
1209 Orange St., Wilmington, DE 19801
Finance company
Studio City Rentals (USA) Inc. 21500 Nordhoff St, Unit B, Chatsworth, CA 91311 Dormant
Sunbelt Rentals Exchange, Inc. The Corporation Trust Company,
1209 Orange St., Wilmington, DE 19801
Dormant
Colt Rentals LLC
1
The Corporation Trust Company,
1209 Orange St., Wilmington, DE 19801
Investment holding company
Colt Sunbelt Rentals LLC
2
The Corporation Trust Company,
1209 Orange St., Wilmington, DE 19801
Equipment rental and related services
UK
Ashtead Holdings PLC 100 Cheapside, London, EC2V 6DT Investment holding company
Sunbelt Rentals Limited 100 Cheapside, London, EC2V 6DT Equipment rental and related services
Ashtead Financing Limited 100 Cheapside, London, EC2V 6DT Finance company
Accession Group Limited 100 Cheapside, London, EC2V 6DT Dormant
Accession Holdings Limited 100 Cheapside, London, EC2V 6DT Dormant
Acorn Film & Video Ltd 100 Cheapside, London, EC2V 6DT Dormant
Alpha Grip (Cardiff) Limited 100 Cheapside, London, EC2V 6DT Dormant
Alpha Grip (UK) Limited 100 Cheapside, London, EC2V 6DT Dormant
Anglia Traffic Management Group Limited 100 Cheapside, London, EC2V 6DT Dormant
Ashtead Canada Limited 100 Cheapside, London, EC2V 6DT Dormant
Ashtead Plant Hire Company Limited 100 Cheapside, London, EC2V 6DT Dormant
ATM Traffic Solutions Limited 100 Cheapside, London, EC2V 6DT Dormant
Carter and Bradbury Limited 36-37 King Street, London, EC2V 8BB Dormant
Eve Trakway Limited 100 Cheapside, London, EC2V 6DT Dormant
Media Access Solutions (MAS) Limited 100 Cheapside, London, EC2V 6DT Dormant
Movietech Camera Rentals Limited 100 Cheapside, London, EC2V 6DT Dormant
Movietech Cymru Limited 100 Cheapside, London, EC2V 6DT Dormant
Optimum Power Services Limited 100 Cheapside, London, EC2V 6DT Dormant
PKE Lighting Holdings Limited 100 Cheapside, London, EC2V 6DT Dormant
PKE Lighting Limited 100 Cheapside, London, EC2V 6DT Dormant
Canada
Sunbelt Rentals of Canada Inc. 777 Dunsmuir Street, 11th Floor,
Vancouver, BC V7Y 1K3
Equipment rental and related services
William F. White International Inc. 777 Dunsmuir Street, 11th Floor,
Vancouver, BC V7Y 1K3
Equipment rental and related services
177Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
Name Address of registered office Principal activity
Republic of Ireland
Ashtead Financing (Ireland) 10 Earlsfort Terrace, Dublin 2, D02 T380 Dormant
Unlimited Company
Sunbelt Rentals (Ireland) Limited 10 Earlsfort Terrace, Dublin 2, D02 T380 Equipment rental and related services
Germany
Sunbelt Rentals GmbH Brücklesäckerstraße 14, 74248 Ellhofen Equipment rental and related services
France
Sunbelt Rentals SAS 5 Avenue Carnot, 91330 Massy Equipment rental and related services
Bahamas
Sunbelt Rentals of the Bahamas, Inc. Ocean Centre, Montagu Foreshore, East Bay Street,
P.O. Box SS-19084, Nassau, Bahamas
Equipment rental and related services
1 The Company has a 40% ownership interest in Colt Rentals LLC.
2 The Company has a 70% ownership interest in Colt Sunbelt Rentals LLC.
The issued share capital (all of which comprises ordinary shares) of subsidiaries is 100% owned by the Company or by subsidiary
undertakings and all subsidiaries are consolidated, unless otherwise specified.
i) Lease liabilities
(i) Amounts recognised in the balance sheet
2024
£m
2023
£m
Maturity analysis – undiscounted cash flows:
Less than one year 0.8 0.8
One to five years 3.2 3.2
More than five years 0.7 1.5
Total undiscounted lease liabilities at 30 April 4.7 5.5
Impact of discounting (0.4) (0.6)
Lease liabilities included in the balance sheet 4.3 4.9
Included in current liabilities 0.8 0.8
Included in non-current liabilities 3.5 4.1
4.3 4.9
(ii) Amounts recognised in the income statement
2024
£m
2023
£m
Depreciation of right-of-use assets 0.7 0.7
Interest on lease liabilities 0.1 0.2
0.8 0.9
Income from sub-leasing right-of-use assets (0.2) (0.2)
0.6 0.7
(iii) Amounts recognised in the statement of cash flows
2024
£m
2023
£m
Financing costs paid in relation to lease liabilities 0.1 0.2
Repayment of principal under lease liabilities 0.6 0.6
Total cash outflow for leases 0.7 0.8
j) Financial instruments
The book value and fair value of the Company’s financial instruments are not materially different.
33 Parent company information (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
178 Ashtead Group plc Annual Report & Accounts 2024
k) Notes to the Company cash flow statement
Cash flow from operating activities
2024
£m
2023
£m
Operating loss (17.8) (16.5)
Depreciation 0.8 0.8
EBITDA (17.0) (15.7)
Decrease in prepayments and accrued income 0.1 0.1
(Decrease)/increase in accruals and deferred income (2.0) 2.0
Increase in intercompany receivable (147.4) (198.9)
Other non-cash movement 6.4 5.8
Net cash outflow from operations before exceptional items (159.9) (206.7)
179Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS
In $m 2024 2023 2022 2021 2020 2019
1
2018
1
2017
1
2016
1
2015
1
Income statement
Revenue 10,858.7 9,667.3 7,962.3 6,638.6 6,398.9 5,869.7 4,959.1 4,125.0 3,824.7 3,258.4
Operating costs + (5,966.1) (5,255.5) (4,352.9) (3,601.8) (3,390.7) (3,121.7) (2,640.1) (2,177.7) (2,055.4) (1,806.7)
EBITDA + 4,892.6 4,411.8 3,609.4 3,036.8 3,008.2 2,748.0 2,319.0 1,947.3 1,769.3 1,451.7
Depreciation + (2,117.7) (1,772.1) (1,553.0) (1,457.6) (1,380.8) (1,099.7) (930.7) (785.5) (675.2) (561.7)
Operating profit + 2,774.9 2,639.7 2,056.4 1,579.2 1,627.4 1,648.3 1,388.3 1,161.8 1,094.1 890.0
Interest + (544.5) (366.2) (232.6) (262.9) (284.2) (200.1) (147.5) (134.8) (124.6) (107.5)
Pre-tax profit + 2,230.4 2,273.5 1,823.8 1,316.3 1,343.2 1,448.2 1,240.8 1,027.0 969.5 782.5
Operating profit 2,654.0 2,522.0 1,947.8 1,498.0 1,549.3 1,582.2 1,330.2 1,125.1 1,051.1 864.7
Pre-tax profit 2,109.5 2,155.8 1,668.1 1,235.1 1,244.0 1,382.1 1,154.5 990.3 926.5 757.1
Cash flow
Cash flow from operations
before exceptional items
and changes in rental fleet 4,541.0 4,073.6 3,406.5 3,017.0 3,076.2 2,664.4 2,248.0 1,889.3 1,617.5 1,347.1
Free cash flow 216.5 531.5 1,125.4 1,822.2 1,001.5 480.4 516.6 433.1 (93.3) (138.7)
Balance sheet
Capital expenditure 4,310.7 3,772.1 2,397.3 947.4 1,877.8 2,070.5 1,657.5 1,405.2 1,863.0 1,698.8
Book cost of rental equipment 17,745.2 15,825.6 13,538.8 11,854.9 11,868.2 10,796.9 9,046.5 7,564.0 6,564.4 5,591.1
Shareholders’ funds 7,084.6 6,008.0 5,033.7 4,525.2 3,748.7 3,650.8 3,481.1 2,549.0 2,168.7 1,708.2
In cents
Dividend per share 105.0¢ 100.0¢ 80.0¢ 58.0¢ 52.91¢ 49.81¢ 43.59¢ 36.88¢ 30.37¢ 23.15¢
Earnings per share 365.8¢ 368.4¢ 280.9¢ 205.4¢ 205.2¢ 216.7¢ 262.5¢ 130.0¢ 122.1¢ 96.7¢
Adjusted earnings per share 386.5¢ 388.5¢ 307.1¢ 219.1¢ 221.5¢ 227.2¢ 170.6¢ 135.0¢ 127.8¢ 100.1¢
In percent
EBITDA margin + 45.1% 45.6% 45.3% 45.7% 47.0% 46.8% 46.8% 47.2% 46.3% 44.6%
Operating profit margin + 25.6% 27.3% 25.8% 23.8% 25.4% 28.1% 28.0% 28.2% 28.6% 27.3%
Pre-tax profit margin + 20.5% 23.5% 22.9% 19.8% 21.0% 24.7% 25.0% 24.9% 25.3% 24.0%
Return on investment + 16.3% 19.2% 18.2% 14.9% 15.2% 17.8% 17.6% 17.3% 18.9% 19.4%
People
Employees at year end 25,958 25,347 21,752 18,826 19,284 17,803 15,996 14,220 13,106 11,928
Locations
Stores at year end 1,511 1,398 1,233 1,126 1,105 1,036 899 808 715 640
+ Before exceptional items, amortisation and fair value remeasurements.
1 The Group elected to apply IFRS 16 using the modified retrospective approach with no restatement of comparative figures. As a result, the results for 2015 to 2019 are
not comparable directly to the later years with the adoption of IFRS 16 resulting in higher EBITDA and operating profit but lower profit before exceptional items,
amortisation and tax than under the previous accounting standard.
TEN-YEAR HISTORY
180 Ashtead Group plc Annual Report & Accounts 2024
The Glossary of terms below sets out definitions of terms used throughout this Annual Report & Accounts. Included are a number
of alternative performance measures (‘APMs’) which the directors have adopted in order to provide additional useful information on
the underlying trends, performance and position of the Group. The directors use these measures, which are common across the
industry, for planning and reporting purposes. These measures are also used in discussions with the investment analyst community
and credit rating agencies. Where relevant, the APMs exclude the impact of IFRS 16 to aid comparability with prior-year metrics.
The APMs are not defined by IFRS and therefore may not be directly comparable with other companies’ APMs and should not be
considered superior to or a substitute for IFRS measures.
Term
Closest equivalent
statutory measure Definition and purpose
Adjusted
results
See definition Adjusted results are the results stated before exceptional items and the amortisation of acquired
intangibles. Adjusted results are utilised by the Group in its remuneration targets. A reconciliation is
shown on the income statement on page 138.
Capital
expenditure
None Represents additions to rental equipment and other property, plant and equipment (excluding assets
acquired through a business combination).
Cash
conversion
ratio
None Represents cash flow from operations before changes in rental equipment as a percentage of EBITDA.
This measure is utilised to show the proportion of EBITDA converted into cash flow from operations
generated by the business before investment expenditures, interest and taxation.
2024 2023
EBITDA ($m) Note 26(a)
4,893
4,412
Cash inflow from operations before
changes in rental equipment ($m) Note 26(a) 4,541 4,074
Cash conversion ratio 93% 92%
Dollar
utilisation
None Dollar utilisation is trailing 12-month rental revenue divided by average fleet at original (or ‘first’) cost
measured over a 12-month period. Dollar utilisation has been identified as one of the Group’s key
performance indicators. The components used to calculate this measure are shown within the
‘Financial review’.
Drop through
None Calculated as the change in rental revenue which converts into EBITDA (excluding gains from sale of new
equipment, merchandise and consumables and used equipment).
2024 2023 Change
US ($m)
Rental revenue
8,321
7,503 818
EBITDA
4,405
3,955
Gains (284) (235)
EBITDA excluding gains 4,121 3,720 401
Drop through 49%
This measure is utilised by the Group to demonstrate the change in profitability generated by the Group
as a result of the change in rental revenue in the year.
EBITDA
Profit before tax EBITDA is not defined by IFRS but is a widely accepted profit measure being earnings before interest,
tax, depreciation and amortisation. A reconciliation of EBITDA to profit before tax is shown on the income
statement on page 138.
EBITDA margin
None EBITDA margin is calculated as EBITDA divided by revenue. Progression in EBITDA margin is an
important indicator of the Group’s performance and this has been identified as one of the Group’s key
performance indicators.
Exceptional
items
None Exceptional items are those items of income or expense which the directors believe should be disclosed
separately by virtue of their significant size or nature and limited predictive value to enable a better
understanding of the Group’s financial performance.
Excluding these items provides readers with helpful additional information on the performance of
the business across periods and against peer companies. It is also consistent with how business
performance is reported to the Board and the remuneration targets set by the Company.
Free cash flow
Net cash
generated
from operating
activities
Net cash generated from operating activities less non-rental net property, plant and equipment
expenditure. Non-rental net property, plant and equipment expenditure comprises payments for non-
rental capital expenditure less disposal proceeds received in relation to non-rental asset disposals.
2024
$m
2023
$m
Net cash generated from operating activities
855
1,000
Payments for non-rental property, plant and equipment
(686)
(510)
Proceeds from disposal of non-rental property, plant and equipment 47 41
Free cash flow 216 531
This measure shows the cash retained by the Group prior to discretionary expenditure on acquisitions
and returns to shareholders.
GLOSSARY OF TERMS
181Ashtead Group plc Annual Report & Accounts 2024
ADDITIONAL INFORMATION
GLOSSARY OF TERMS CONTINUED
Term
Closest equivalent
statutory measure Definition and purpose
Growth at
constant
exchange rates
None Calculated by applying the current period exchange rate to the comparative period result. The relevant
foreign currency exchange rates are provided within Note 2, Accounting policies, to the financial
statements. This measure is used as a means of eliminating the effects of foreign exchange rate
movements on the period-on-period changes in reported results.
2024 2023 %
Rental revenue ($m)
As reported 9,630 8,698 11%
Retranslation effect – 24
At constant currency 9,630 8,722 10%
Adjusted profit before tax ($m)
As reported 2,230 2,273 -2%
Retranslation effect – –
At constant currency 2,230 2,273 -2%
Leverage
None Leverage calculated at constant exchange rates uses the period end exchange rate for the relevant
period and is determined as net debt divided by EBITDA.
2024 2023
Excluding
IFRS 16
Including
IFRS 16
Excluding
IFRS 16
Including
IFRS 16
Net debt ($m)
As reported and at constant currency 8,014 10,655 6,588 8,960
EBITDA ($m)
As reported 4,637 4,893 4,203 4,412
Retranslation effect (5) (6) 4 4
At constant currency 4,632 4,887 4,207 4,416
Leverage
As reported 1.7 2.2 1.6 2.0
At constant currency 1.7 2.2 1.6 2.0
This measure is used to provide an indication of the strength of the Group’s balance sheet and is widely
used by investors and credit rating agencies. It also forms part of the remuneration targets of the Group
and has been identified as one of the Group’s key performance indicators.
Net debt
None Net debt is total borrowings (bank, bonds) and lease liabilities less cash balances, as reported. This
measure is used to provide an indication of the Group’s overall level of indebtedness and is widely used
by investors and credit rating agencies. It has been identified as one of the Group’s key performance
indicators. An analysis of net debt is provided in Note 26(b) of the financial statements.
Operating
profit
Profit before tax Operating profit is earnings before interest and tax. A reconciliation of operating profit to profit before tax
is shown on the income statement on page 138.
Operating
profit margin
None Operating profit margin is calculated as operating profit divided by revenue. Progression in operating
profit margin is an important indicator of the Group’s performance.
Organic
measures
See definition Organic measures are used to explain the financial and operational performance of Sunbelt US and
comprise all locations, excluding locations arising from a bolt-on acquisition completed after the start
of the comparative financial period.
182 Ashtead Group plc Annual Report & Accounts 2024
Term
Closest equivalent
statutory measure Definition and purpose
Return on
investment
(‘RoI’)
None Last 12-month (‘LTM’) adjusted operating profit divided by the last 12-month average of the sum
of net tangible and intangible fixed assets, plus net working capital but excluding net debt and tax.
RoI is calculated excluding the impact of IFRS 16.
RoI is used by management to help inform capital allocation decisions within the business and has
beenidentified as one of the Group’s key performance indicators. It also forms part of the remuneration
targets of the Group. The impact of IFRS 16 has been excluded so as to reflect the way the business
ismanaged.
A reconciliation of Group RoI is provided below:
2024 2023
Adjusted operating profit ($m) 2,775 2,640
IFRS 16 impact ($m) (59) (40)
Adjusted operating profit (excluding IFRS 16) ($m) 2,716 2,600
Average net assets ($m) 16,657 13,565
Return on investment 16% 19%
RoI for the businesses is calculated in the same way, but excludes goodwill and intangible assets:
US
$m
Canada
C$m
UK
£m
Adjusted operating profit 2,633 138 58
IFRS 16 impact (49) (11) (1)
Adjusted operating profit (excluding IFRS 16) 2,584 127 57
Average net assets, excluding goodwill and intangibles 11,214 1,169 788
Return on investment 23% 11% 7%
Other terms used within this Annual Report & Accounts include:
− Availability: represents the headroom on a given date under the terms of our $4.5bn asset-backed senior bank facility, taking
account of current borrowings.
− Fleet age: original cost weighted age of serialised rental assets. Serialised rental assets constitute the substantial majority of
our fleet.
− Fleet on rent: quantity measured at original cost of our rental fleet on rent. Fleet on rent has been identified as one of the Group’s
key performance indicators.
− Rental only revenue: rental revenue excluding loss damage waiver, environmental fees, erection and dismantling revenue and
revenue from rental equipment delivery and collection.
− RIDDOR rate: the RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations) reportable rate is the number
of major injuries or over seven-day injuries per 100,000 hours worked.
− Same-store: same-stores are those locations which were open at the start of the comparative financial period.
− Segment profit: operating profit before amortisation and exceptional items by segment.
− Staff turnover: staff turnover is calculated as the number of leavers in a year (excluding redundancies) divided by the average
headcount during the year.
− Suppressed availability: represents the amount on a given date that the asset base exceeds the facility size under the terms of
our $4.5bn asset-backed senior bank facility.
− TRIR rate: reportable incidents in North America are reported in accordance with the OSHA (Occupational, Safety and Health
Administration) framework as a Total Recordable Incident Rate (‘TRIR’)
183Ashtead Group plc Annual Report & Accounts 2024
ADDITIONAL INFORMATION
Future dates
Quarter 1 results ..................................................3 September 2024
2024 Annual General Meeting .............................4 September 2024
Quarter 2 results ................................................ 10 December 2024
Quarter 3 results .......................................................... 4 March 2025
Quarter 4 and year-end results ...................................17 June 2025
Advisers
Auditor
PricewaterhouseCoopers LLP
Statutory Auditor
Embankment Place
London
WC2N 6RH
United Kingdom
Registrars and Transfer Office
Equiniti
PO Box 4630
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Financial PR Advisers
H/Advisors Maitland
3 Pancras Square
London
N1C 4AG
Solicitors
Slaughter and May
One Bunhill Row
London
EC1Y 8YY
Skadden, Arps, Slate, Meagher & Flom LLP
155 N Wacker Drive
Chicago, IL 60606
Parker, Poe, Adams & Bernstein LLP
401 South Tryon Street
Charlotte, NC 28202
Brokers
Barclays Bank plc
North Colonnade
Canary Wharf
London
E14 4BB
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London
E14 5JP
Registered number
01807982
Registered office
ADDITIONAL INFORMATION
184 Ashtead Group plc Annual Report & Accounts 2024
Ashtead Group plc
100 Cheapside
London EC2V 6DT
Phone: + 44 (0) 20 7726 9700
www.ashtead-group.com
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