Ashtead Group PLC — Annual Report 2024

Jul 25, 2024

Ashtead Group plc - Annual Report & Accounts 2024

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 runway for success.

BRENDAN HORGAN

Read more on page 26

OUR RUNWAY

4 SUCCESS RUNWAY SUCCESS

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 to a number 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 page 181.

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

	2024	2023	2022	2021	2020
Profit before taxation ($m)	2,110	1,235	1,244	1,668	2,156
$2,110m
Adjusted operating profit ($m)	2,775	1,579	1,627	2,056	2,640
$2,775m
EPS (¢)	365.8	280.9	205.4	205.2	368.4
365.8¢
Adjusted profit before tax ($m)	2,230	1,316	1,343	1,824	2,273
$2,230m
Revenue ($m)	10,859	6,399	6,639	7,962	9,667
$10,859m
Adjusted EPS (¢)	386.5	219.1	221.5	307.1	388.5
386.5¢

1 Ashtead Group plc Annual Report & Accounts 2024

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STRATEGIC REPORT

1 2 3 7 4 5 6 8 1 2 3 4 5 6

US

An international network of equipment solutions and services

Ashtead is an international equipment rental company, trading under the Sunbelt Rentals brand, with national networks in the US, Canada and the UK. We rent a broad range of construction, industrial, general and specialty equipment across a wide variety of applications to a diverse customer base.

• 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

MARKET SHARE
| | |
| :------------------------------ | --: |
| 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% |

FLEET COMPOSITION
| | |
| :----------------------------- | --: |
| 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 based on S&P Global Market Intelligence market size estimate.
• 3 Source: Management information.

1,186 STORES

OUR GROUP AT A GLANCE

2 Ashtead Group plc Annual Report & Accounts 2024

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UK

• Revenue £706m
• Return on investment 1 7%
• Segment result £58m
• Employees 4,384
• Stores 190
• Fleet size £1,130m

MARKET SHARE
| | |
| :--------------------------- | --: |
| 1 Sunbelt | 10% |
| 2 Speedy | 6% |
| 3 HSS | 5% |
| 4 VP | 5% |
| 5 Others | 74% |

FLEET COMPOSITION
| | |
| :----------------------------- | --: |
| 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 based on S&P Global Market Intelligence market size estimates.
• 3 Source: Management information.

190 STORES

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CANADA

• The second largest equipment rental company in Canada with 135 stores
• Revenue C$897m
• Return on investment 1 11%
• Segment result C$138m
• Employees 2,306
• Stores 135
• Fleet size C$1,751m

MARKET SHARE
| | |
| :---------------------------- | --: |
| 1 United Rentals | 19% |
| 2 Sunbelt | 9% |
| 3 Others | 72% |

FLEET COMPOSITION
| | |
| :----------------------------- | --: |
| 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 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.

135 STORES

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3 Ashtead 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. Wealso 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 toattend 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 willbe paid, if approved at the AGM, on 10September 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 anddeveloped in the business over manyyears. 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.

5 Ashtead 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 2024

6

Elevating our customer culture fromcentric to obsession

Roadmap for success

Opportunity for share gains and annuityvalue

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. Welaunched 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 nextphase 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 ashorter-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 wedo.

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 the year.

STRATEGIC REVIEW

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 a year 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, which impacted 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, for example the day-to-day MRO (maintenance, repair and operations) of our 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, the team members, and our investors.

RUNWAY SUCCESS

Ashtead 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; 1.7 times at 30 April 2024

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

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 the larger, 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.# STRATEGIC REPORT

OUR MARKETS CONTINUED

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

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• Fire
• Hurricanes
• Flooding
• Tornadoes
• Winter storms
• Residential emergencies
• Health emergencies

---

• Alternative care facilities
• Points of distribution
• Healthcare testing facilities

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• National events
• Concerts
• Sporting events
• Film and television production
• Theme parks
• Festivals
• Farmers’ markets
• Local 5K runs
• Cycle races

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• Office complexes
• Apartment complexes
• Data centres
• Shopping centres
• Golf course maintenance
• Industrial
• Entertainment and conference venues

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MAINTENANCE, REPAIR AND OPERATIONS

CONSTRUCTION

ENTERTAINMENT AND SPECIAL EVENTS

EMERGENCY RESPONSE AND RESTORATION

STATE AND LOCAL GOVERNMENT

13 Ashtead 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, the continuing evolvement of the mega project landscape will drive further construction as infrastructure is developed around the mega projects to support 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. As such, we believe most mega projects will likely generate broader ecosystems, creating significant opportunities for growth. 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 up approximately 10% of our fleet on rent today and this will increase as the increasing number of starts translate into put-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 to 2011, 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 as we 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 a degree 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

Chart 02: Construction activity by cycle

Cycle	T+2	T+4	T+6	T+8	T+10	T+12	T+14	T+16	T+18	T+20
1975–1982	40	60	80	100	120	140	160	180	200
1982–1991	40	60	80	100	120	140	160	180	200
1991–2011			40	60	80	100	120	140	160	180
2011–2020			40	60	80	100	120	140	160	180
Forecast						100
(T=100 based on constant dollars)

Source: Dodge Data & Analytics (May 2024)

Market share in the US

We continue to grow our market share in the US and even though we are the second largest equipment rental company, there remains plenty of room to grow 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 of the market is made up of small local independent rental shops, with five or fewer locations, comprising c. 50% of all rental 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)

	2024	2025	2026
Industry rental revenue	+10%	+5%	+4%

01 US market outlook

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 larger market. Rental still only makes up around 55% to 60% of the US market compared to around 75% in the UK. However, this is a broad 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 end of 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 MARKETS CONTINUED

Our highly sophisticated proprietary customer management, inventory and delivery tracking systems all contribute to Availability, Reliability and Ease for our customers. 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.

US market share

Chart 03 US market share development

STRATEGIC REPORT

OUR BUSINESS MODEL CONTINUED

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 AND APPLICATIONS

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

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 and small. 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 lifting solutions for the construction of a new bridge
Providing equipment for facilities management at a shopping complex
Providing traffic management solutions for engineering projects
Facilitating fit-out and ongoing maintenance at a power plant

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 rental revenue 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 General Tool 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 used in 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 page 29.
• 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.# Ashtead 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 been 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

1. 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

1. Operate with more efficiency through scale, process, and technology to unlock margin progression

SUSTAINABILITY

1. Advance our position as a thriving, growing enterprise to deliver long-term sustainable value for our people, customers, communities and investors

INVESTMENT

1. Disciplined capital allocation driving profitable growth, strong cash generation and enhanced shareholder value

PEOPLE

PLATFORM

INNOVATION

FOUNDATIONAL ELEMENTS

Our Sunbelt 4.0 strategic priorities

| STRATEGIC PRIORITY | KEY INITIATIVES # STRATEGIC REPORT

OUR SPECIALTY BUSINESSES

Our Specialty businesses focus on products with comparatively low rental penetration in predominantly non-construction markets. They are hugely important to our business and remain core to our Sunbelt 4.0 strategy. Specialty products and services are often a natural add-on to our General Tool products and services. We are always looking for new rental opportunities and to expand the number of our Specialty lines of businesses which in North America 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

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.

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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 US and Canadian centres, and model our 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.

Rental market	US	Canada
%
Top 25	57%	48%
26–50	19%	19%
51–100	16%	33%
101–210	8%
Top 5		4%
6–10		19%
11–55		16%
Cluster definition
	>15	>10
	>10	>7
	>4	>1
	>1
Clustered	21	3
	12	2
	25	8
	26
Sunbelt 4.0 target
22 markets	15–17 markets	13–15 markets
30–33 markets	4–5 markets
39–48 markets	3–5 markets

Fleet density $ OEC per capita	US	Canada
0–10
10–20
20–30
30–40
40–50
50–60
>60

Source: ARA Rentalytics, US and Canada census.

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Ashtead Group plc Annual Report & Accounts 2024

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 andgreenfields
• 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

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Ashtead Group plc Annual Report & Accounts 2024# STRATEGIC REPORT

Operations

− 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 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

5. INVESTMENT

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. In the 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).

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

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

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:

KEY PERFORMANCE INDICATORS MEASURING OUR PERFORMANCE

At Group level, we measure the performance of the business using a number of key performance indicators (‘KPIs’). These help to ensure 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 (¢)	222	219	307	388
Return on investment (‘RoI’) (%)	15	15	18	19
Net debt and leverage at constant exchange rates
2 5 3 2 3 1 5 5
387
2020	2021	2022	2023	2024
Apr 24Apr 23Apr 22Apr 21Apr 20
Net debt ($m)	5,368	4,180	5,179	6,588
Leverage (x)	1.5	1.4	1.9	1.6
8,014
1.7

Adjusted EPS (¢)

• 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.

Return on investment (‘RoI’) (%)

• 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.

Net debt and leverage at constant exchange rates

• 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

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

Fleet on rent ($m/C$m/£m)

• 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%.

Dollar utilisation (%)

• 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.

EBITDA margins (%)

• 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

Metric	2018	2021	2022	2023	2024
US	54.0	48.5	42.2	38.4	37.4
Canada	21	28	25	20	21
UK	24	21	29	23	20

Metric	2022	2023	2024
US (TRIR)	0.90	1.49	0.97
Canada (TRIR)	0.76	0.89	0.78
UK (RIDDOR)	0.22	0.25	0.19

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.

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Ashtead 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

Assessment of likelihood and impact

Mitigating controls implemented

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

37
Ashtead 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:

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 2, 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.

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

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, it represents 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 Group has 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.# STAKEHOLDER ENGAGEMENT

OUR PEOPLE

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 and apps

Relevant KPIs
* Customer satisfaction scores
* Level of repeat business
* Customer spend
* Debtor days/days to credit

OUR CUSTOMERS

OUR SUPPLIERS

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

OUR COMMUNITIES

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

OUR INVESTORS

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

Board level engagement

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 the next level, providing opportunities for continued profitable growth and furthering our return on investment, but also prioritising the customer experience and ensuring the long-term sustainable value generation for our people, 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.

45 Ashtead Group plc Annual Report & Accounts 2024

STRATEGIC REPORT

Statement by the Directors in performance 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) of the 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 page 44 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
	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		Canada		UK		Group
	2024	2023	2024	2023	2024	2023	2024	2023
	47.3%	48.1%	40.5%	40.7%	28.2%	28.1%	45.1%	45.6%
	28.3%	30.0%	15.4%	20.2%	8.2%	9.5%	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 the lower 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 did not 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 47

Ashtead 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

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.

Type of tax
Profit	$246m	45%
People	$177m	32%
Product	$119m	22%
Property	$9m	1%
Total	$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

Jurisdiction
US	83%
Canada	8%
UK	9%

Taxes borne by the Group by jurisdiction

Jurisdiction
US	86%
Canada	5%
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.

Taxes borne by the Group by jurisdiction

	$m	Revenue	Tax collected	Tax borne
US		888	83%	474
Canada		80	8%	26
UK		97	9%	51
Total	$1,065	100%	$551	100%

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. Capital expenditure by division is shown in Table 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 $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.

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.

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 plc, the parent company of the Group, is a 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

[Image of a graph showing Net debt and Leverage over time]

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.

Table 07 Minimum contracted debt commitments

Table 07 below summarises the maturity of the Group’s borrowings at 30 April 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

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

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:

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

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.# RESPONSIBLE BUSINESS REPORT CONTINUED

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
	Health and safety	Low
	Climate action	Medium
	Waste and water	High
	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

57 Ashtead 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 and training 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 to near misses as a way of continuing to understand and focus on safety risks. All incidents 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 health and safety (‘OHS’) legislation: the Group’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. These include:

• 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 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.

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 our TRIR.

• 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

Driver safety programmes

We deliver to customers across all 50 states in the US, eight provinces in Canada and across the UK. Covering this distance 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.# STRATEGIC REPORT

59 Ashtead Group plc Annual Report & Accounts 2024

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.

Ashtead Group plc Annual Report & Accounts 2024 59

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
US Recordable accidents	212	68
Incident rate	0.76	0.12
Canada Recordable accidents	19	3
Incident rate	0.78	0.06
UK Recordable accidents	n/a	19
Incident rate	n/a	0.19

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 onour commitments and progress including a more detailed road map willbe provided in the Group’s next Sustainability report, which we expect topublish 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 aScope 3 intensity target for the Group.

02 Greenhouse gas emissions

	2024 UK Total	2024 Total	2023 UK Total	2023 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.

Group fleet composition

Item	Percentage
Fossil fuel	67%
Electric	18%
Other, including non-powered	15%

Approximately 9% of our workforce in NorthAmerica 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. Weclosely 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

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.# Responsible Business Report Continued

Workforce

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 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.

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

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 we maintain 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 to monitor 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.

66 Ashtead 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 to implement 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.

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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 page 86.

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.

	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.

	Sunbelt US	Sunbelt Canada	Sunbelt UK
Pay gap	4%	7%	2%

Summarised in Table 05 is the amount by which average pay for men exceeds that for women.
05 Pay gap
04 Workforce by gender# Ashtead Group plc Annual Report & Accounts 2024

STRATEGIC REPORT

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.

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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.# Ashtead Group plc Annual Report & Accounts 2024

STRATEGIC REPORT

This includes developing a clear and dynamic strategy to support the Group’s transition to a low-carbon economy.

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 # H1: Ashtead Group plc Annual Report & Accounts 2024

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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, 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
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED

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.# Climate-related Risks and Opportunities

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.
• 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.

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.

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 # Ashtead Group plc Annual Report & Accounts 2024

STRATEGIC REPORT

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| Type of risk or opportunity | Description of risk or opportunity # Ashtead Group plc Annual Report & Accounts 2024

STRATEGIC REPORT

INVESTMENT

Disciplined capital allocation driving profitable growth, strong cash generation and enhanced shareholder value.

ACTIONABLE COMPONENT Ashtead Group plc Annual Report & Accounts 2024

New target leverage range of 1.0 to 2.0 times net debt to EBITDA (excluding IFRS 16)
Strong free cash flow will fund 100% of ambitious Sunbelt 4.0 organic growth plans
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

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 to enhance our health and safety programmes to minimise any risk to our people. 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
Chief executive
17 June 2024

Michael Pratt
Chief financial officer
17 June 2024

Ashtead Group plc Annual Report & Accounts 2024

DIRECTORS’ REPORT

CONTENTS

Chair’s introduction to Corporate Governance
Our Board of directors
Corporate governance report
Audit Committee report
Nomination Committee report
Remuneration report
Other statutory disclosures
Statement of directors’ responsibilities

DIRECTORS’ REPORT

Ashtead 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.# Directors' Report

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

Ashtead Group plc Annual Report & Accounts 2024

82

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
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
J. Appointments to the Board	Pages 90 and 91
K. Board skills, experience and knowledge	Page 90
L. Board evaluation of effectiveness	Page 92
M. Independence and effectiveness of internal and external audit	Pages 96 to 98
N. Fair, balanced and understandable assignment	Page 97
O. Internal control framework and risk management	Pages 97 and 98
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

OUR BOARD OF DIRECTORS

PAUL WALKER, 67

INDEPENDENT NON-EXECUTIVE CHAIR

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 also been 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

BRENDAN HORGAN, 50

CHIEF EXECUTIVE

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

G MICHAEL PRATT, 60

CHIEF FINANCIAL OFFICER

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

ANGUS COCKBURN, 61

SENIOR INDEPENDENT DIRECTOR

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

JILL EASTERBROOK, 53

INDEPENDENT NON-EXECUTIVE DIRECTOR

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

TANYA FRATTO, 60

INDEPENDENT NON-EXECUTIVE DIRECTOR

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

RENATA RIBEIRO, 44

INDEPENDENT NON-EXECUTIVE DIRECTOR

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

LUCINDA RICHES, 53

INDEPENDENT NON-EXECUTIVE DIRECTOR

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

LINDSLEY RUTH, 53

INDEPENDENT NON-EXECUTIVE DIRECTOR

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.

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

Ashtead Group plc Annual Report & Accounts 2024

84# 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 and markets.

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.

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 in North 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.

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Roy Twite
57
Independent Non-Executive Director
Nationality – British
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.
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.

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Tanya Fratto
63
Independent Non-Executive Director
Nationality – American
Qualifications – Graduated in engineering from Texas A&M University
Other roles – Member of the CBI’s International Trade Council.

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Renata Ribeiro
52
Independent Non-Executive Director
A N R

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Lucinda Riches
62
Independent Non-Executive Director
A N R

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Lindsley Ruth
53
Independent Non-Executive Director
A N R

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Ashtead Group plc Annual Report & Accounts 2024 85
DIRECTORS’ REPORT
CORPORATE GOVERNANCE REPORT# Engaging with Stakeholders

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 at the Group’s Powerhouse event in April 2024.

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

Month	Activity
JUNE 2023	− Annual results announcement and presentation − Bondholder call − Investor roadshow following annual results presentation
SEPTEMBER 2023	− First quarter results announcement and presentation − Bondholder call − Annual General Meeting − Conference calls with investors following Q1 results
DECEMBER 2023	− Half-year results announcement and presentation − Bondholder call − Investor roadshow following half-year results presentation
MARCH 2024	− Third quarter results announcement and presentation − Bondholder call − Conference calls with investors following Q3 results
APRIL 2024	− Capital Markets Day event in Atlanta

Ashtead Group plc Annual Report & Accounts 2024 88

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.# 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 its routine 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 formal meeting. 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 to be 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 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 its routine 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 formal meeting. 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 to be 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
Chair
Paul Walker		5/5	5/5
Executive
Brendan Horgan		5/5	5/5
Michael Pratt		5/5	5/5
Non-executive
Angus Cockburn		5/5	5/5
Jill Easterbrook		5/5	5/5
Tanya Fratto		5/5	5/5
Renata Ribeiro		5/5	5/5
Lindsley Ruth		2	4/5
Lucinda Riches		5/5	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 2024
90
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.# CORPORATE GOVERNANCE REPORT CONTINUED

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 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.

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.

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

Ashtead Group plc Annual Report & Accounts 2024 92

THREE LINES OF DEFENCE IN RISK MANAGEMENT

1ST LINE OF DEFENCE	2ND LINE OF DEFENCE	3RD 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.# AUDIT COMMITTEE REPORT

Ashtead Group plc Annual Report & Accounts 2024

The Audit Committee assists the Board in its oversight and monitoring of financial reporting, risk management and internal controls. 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 the Committee. 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 # 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, as they relate to financial reporting, and the documentation of controls associated with automated controls and system-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 2024 96

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. The meetings 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 audit partner. 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.# AUDIT COMMITTEE REPORT CONTINUED

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.

Ashtead Group plc Annual Report & Accounts 2024
98

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. Royhas 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 2024

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

$12bn |
      |
$10bn |                                                                     ******
      |                                                                 ****
$8bn  |                                                          ******
      |                                                      ****
$6bn  |                                                  ****
      |                                              ****
$4bn  |                                          ******
      |                                      ****
$2bn  | *******                          ****
      |******
$0bn  |******_______________________________________________________________________
      2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
      CAGR: +15%                                  Year ending 30 April

Adjusted operating profit: a 3x increase since 2014

$3.0bn |
      |
$2.5bn |                                                                 ******
      |                                                             ****
$2.0bn |                                                         ******
      |                                                     ****
$1.5bn |                                                 ******
      |                                             ****
$1.0bn |                                         ******
      |                                     ****
$0.5bn | *******                         ****
      |******
$0bn  |******_______________________________________________________________________
      2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
      CAGR: +16%                                  Year ending 30 April

Total Shareholder Return: Value of £100 invested on 30 April 2014

900   |                                                                     ******
      |                                                                 ****
800   |                                                             ******
      |                                                         ****
700   |                                                     ******
      |                                                 ****
600   |                                             ******
      |                                         ****
500   |                                     ******
      |                                 ****
400   |                             ******
      |                         ****
300   |                     ******
      |                 ****
200   |             ******
      |         ****
100   | ******
      ******_______________________________________________________________________
      2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
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

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  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

20% |
    |
11% |                             ******
    |                         ****
6%  |                     ******
    |                 ****
4%  |             ******
    |         ****
2%  |     ******
    | ****
0%  |_______________________________________________________________________
    2002 2007 2014 2024
    Target

Unlike other FTSE companies, our leadership team is almost entirely US-based:

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.

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.# DIRECTORS’ REPORT

400 US colleagues, to operate 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 2024 104

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.# 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

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REMUNERATION REPORT CONTINUED

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Remuneration at a glance

Summary of the proposed policy:

| Element | Proposed policy | Rationale (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

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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.

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Remuneration at a glance

Summary of the proposed policy:

| Element | Proposed policy | Rationale # REMUNERATION REPORT CONTINUED

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)

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DIRECTORS’ REPORT

Chief executive target total remuneration¹: 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

¹ Target total remuneration = base salary + target annual bonus + long-term incentive fair value.

The proposed target total remuneration opportunity for Brendan Horgan is around 25th percentile vs US comparators; Ashtead’s market cap is median

Chief executive target total remuneration¹: 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

¹ Target total remuneration = base salary + target annual bonus + long-term incentive fair value.

The chief executive's target total remuneration opportunity is currently around 25th percentile; the proposed package is around upper quartile. Ashtead's market cap is around median

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REMUNERATION REPORT CONTINUED

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 page 13 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.

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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.

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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.

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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.# REMUNERATION REPORT CONTINUED

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 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)

	Salary	Pension and benefits	DBP	PSP	RSU
Minimum	32%	27%	59%	13%	68%
Target	18%	91%	8%	6%	9%
Maximum	37%	93%	17%	14%	7%

Share price growth

| | | | | | | | |
| :-------- | :----- | :----- | :---- | :---- | :--- | :--- | :-- | :-- |
| Minimum | 0 | 1,000 | 2,000 | 3,000 | 4,000 | 5,000 | | |
| Target | | | | | | | | |
| Maximum | | | | | | | | |

Chief financial officer – Michael Pratt (£’000)

	Salary	Pension and benefits	DBP	PSP	RSU
Minimum	1%	1%	0	5,000	10,000
Target	21%	19%	15%	0	1,000
Maximum	28%	30%	32%	52%	24%

Share price growth

| | | | | | | | |
| :-------- | :----- | :----- | :---- | :---- | :--- | :--- | :-- | :-- |
| Minimum | 0 | 1,000 | 2,000 | 3,000 | 4,000 | 5,000 | | |
| Target | | | | | | | | |
| Maximum | | | | | | | | |

Salary
Pension and benefits
DBP
PSP
RSU

In illustrating potential reward opportunities, the following assumptions have been made:

• Minimum Base salary, benefits, pension or cash in lieu of pension. 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.

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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 # 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

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
Fixed remuneration
Salary	1,125	1,082	612
Benefits (2)	82	21	7
Pension (3)	30	23	37
Total fixed	1,237	1,126	656
Variable remuneration
DBP (4)	549	3,120	224
PSU (5)	2,293	4,309	1,095
SPA (6)	3,181	–	1,354
Total variable	6,023	7,429	2,673
Total	7,260	8,555	3,329

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)

# H1 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:

	Entry	Threshold	Target	Maximum	Actual – reported	Actual – budget exchange rates
Group adjusted pre-tax profit	10% $2,200m	30% $2,260m	50% $2,325m	100% $2,585m	$2,230m	$2,230m
Free cash flow	$850m	$910m	$965m	$1,135m	$975m	$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 at budget exchange rates. As a result, Brendan Horgan and Michael Pratt earned 36.6% of their maximum bonus entitlements. These are 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:

	Brought forward	Contribution	Amount paid out	Carried forward	Notional shares carried forward
Brendan Horgan	–	–	$823,324	$548,883	3,752
Michael Pratt	–	–	£335,724	£223,816	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

## 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)	Status
19/06/20	2020/21	TSR (40%) 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. Adjusted EPS (25%) 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. RoI (25%) 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). Leverage (10%) 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 June 2023.
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 July 2024.
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.

## 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.

Measure	Weighting	Targets	Outcome
1 Grow General Tool and advance our clusters	50%	Increase in EBITDA: measured at constant currency plan rates	$820m
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

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.

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		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.

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
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	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. As shown below, the executive directors comply with these shareholding requirements.

	Shares held outright at 30 April 2024	Shares held outright at 30 April 2024 as a % of salary	Outstanding unvested plan interests subject to performance measures	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

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	1,550

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

During the same period, the total remuneration received by the Group chief executive has reflected the strong performance of the business:

Year	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.# REMUNERATION REPORT CONTINUED

Executive directors	% change in salary	% change in benefits	% change in annual bonuses
	2024	2023	2022	2021	2024	2023	2022	2021	2024	2023	2022
Brendan Horgan	4%	5%	– %	– %	290%	–51%	–4%	1%	–82%	76%	29%
Michael Pratt	4%	5%	18%	– %	17%	–45%	–48%	– %	–82%	80%	48%

Non-executive directors	% change in salary	% change in benefits	% change in annual bonuses
	2024	2023	2022	2021	2024	2023	2022	2021	2024	2023	2022
Angus Cockburn	– %	20%	11%	– %	116%	–45%	Note 3	– %	n/a	n/a	n/a
Jill Easterbrook	1	– %	20%	11%	– %	656%	–52%	Note 3	– %	n/a	n/a
Tanya Fratto	– %	20%	11%	– %	100%	–	Note 3	– %	–100%	n/a	n/a
Renata Ribeiro	1	– %	–%	n/a	n/a	–59%	75%	n/a	n/a	n/a	n/a
Lucinda Riches	– %	20%	11%	– %	62%	–	– %	– %	n/a	n/a	n/a
Lindsley Ruth	– %	20%	11%	– %	–100%	Note 3	– %	– %	n/a	n/a	n/a
Paul Walker	– %	17%	10%	– %	15%	250%	Note 3	–100%	n/a	n/a	n/a
Employees of the Group	2	5%	7%	5%	2%	– %	– %	– %	– %	–41%	–1%

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
2023/24	B	$66,167	110:1	$89,424	81:1
2022/23	B	$55,031	148:1	$71,075	115:1
2021/22	B	$63,588	119:1	$71,210	107:1
2020/21	B	$37,338	162:1	$80,427	75:1
2019/20	B	$43,661	86:1	$59,362	63:1

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
2023/24	B	£24,539	236:1	£38,966	149:1
2022/23	B	£25,719	263:1	£31,403	216:1
2021/22	B	£24,819	225:1	£31,114	179:1
2020/21	B	£21,143	217:1	£24,763	185:1
2019/20	B	£20,566	144:1	£23,199	127:1

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.

Ashtead Group plc Annual Report & Accounts 2024 124

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.

Long-Term Incentive Plan 2024

The Remuneration Committee has approved a new Long-Term Incentive Plan (LTIP) for the financial year ending 30 April 2025, which will align with the proposed Remuneration Policy and will be effective from 1 May 2024. The targets are based on a balanced scorecard approach, comprising financial and strategic metrics, with specific targets for each element being as follows:

Metric	Target	Median	Upper quartile
Relative 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.

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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

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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

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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 6 December 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 general meetings. 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

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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

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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

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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.
Recoverability of amounts due from subsidiary undertakings (Company)	As part of our audit of the financial statements, we performed detailed testing over the recoverability of intercompany balances, focusing on the utilisation of the balances and the Group’s ability to repay.

Audit and Assurance

Audit of 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.

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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	Overall materiality
Group	$107,000,000
Company	£14,000,000

How we determined it

Approximately 5% of the Group’s profit on ordinary activities beforetaxation

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.# INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ASHTEAD GROUP PLC

CONTINUED

134 Ashtead Group plc Annual Report & Accounts 2024

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.

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.

135 Ashtead 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.# INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ASHTEAD GROUP PLC

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

		Before Amortisation	Amortisation	Total	Before Amortisation	Amortisation	Total
	Notes	$m	$m	$m	$m	$m	$m
Revenue
Rental revenue	3, 6	9,630.2	–	9,630.2	8,698.2	–	8,698.2
Sale of new equipment, merchandise and consumables	3	369.7	–	369.7	341.7	–	341.7
Sale of used rental equipment	3	858.8	–	858.8	627.4	–	627.4
		10,858.7	–	10,858.7	9,667.3	–	9,667.3
Operating costs
Staff costs	4	(2,485.1)	–	(2,485.1)	(2,222.1)	–	(2,222.1)
Other operating costs	4	(2,845.2)	–	(2,845.2)	(2,591.1)	–	(2,591.1)
Used rental equipment sold	4	(635.8)	–	(635.8)	(442.3)	–	(442.3)
		(5,966.1)	–	(5,966.1)	(5,255.5)	–	(5,255.5)
EBITDA¹		4,892.6	–	4,892.6	4,411.8	–	4,411.8
Depreciation	4	(2,117.7)	-	(2,117.7)	(1,772.1)	–	(1,772.1)
Amortisation of intangibles	4, 5	–	(120.9)	(120.9)	–	(117.7)	(117.7)
Operating profit	3, 4	2,774.9	(120.9)	2,654.0	2,639.7	(117.7)	2,522.0
Interest income	6	1.8	–	1.8	2.6	–	2.6
Interest expense	6	(546.3)	–	(546.3)	(368.8)	–	(368.8)
Profit on ordinary activities before taxation		2,230.4	(120.9)	2,109.5	2,273.5	(117.7)	2,155.8
Taxation	7, 21	(541.3)	30.2	(511.1)	(567.7)	29.6	(538.1)
Profit attributable to equity holders of the Company		1,689.1	(90.7)	1,598.4	1,705.8	(88.1)	1,617.7
Basic earnings per share	8	386.5¢	(20.7¢)	365.8¢	388.5¢	(20.1¢)	368.4¢
Diluted earnings per share	8	384.3¢	(20.6¢)	363.7¢	386.0¢	(19.9¢)	366.1¢

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		1,598.4	1,617.7
Items that will not be reclassified to profit or loss:
Movements on equity instruments held at fair value		–	(36.8)
Remeasurement of the defined benefit pension plan	24	(22.6)	(2.9)
Tax on defined benefit pension plan		5.6	0.7
		(17.0)	(39.0)
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences		(17.6)	(19.2)
Loss on cash flow hedge		0.2	(3.1)
		(17.4)	(22.3)
Total other comprehensive loss for the year		(34.4)	(61.3)
Total comprehensive income for the year		1,564.0	1,556.4

138 Ashtead Group plc Annual Report & Accounts 2024

CONSOLIDATED BALANCE SHEET at 30 April 2024

		2024	2023
	Notes	$m	$m
Current assets
Inventories	10	162.0	181.3
Trade and other receivables	11	1,850.2	1,659.2
Current tax asset		13.0	14.6
Cash and cash equivalents	12	20.8	29.9
		2,046.0	1,885.0
Non-current assets
Property, plant and equipment
– rental equipment	13	11,450.8	9,649.1
– other assets	13	1,797.7	1,392.0
		13,248.5	11,041.1
Right-of-use assets	14	2,425.6	2,206.0
Goodwill	15	3,211.5	2,865.5
Other intangible assets	15	485.9	523.4
Other non-current assets	16	189.3	145.2
Current tax asset		44.5	44.7
Net defined benefit pension plan asset	24	–	18.4
		19,605.3	16,844.3
Total assets		21,651.3
(in $m)

	2024	2023
Assets
Non-current assets
Property, plant and equipment	10,306.9	8,200.6
Right-of-use assets	2,656.5	2,340.1
Goodwill	2,121.5	1,318.6
Intangible assets	244.2	193.0
Investments in joint ventures	13.2	11.0
Other investments	1.0	1.0
Deferred tax assets	606.2	519.0
Current tax asset	18.6	5.3
Total non-current assets	16,968.1	12,588.6
Current assets
Inventories	1,784.0	1,435.3
Trade and other receivables	2,203.9	1,988.9
Current tax asset	0.3	0.0
Derivative financial instruments	0.8	1.2
Cash and cash equivalents	20.8	29.9
Total current assets	4,009.8	3,455.3
Total assets	20,977.9	16,043.9
Liabilities and equity
Current liabilities
Trade and other payables	1,482.9	1,572.3
Current tax liability	10.1	12.4
Lease liabilities	273.8	233.2
Provisions	42.5	39.9
Total current liabilities	1,809.3	1,857.8
Non-current liabilities
Lease liabilities	2,406.8	2,161.1
Long-term borrowings	7,995.1	6,595.1
Provisions	75.4	67.9
Deferred tax liabilities	2,224.2	1,995.3
Other non-current liabilities	55.5	44.1
Net defined benefit pension plan liability	0.4	0.0
Total non-current liabilities	12,757.4	10,863.5
Total liabilities	14,566.7	12,721.3
Equity
Share capital	81.8	81.8
Share premium account	6.5	6.5
Capital redemption reserve	20.0	20.0
Own shares held by the Company	(818.7)	(740.9)
Own shares held by the ESOT	(43.5)	(38.8)
Cumulative foreign exchange translation differences	(263.5)	(245.9)
Retained reserves	8,102.0	6,925.3
Equity attributable to equity holders of the Company	7,084.6	6,008.0
Total liabilities and equity	21,651.3	18,729.3

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.

These financial statements were approved by the Board on 17 June 2024.

BRENDAN HORGAN MICHAEL PRATT
Chief executive Chief financial officer

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FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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 by the ESOT $m	Cumulative foreign exchange translation differences $m	Retained reserves $m	Total $m
At 1 May 2022	81.8	6.5	20.0	(480.1)	(44.9)	(226.7)	5,677.1	5,033.7
Profit for the year	–	–	–	–	–	–	1,617.7	1,617.7
Other comprehensive income:
Movement on equity instruments held at fair value	–	–	–	–	–	(36.8)	–	(36.8)
Foreign currency translation differences	–	–	–	–	–	(19.2)	–	(19.2)
Loss on cash flow hedge	–	–	–	–	–	(3.1)	–	(3.1)
Remeasurement of the defined benefit pension plan (note 24)	–	–	–	–	–	(2.9)	–	(2.9)
Tax on defined benefit pension scheme	–	–	–	–	–	0.7	0.7	0.7
Total comprehensive income for the year	–	–	–	–	–	(19.2)	1,575.6	1,556.4
Dividends paid (note 9)	–	–	–	–	–	–	(356.6)	(356.6)
Own shares purchased by the ESOT (note 22)	–	–	–	–	(12.5)	–	–	(12.5)
Own shares purchased by the Company (note 22)	–	–	–	(260.8)	–	–	–	(260.8)
Share-based payments (note 23)	–	–	–	–	18.6	26.2	26.2	44.8
Tax on share-based payments	–	–	–	–	–	3.0	3.0	3.0
At 30 April 2023	81.8	6.5	20.0	(740.9)	(38.8)	(245.9)	6,925.3	6,008.0
Profit for the year	–	–	–	–	–	–	1,598.4	1,598.4
Other comprehensive income:
Foreign currency translation differences	–	–	–	–	–	(17.6)	–	(17.6)
Loss on cash flow hedge	–	–	–	–	–	0.2	0.2	0.2
Remeasurement of the defined benefit pension plan (note 24)	–	–	–	–	–	(22.6)	–	(22.6)
Tax on defined benefit pension scheme	–	–	–	–	–	5.6	5.6	5.6
Total comprehensive income for the year	–	–	–	–	–	(17.6)	1,581.6	1,564.0
Dividends paid (note 9)	–	–	–	–	–	–	(436.6)	(436.6)
Own shares purchased by the ESOT (note 22)	–	–	–	–	(29.9)	–	–	(29.9)
Own shares purchased by the Company (note 22)	–	–	–	(77.8)	–	–	–	(77.8)
Share-based payments (note 23)	–	–	–	–	25.2	22.3	22.3	47.5
Tax on share-based payments	–	–	–	–	–	9.4	9.4	9.4
At 30 April 2024	81.8	6.5	20.0	(818.7)	(43.5)	(263.5)	8,102.0	7,084.6

CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
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Ashtead Group plc Annual Report & Accounts 2024

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 30 April 2024

	2024 $m	2023 $m
Cash flows from operating activities
Cash generated from operations before changes in rental equipment	4,541.0	4,073.6
Payments for rental property, plant and equipment	(3,759.2)	(3,019.6)
Proceeds from disposal of rental property, plant and equipment	831.7	573.6
Cash generated from operations	1,613.5	1,627.6
Financing costs paid	(513.1)	(340.2)
Tax paid	(245.8)	(287.3)
Net cash generated from operating activities	854.6	1,000.1
Cash flows from investing activities
Acquisition of businesses (note 26(c))	(875.6)	(1,083.2)
Disposal of businesses	1.9	–
Financial asset investments (note 25)	(15.0)	(42.4)
Payments for non-rental property, plant and equipment	(685.6)	(510.0)
Proceeds from disposal of non-rental property, plant and equipment	47.5	41.4
Net cash used in investing activities	(1,526.8)	(1,594.2)
Cash flows from financing activities
Drawdown of loans	3,616.3	3,355.0
Redemption of loans	(2,275.0)	(2,001.5)
Repayment of principal under lease liabilities (note 18)	(133.7)	(109.5)
Dividends paid (note 9)	(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)
Net cash generated from financing activities	663.2	609.3
(Decrease)/increase in cash and cash equivalents	(9.0)	15.2
Opening cash and cash equivalents	29.9	15.3
Effect of exchange rate differences	(0.1)	(0.6)
Closing cash and cash equivalents	20.8	29.9

	2024 $m	2023 $m
Reconciliation of net cash flows to net debt
Decrease/(increase) in cash and cash equivalents in the year	9.0	(15.2)
Increase in debt through cash flow	1,207.6	1,244.0
Change in net debt from cash flows	1,216.6	1,228.8
Exchange differences	(9.7)	(37.8)
Debt acquired	154.5	227.9
Deferred costs of debt raising	8.7	7.2
New lease liabilities	325.3	373.4
Increase in net debt in the year	1,695.4	1,799.5
Net debt at 1 May	8,959.5	7,160.0
Net debt at 30 April (note 26(b))	10,654.9	8,959.5

141
Ashtead Group plc Annual Report & Accounts 2024

FINANCIAL STATEMENTS

1 General information

Ashtead Group plc (‘the Company’) is a company incorporated and domiciled in England and Wales and listed on the London Stock Exchange. The consolidated financial statements are presented in US dollars.

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.

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted International Accounting Standards (‘IFRS’) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention, modified for certain items carried at fair value, as stated in the accounting policies.

In preparing these financial statements, the exchange rates used in respect of the pound sterling (£) and Canadian dollar (C$) are:

	2024	2023	2024	2023
Pound sterling	1.26	1.20	1.25	1.26
Canadian dollar	0.74	0.75	0.73	0.74
Average for the year ended 30 April			At 30 April

The consolidated financial statements have been prepared on the going concern basis. The Group’s internal budgets and forecasts of future performance, available financing facilities and facility headroom (see Note 19), provide a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future and consequently the going concern basis continues to be appropriate in preparing the consolidated financial statements.

In reaching its conclusion on the going concern assessment, the Board also considered the findings of the work performed to support the statement on the long-term viability. This included scenario planning based on the timing, severity and duration of any downturn and subsequent recovery. Further details are provided in the viability statement on page 41.

Climate change considerations

In preparing the consolidated financial statements, the potential impacts of climate change, particularly those discussed in the Group’s TCFD statement on pages 70 to 77 and as a result of our sustainability targets, have been considered. Our assessment focused primarily on the carrying value of the Group’s assets and was factored into our assessment of the appropriateness of the going concern basis in the preparation of the consolidated financial statements and longer-term viability of the Group.

There has been no material impact on the financial statements. The potential implications of climate change risks on the financial statements will continue to be monitored and assessed in future periods.

Key judgements and estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period.

In the course of preparing the financial statements, no judgements have been made in the process of applying the Group’s accounting policies, other than those involving estimations, that have had a significant effect on the amounts recognised within the financial statements. The estimates and associated assumptions which have been used are based on historical experience and other factors that are considered to be relevant. While actual results could differ from these estimates, the Group has not identified any assumptions, or other key sources of estimation uncertainty in the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Changes in accounting policies and disclosures

New and amended standards adopted by the Group

There are no new IFRS or IFRIC Interpretations that are effective for the first time this financial year which have a material impact on the Group.# New standards, amendments and interpretations issued but not effective for the financial year beginning 1 May 2023 and not adopted early

There are no IFRS or IFRIC Interpretations that are not yet effective that would be expected to have a material impact on the Group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

142 Ashtead Group plc Annual Report & Accounts 2024

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 30 April each year. Control is achieved when the Company has the power over the investee, is exposed, or has rights, to variable returns from its involvement with the investee, and has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the date the Company gains control until the date when the Company ceases to control the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business combination is the fair value at the acquisition date of the assets transferred and the liabilities incurred by the Group and includes the fair value of any contingent consideration arrangement. Acquisition-related costs are recognised in the income statement as incurred. Contingent consideration is measured at the acquisition date at fair value and included in liabilities in the balance sheet. Changes in the fair value of contingent consideration due to events post the date of acquisition are recognised in the income statement. Cash flow payments to settle contingent consideration are reflected in investing activities.

Foreign exchange

Foreign currency transactions

Foreign currency transactions are translated into the functional currency of the entity that has undertaken the transaction using the exchange rates ruling on the dates of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing on the reporting date. All currency translation differences are taken to the income statement. The functional currency of the parent company is pounds sterling.

Translation of overseas operations

The reporting currency of the Group is the US dollar, the currency in which the majority of our assets, liabilities, revenue and costs are denominated. Assets and liabilities in non-US dollar denominated currencies are translated into US dollars at rates of exchange ruling at the balance sheet date. Income statements and cash flows of non-US dollar denominated subsidiary undertakings are translated into US dollars at average rates of exchange for the year. Exchange differences arising from the retranslation of the opening net investment of non-US dollar denominated subsidiaries and the difference between the inclusion of their profits at average rates of exchange in the Group income statement and the closing rate used for the balance sheet are recognised directly in a separate component of equity.

Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties and VAT/sales tax. Our revenue is a function of our rental rates and the size, utilisation and mix of our rental equipment. The Group has three main sources of revenue as detailed below:

− rental revenue, including loss damage waiver, environmental fees and revenue from rental equipment delivery and collection;
− revenue from the sale of new equipment, merchandise and consumables; and
− revenue from the sale of used rental equipment.

Rental revenue, including loss damage waiver and environmental fees, is recognised on a straight-line basis over the period of the rental contract. In general, rental contracts have no fixed duration and are cancellable at any time. However, as a rental contract can extend across financial reporting period ends, the Group records accrued revenue (unbilled rental revenue) and deferred revenue at the beginning and end of each reporting period so that rental revenue is appropriately stated in the financial statements. Revenue from rental delivery and collection is recognised when the delivery or collection has occurred and the performance obligation therefore fulfilled. Revenue from the sale of new rental equipment, merchandise and consumables, together with revenue from the sale of used rental equipment, is recognised at the time of delivery to, or collection by, the customer and when all performance obligations under the sale contract have been fulfilled. Revenue from the sale of rental equipment in connection with trade-in arrangements with certain manufacturers from whom the Group purchases new equipment is accounted for at the lower of transaction value or fair value based on independent appraisals. If the trade-in price of a unit of equipment exceeds the fair market value of that unit, the excess is accounted for as a reduction of the cost of the related purchase of new rental equipment.

Of the Group’s rental revenue, $8,061m (2023: $7,264m) is accounted for in accordance with IFRS 16, ‘Leases’, while revenue from other ancillary services ($1,569m (2023: $1,434m)), each of which is billed separately, revenue from the sale of new equipment, merchandise and consumables ($370m (2023: $342m)) and revenue from the sale of used equipment ($859m (2023: $627m)) totalling $2,798m (2023: $2,403m) is accounted for in accordance with IFRS 15, ‘Revenue from Contracts with Customers’.

143 Ashtead Group plc Annual Report & Accounts 2024 FINANCIAL STATEMENTS

2 Accounting policies (continued)

Interest income and expense

Interest income comprises interest receivable on funds invested and net interest on net defined benefit pension plan assets. Interest expense comprises interest payable on borrowings and lease liabilities, amortisation of deferred debt raising costs, the unwind of the discount on the self-insurance and contingent consideration liabilities and the net interest on net defined benefit pension plan liabilities.

Exceptional items

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.

Earnings per share

Earnings per share is calculated based on the profit for the financial year and the weighted average number of ordinary shares in issue during the year. For this purpose the number of ordinary shares in issue excludes shares held by the Company or by the Employee Share Ownership Trust in respect of which dividends have been waived. Diluted earnings per share is calculated using the profit for the financial year and the weighted average diluted number of shares (ignoring any potential issue of ordinary shares which would be anti-dilutive) during the year. Adjusted earnings per share comprises basic earnings per share adjusted to exclude earnings relating to exceptional items and amortisation of intangibles.

Current/non-current distinction

Current assets include assets held primarily for trading purposes, cash and cash equivalents and assets expected to be realised in, or intended for sale or consumption in, the course of the Group’s operating cycle and those assets expected to be realised within one year from the reporting date. All other assets are classified as non-current assets. Current liabilities include liabilities held primarily for trading purposes, liabilities expected to be settled in the course of the Group’s operating cycle and those liabilities due within one year from the reporting date. All other liabilities are classified as non-current liabilities.

Property, plant and equipment

Property, plant and equipment is stated at cost (including transportation costs from the manufacturer to the initial rental location) less accumulated depreciation and any provisions for impairment. In respect of certain assets, cost includes rebuild costs when the rebuild extends the asset’s useful economic life and it is probable that incremental economic benefits will accrue to the Group. Rebuild costs include the cost of transporting the equipment to and from the rebuild supplier. Depreciation is not charged while the asset is not in use during the rebuild period.

Depreciation

Property, plant and equipment is depreciated on a straight-line basis applied to the opening cost to write down each asset to its residual value over its useful economic life. Estimates of useful life and residual value are determined with the objective of allocating most appropriately the cost of property, plant and equipment to our income statement, over the period we anticipate it will be used in our business. Residual values and estimated useful economic lives are reassessed annually, recognising the cyclical nature of the business, by making reference to recent experience of the Group.# The depreciation rates in use are as follows:

• Per annum
  • Freehold property: 2%
  • Rental equipment: 4% to 33%
  • Motor vehicles: 7% to 25%
  • Office and workshop equipment: 20%

Residual values are estimated at 10 to 15% of cost in respect of most types of rental equipment, although the range of residual values used varies between zero and 35%.

Repairs and maintenance

Costs incurred in the repair and maintenance of rental and other equipment are charged to the income statement as incurred.

Intangible assets

Goodwill

Goodwill represents the difference between the fair value of the consideration for an acquisition and the fair value of the net identifiable assets acquired, including any intangible assets other than goodwill. Goodwill is stated at cost less any accumulated impairment losses and is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. The profit or loss on the disposal of a previously acquired business includes the attributable amount of any purchased goodwill relating to that business.

Other intangible assets

Other intangible assets acquired as part of a business combination are capitalised at fair value as at the date of acquisition. Internally generated intangible assets are not capitalised. Amortisation is charged on a straight-line basis over the expected useful life of each asset. Contract-related intangible assets are amortised over the life of the contract.

Amortisation rates for other intangible assets are as follows:

• 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

Impairment of assets

Goodwill is not amortised but is tested annually for impairment as at 30 April each year. Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised in the income statement for the amount by which the asset’s carrying amount exceeds its recoverable amount. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable and independent cash flows for the asset being tested for impairment (cash-generating unit). The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. In assessing value in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In respect of assets other than goodwill, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Impairment losses in respect of goodwill are not reversed.

Taxation

The tax charge for the period comprises both current and deferred tax. Taxation is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case the related tax is also recognised in equity. Current tax is the expected tax payable on the taxable income for the year and any adjustment to tax payable in respect of previous years. The Group’s liability for current tax is calculated using tax rates applicable for the reporting period. Deferred tax is provided using the balance sheet liability method on any temporary differences between the carrying amounts for financial reporting purposes and those for taxation purposes. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arise from the initial recognition of goodwill. Deferred tax is not recognised for temporary differences arising on investments in subsidiaries where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based on tax laws and rates that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority, there is a legally enforceable right to offset tax assets against tax liabilities, and, where they arise in different entities, the Group intends to settle them on a net basis.

Inventories

Inventories, which comprise equipment, fuel, merchandise and spare parts, are valued at the lower of cost and net realisable value. The cost of inventory that is not ordinarily interchangeable is valued at individual cost. The cost of other inventories is determined on a first-in, first-out basis or using a weighted average cost formula, depending on the basis most suited to the type of inventory held.

Financial instruments

Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

Financial asset investments

The Group makes an election on initial recognition whether to designate financial asset investments in equity instruments, other than those held for trading, to be measured at fair value through other comprehensive income. Financial asset investments that do not meet this criteria are measured at fair value through profit or loss. Given the nature of the Group’s limited targeted investments in start-up and early-stage companies, it can be difficult to determine fair value. The directors consider that the most appropriate approach to fair value is to use a valuation technique based on market data, such as a valuation based on a recent investment or funding round.

Trade receivables

Trade receivables do not carry interest and are initially recognised at their transaction value and measured subsequently at amortised cost using the effective interest method as reduced by appropriate loss allowances for estimated irrecoverable amounts. The loss allowances are calculated using the simplified expected credit loss approach, based on prior experience reflecting the level of uncollected receivables over the last year within each business adjusted for factors that are specific to the receivables, the industry in which we operate and the economic environment. Adjustments to the loss allowances are recognised in the income statement. Trade receivables are written off when recoverability is assessed as being remote while subsequent recoveries of amounts previously written off are credited to the income statement.

145Ashtead Group plc Annual Report & Accounts 2024

FINANCIAL STATEMENTS
2 Accounting policies (continued)

Cash and cash equivalents

Cash and cash equivalents comprises cash balances and call deposits with maturity of less than, or equal to, three months.

Financial liabilities and equity

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

Trade payables

Trade payables are not interest bearing and are stated at fair value and subsequently measured at amortised cost using the effective interest rate method.

Borrowings

Interest-bearing bank loans and overdrafts are recorded at the proceeds received. The direct transaction costs related to arranging our senior secured credit facility are recognised separately from the financial liability as a loan commitment asset. Finance charges, including amortisation of direct transaction costs, are charged to the income statement using the effective interest rate method. Borrowings exclude accrued interest which is classified as a current liability and included within trade and other payables in the balance sheet. Tranches of borrowings and overdrafts which mature on a regular basis are classified as current or non-current liabilities based on the maturity of the facility so long as the committed facility exceeds the drawn debt.

Net debt

Net debt consists of total borrowings and lease liabilities less cash and cash equivalents. Non-US dollar denominated balances are retranslated to US dollars at rates of exchange ruling at the balance sheet date.

Senior notes

The Group’s senior notes contain early repayment options, which constitute embedded derivatives in accordance with IFRS 9, Financial Instruments. The accounting for these early repayment options depends on whether they are considered to be closely related to the host contract or not based on IFRS 9. Where they are closely related, the early repayment option is not accounted for separately and the notes are recorded within borrowings, net of direct transaction costs. The interest expense is calculated by applying the effective interest rate method. In circumstances where the early repayment option is not considered closely related to the host contract, the repayment option has to be valued separately. At the date of issue the liability component of the notes is estimated using prevailing market interest rates for similar debt with no repayment option and is recorded within borrowings, net of direct transaction costs.The difference between the proceeds of the note issue and the fair value assigned to the liability component, representing the embedded option to prepay the notes is included within Other financial assets – derivatives. The interest expense on the liability component is calculated by applying the effective interest rate method. The embedded option to prepay is fair valued using an appropriate valuation model and fair value remeasurement gains and losses are included in investment income and interest expense respectively. Where the Group’s senior notes are issued at a premium or a discount, they are initially recognised at their face value plus or minus the premium or discount. The notes are measured subsequently at amortised cost using the effective interest rate method.

Financial guarantees

The Company enters into contracts to guarantee the indebtedness of other companies within the Group. The Company applies IFRS 9 and recognises the financial guarantee contracts initially at fair value and thereafter based on the expected credit losses.

Leases

The Group assesses whether a contract is a lease, or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is measured initially at the present value of future lease payments at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the Group’s lease liability comprise:
− fixed lease payments, less any lease incentives received; and
− variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date.

The lease liability is measured subsequently by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
− the lease term changes, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;
− the lease payments change due to changes in an index or rate, in which case the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used); or
− a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

The right-of-use asset comprises the initial measurement of the corresponding lease liability, lease payments made at or before the commencement date and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the underlying asset with depreciation commencing at the commencement date of the lease.

Variable lease payments that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in the line ‘Other operating costs’ in the income statement.

Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date and are discounted to present value where the effect is material.

Insurance

Insurance costs include insurance premiums which are written off to the income statement over the period to which they relate and an estimate of the discounted liability for uninsured retained risks on unpaid claims incurred up to the balance sheet date. The estimate includes events incurred but not reported at the balance sheet date. This estimate is discounted and included in provisions in the balance sheet on a gross basis with a corresponding insurance receivable amount recognised as an asset where it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Employee benefits

Defined contribution pension plans

Obligations under the Group’s defined contribution plans are recognised as an expense in the income statement as incurred.

Defined benefit pension plans

The Group’s obligation in respect of defined benefit pension plans is calculated by estimating the amount of future benefit that employees have earned in return for their service in prior periods; that benefit is discounted to determine its present value and the fair value of plan assets is deducted. The discount rate used is the yield at the balance sheet date on AA-rated corporate bonds. The calculation is performed by a qualified actuary using the projected unit credit method. Actuarial gains and losses are recognised in full in the period in which they arise through the statement of comprehensive income. Net interest is calculated by applying a discount rate to the net defined benefit pension plan asset or liability. The net interest income or net interest expense is included in investment income or interest expense, respectively. The defined pension surplus or deficit represents the fair value of the plan assets less the present value of the defined benefit obligation. A surplus is recognised in the balance sheet to the extent that the Group has an unconditional right to the surplus, either through a refund or reduction in future contributions. A deficit is recognised in full.

Share-based compensation

The fair value of awards made under share-based compensation plans is measured at grant date and spread over the vesting period through the income statement with a corresponding increase in equity. The fair value of share options and awards is measured using an appropriate valuation model taking into account the terms and conditions of the individual award. The amount recognised as an expense is adjusted to reflect the actual awards vesting except where any change in the awards vesting relates only to market-based criteria not being achieved.

Employee Share Ownership Trust

Shares in the Company acquired by the Employee Share Ownership Trust (‘ESOT’) in the open market for use in connection with employee share plans are presented as a deduction from shareholders’ funds. When the shares vest to satisfy share-based payments, a transfer is made from own shares held through the ESOT to retained earnings.

Own shares held by the Company

The cost of own shares held by the Company is deducted from shareholders’ funds. The proceeds from the reissue of own shares are added to shareholders’ funds with any gains in excess of the average cost of the shares being recognised in the share premium account.

Dividends

Dividends on the Company’s ordinary shares are recognised when they have been authorised and are no longer at the Company’s discretion. Accordingly, interim dividends are recognised when they are paid, and final dividends are recognised when they are approved by shareholders at the Company’s AGM. Dividends are recognised as an appropriation of shareholders’ funds.

147
Ashtead Group plc Annual Report & Accounts 2024

FINANCIAL STATEMENTS

3 Segmental analysis

Segmental analysis by reportable operating segment

The Group operates one class of business: rental of equipment. Operationally, the Group is split into three business units, US, Canada and UK which report separately to, and are managed by, the chief executive and align with the geographies in which they operate. Accordingly, the Group’s reportable operating segments are the US, Canada and UK.

The Group manages debt and taxation centrally, rather than by business unit. Accordingly, segmental results are stated before interest and taxation which are reported as central Group items. This is consistent with the way the chief executive reviews the business. There are no material sales between the business segments.

Segment assets include property, plant and equipment, right-of-use assets, goodwill, intangibles, other non-current assets, net defined benefit pension asset, inventory and receivables. Segment liabilities comprise operating liabilities and exclude taxation balances, corporate borrowings and accrued interest. Capital expenditure represents additions to property, plant and equipment and intangible assets, including goodwill, and includes additions through the acquisition of businesses.# NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

Segmental analysis by geography

The Group’s operations are located in the United States, Canada and the United Kingdom. The following table provides an analysis of the Group’s revenue, segment assets and capital expenditure, including expenditure on acquisitions, by country of domicile. Segment assets by geography include property, plant and equipment, goodwill, intangible assets, right-of-use assets and other non-current assets (excluding financial asset investments), but exclude the net defined benefit pension plan, inventory, receivables, and financial asset investments.

Revenue	Segment assets	Capital expenditure
2024	2023	2024
$m	$m	$m
United States	9,306.7	8,222.4
Canada	664.4	622.1
United Kingdom	887.6	822.8
Total	10,858.7	9,667.3

149

4 Operating costs

	2024		2024	2023		2023
	Before amortisation	Amortisation	Total	Before amortisation	Amortisation	Total
$m	$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
Total	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
Total	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
Total	2,117.7	120.9	2,238.6	1,772.1	117.7	1,889.8
Grand Total	8,083.8	120.9	8,204.7	7,027.6	117.7	7,145.3

Proceeds from the disposal of non-rental property, plant and equipment amounted to $47m (2023: $40m), resulting in a profit on disposal of $22m (2023: $19m) which is included in other external charges.

The costs shown in the above table include:

	2024	2023
$m	$m	$m
Cost of inventories recognised as expense	1,010.8	826.5
Net charge of allowance on trade receivables	83.7	47.3

Staff costs include remuneration of key management personnel, which comprise non-executive and executive directors. Key management personnel remuneration comprised:

	2024	2023
$’000	$’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
Total	10,290	13,284

The Schedule 5 requirements of the Accounting Regulations for directors’ remuneration are included within the Directors’ remuneration report on pages 100 to 127.

150

Remuneration payable to the Company’s auditor, PricewaterhouseCoopers LLP in the year and Deloitte LLP in the prior year, is given below:

	2024	2023
$’000	$’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
Total	3,131	1,918

Fees paid for audit-related assurance services relate to the review of the Group’s half-year interim financial statements. Other assurance services relate to comfort letters provided in connection with the senior notes issued in January 2024.

5 Amortisation

	2024	2023
$m	$m	$m
Amortisation of intangibles	120.9	117.7
Taxation	(30.2)	(29.6)
Net profit	90.7	88.1

6 Net financing costs

	2024	2023
$m	$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

151

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	$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)
Subtotal current tax	291.0	275.0
Deferred tax
– origination and reversal of temporary differences	236.1	261.3
– adjustments to prior year	(16.0)	1.8
Subtotal deferred tax	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
Total	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	$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

152

8 Earnings per share

	2024		2023
	Weighted average no.	Per share	Weighted average no.
$	$	$	$

	2024	2023
Final dividend paid on 12 September 2023 of 85 .0 0¢ (2023: 67.50¢) per 10p ordinary share	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
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

11 Trade and other receivables

	2024	2023
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

The fair values of trade and other receivables are not materially different to the carrying values presented.

a) Trade receivables: credit risk

The Group’s exposure to the credit risk inherent in its trade receivables and the associated risk management techniques that the Group deploys in order to mitigate this risk are discussed in Note 25. The credit periods offered to customers vary according to the credit risk profiles of, and the invoicing conventions established in, the Group’s markets. The contractual terms on invoices issued to customers vary between North America and the UK, in that invoices issued by Sunbelt UK are payable within 30-60 days whereas invoices issued by Sunbelt US and Sunbelt Canada are payable within 30 days. The loss allowance is calculated based on prior experience reflecting the level of uncollected receivables over the last year within each business adjusted for factors that are specific to the receivables, the industry in which we operate and the economic environment. Accordingly, the loss allowance cannot be attributed to specific receivables so the aged analysis of trade receivables, including those past due, is shown gross of the loss allowance. On this basis, the ageing analysis of trade receivables, including those past due, is as follows:

Trade receivables past due by:	Less than 30 days	30–60 days	60–90 days	More than 90 days	Total
Carrying value at 30 April 2024	870.9	396.2	150.6	73.1	178.0
Carrying value at 30 April 2023	787.9	395.1	153.1	51.8	104.1

b) Movement in the loss allowance

	2024	2023
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
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 workshop buildings	Rental equipment	Motor vehicles	Total
Cost or valuation
At 1 May 2022	548.8	13,538.8	403.1	1,066.3
Exchange differences	(3.1)	(48.1)	(1.1)	(3.7)
Acquisitions	25.6	618.6	(2.5)	39.8
Reclassifications	–	(2.0)	2.0	–
Additions	164.5	3,262.1	113.5	232.0
Disposals	(7.5)	(1,543.8)	(12.7)	(108.5)
At 30 April 2023	728.3	15,825.6	502.3	1,225.9
Exchange differences	(2.1)	(22.5)	(0.8)	(1.6)
Acquisitions	2.0	533.4	1.0	35.9
Reclassifications	0.5	2.0	1.9	(4.4)
Additions	268.4	3,624.0	131.2	287.1
Disposals	(11.7)	(2,217.3)	(17.2)	(139.6)
At 30 April 2024	985.4	17,745.2	618.4	1,403.3
Depreciation
At 1 May 2022	194.9	5,724.5	267.7	477.3
Exchange differences	(1.0)	(22.2)	(0.7)	(1.4)
Acquisitions	0.7	207.8	0.5	16.4
Reclassifications	–	(0.3)	0.3	–
Charge for the period	35.4	1,384.0	60.7	120.4
Disposals	(7.1)	(1,117.3)	(9.9)	(89.7)
At 30 April 2023	222.9	6,176.5	318.6	523.0
Exchange differences	(0.7)	(9.1)	(0.6)	(0.6)
Acquisitions	–	92.6	0.4	12.4
Reclassifications	0.2	0.9	0.9	(2.0)
Charge for the period	48.7	1,640.8	75.7	148.4
Disposals	(10.1)	(1,607.3)	(14.3)	(113.5)
At 30 April 2024	261.0	6,294.4	380.7	567.7
Net book value
At 30 April 2024	724.4	11,450.8	237.7	835.6
At 30 April 2023	505.4	9,649.1	183.7	702.9

$27m of rebuild costs were capitalised in the year (2023: $13m).

155 Ashtead Group plc Annual Report & Accounts 2024 FINANCIAL STATEMENTS

14 Right-of-use assets

	Property leases	Other leases	Total
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

Included within depreciation is an impairment charge of $6m (2023: $nil).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

156 Ashtead Group plc Annual Report & Accounts 2024

15 Intangible assets including goodwill

	Other intangible assets	Brand names	Customer lists	Contract related	Goodwill	Total
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	437.3	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

Goodwill acquired in a business combination is allocated at acquisition to the cash-generating units (‘CGUs’) that benefit from that business combination. Goodwill allocated to each of the Group’s CGUs is as follows:

	2024	2023
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

157 Ashtead Group plc Annual Report & Accounts 2024 FINANCIAL STATEMENTS

15 Intangible assets including goodwill (continued)

For the purposes of determining potential goodwill impairment, recoverable amounts are determined from value in use calculations using cash flow projections based on the Group’s financial plans covering a three-year period which were adopted and approved by the Board in April 2024. The key assumptions for these financial plans are those regarding revenue growth, margins and capital expenditure required to replace the rental fleet and support the growth forecast, which management estimates based on past experience, market conditions and expectations for the future development of the market, including consideration of the risks and opportunities related to climate-related matters as detailed within the Group’s TCFD disclosures.The projections consist of the 2024/25 budget, a further two years from the Group’s business plan and a further seven years’ cash flows. The valuation uses an annual growth rate to determine the cash flows beyond the three-year forecast period of 2%, which does not exceed the average long-term growth rates for the relevant markets, a terminal value reflective of market multiples and discount rates of 10% (2023: 10%), 10% (2023: 10%) and 12% (2023: 11%) for the US, Canadian and UK businesses respectively. The discount rates for each country are determined by reference to the Group’s weighted average cost of capital. The impairment review is potentially sensitive to changes in key assumptions used, most notably the discount rate and the annuity growth rates. A sensitivity analysis has been undertaken by changing each of the key assumptions used in isolation for each CGU in the US, Canada and UK. Based on this sensitivity analysis, no reasonably possible change in any of the key assumptions resulted in the recoverable amount for the CGUs identified above to fall below their carrying value.

US

General equipment and related businesses

Revenue for the general equipment business is linked primarily to US non-residential construction spend, which, based on market forecasts, is expected to grow during the business plan period, underpinned by a significant level of large scale, multi-year projects. The general equipment and related businesses have grown more rapidly than both the non-residential construction market and the broader rental market in recent years and this outperformance is expected to continue over the business plan period, although not necessarily to the same degree. EBITDA margins are forecast to improve slightly as inflationary cost pressures ease and the businesses benefit from operational efficiencies and increased scale.

Power and HVAC and Climate Control

Revenue for the Power and HVAC and Climate Control businesses is in part linked to the level of non-residential construction and also general levels of economic activity. These businesses are also expected to benefit from increased rental penetration. EBITDA margins are forecast to improve slightly as the businesses benefit from higher rental penetration, operational efficiencies and increased scale.

Canada

Revenue for Canada is linked primarily to Canadian non-residential construction spend which, based on market forecasts, is expected to grow during the business plan period. The Canadian business has grown over the last three years more quickly than non-residential construction and we expect it to continue to perform ahead of the market over the forecast period, although not necessarily to the same degree as over recent years. EBITDA margins are forecast to increase as the business benefits from the integration of recent acquisitions, operational improvement and increased scale.

UK

Revenue for each of the UK CGUs is linked primarily to UK non-residential construction spend. This market is more challenging than in the US, with structural growth opportunities more difficult to achieve due to a higher level of rental penetration in the market. The market is expected to grow over the business plan period. The Engineered Access business is also reliant on the events market which is also expected to grow over the plan period. EBITDA margins are forecast to improve as the businesses focus on operational improvement and leveraging the platform.

16 Other non-current assets

	2024	2023
	$m	$m
Financial asset investments	57.0	41.3
Insurance receivable	11.9	13.1
Other	120.4	90.8
Total	189.3	145.2

The financial asset investments of $57m (2023: $41m) represent two targeted investments in early development-stage companies, which have been made in the US as part of the Group’s activity to support the transition to a lower-carbon economy.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
158 Ashtead Group plc Annual Report & Accounts 2024

17 Trade and other payables

	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
Total	1,482.9	1,572.3

Trade and other payables include amounts relating to the purchase of fixed assets of $512m (2023: $606m). The fair values of trade and other payables are not materially different from the carrying values presented.

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
Total	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
Total	357.3	291.9
Income from sub-leasing right-of-use assets	(11.9)	(27.9)
Net total	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

159 Ashtead Group plc Annual Report & Accounts 2024
FINANCIAL STATEMENTS

19 Borrowings

	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	–
Total	7,995.1	6,595.1

The senior secured bank debt is secured by way of fixed and floating charges over substantially all the Group’s property, plant and equipment, inventory and trade receivables. The senior notes are guaranteed by Ashtead Group plc and all its principal subsidiary undertakings.

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. At 30 April 2024, the borrowing rate was the applicable interest rate plus 150bp and the weighted average interest rate was 6.853% (2023: 6.414%). 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 availability under the bank facility for covenant purposes 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.

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% notes are due on 15 October 2033 and the $850m 5.800% senior notes are due on 15 April 2034.

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
Total	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’.

21 Deferred tax

	Other assets from temporary differences	Other liabilities from temporary differences	Accelerated tax depreciation	Right-of-use assets	Lease liabilities	Tax losses	Total
$m	$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

The Group now presents deferred tax assets and liabilities arising in respect of lease liabilities and right-of-use assets on a gross basis, in accordance with an amendment made to IAS 12, Income Taxes. There is no impact on the deferred tax liability reported on the balance sheet, as the offset requirements continue to be met.

Other assets from temporary differences includes deferred tax on items such as accrued remuneration and other expenditure and interest deductible in future periods for tax purposes. Other liabilities from temporary differences includes deferred tax on items such as goodwill and other intangible assets and prepayments.

The Group has not recognised a deferred tax asset of $2m (2023: $15m) in the US and $12m (2023: $2m) in the UK in respect of certain losses carried forward where it was not considered probable at the balance sheet date that these losses would be utilised.

At the balance sheet date, there is $126m (2023: $103m) of undistributed earnings in subsidiaries of Ashtead Group plc which, if distributed as dividends may be subject to withholding tax of 5%. No deferred tax liability has been recognised in relation to this potential temporary difference, as the Group does not expect to distribute these profits in the foreseeable future. The remaining distributable reserves are not expected to be subject to withholding taxes and no dividends are expected to be taxable on receipt, in accordance with UK tax legislation.

161Ashtead Group plc Annual Report & Accounts 2024 FINANCIAL STATEMENTS

22 Share capital and reserves

	30 April 2024	30 April 2023	30 April 2024	30 April 2023
Ordinary shares of 10p each:	Number	Number	$m	$m
Issued and fully paid	451,354,833	451,354,833	81.8	81.8

During the year, the Company purchased 1.2m ordinary shares at a total cost of $78m (£62m) under the Group’s share buyback programme, which are held in treasury. At 30 April 2024, 14.1m (April 2023: 12.9m) shares were held by the Company ($819m; April 2023: $741m) and a further 0.9m (April 2023: 1.0m) shares were held by the Company’s Employee Share Ownership Trust ($43m; April 2023: $39m) .

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.

Details of the long-term incentive awards outstanding during the year are as follows:

	2024	2023
	Weighted average fair value at Number grant date	Weighted average fair value at 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

The weighted average share price of those awards exercised during the year was 5,373p (2023: 3,484p). The weighted average remaining contractual life of the share options outstanding at 30 April 2024 was eight months (2023: 14 months).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

162 Ashtead Group plc Annual Report & Accounts 2024

24 Pensions

Defined contribution plans

The Group operates pension plans for the benefit of qualifying employees. The plans for new employees throughout the Group are all defined contribution plans. Pension costs for defined contribution plans were $47m (2023: $40m).

Defined benefit plan

The Group also has a defined benefit plan which was closed to new members in 2001 and closed to future accrual in October 2020. The plan is a funded defined benefit plan with trustee-administered assets held separately from those of the Group. During the year, the corporate trustee was appointed as sole trustee to the plan. The Trustees are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy of the assets and the day-to-day administration of the benefits. The plan is a final salary plan which provides members a guaranteed level of pension payable for life. The level of benefits provided by the plan depends on members’ length of service and their salary at the date of leaving the plan. The plan’s duration is an indicator of the weighted-average time until benefit payments are made. For the plan as a whole, the duration at 30 April 2024 is approximately 15 years. The Group does not expect contributions to be paid to the plan during the 2024/25 financial year.

In March 2024, the Trustees completed a buy-in transaction in relation to the Group’s defined benefit pension with the purchase of a bulk annuity policy covering the whole of the plan membership. As such, the Group now holds an insurance policy that is designed to provide cash flows that exactly match the value and timing of the benefits payable to the members it covers. Consequently, the Group is no longer exposed to investment, interest rate, inflation or life expectancy risk, or future funding requirements. The buy-in was facilitated by the contribution of the plan assets together with an additional contribution made by the Group of £2m ($3m).

The most recent actuarial valuation was carried out as at 30 April 2022 by a qualified independent actuary and showed a funding surplus of £11.1m ($13.9m at April 2024 exchange rate). The actuary was engaged by the Company to perform a valuation in accordance with IAS 19 (revised) as at 30 April 2024.

The principal financial assumptions made by the actuary were as follows:

	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%

Pensioner life expectancy assumed in the 30 April 2024 update is based on the ‘S3PA CMI 2023’ projection model mortality tables adjusted so as to apply a minimum annual rate of improvement of 1.25% a year. Samples of the ages to which pensioners are assumed to live are as follows:

	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

The plan’s assets are invested in the following asset classes:

	Fair value 2024	Fair value 2023
$m	$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)

The amounts recognised in the balance sheet are determined as follows:

	2024	2023
$m	$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

The components of the defined benefit cost recognised in the income statement are as follows:

	2024	2023
$m	$m	$m
Net interest on the net defined benefit plan	0.9	0.6
Net income in the income

164 Ashtead Group plc Annual Report & Accounts 2024

The remeasurements of the defined benefit plan recognised in the statement of comprehensive income are as follows:

	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)

Movements in the present value of defined benefit obligations were as follows:

	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

The key assumptions used in valuing the defined benefit obligation are: discount rate, inflation and mortality. The sensitivity of the results to these assumptions is as follows:

• A decrease in the discount rate of 0.5% would result in a $6m increase in the defined benefit obligation. In the prior year, an increase in the discount rate of 0.5% would result in a $6m decrease in the defined benefit obligation.
• An increase in the inflation rate of 0.5% would result in a $5m (2023: $5m) increase in the defined benefit obligation. This includes the resulting change to other assumptions that are related to inflation such as pensions and salary growth.
• A one-year increase in the pensioner life expectancy at age 65 would result in a $3m (2023: $3m) increase in the defined benefit obligation.

Changes in the assumptions would have an equal effect on both the value of the defined benefit obligation and the insurance policy. The above sensitivity analysis has been determined based on reasonably possible changes to the significant assumptions, while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some assumptions may be correlated. The sensitivity information shown above has been prepared using the same method as adopted when adjusting the results of the latest funding valuation to the balance sheet date. This is the same approach as has been adopted in previous periods.

165 Ashtead Group plc Annual Report & Accounts 2024

FINANCIAL STATEMENTS

25 Financial risk management

Movements in the fair value of plan assets were as follows:

	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

The actual return on plan assets was a loss of $20m (2023: $32m).

The Group’s trading and financing activities expose it to various financial risks that, if left unmanaged, could adversely impact on current or future earnings. Although not necessarily mutually exclusive, these financial risks are categorised separately according to their different generic risk characteristics and include market risk (foreign currency risk and interest rate risk), credit risk and liquidity risk. It is the role of the Group treasury function to manage and monitor the Group’s financial risks and internal and external funding requirements in support of the Group’s corporate objectives. Treasury activities are governed by policies and procedures approved by the Board and monitored by the Finance and Administration Committee. In particular, the Board of directors or, through delegated authority, the Finance and Administration Committee, approves any derivative transactions. Derivative transactions are only undertaken for the purposes of managing interest rate risk and currency risk. The Group does not trade in financial instruments. The Group maintains treasury control systems and procedures to monitor liquidity, currency, credit and financial risks.

Market risk

The Group’s activities expose it primarily to interest rate and currency risk. Interest rate risk is monitored on a continuous basis and managed, where appropriate, through the use of interest rate swaps whereas, the use of forward foreign exchange contracts to manage currency risk is considered on an individual non-trading transaction basis. The Group is not exposed to commodity price risk or equity price risk as defined in IFRS 7.

Interest rate risk

Management of fixed and variable rate debt
The Group has fixed and variable rate debt in issue with 77% of the drawn debt at a fixed rate as at 30 April 2024, excluding lease liabilities. The Group’s accounting policy requires all borrowings to be held at amortised cost. As a result, the carrying value of fixed rate debt is unaffected by changes in credit conditions in the debt markets and there is therefore no exposure to fair value interest rate risk. The Group’s debt that bears interest at a variable rate comprises all outstanding borrowings under the senior secured credit facility. Pricing 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 has 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 Group periodically utilises interest rate swap agreements to manage and mitigate its exposure to changes in interest rates. However, during the year ended and as at 30 April 2024, the Group had no such swap agreements outstanding. The Group also may at times hold cash and cash equivalents which earn interest at a variable rate.

Net variable rate debt sensitivity
At 30 April 2024, based upon the amount of variable rate debt outstanding, the Group’s pre-tax profits would change by approximately $19m for each one percentage point change in interest rates applicable to the variable rate debt and, after tax effects, equity would change by approximately $14m.

Currency risk

Currency risk is predominantly translation risk as there are no significant transactions in the ordinary course of business that take place between foreign entities. The Group’s reporting currency is US dollars. The majority of our assets, liabilities, revenue and costs are denominated in US dollars, but Canadian dollars and sterling make up 25% of our net assets. Fluctuations in the value of Canadian dollars and pound sterling with respect to US dollars may have an impact on our financial condition and results of operations as reported in US dollars. The Group’s financing is arranged such that the majority of its debt and interest expense is in US dollars. At 30 April 2024, 88% of its debt (including lease liabilities) was denominated in US dollars. The Group’s exposure to exchange rate movements on trading transactions is relatively limited. All Group companies invoice revenue in their respective local currency and generally incur expense and purchase assets in their local currency. Consequently, the Group does not routinely hedge either forecast foreign exchange exposures or the impact of exchange rate movements on the translation of overseas profits into dollars. Where the Group does hedge, it maintains appropriate hedging documentation. Foreign exchange risk on significant non-trading transactions is considered on an individual basis.

166 Ashtead Group plc Annual Report & Accounts 2024

25 Financial risk management (continued)

Resultant impacts of reasonably possible changes to foreign exchange rates
Based on the current currency mix of our profits and on current sterling and dollar debt levels, interest and exchange rates at 30 April 2024, a 1% change in the Canadian dollar and pound sterling to US dollar exchange rates would impact pre-tax profit by $0.5m and equity by approximately $18m. At 30 April 2024, the Group had no outstanding foreign exchange contracts.

Credit risk

The Group’s principal financial assets are cash and bank balances and trade and other receivables. The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of loss allowances. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies. The carrying amount of financial assets recorded in the financial statements are net of impairment losses. The gross amount represents the Group’s maximum exposure to credit risk. The Group has a large number of unrelated customers, serving over 900,000 during the financial year. Each business segment manages its own exposure to credit risk according to the economic circumstances and characteristics of the markets they serve. The Group believes that management of credit risk on a devolved basis enables it to assess and manage it more effectively. However, broad principles of credit risk management practice are observed across the Group, such as the use of credit reference agencies and the maintenance of credit control functions.

Liquidity risk

Liquidity risk is the risk that the Group could experience difficulties in meeting its commitments to creditors as financial liabilities fall due for payment. The Group uses both short and long-term cash forecasts to assist in monitoring cash flow requirements ensuring sufficient cash is available to meet operational needs. The Group monitors available facilities against forward requirements on a regular basis.The Group generates significant free cash flow before investment (defined as cash flow from operations less replacement capital expenditure net of proceeds of asset disposals, interest paid and tax paid). This free cash flow before investment is available to the Group to invest in growth capital expenditure, acquisitions, dividend payments and other returns to shareholders or to reduce debt. In addition to the strong free cash flow from normal trading activities, additional liquidity is available through the Group’s ABL facility. At 30 April 2024, availability under the $4.5bn facility was $2,771m ($2,573m at 30 April 2023), which compares with the threshold of $450m, above which the covenant does not apply.

Contractual maturity analysis

Trade receivables, the principal class of non-derivative financial asset held by the Group, are settled gross by customers. The following table presents the Group’s outstanding contractual maturity profile for its non-derivative financial liabilities, excluding trade and other payables which fall due within one year and lease liabilities which are analysed in Note 18. The analysis presented is based on the undiscounted contractual maturities of the Group’s financial liabilities, including any interest that will accrue, except where the Group is entitled and intends to repay a financial liability, or part of a financial liability, before its contractual maturity. The undiscounted cash flows have been calculated using foreign currency exchange rates and interest rates ruling at the balance sheet date.

At 30 April 2024

Undiscounted cash flows – year to 30 April	2025	2026	2027	2028	2029	Thereafter	Total
$m	$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
Total	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

Letters of credit of $93m (2023: $73m) are provided and guaranteed under the ABL facility which expires in August 2026.

At 30 April 2023

Undiscounted cash flows – year to 30 April	2024	2025	2026	2027	2028	Thereafter	Total
$m	$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
Total	–	–	–	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
Total	316.0	316.0	316.0	2,807.9	758.4	3,937.0	8,451.3

Fair value of financial instruments

Financial assets and liabilities are measured in accordance with the fair value hierarchy and assessed as Level 1, 2 or 3 based on the following criteria:

• Level 1: fair value measurement based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: fair value measurements derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3: fair value measurements derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data.

Fair value of derivative financial instruments

At 30 April 2024, the Group had no derivative financial instruments. The embedded prepayment options included within the senior notes are either closely related to the host debt contract or immaterial and hence, are not accounted for separately. These loan notes are carried at amortised cost.

Fair value of non-derivative financial assets and liabilities

The table below provides a comparison, by category of the carrying amounts and the fair values of the Group’s non-derivative financial assets and liabilities.

	At 30 April 2024	At 30 April 2023
	Book value $m	Fair value $m
Long-term borrowings
– first priority senior secured bank debt	Level 1	1,848.0
– 1.500% senior notes	Level 1	550.0
– 4.375% senior notes	Level 1	600.0
– 4.000% senior notes	Level 1	600.0
– 4.250% senior notes	Level 1	600.0
– 2.450% senior notes	Level 1	750.0
– 5.500% senior notes	Level 1	750.0
– 5.550% senior notes	Level 1	750.0
– 5.950% senior notes	Level 1	750.0
– 5.800% senior notes	Level 1	850.0
Total long-term borrowings		8,048.0
Discount on issue of debt		(14.0)
Deferred costs of raising finance		(38.9)
		7,995.1
Other financial instruments
Contingent consideration	Level 3	31.4
Financial asset investments	Level 3	57.0
Cash and cash equivalents	Level 1	20.8

1 The Group’s trade and other receivables, trade and other payables, excluding contingent consideration, and lease liabilities are not shown in the table above. The carrying amounts of trade and other receivables and trade and other payables categories approximate their fair values. Required disclosures relating to lease liabilities are provided in Note 18.

167 Ashtead Group plc Annual Report & Accounts 2024 FINANCIAL STATEMENTS 25 Financial risk management (continued)

Contingent consideration relates to recent acquisitions and is based on the post-acquisition performance of the acquired businesses. The consideration is expected to be paid out over the next five years and is reassessed at each reporting date. Contingent consideration is a Level 3 financial liability. Future anticipated payments to vendors in respect of contingent consideration are initially recorded at fair value which is the present value of the expected cash outflows of the obligations. The obligations are dependent upon the future financial performance of the businesses acquired. The fair value is estimated based on internal financial projections prepared in relation to the acquisition with the contingent consideration discounted to present value using a discount rate in line with the Group’s cost of debt. Details of the movement in the fair value during the year are as follows:

	2024	2023
$m	$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

Financial asset investments are measured at fair value and are Level 3 financial assets. These assets are measured at fair value through other comprehensive income. Their fair values are estimated based on the latest transaction price and any subsequent investment-specific adjustments. Details of the movement in the fair value during the year are as follows:

	2024	2023
$m	$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	$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

b) Analysis of net debt

Net debt consists of total borrowings and lease liabilities less cash and cash equivalents. Borrowings exclude accrued interest. Non-US dollar denominated balances are translated to US dollars at rates of exchange ruling at the balance sheet date.

	1 May 2023	Cash flow	Exchange movement	Debt acquired	New lease liabilities	Other movements	30 April 2024
$m	$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

	1 May 2022	Cash flow	Exchange movement	Debt acquired	New lease liabilities	Other movements	30 April 2023
$m	$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	$m
Cash consideration paid – acquisitions in the period (net of cash acquired)	845.6	1,061.3
– contingent consideration	30.0	21.9
Total	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).# Ashtead 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.

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)	849.7
– 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.

171

Ashtead Group plc Annual Report & Accounts 2024

FINANCIAL STATEMENTS

28 Contingent liabilities

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.

The Company

The Company has guaranteed the borrowings of its subsidiary undertakings under the Group’s senior secured credit and overdraft facilities. At 30 April 2024 the amount borrowed under these facilities was $1,848m (2023: $2,038m).Subsidiary undertakings are also able to obtain letters of credit under these facilities and, at 30 April 2024, letters of credit issued under these arrangements totalled $93m (2023: $73m). In addition, the Company has guaranteed the 1.500%, 4.375%, 4.000%, 4.250%, 2.450%, 5.500%, 5.550%, 5.950% and 5.800% senior notes issued by Ashtead Capital, Inc.. The Company has guaranteed lease commitments of subsidiary undertakings where the minimum lease commitment at 30 April 2024 totalled $30m (2023: $34m) in respect of land and buildings of which $6m is payable by subsidiary undertakings in the year ending 30 April 2025. The Company has guaranteed the performance by subsidiaries of certain other obligations up to $11m (2023: $6m). The fair value of financial guarantees was considered to be immaterial at initial recognition and since the likelihood of default is considered remote, no subsequent expected credit losses have been recognised. The Company has provided a guarantee to the Ashtead Group plc Retirement Benefits Plan (‘the plan’) that ensures the plan is at least 105% funded as calculated in accordance with Section 179 of the Pensions Act 2004. Based on the last actuarial valuation at 30 April 2022 the plan was 108% funded, so no value was attributable to the guarantee.

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.

30 Related party transactions

The Group’s key management comprises the Company’s executive and non-executive directors. Details of their remuneration are given in Note 4 and details of their share interests and share awards are given in the Directors’ remuneration report. In relation to the Group’s defined benefit pension plan, details are included in Note 24.

31 Capital commitments

At 30 April 2024 capital commitments in respect of purchases of rental and other equipment totalled $1.4bn (2023: $1.4bn), all of which had been ordered. There were no other material capital commitments at the year end.

32 Employees

The average number of employees, including directors, during the year was as follows:

	2024	2023
Number	Number	Number
United States	20,064	17,902
Canada	2,173	1,879
United Kingdom	4,405	4,262
	26,642	24,043

173 Ashtead 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	–	–

175 Ashtead 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:

Number	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 £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.

FINANCIAL STATEMENTS

Name Address of registered office Principal activity

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

Republic of Ireland

• Ashtead Financing (Ireland) Unlimited Company 10 Earlsfort Terrace, Dublin 2, D02 T380 Dormant
• 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

FINANCIAL STATEMENTS

In $m	2024	2023	2022	2021	2020	2019	1 2018	1 2017	1 2016	1 2015
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
EBITDA ($m)	Note 26(a)	4,893
Cash inflow from operations before changes in rental equipment ($m)	Note 26(a)	4,541
Cash conversion ratio		93%
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).

GLOSSARY OF TERMS

| Term | Closest equivalent statutory measure | Definition and purpose