Ashtead Group, the equipment rental company that has struggled with accounting errors and mounting debts, said it had had the worst year in its history.
Shares initially plummeted 19 per cent on the news that the group had made a £42.2m pre-tax loss for 2002/03, widening from a £15.5m loss in 2002. "The group has had to confront unprecedented internal difficulties in the USA against a backdrop of the worst trading conditions in at least a decade," Henry Staunton, the chairman of the company, said.
The company discovered an accounting problem in its US division in March that put the group in breach of its banking arrangements.
The stock hit rock bottom, plummeting 68 per cent, and the group has since had to tell its investors that it would not be able to pay a dividend this year. However, Mr Staunton said the group had now drawn a line under its accounting problems and had secured strong financing agreements for the company. Ashtead has so far managed to pay back £21.2m of debt, bringing its borrowings down to £622m.
"The Board regrets that the past year has been a difficult one for all the company's stakeholders but looks forward to making progress," Mr Staunton said. "There are some indications that the worst is over as far as the economic cycle is concerned."
Ashtead is hoping to capitalise on the Government's £7bn road-building plans that will create demand for equipment rentals. Mr Staunton said the group was well positioned to recoup lost ground when demand in the US picks up. But this was not enough to convince investors. Nick Walker, an analyst at Evolution Beeson Gregory, said: "The outlook for [Ashtead] remains poor.... The group's markets remain depressed."