ashtead 
2006
wwwashteadgroupcom
ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom ashtead group plc king’s court 4151 kingston road leatherhead surrey kt22 7ap tel 44 0 1372 362300
ashtead group plc annual report and accounts for the year ended 30 april 2006 a snapshot 
of the business
renting specialised electronic 
equipment to the offshore oil and 
gas sectors and the environmental 
monitoring and testing industry 
from eleven locations in the uk  
the us canada and singapore
the uk’s third largest equipment 
rental company with 193 locations 
across britain operating in a mature 
stable market 
the fourth largest equipment rental 
business in the fragmented us 
market sunbelt continues to 
increase its market share rapidly 
sunbelt has 209 locations operating 
in 27 states 
a market leader in equipment 
rental serving the us and uk 
construction industrial and 
homeowner markets £638m £1111m
£675m 178p
£638m £1111m
£675m 178p
£638m £1112m
£675m 178p
£638m £1111m
£675m 178p
122p
000
7975
15950
23925
31900
39875
47850
55825
63800
04 £5003m
05 £5237m
06 £6380m
0000000
13887500
27775000
41662499
55549999
69437499
83324999
97212499
111099998
04 £442m
05 £671m
06 £1111m
00000
84375
168750
253125
337500
421875
506250
590625
675000
04 £76m
05 £224m
06 £675m
0000000
2225000
4450000
6675000
8900000
11125000
13349999
15574999
17799999
04 24p
05 67p
06 178p
10800
7925
5050
2175
0700
3575
6450
9325
12200
04 108p
05 26p
06 122p
01	 financial 	 highlights
02	 chairman’s 	 report
04	 chief 	 executive’s	 review
08	 group 	 in	 review
16	 board 	 of	 directors
18	 directors’ 	 report
20	 corporate 	 governance	 report
24	 directors’ 	 remuneration	 report
33	 business 	 and	 financial	 review
45	 independent 	 auditors’	 report
47	 consolidated 	 income	 statement
48	 	consolidated	 statement	 of	 recognised	 	 income	 and	 expense
48	 	consolidated	 movements	 in	 	 equity	 shareholders’	 funds
49	 consolidated 	 balance	 sheet
50	 consolidated 	 cash	 flow	 statement
51	 notes 	 to	 the	 consolidated	 financial	 statements
89	 ten 	 year	 history
90	 senior 	 management	 and	 advisers
91	 where 	 we	 are
96	 future 	 dates
revenue 
£6380m up	 218	 2005	 –	 £5237m
operating profit 
£1111m up	 655
2005	 –	 £671m
pretax profit 
£675m up	 3	 times
2005	 –	 £224m
cash tax earnings per share 
178p up	 165
2005	 –	 67p
earnings per share 
122p up	 369
2005	 –	 26p
financial highlights
group	 full	 year	 underlying	 profit	 before	 taxation	 of	 £675m	 2005	 £224m	 group	 full	 year	 profit	 before	 taxation	 of	 £817m	 2005	 profit	 of	 £322m
sunbelt’s	 full	 year	 operating	 profit	 before	 exceptionals	 rises	 627	 to	 1755m	 2005	 1079m
aplant’s	 full	 year	 operating	 profit	 rises	 220	 to	 £139m	 2005	 £113m
final	 dividend	 of	 10p	 per	 share	 proposed	 making	 15p	 2005	 nil	 for	 the	 full	 year
us	 market	 demand	 expected	 to	 remain	 strong
pension	 fund	 is	 now	 fully	 funded
underlying	 profit	 before	 taxation	 and	 earnings	 per	 share	 are	 stated	 before	 exceptional	 items	 and	 fair	 value	 remeasurements	 related	 to	 embedded	 derivatives	 in	 longterm	 debt
figures	 for	 2004	 are	 in	 accordance	 with	 uk	 gaap	 and	 are	 before	 exceptional	 items	 figures	 for	 2005	 and	 2006	 are	 in	 accordance	 with	 ifrs	 and	 are	 before	 fair	 value	 remeasurements	 of	 embedded	 derivatives	 in	 long	 term	 debt		 and	 in	 2006	 before	 exceptional	 items
01	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom chairman’s 
report 
the year saw the group move  
forward strongly…with underlying  
pretax profits of £675m just over  
triple last year’s £224m
the	 year	 saw	 the	 group	 move	 forward	 strongly	 particularly	 in	 the	 united	 states	 with	 underlying	 pretax	 profits	 of	 £675m	 just	 over	 triple	 last	 year’s	 £224m	 we	 also	 invested	 heavily	 to	 ensure	 that	 our	 fleet	 age	 remained	 competitive	 spending	 £2202m	 in	 the	 year	 almost	 double	 our	 depreciation	 charge	 £645m	 was	 for	 growth	 with	 the	 balance	 representing	 replacement	 or	 maintenance	 expenditure	 we	 also	 spent	 100m	 on	 acquisitions	 in	 the	 us	 with	 the	 support	 of	 shareholders	 in	 last	 summer’s	 equity	 placing	 we	 also	 further	 strengthened	 the	 balance	 sheet	 and	 provided	 an	 appropriate	 platform	 from	 which	 to	 execute	 our	 growth	 plans
cliff	 miller	 and	 the	 sunbelt	 team	 took	 advantage	 of	 the	 strong	 market	 conditions	 in	 the	 us	 to	 deliver	 an	 impressive	 24	 revenue	 growth	 to	 8187m	 2005	 6611m	 and	 operating	 profits	 up	 63	 to	 1755m	 2005	 1079m	 whilst	 19	 of	 the	 revenue	 growth	 was	 same	 store	 	 we	 also	 welcomed	 to	 the	 group	 the	 staff	 of	 16	 new	 profit	 centres	 acquired	 during	 the	 year	 in	 the	 florida	 southern	 california	 las	 vegas	 indianapolis	 and	 tennessee	 markets	 as	 well	 as	 sunbelt’s	 six	 new	 openings	 the	 acquisitions	 delivered	 an	 excellent	 first	 year	 return
the	 board	 was	 also	 pleased	 to	 note	 the	 success	 of	 the	 new	 national	 sales	 force	 structure	 in	 aplant	 which	 drove	 a	 rise	 both	 in	 its	 profitability	 and	 rate	 of	 return	 we	 look	 for	 these	 trends	 to	 continue	 in	 the	 coming	 year	 ashtead	 technology	 also	 delivered	 solid	 growth	 in	 revenues	 and	 profit	 and	 continues	 to	 earn	 the	 highest	 returns	 in	 the	 group	 at	 aplant	 in	 particular	 we	 face	 very	 different	 market	 conditions	 to	 those	 which	 prevail	 in	 the	 us	 and	 its	 staff	 and	 management	 are	 to	 be	 congratulated	 on	 the	 progress	 made	 in	 the	 past	 year
these	 strong	 results	 and	 the	 strengthening	 of	 the	 balance	 sheet	 last	 summer	 enabled	 the	 board	 to	 announce	 the	 resumption	 of	 dividend	 payments	 last	 december	 accordingly	 an	 interim	 dividend	 of	 05p	 	 per	 share	 was	 paid	 in	 february	 and	 the	 board	 is	 recommending	 a	 	 final	 dividend	 of	 10p	 per	 share	 if	 approved	 at	 the	 forthcoming	 annual	 general	 meeting	 this	 will	 be	 paid	 on	 28	 september	 2006	 to	 shareholders	 	 on	 the	 register	 on	 28	 july	 2006
at	 board	 level	 we	 saw	 no	 changes	 in	 the	 past	 year	 however	 as	 we	 announced	 with	 the	 release	 of	 the	 preliminary	 results	 on	 28	 june	 2006	 02	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 international	 equipment	 rental george	 burnett	 will	 be	 retiring	 from	 his	 role	 as	 chief	 executive	 at	 the	 end	 of	 2006	 george	 cofounded	 ashtead	 in	 1984	 when	 he	 and	 a	 fellow	 investor	 purchased	 what	 was	 then	 a	 five	 branch	 business	 trading	 in	 	 the	 southeast	 of	 england	 with	 revenues	 of	 £1m	 george	 has	 been	 instrumental	 in	 all	 the	 key	 steps	 undertaken	 by	 the	 group	 since	 that	 time	 since	 george	 assumed	 the	 role	 of	 group	 chief	 executive	 in	 february	 2000	 he	 has	 successfully	 led	 the	 group	 through	 the	 us	 economic	 downturn	 of	 20012	 and	 the	 turbulent	 times	 which	 followed	 and	 has	 overseen	 the	 recovery	 with	 profits	 now	 at	 record	 levels	 george	 well	 deserves	 to	 enjoy	 his	 forthcoming	 retirement	 and	 on	 behalf	 of	 my	 fellow	 directors	 the	 company’s	 shareholders	 and	 its	 employees	 	 i	 would	 like	 to	 thank	 george	 for	 his	 leadership	 in	 developing	 the	 group	 into	 one	 of	 the	 largest	 equipment	 rental	 businesses	 in	 the	 world	 and	 to	 record	 our	 best	 wishes	 for	 the	 future
at	 the	 same	 time	 i	 would	 like	 to	 introduce	 our	 new	 chief	 executive	 	 geoff	 drabble	 and	 to	 welcome	 him	 to	 his	 new	 role	 in	 the	 company	 	 geoff	 joined	 the	 board	 in	 2005	 following	 our	 search	 for	 a	 nonexecutive	 director	 with	 substantial	 experience	 of	 running	 businesses	 in	 the	 us	 	 he	 is	 currently	 an	 executive	 director	 of	 the	 laird	 group	 where	 he	 is	 responsible	 for	 the	 building	 products	 division	 geoff	 has	 extensive	 experience	 of	 managing	 businesses	 with	 operations	 in	 both	 the	 us	 	 and	 the	 uk	 from	 both	 his	 time	 with	 laird	 and	 previously	 with	 black	 	 decker	 we	 are	 certain	 that	 in	 his	 new	 role	 geoff	 will	 bring	 both	 an	 understanding	 and	 continuity	 of	 our	 strategy	 whilst	 also	 providing	 renewed	 focus	 on	 all	 aspects	 of	 the	 group’s	 operations	 geoff	 emerged	 as	 the	 nomination	 committee’s	 preferred	 candidate	 after	 an	 extensive	 external	 and	 internal	 search	 and	 we	 are	 delighted	 he	 has	 agreed	 to	 	 join	 ashtead	 as	 its	 next	 chief	 executive	 geoff	 will	 be	 available	 to	 start	 	 full	 time	 in	 his	 new	 role	 from	 early	 october	 and	 will	 benefit	 from	 a	 handover	 period	 working	 alongside	 george	 until	 his	 retirement	 at	 the	 	 end	 of	 the	 year
amongst	 the	 other	 board	 members	 philip	 lovegrove	 remained	 on	 the	 board	 longer	 than	 i	 had	 anticipated	 this	 time	 last	 year	 like	 george	 he	 has	 served	 on	 the	 company’s	 board	 since	 1984	 and	 for	 a	 long	 time	 was	 the	 sole	 nonexecutive	 as	 a	 member	 of	 the	 ftse	 250	 the	 combined	 code	 requires	 that	 the	 company	 has	 at	 least	 an	 equal	 number	 of	 independent	 nonexecutive	 directors	 as	 there	 are	 executive	 directors	 not	 counting	 myself	 your	 board	 endorses	 these	 principles	 and	 accordingly	 	 is	 initiating	 a	 search	 for	 a	 new	 independent	 nonexecutive	 to	 replace	 philip	 who	 cannot	 be	 classed	 as	 independent	 under	 the	 rules	 of	 the	 code	 because	 of	 the	 length	 of	 his	 service	 as	 a	 director	 before	 the	 end	 	 of	 the	 current	 financial	 year	 i	 therefore	 wish	 to	 record	 the	 company’s	 thanks	 to	 philip	 for	 his	 expertise	 and	 advice	 over	 many	 years
in	 closing	 i	 should	 like	 to	 thank	 all	 the	 group’s	 employees	 for	 their	 continuing	 efforts	 on	 behalf	 of	 the	 company	 in	 the	 past	 demanding	 	 but	 successful	 year
cob stenham
chairman
27	 june	 2006
£638m
group	 revenue	 up	 from	 2005	 by	 218	 from	 £5237	 million
03	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom chief executive’s 
review
the group achieved a record performance 
in 2006 and the board looks forward to 
reporting further significant progress  
in the coming year
overview
the	 group	 achieved	 a	 record	 performance	 in	 the	 year	 to	 april	 2006	 revenue	 increased	 by	 218	 to	 £6380m	 underlying	 profit	 for	 the	 year	 before	 tax	 of	 £675m	 was	 three	 times	 last	 year’s	 £224m	 while	 the	 pretax	 profit	 for	 the	 year	 was	 £817m	 underlying	 basic	 earnings	 per	 share	 were	 122p	 2005	 26p	 while	 basic	 earnings	 per	 share	 were	 147p	 2005	 56p	 on	 a	 cash	 tax	 basis	 earnings	 per	 share	 were	 178p	 2005	 67p	 the	 group	 now	 reports	 its	 results	 under	 international	 financial	 reporting	 standards	 ifrs	 and	 comparatives	 have	 been	 restated	 accordingly	 see	 note	 28	 to	 the	 financial	 statements
review of trading for the year to 30 april
	 	 	 underlying	 	 revenue	 ebitda	 profit
	 2006	 2005	 2006	 2005	 2006	 2005
sunbelt	 in	 m	 8187	 6611	 3079	 2240	 1755	 1079
sunbelt	 in	 £m	 4612	 3550	 1734	 1203	 989	 579
aplant	 1607	 1563	 489	 482	 139	 113
ashtead	 technology	 161	 124	 80	 65	 40	 34
group	 central	 costs	 –	 –	 56	 55	 57	 55
	 6380	 5237	 2247	 1695	 1111	 671
interest	 	 	 	 	 	 436	 447
underlying	 profit	 before	 tax	 	 	 	 	 675	 224
	 in	 2006	 before	 exceptional	 items
reflecting	 the	 group’s	 operational	 gearing	 the	 218	 revenue	 increase	 resulted	 in	 a	 325	 increase	 in	 ebitda	 before	 exceptional	 items	 to	 £2247m	 and	 an	 increase	 of	 655	 in	 operating	 profit	 before	 exceptional	 items	 to	 £1111m	 measured	 at	 constant	 exchange	 rates	 to	 eliminate	 currency	 translation	 effects	 revenue	 grew	 178	 ebitda	 before	 04	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 international	 equipment	 rental exceptional	 items	 grew	 280	 operating	 profit	 before	 exceptional	 items	 grew	 586	 and	 underlying	 profit	 before	 tax	 was	 still	 almost	 three	 times	 that	 of	 last	 year	 these	 improvements	 were	 reflected	 in	 the	 group’s	 margins	 ebitda	 margins	 grew	 from	 324	 to	 352	 and	 operating	 margins	 before	 exceptional	 items	 rose	 from	 128	 to	 174
sunbelt
in	 the	 year	 to	 30	 april	 2006	 revenue	 grew	 238	 to	 8187m	 this	 was	 achieved	 through	 increased	 investment	 in	 the	 rental	 fleet	 which	 was	 	 on	 average	 11	 larger	 than	 a	 year	 ago	 and	 by	 significant	 increases	 in	 rental	 rates	 which	 were	 increased	 approximately	 12	 in	 strong	 market	 conditions	 average	 utilisation	 remained	 high	 at	 70	 2005	 69	 revenue	 growth	 was	 broadly	 based	 with	 all	 regions	 and	 all	 major	 product	 areas	 trading	 ahead	 of	 last	 year	 last	 summer’s	 hurricanes	 are	 estimated	 to	 have	 added	 around	 2	 to	 20056’s	 revenues	 in	 a	 strong	 trading	 environment	 where	 us	 nonresidential	 construction	 rose	 102	 in	 the	 12	 months	 to	 end	 april	 according	 to	 figures	 published	 by	 the	 	 us	 department	 of	 commerce	 sunbelt	 continued	 to	 take	 market	 share	 revenues	 from	 house	 builders	 where	 the	 short	 term	 outlook	 is	 less	 certain	 accounted	 for	 just	 6	 of	 sunbelt’s	 revenues	 the	 shift	 from	 ownership	 to	 rental	 in	 the	 us	 continued	 with	 the	 rental	 market	 again	 growing	 faster	 than	 its	 key	 customer	 base	 nonresidential	 construction	 in	 calendar	 2005
for	 the	 full	 year	 sunbelt’s	 operating	 profit	 before	 exceptional	 items	 was	 up	 627	 to	 1755m	 representing	 a	 margin	 of	 214	 2005	 163
sunbelt	 continued	 to	 invest	 to	 reduce	 the	 age	 of	 its	 rental	 fleet	 and	 	 to	 invest	 for	 growth	 spending	 2579m	 in	 the	 year	 including	 the	 funding	 of	 six	 new	 greenfield	 stores	 a	 further	 16	 new	 general	 equipment	 rental	 stores	 were	 acquired	 during	 the	 year	 for	 a	 consideration	 including	 costs	 of	 approximately	 100m	 the	 acquired	 stores	 were	 all	 immediately	 transferred	 onto	 sunbelt’s	 point	 of	 sale	 system	 and	 staff	 incentive	 programmes	 and	 began	 trading	 as	 sunbelt	 stores	 from	 their	 acquisition	 closing	 date	 the	 financial	 performance	 since	 acquisition	 has	 been	 strongly	 positive	 in	 august	 sunbelt	 also	 disposed	 of	 12	 specialist	 scaffold	 stores	 on	 the	 west	 coast	 and	 in	 texas	 for	 243m	 generating	 	 an	 exceptional	 disposal	 profit	 of	 51m	 £29m	 the	 new	 stores	 continue	 sunbelt’s	 strategy	 of	 clustering	 stores	 in	 major	 metropolitan	 markets	 sunbelt	 also	 continues	 to	 emphasise	 organic	 growth	 with	 an	 increase	 	 in	 same	 store	 revenues	 for	 the	 year	 of	 193
in	 the	 fourth	 quarter	 sunbelt	 delivered	 revenue	 growth	 of	 271	 and	 growth	 in	 operating	 profit	 before	 exceptional	 items	 of	 632
aplant
aplant’s	 revenue	 for	 the	 year	 was	 £1607m	 compared	 to	 £1563m	 last	 year	 the	 successful	 restructuring	 of	 aplant’s	 sales	 force	 undertaken	 in	 the	 first	 half	 contributed	 to	 a	 significantly	 improved	 performance	 in	 the	 second	 half	 of	 the	 year	 and	 a	 particularly	 strong	 fourth	 quarter	 in	 which	 revenues	 increased	 by	 8	 to	 £418m	 and	 operating	 profit	 by	 471	 to	 £39m	 rental	 rates	 average	 fleet	 size	 and	 utilisation	 for	 the	 year	 were	 all	 at	 similar	 levels	 to	 those	 of	 last	 year	 revenues	 from	 aplant’s	 largest	 150	 customers	 continued	 to	 grow	 and	 represented	 39	 of	 the	 year’s	 total
operating	 expenses	 were	 again	 carefully	 controlled	 increasing	 by	 just	 34	 before	 depreciation	 as	 a	 result	 aplant’s	 operating	 profit	 for	 the	 year	 grew	 220	 to	 £139m	 2005	 £113m	 representing	 a	 margin	 of	 86	 2005	 73	 the	 investment	 aplant	 makes	 in	 developing	 its	 staff	 which	 is	 at	 the	 heart	 of	 its	 improving	 performance	 was	 recognised	 in	 may	 when	 hire	 association	 europe	 ‘hae’	 announced	 that	 aplant	 had	 won	 amongst	 competition	 from	 rental	 companies	 across	 europe	 hae’s	 ‘excellence	 	 in	 training’	 award
£638m
81 9m
£1 61 m
£1 6m
group	 revenue	 up	 218
sunbelt	 revenue	 up	 238
aplant	 revenue	 up	 28
ashtead technology	 revenue	 up	 295
05	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom chief executive’s 
review continued
over £200m invested in the rental fleet  
with £65m being for growth
ashtead technology
ashtead	 technology’s	 performance	 continued	 recent	 trends	 with	 revenue	 for	 the	 year	 up	 295	 to	 £161m	 2005	 £124m	 and	 operating	 profit	 up	 199	 to	 £40m	 2005	 £34m	 this	 reflects	 increased	 investment	 by	 the	 oil	 majors	 which	 is	 delivering	 higher	 offshore	 exploration	 and	 construction	 activity	 as	 well	 as	 continued	 growth	 in	 ashtead	 technology’s	 onshore	 environmental	 business	 investment	 	 for	 future	 growth	 included	 a	 significantly	 enlarged	 onshore	 sales	 force	 and	 a	 new	 profit	 centre	 in	 chicago	 opened	 last	 november
exceptional items and fair value remeasurements of  
embedded derivatives
in	 addition	 to	 the	 trading	 results	 discussed	 above	 operating	 profit	 as	 reported	 in	 the	 consolidated	 income	 statement	 includes	 £134m	 of	 	 net	 exceptional	 profits	 these	 comprise	 the	 £113m	 received	 when	 sunbelt	 settled	 its	 long	 standing	 litigation	 with	 head	 	 engquist	 in	 november	 2005	 a	 £29m	 profit	 on	 disposal	 of	 sunbelt’s	 12	 scaffold	 stores	 less	 £08m	 of	 post	 acquisition	 integration	 costs	 included	 	 within	 finance	 costs	 is	 the	 £48m	 net	 cost	 of	 last	 summer’s	 capital	 reorganisation	 mainly	 relating	 to	 the	 12	 premium	 payable	 on	 the	 £42m	 of	 sterling	 senior	 secured	 notes	 redeemed	 early	 out	 of	 the	 proceeds	 of	 the	 equity	 placing	 and	 the	 £56m	 2005	 £98m	 noncash	 fair	 value	 remeasurements	 of	 embedded	 derivatives	 in	 long	 term	 debt
taxation
overall	 for	 the	 year	 the	 effective	 accounting	 tax	 rate	 on	 the	 underlying	 profit	 was	 31	 whilst	 the	 cash	 tax	 rate	 on	 the	 same	 basis	 remained	 minimal	 the	 recent	 increases	 in	 sunbelt’s	 profitability	 together	 with	 the	 head	 	 engquist	 litigation	 receipt	 means	 however	 that	 sunbelt’s	 us	 federal	 tax	 losses	 have	 now	 been	 fully	 utilised	 and	 that	 consequently	 	 the	 group’s	 cash	 tax	 rate	 will	 rise	 into	 double	 digits	 next	 year
pensions
funding	 of	 the	 uk	 pension	 plan	 deficit	 as	 announced	 with	 the	 third	 quarter	 results	 was	 completed	 at	 the	 end	 of	 march	 with	 the	 payment	 of	 £171m	 the	 amount	 recommended	 by	 the	 actuary	 into	 the	 fund	 as	 a	 result	 the	 group’s	 pension	 obligations	 are	 now	 fully	 funded	 funding	 of	 the	 deficit	 had	 no	 significant	 effect	 on	 the	 group’s	 income	 statement
capital expenditure and net debt
capital	 expenditure	 in	 the	 year	 was	 £2202m	 2005	 £1384m	 of	 which	 £2018m	 was	 invested	 in	 the	 rental	 fleet	 £645m	 of	 the	 fleet	 expenditure	 was	 for	 growth	 principally	 in	 sunbelt	 with	 the	 remainder	 spent	 to	 replace	 existing	 equipment	 disposal	 proceeds	 were	 £508m	 2005	 £376m	 generating	 a	 profit	 on	 disposal	 of	 £91m	 2005	 £71m	 as	 indicated	 in	 march	 capital	 expenditure	 for	 the	 year	 to	 30	 april	 2007	 is	 currently	 expected	 to	 total	 approximately	 £250m
net	 debt	 at	 30	 april	 2006	 was	 £4936m	 an	 increase	 of	 £113m	 since	 	 30	 april	 2005	 at	 constant	 exchange	 rates	 the	 increase	 over	 the	 year	 was	 £25m	 net	 debt	 to	 ebitda	 leverage	 reduced	 from	 285x	 a	 year	 ago	 to	 22x	 at	 30	 april	 2006	 availability	 under	 the	 asset	 based	 loan	 facility	 was	 283m	 at	 30	 april	 2006	 157m	 at	 30	 april	 2005
dividends
the	 directors	 intend	 proposing	 to	 shareholders	 at	 the	 annual	 general	 meeting	 that	 a	 final	 dividend	 of	 10p	 per	 share	 be	 paid	 making	 a	 total	 	 for	 the	 year	 of	 15p	 per	 share	 2005	 nil	 under	 ifrs	 the	 financial	 statements	 now	 reflect	 just	 dividends	 paid	 in	 the	 year	 and	 therefore	 show	 only	 the	 £20m	 cost	 of	 the	 interim	 dividend	 paid	 in	 february	 	 the	 final	 dividend	 if	 approved	 by	 shareholders	 will	 be	 paid	 on	 	 28	 september	 2006	 to	 shareholders	 on	 the	 register	 on	 28	 july	 2006
06	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 international	 equipment	 rental current trading and outlook
all	 three	 of	 our	 businesses	 performed	 well	 in	 the	 past	 year	 each	 continues	 to	 benefit	 from	 good	 market	 conditions	 and	 has	 made	 an	 excellent	 start	 to	 the	 new	 financial	 year
in	 the	 us	 where	 the	 shift	 from	 ownership	 to	 rental	 continues	 we	 are	 encouraged	 by	 the	 strength	 of	 the	 nonresidential	 construction	 market	 which	 rose	 10	 in	 the	 12	 months	 to	 april	 2006	 and	 is	 forecast	 to	 grow	 strongly	 for	 at	 least	 the	 next	 two	 years	 and	 by	 sunbelt’s	 continuing	 gains	 in	 market	 share	 revenues	 from	 house	 builders	 where	 the	 short	 term	 outlook	 is	 less	 certain	 accounted	 for	 just	 6	 of	 sunbelt’s	 revenues	 last	 year	 the	 restructuring	 of	 aplant’s	 sales	 force	 at	 the	 start	 of	 last	 year	 delivered	 benefits	 on	 a	 rising	 scale	 as	 the	 year	 progressed	 a	 trend	 which	 has	 continued	 into	 our	 new	 financial	 year
with	 this	 strong	 broadlybased	 momentum	 the	 board	 looks	 forward	 	 to	 reporting	 further	 significant	 progress	 in	 the	 coming	 year
in	 closing	 i	 should	 like	 to	 express	 my	 thanks	 to	 everyone	 who	 has	 contributed	 to	 the	 growth	 of	 ashtead	 group	 over	 the	 last	 22	 years	 shareholders	 suppliers	 customers	 without	 whom	 we	 would	 not	 be	 here	 but	 most	 of	 all	 to	 our	 staff	 past	 and	 present	 we	 are	 a	 service	 business	 in	 a	 ‘hardwork’	 industry	 and	 it	 is	 the	 enthusiasm	 drive	 and	 commitment	 of	 the	 aplant	 sunbelt	 and	 ashtead	 technology	 teams	 backed	 up	 by	 the	 equally	 capable	 and	 committed	 ashtead	 group	 support	 staff	 that	 makes	 the	 difference	 my	 appreciation	 and	 best	 wishes	 go	 to	 all	 of	 them
i	 am	 delighted	 that	 geoff	 drabble	 will	 be	 joining	 the	 group	 in	 an	 executive	 capacity	 in	 october	 and	 very	 much	 look	 forward	 to	 working	 with	 him	 in	 effecting	 a	 seamless	 transition	 he	 will	 take	 over	 the	 best	 management	 team	 in	 the	 industry	 and	 will	 bring	 both	 a	 sense	 of	 continuity	 and	 fresh	 new	 ideas	 to	 the	 next	 phase	 of	 ashtead’s	 development	 i	 wish	 him	 and	 the	 entire	 board	 every	 success	 in	 taking	 the	 group	 forward	 to	 what	 i	 am	 sure	 will	 be	 a	 prosperous	 and	 exciting	 future
 
george burnett 
chief	 executive
27	 june	 2006
07	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom investing
for growth
regular	 reinvestment	 in	 our	 rental	 fleet	 sits	 at	 the	 heart	 of	 ashtead’s	 business	 philosophy	 as	 does	 investing	 for	 growth	 when	 market	 conditions	 allow
in	 the	 us	 sunbelt	 is	 growing	 as	 new	 sites	 are	 established	 	 and	 smaller	 businesses	 are	 acquired	 20056	 has	 seen	 2579m	 invested	 in	 sunbelt’s	 fleet	 and	 six	 new	 greenfield	 stores	 opened	 the	 year	 also	 saw	 the	 acquisition	 of	 a	 further	 16	 new	 general	 equipment	 rental	 stores	 representing	 an	 investment	 of	 100m
aplant	 is	 targeting	 a	 more	 mature	 market	 in	 the	 uk	 and	 the	 challenge	 here	 is	 to	 strengthen	 and	 consolidate	 the	 brand	 	 aplant	 is	 well	 established	 in	 the	 market	 and	 within	 the	 industry	 its	 reputation	 continues	 to	 improve	 internal	 restructuring	 has	 helped	 drive	 22	 profit	 growth	 in	 20056	 and	 positioned	 it	 for	 ongoing	 growth
ashtead	 technology	 maintains	 a	 substantial	 position	 within	 its	 specialist	 market	 the	 significant	 rise	 in	 its	 20056	 operating	 profit	 reflects	 both	 the	 increase	 in	 offshore	 activity	 around	 the	 world	 and	 growth	 in	 its	 environmental	 business	 demonstrating	 its	 ability	 to	 take	 advantage	 of	 market	 strengths
aplant’s	 accommodation	 business	 offers	 a	 wide	 range	 of	 accommodation	 units
08	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 international	 equipment	 rental maintaining
our rental fleet 
the	 quality	 of	 the	 operational	 fleet	 is	 the	 key	 to	 successful	 rental	 operations	 in	 all	 three	 divisions	 and	 in	 all	 markets	 ashtead	 is	 committed	 to	 offering	 the	 customer	 high	 	 standards	 of	 equipment	 ashtead’s	 strong	 growth	 over	 the	 last	 two	 years	 taken	 in	 tandem	 with	 the	 company’s	 financial	 restructuring	 allows	 	 for	 a	 significant	 level	 of	 discretion	 in	 fleet	 investment	 decisions
the	 volume	 and	 pattern	 of	 replacement	 within	 the	 fleet	 can	 be	 used	 at	 the	 directors’	 discretion	 to	 manage	 the	 group’s	 free	 cash	 flow	 with	 record	 results	 this	 year	 the	 level	 of	 replacement	 investment	 has	 been	 high	 ensuring	 we	 are	 able	 to	 offer	 our	 customers	 a	 highly	 competitive	 standard	 and	 age	 of	 equipment	 also	 by	 reducing	 fleet	 age	 significantly	 this	 year	 the	 company	 has	 the	 option	 to	 be	 flexible	 in	 the	 future	 fleet	 age	 at	 30	 april	 2006	 was	 37	 months	 for	 the	 group	 38	 months	 for	 sunbelt	 and	 36	 months	 for	 aplant	 these	 figures	 compare	 to	 the	 average	 depreciable	 life	 of	 the	 equipment	 in	 our	 fleet	 of	 96	 months	 indicating	 the	 flexibility	 available	 to	 us
sunbelt	 rentals	 provides	 forklifts	 for	 all	 types	 of	 construction	 and	 industrial	 lifting	 applications
09	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom growth 
opportunities
sunbelt	 continues	 to	 open	 greenfield	 stores	 but	 during	 the	 	 year	 returned	 to	 acquisitions	 to	 consolidate	 and	 expand	 its	 clusters	 in	 key	 metropolitan	 areas	 stores	 acquired	 from	 hss	 rentx	 consolidated	 the	 miami	 cluster	 and	 the	 northridge	 	 and	 brookstone	 acquisitions	 increased	 sunbelt’s	 presence	 	 in	 the	 attractive	 southern	 california	 market	 they	 have	 	 been	 integrated	 within	 sunbelt’s	 operations	 exceeding	 our	 expectations	 post	 acquisition	 sunbelt	 intends	 to	 continue	 	 to	 develop	 further	 clusters	 in	 key	 markets
in	 the	 uk	 an	 estimated	 70–80	 of	 equipment	 is	 rented	 rather	 than	 owned	 early	 in	 20056	 aplant	 restructured	 its	 sales	 operation	 to	 streamline	 and	 increase	 its	 penetration	 of	 the	 market	 the	 enhanced	 sales	 operation	 which	 secures	 	 and	 services	 our	 larger	 customers	 was	 strengthened	 and	 consolidated	 into	 a	 single	 national	 structure	 this	 has	 been	 instrumental	 in	 driving	 our	 national	 accounts	 business	 with	 	 the	 top	 150	 customers	 accounting	 for	 39	 of	 aplant’s	 revenue	 in	 the	 year
over	 the	 past	 year	 the	 market	 profile	 of	 ashtead	 technology	 was	 raised	 further	 as	 it	 successfully	 pursued	 growth	 in	 its	 offshore	 and	 onshore	 markets	 ashtead	 technology	 now	 has	 	 a	 strong	 position	 within	 this	 exciting	 and	 dynamic	 sector	 and	 intends	 to	 use	 that	 advantage	 to	 grow	 as	 its	 markets	 expand
ashtead	 technology	 rentals	 offers	 a	 wide	 range	 of	 remote	 visual	 inspection	 equipment	 to	 meet	 many	 inspection	 requirements
10	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 international	 equipment	 rental the trend
to rent
sunbelt	 is	 riding	 the	 national	 trend	 in	 the	 us	 away	 from	 ownership	 and	 towards	 rental	 ashtead	 originally	 identified	 this	 shift	 within	 the	 marketplace	 ten	 years	 or	 more	 ago	 and	 sunbelt	 is	 perfectly	 placed	 to	 take	 advantage	 of	 the	 changing	 patterns	 of	 utilisation
at	 the	 moment	 an	 estimated	 38	 of	 construction	 equipment	 is	 rented	 by	 contractors	 but	 this	 is	 expected	 by	 dan	 kaplan	 associates	 to	 grow	 to	 50	 by	 2010	 this	 gives	 sunbelt	 enormous	 scope	 for	 growth	 as	 the	 company’s	 customers	 make	 the	 strategic	 decision	 to	 move	 away	 from	 outright	 ownership	 and	 towards	 rental	 sunbelt’s	 objective	 is	 to	 continue	 its	 expansion	 in	 this	 vigorous	 and	 buoyant	 marketplace	 in	 the	 coming	 year
sunbelt	 also	 plays	 a	 crucial	 part	 in	 clearing	 and	 reconstruction	 operations	 following	 meteorological	 occurrences	 such	 as	 tornadoes	 hurricanes	 and	 flooding	 these	 naturally	 occurring	 events	 are	 a	 weighty	 challenge	 for	 the	 regional	 authorities	 and	 contractors	 charged	 with	 implementing	 both	 emergency	 and	 longterm	 repair	 and	 restoration	 it	 makes	 no	 sense	 for	 these	 bodies	 to	 own	 the	 essential	 equipment	 outright	 so	 they	 turn	 to	 rental	 companies	 for	 a	 fast	 efficient	 and	 professional	 service	 sunbelt	 is	 proud	 of	 its	 record	 in	 providing	 its	 equipment	 as	 rapidly	 as	 possible	 to	 help	 assist	 the	 recovery	 from	 such	 natural	 disasters
sunbelt	 rentals	 crews	 respond	 day	 or	 night	 for	 emergency	 equipment	 needs
11	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom focus on  
health and safety
in	 all	 markets	 there	 is	 an	 ever	 greater	 awareness	 of	 health	 	 and	 safety	 with	 our	 customers	 demanding	 increasing	 levels	 	 of	 support
in	 the	 us	 sunbelt	 offers	 an	 extensive	 online	 library	 of	 safety	 advice	 and	 has	 also	 initiated	 a	 monthly	 safety	 message	 quiz	 with	 prizes	 for	 both	 customers	 and	 members	 of	 the	 sunbelt	 team	 the	 company	 also	 offers	 training	 to	 customers’	 employees	 with	 qualified	 trainers	 available	 there	 is	 also	 an	 	 inhouse	 national	 training	 centre	 in	 charlotte	 north	 carolina	 which	 provides	 sunbelt’s	 employees	 with	 training	 of	 the	 highest	 standard
with	 its	 national	 presence	 and	 established	 it	 systems	 aplant	 is	 one	 of	 only	 a	 few	 national	 providers	 able	 to	 consistently	 meet	 its	 customers’	 health	 and	 safety	 requirements	 and	 to	 report	 on		 its	 success	 in	 doing	 so	 aplant	 launched	 a	 health	 and	 safety	 awareness	 programme	 amongst	 its	 customers	 during	 the	 	 year	 entitled	 ‘making	 your	 safety	 our	 priority’	 and	 distributed	 over	 100000	 copies	 throughout	 the	 uk	 aplant	 also	 won	 	 the	 hire	 association	 europe’s	 ‘excellence	 in	 training	 award’	 earlier	 this	 year
aplant’s	 rail	 division	 offers	 a	 wide	 range	 of	 lighting	 products
12	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 international	 equipment	 rental rewarding our
employees
the	 strength	 of	 our	 business	 and	 its	 culture	 is	 the	 level	 of	 responsibility	 delegated	 to	 the	 rental	 store	 level	 the	 rental	 store	 manager	 has	 a	 high	 degree	 of	 autonomy	 to	 manage	 his	 business	 in	 the	 light	 of	 local	 market	 conditions	 this	 is	 reflected	 in	 the	 monthly	 profit	 share	 programme	 in	 which	 every	 member	 of	 the	 store	 staff	 is	 entitled	 to	 participate	 and	 is	 based	 on	 	 the	 store’s	 month	 to	 month	 performance	 the	 profit	 share	 programme	 motivates	 employees	 to	 maximise	 returns	 on	 investment	 and	 encourages	 them	 to	 build	 and	 reinforce	 relationships	 with	 our	 customers	 it	 contributes	 to	 the	 performance	 of	 the	 business	 through	 acting	 as	 an	 incentive	 	 to	 control	 costs	 optimise	 pricing	 and	 promote	 efficient	 fleet	 management	 while	 building	 motivated	 cohesive	 teams	 focused	 on	 profitability	 at	 a	 local	 level	 profit	 share	 payments	 totalled	 £162m	 in	 20056	 representing	 7 7	 of	 employee	 remuneration
in	 addition	 to	 rewarding	 our	 employees	 financially	 the	 development	 of	 their	 careers	 is	 a	 priority	 and	 we	 believe	 an	 important	 way	 of	 maintaining	 employee	 morale	 and	 loyalty	 sunbelt	 and	 aplant	 maintain	 inhouse	 training	 teams	 which	 during	 20056	 organised	 over	 2200	 courses	 for	 a	 significant	 number	 of	 employees
sunbelt’s	 dieseldriven	 generators	 provide	 emergency	 power	 for	 diverse	 needs
13	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom clustered
operations
ashtead	 is	 committed	 to	 continuing	 sunbelt’s	 strategy	 of	 clustering	 its	 stores	 in	 key	 markets	 across	 the	 country	 sunbelt’s	 209	 outlets	 are	 concentrated	 in	 major	 metropolitan	 areas	 ranging	 from	 washington	 dc	 and	 baltimore	 on	 the	 atlantic	 coast	 through	 miami	 tampa	 and	 orlando	 in	 florida	 	 to	 seattle	 on	 the	 west	 coast
sunbelt	 concentrates	 on	 expanding	 and	 improving	 both	 its	 profile	 and	 the	 service	 it	 offers	 to	 its	 customers	 within	 these	 large	 metropolitan	 markets	 in	 so	 doing	 sunbelt	 aims	 to	 	 offer	 its	 customers	 a	 complete	 onestop	 service	 for	 all	 their	 	 rental	 requirements
sunbelt	 also	 actively	 looks	 for	 acquisitions	 in	 pursuit	 of	 this	 strategy	 for	 the	 most	 part	 these	 will	 be	 smaller	 traditionally	 familyrun	 operations	 in	 key	 locations	 although	 as	 and	 when	 the	 opportunities	 arise	 the	 company	 may	 pursue	 larger	 acquisitions	 of	 operators	 who	 fit	 sunbelt’s	 profile
the	 us	 economy	 performed	 well	 in	 the	 past	 year	 and	 sunbelt	 is	 servicing	 one	 of	 the	 most	 solid	 sectors	 of	 that	 economy	 nonresidential	 construction	 this	 market	 is	 in	 excellent	 shape	 with	 its	 growth	 rate	 forecast	 by	 mcgrawhill	 construction	 to	 significantly	 outstrip	 the	 growth	 rate	 of	 the	 national	 economy	 	 in	 2006	 and	 2007	 sunbelt	 green	 –	 the	 dominant	 brand	 on	 the	 job	 site
14	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 international	 equipment	 rental maximising
utilisation
the	 company’s	 distinctive	 and	 attractive	 green	 livery	 means	 that	 its	 equipment	 is	 easily	 identified	 and	 its	 quality	 is	 appreciated	 wherever	 it	 is	 found
however	 equipment	 which	 is	 sitting	 in	 a	 yard	 or	 a	 showroom	 unused	 is	 not	 earning	 its	 keep	 a	 key	 objective	 is	 to	 maximise	 the	 use	 of	 all	 items	 of	 equipment	 this	 objective	 is	 supported	 by	 both	 our	 strategic	 national	 purchasing	 policy	 in	 each	 of	 the	 us	 and	 uk	 and	 by	 the	 local	 knowledge	 of	 customer	 requirements	 	 and	 preferences	 amongst	 our	 regional	 district	 and	 profit	 	 centre	 managers
time	 utilisation	 of	 our	 fleet	 has	 improved	 significantly	 in	 the	 past	 two	 years	 at	 both	 sunbelt	 and	 aplant	 and	 now	 approaches	 peak	 efficiency
both	 aplant	 and	 sunbelt	 work	 hard	 to	 assist	 and	 inform	 their	 customers	 and	 thereby	 ensure	 that	 they	 hire	 the	 most	 appropriate	 equipment	 for	 the	 job	 in	 hand	 to	 this	 end	 both	 	 have	 public	 internet	 websites	 which	 are	 easily	 navigated	 	 and	 provide	 technical	 information	 on	 the	 equipment	 in	 the	 	 field	 there	 are	 provisions	 on	 both	 sites	 for	 customers	 to	 put	 questions	 to	 technical	 experts
aplant	 offers	 a	 wide	 range	 of	 lighting	 towers
15	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom 1 cob stenham ma fca
nonexecutive chairman
aged	 74	 cob	 stenham	 has	 been	 nonexecutive	 chairman	 chairman	 	 of	 the	 nomination	 committee	 and	 a	 member	 of	 the	 finance	 and	 administration	 committee	 since	 january	 2004	 and	 a	 director	 since	 	 27	 october	 2003	 mr	 stenham	 is	 also	 deputy	 chairman	 of	 ntl	 incorporated	 chairman	 of	 telewest	 communications	 plc	 and	 a	 	 nonexecutive	 director	 of	 whatsonwhen	 nonexecutive	 chairman	 management	 consulting	 group	 plc	 cambridge	 place	 investment	 management	 and	 ifonline	 group	 plc	 nonexecutive	 chairman
2 george burnett ma llb ca
chief executive 
aged	 59	 george	 burnett	 has	 been	 chief	 executive	 since	 february	 	 2000	 and	 one	 of	 our	 directors	 since	 may	 1984	 prior	 to	 february	 2000	 mr	 burnett	 was	 managing	 director	 for	 16	 years	 mr	 burnett	 is	 also	 chairman	 of	 henderson	 strata	 investments	 plc	 and	 is	 chair	 of	 the	 governors	 of	 university	 college	 for	 the	 creative	 arts	 at	 canterbury	 epsom	 farnham	 maidstone	 and	 rochester	 formerly	 the	 surrey	 institute	 of	 art	 	 design	 university	 college	 overall	 mr	 burnett	 has	 over	 28	 years’	 experience	 in	 the	 equipment	 rental	 business	 george	 burnett	 is	 chairman	 of	 the	 finance	 and	 administration	 committee	 and	 a	 member	 of	 the	 nomination	 committee
3 ian robson bsc fca
finance director
aged	 47	 ian	 robson	 has	 been	 finance	 director	 since	 june	 2000	 	 prior	 to	 june	 2000	 mr	 robson	 held	 a	 series	 of	 senior	 financial	 	 positions	 at	 reuters	 group	 plc	 for	 four	 years	 prior	 to	 joining	 	 reuters	 group	 plc	 mr	 robson	 was	 a	 partner	 at	 price	 waterhouse	 	 now	 pricewaterhousecoopers	 llp	 ian	 robson	 is	 a	 member	 	 of	 the	 finance	 and	 administration	 committee
4 cliff miller
president and chief executive officer sunbelt
aged	 43	 cliff	 miller	 was	 appointed	 president	 and	 chief	 executive	 officer	 of	 sunbelt	 and	 as	 one	 of	 our	 directors	 in	 july	 2004	 cliff	 miller	 has	 more	 than	 20	 years	 of	 experience	 in	 the	 rental	 industry	 and	 joined	 the	 group	 	 in	 1996	 with	 the	 acquisition	 of	 mclean	 rentals	 from	 that	 time	 until	 2003	 he	 was	 vice	 president	 responsible	 for	 sunbelt’s	 northeastern	 division	 subsequently	 he	 was	 one	 of	 two	 executive	 vice	 presidents	 responsible	 for	 all	 of	 sunbelt’s	 front	 line	 operations
5 sat dhaiwal
chief executive officer aplant
aged	 37	 sat	 dhaiwal	 has	 been	 chief	 executive	 officer	 of	 aplant	 and	 one	 of	 our	 directors	 since	 march	 2002	 mr	 dhaiwal	 was	 managing	 director	 of	 aplant	 east	 one	 of	 aplant’s	 four	 operational	 regions	 from	 may	 1998	 to	 march	 2002	 he	 was	 an	 aplant	 trading	 director	 from	 	 1995	 until	 his	 appointment	 as	 managing	 director	 of	 aplant	 east	 and	 prior	 to	 1995	 he	 managed	 one	 of	 aplant’s	 profit	 centres	 mr	 dhaiwal	 has	 some	 20	 years’	 experience	 in	 the	 equipment	 rental	 industry
board of directors 
1 2 3 4 5
16	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 international	 equipment	 rental 6 chris cole ceng fcibse
senior independent nonexecutive director 
aged	 59	 chris	 cole	 has	 been	 a	 director	 and	 a	 member	 of	 the	 audit	 nomination	 and	 remuneration	 committees	 since	 january	 2002	 he	 was	 appointed	 chairman	 of	 the	 remuneration	 committee	 in	 september	 2003	 and	 became	 the	 senior	 independent	 nonexecutive	 director	 from	 the	 same	 date	 mr	 cole	 is	 chief	 executive	 of	 wsp	 group	 plc
7 hugh etheridge fca mct
independent nonexecutive director
aged	 56	 hugh	 etheridge	 has	 been	 a	 director	 chairman	 of	 the	 audit	 committee	 and	 a	 member	 of	 the	 remuneration	 and	 nomination	 committees	 since	 january	 2004	 he	 also	 became	 chairman	 of	 the	 	 audit	 committee	 in	 january	 2004	 mr	 etheridge	 is	 chief	 financial	 	 officer	 of	 the	 waste	 and	 resources	 action	 programme	 ‘wrap’	 	 a	 nonprofit	 organisation	 established	 by	 the	 uk	 government	 to	 	 promote	 sustainable	 waste	 management	 before	 joining	 wrap	 	 mr	 etheridge	 was	 finance	 director	 of	 waste	 recycling	 group	 plc	 	 and	 prior	 to	 that	 of	 matthew	 clark	 plc
8 philip lovegrove obe llm
nonexecutive director 
aged	 68	 philip	 lovegrove	 has	 been	 a	 director	 since	 1984	 and	 is	 a	 member	 of	 the	 nomination	 committee	 mr	 lovegrove	 is	 chairman	 	 of	 stanelco	 plc	 9 gary iceton
independent nonexecutive director
aged	 56	 gary	 iceton	 was	 appointed	 as	 a	 nonexecutive	 director	 	 and	 a	 member	 of	 the	 audit	 and	 nomination	 committees	 effective	 	 from	 1	 september	 2004	 until	 2000	 he	 was	 a	 director	 of	 st	 ives	 plc	 	 and	 chairman	 and	 chief	 executive	 of	 the	 books	 division	 more	 	 recently	 he	 was	 chairman	 of	 jarrold	 limited	 and	 prior	 to	 that	 	 ceo	 of	 amertrans
10 geoffrey drabble bsc fca
currently a nonexecutive director and chief executive designate
aged	 46	 geoffrey	 drabble	 was	 appointed	 as	 a	 nonexecutive	 director	 and	 a	 member	 of	 the	 nomination	 and	 remuneration	 committees	 in	 	 april	 2005	 he	 is	 currently	 an	 executive	 director	 of	 the	 laird	 group	 plc	 where	 he	 is	 responsible	 for	 its	 building	 products	 division	 which	 has	 extensive	 us	 and	 uk	 operations	 prior	 to	 joining	 laird	 group	 mr	 drabble	 held	 a	 number	 of	 senior	 management	 positions	 at	 black	 	 decker	 	 he	 will	 join	 the	 group	 as	 chief	 executive	 designate	 on	 2	 october	 2006
details	 of	 the	 directors’	 contracts	 emoluments	 and	 share	 interests	 can	 be	 found	 in	 the	 directors’	 remuneration	 report
6 7 8 9 10
17	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom 18  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
directors’ report
the directors present their report and the audited accounts for the 
financial year ended 30 april 2006
principal activities
the principal activity of the company is that of an investment holding  
and management company the principal activity of the group is the 
rental of equipment to industrial and commercial users mainly in the  
nonresidential construction sectors in the us and the uk
trading results and dividends
the group’s consolidated profit before taxation for the year was  
£817m 2005 £322m a review of the group’s performance and future 
development including the principal risks and uncertainties facing the 
group is given in the business and financial review on pages 33 to 44 
these disclosures form part of this report the group paid an interim 
dividend of 05p per ordinary share in february and the directors 
recommend the payment of a final dividend of 1p per ordinary share to 
be paid on 28 september 2006 to those shareholders on the register at 
the close of business on 28 july 2006 making a total dividend for the 
year of 15p 2005 nil
share capital and major shareholders
details of the company’s share capital are given in note 18 to the financial 
statements so far as the company is aware the only holdings of 3  
or more of the issued share capital of the company as at 23 june 2006 
the latest practicable date before approval of the financial statements 
are as follows
 
 at 23 june  
 
the goldman sachs group inc 59
aviva plc 50
barclays bank plc 36
legal  general 35
gb burnett 32
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 24 to 32 details of all shares subject  
to option are given in note 20 to the financial statements
employees 
the total number of employees worldwide of the group at 30 april 2006 
was 6465
the group makes 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 the group is an equal opportunities employer 
the group has taken action consistently through the year to maintain  
and develop arrangements aimed at involving employees in its affairs 
for example monthly meetings are held at profit centres to discuss  
the previous month’s performance the group has a positive approach 
to health and safety at work and to compliance with the law and the 
requirements of the regulatory bodies in both the uk and the us a 
copy of the relevant formal statement of the group’s policy on health 
and safety is on display at profit centres in the uk and the us
the group encourages uk employees to become shareholders through 
the saye share option scheme 
directors and directors’ insurance
details of the directors of the company are given on pages 16 and 17 
each of the directors as at the date of approval of this report confirms 
as required by section 234 of the companies act 1985 that to the best 
of their knowledge and belief
1 there is no significant information known to the director relevant to 
the audit of which the company’s auditors are unaware and
2 each director has taken reasonable steps to make himself aware of 
such information and to establish that the company’s auditors are 
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 
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 2006 was 57 days 30 april 2005 74 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 19  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
political and charitable donations 
charitable donations in the year amounted to £29914 in total 2005 
£22650 no political donations were made in either year 
environmental report
the group through its equipment purchasing policies maintenance 
programmes and environmental monitoring practices endeavours to 
ensure that its trading activities have as little adverse impact on the 
environment as it is possible to achieve accordingly the group has 
developed environmental management processes which are designed 
to ensure
compliance with relevant legislation
removal of potential causes of environmental damage where 
practicable and
continuous reduction in environmental impact through monitoring 
and corrective action
the group’s continued investment in its rental fleet along with its 
maintenance programmes minimises both pollution to the atmosphere 
and accidental contamination the facilities the group maintains 
throughout its profit centre network are designed to enable waste to be 
disposed of correctly bulk fuels to be stored safely and fleet cleaning 
and maintenance to be carried out efficiently 
group companies have documented procedures at profit centre level  
for fleet maintenance removal of waste from customers’ sites back to 
company premises for safe disposal as well as contractual arrangements 
for the disposal of all major waste products 
the group’s internal operational audit teams measure and monitor 
environmental performance and control measures at profit centres as 
part of their rolling audit programme and report their findings to senior 
operational management 
auditors
deloitte  touche llp has indicated its willingness to continue in office 
and in accordance with section 385 of the companies act 1985 a 
resolution concerning its reappointment and authorising the directors 
to fix its remuneration will be proposed at the annual general meeting
•
•
•
annual general meeting 
the annual general meeting will be held at 230pm on tuesday  
26 september 2006 notice of the meeting is set out in the document 
accompanying this report and accounts in addition to the adoption  
of the 20056 report and accounts the declaration of a final dividend 
resolutions dealing with the appointment and reelection of directors and 
the resolution dealing with the approval of the directors’ remuneration 
report there are four other matters which will be considered at the 
annual general meeting these relate to the reappointment of deloitte  
touche llp as auditors the ability for the directors to unconditionally allot 
shares up to approximately one third of the company’s share capital the 
disapplication of preemption rights in relation to the previous resolution 
and empowering the company to buy back up to 5 of its issued share 
capital these resolutions update for a further year similar resolutions 
approved by shareholders in previous years 
by order of the board 
eric watkins
company secretary
27 june 2006
  20  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
corporate governance report
the revised combined code on corporate governance was published  
in july 2003 by the financial reporting council ‘the 2003 frc code’ 
following a review of the role and effectiveness of nonexecutive 
directors by sir derek higgs and a review of audit committees by  
a group led by sir robert smith
the company is committed to maintaining high standards of corporate 
governance the board recognises that it is accountable to the 
company’s shareholders for corporate governance and this statement 
describes how the company has applied the relevant principles of  
the 2003 frc code the company complied throughout the year  
with the provisions of the 2003 frc code on corporate governance
the board 
the company’s board comprises the nonexecutive chairman the  
chief executive the finance director the executive heads of sunbelt  
and aplant the senior independent nonexecutive director and  
four other nonexecutive directors short biographies of the directors 
are given on pages 16 and 17
the chairman undertakes leadership of the board by agreeing board 
agendas and encourages its effectiveness by 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 the chairman assisted by other directors reviews the 
effectiveness of each member of the board no less than annually and 
he facilitates constructive relationships between the executive and non
executive directors through both formal and informal meetings
the chairman ensures that all directors are properly briefed to enable 
them to discharge their duties effectively all newly appointed directors 
undertake an induction to all parts of the group’s business 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 chairman facilitates effective communication with shareholders 
through both the annual general meeting and by individual meetings 
with major shareholders to develop an understanding of the views of  
the investors in the business he also ensures that shareholders have 
access to other directors including nonexecutive directors as 
appropriate
the chief executive’s role is to provide entrepreneurial leadership of  
the group within a framework of prudent and effective controls which 
enables risk to be assessed and managed the chief executive 
undertakes the leadership and responsibility for the direction and 
management of the daytoday business and conduct of the group  
in doing so the chief executive’s role includes but is not restricted to 
implementing board decisions delegating responsibility and reporting 
to the board regarding the conduct activities and performance of the 
group the chief executive chairs the formal management meetings 
with the operating divisions of the group’s business and sets policies 
and direction to maximise returns to shareholders
all directors are responsible under the law for the proper conduct of  
the company’s affairs the directors are also responsible for ensuring 
that the strategies proposed by the executive directors are discussed  
in detail and assessed critically to ensure they conform with the long
term interests of shareholders and are compatible with the interests  
of employees customers and suppliers the board has reserved  
to itself those matters which reinforce its control of the company  
these include treasury policy acquisitions and disposals appointment 
and removal of directors or the company secretary appointment and 
removal of the auditors and approval of the annual accounts
regular reports and briefings are provided to the board by the 
executive directors and the company secretary to ensure the directors 
are suitably briefed to fulfil their roles the board normally meets at least 
six times a year and there is contact between meetings to advance the 
company’s activities it is the board’s usual practice to meet at least 
annually at the offices of sunbelt and aplant the directors also have 
access to the company secretary and are able to seek independent 
advice at the company’s expense
the board’s terms of reference are available for inspection at the annual 
general meeting
all directors are subject to election by shareholders at the first annual 
general meeting after their appointment and to reelection thereafter  
at intervals of no more than three years nonexecutive directors are 
appointed for specified terms not exceeding three years and are subject 
to reelection and the provision of the companies act relating to the 
removal of a director
in accordance with the company’s articles of association mr stenham 
mr robson and mr miller will offer themselves for retirement and  
reelection to the board at the next annual general meeting 
nonexecutive directors 
the board considers that the company is in compliance with the 
independence provisions of the 2003 frc code
in the recruitment of nonexecutive directors it is the group’s practice  
to utilise the services of an external search consultancy before 
appointment nonexecutive directors are required to assure the board  21  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
that they can give the time commitment necessary to fulfil properly  
their duties both in terms of availability to attend meetings and discuss 
matters on the telephone and meeting preparation time the non
executives’ letters of appointment are available for inspection at the 
annual general meeting
the nonexecutive directors including the chairman meet as and  
when required in the absence of the executive directors to discuss and 
appraise the performance of the board as a whole and the performance 
of the executive directors in accordance with the frc code the  
nonexecutive directors led by the senior independent nonexecutive 
director also meet annually in the absence of the chairman to discuss 
and appraise his performance
performance evaluation
the performance of the chairman the chief executive the board and its 
committees is evaluated amongst other things against their respective 
role profiles and terms of reference this evaluation was conducted by 
the board as a whole in the context of a paper submitted by the company 
secretary summarising the key highlights of the year the executive 
directors are additionally evaluated against the agreed budget for the 
generation of revenue profit and value to shareholders 
board committees
audit committee
the audit committee comprised throughout the year mr etheridge 
chairman mr cole and mr iceton in accordance with the 
recommendation of the smith committee the company’s nonexecutive 
chairman mr stenham is not a member of the audit committee  
by invitation our finance director mr robson our director of financial 
reporting mr pratt and other directors including the chairman normally 
attend the committee’s meetings as do representatives of our internal 
and external auditors 
as is required by its terms of reference the audit committee meets  
on at least four occasions each year to review the draft quarterly and 
annual financial statements prior to their publication to consider the  
key accounting estimates and judgements contained therein and to 
consider reports from both the internal and external auditors which 
includes audit plans and the key findings of their work the audit 
committee also keeps the group’s accounting policies under review 
evaluates the effectiveness of the group’s internal controls and financial 
reporting policies and is responsible for dealing with any matter brought 
to its attention by the auditors the audit committee also keeps under 
review the effectiveness of both internal and external audit as well as  
the independence of the external auditors including the type of and 
associated fees for nonaudit services 
the audit committee reviews the nature of any nonaudit work to be 
undertaken by deloitte  touche llp and the level of proposed fees to 
ensure their independence is not impaired the principal nonaudit fees for 
the year relate to their work in connection with last year’s share placing and 
open offer to their reviews of the group’s quarterly results announcements 
and to their work on the group’s ifrs implementation project the audit 
committee is satisfied that the nature of work undertaken and the level of 
nonaudit fees did not impair their independence
the audit committee’s terms of reference are available for inspection  
at the annual general meeting
remuneration committee
the remuneration committee comprised throughout the year mr cole 
chairman mr etheridge and mr drabble 
the remuneration committee meets as and when required but in any 
event holds a series of meetings during the year to set the compensation 
packages for the executive directors to establish the terms and conditions 
of the executive directors’ employment and to set remuneration policy 
generally mr stenham and mr burnett normally attend the meetings of 
the committee the committee also engages remuneration consultants 
to advise it in its work as and when required
none of the members of the remuneration committee is currently  
or has been at any time one of the company’s executive directors or  
an employee none of the executive directors currently 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 remuneration committee’s terms of reference are available for 
inspection at the annual general meeting
 
nomination committee
the nomination committee comprised throughout the year mr stenham 
chairman mr burnett mr cole mr etheridge mr lovegrove mr iceton 
and mr drabble the nomination committee meets as and when required 
to recommend proposed changes to the structure and composition of 
the board of directors the nomination committee met informally on a 
number of occasions throughout the year usually at the end of board 
meetings as there were no proposed changes to the composition of the 
board of directors the committee did not meet formally during the year 
the nomination committee’s terms of reference are available for 
inspection at the annual general meeting 22  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
attendance at board and committee meetings held between 1 may 2005 and 30 april 2006
      board audit remuneration nomination
number of meetings held      8 5 4 0
mr stenham      8 na na –
mr burnett      8 na na –
mr robson      8 na na na
mr dhaiwal      8 na na na
mr miller      8 na na na
mr cole      8 5 4 –
mr etheridge      7 5 3 –
mr lovegrove      8 na na –
mr iceton       8 5 na –
mr drabble       8 na 4 –
corporate governance report continued
finance and administration committee
the finance and administration committee comprised mr stenham  
mr burnett and mr robson throughout the year and is chaired by  
mr burnett 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 presence of mr stenham our  
nonexecutive chairman including for example the approval of  
material announcements to the london stock exchange 
internal control 
the directors acknowledge their responsibility for the group’s system  
of internal control and confirm they have reviewed its effectiveness  
in doing so the group has taken note of the guidance for directors  
on internal control internal control guidance for directors on the 
combined code the turnbull guidance
the board confirms that there is a process for identifying evaluating 
and managing significant risks faced by the group this process has 
been in place for the full financial year and is ongoing it is kept under 
regular review by the executive directors and is considered periodically 
by the board and accords with the turnbull guidance
 
the board considers that the group’s internal control system is 
appropriately designed to manage rather than eliminate the risk  
of failure to achieve business objectives any such control system 
however can only provide reasonable and not absolute assurance 
against material misstatement or loss 
the group reviews the risks it faces in its business and how these  
risks are managed these reviews are conducted in conjunction with 
the management teams of each of the group’s businesses and are 
documented in an annual report the reviews consider whether any 
matters have arisen since the last report was prepared which might 
indicate omissions or inadequacies in that assessment they also 
consider whether as a result of changes in either the internal or external 
environment any new significant risks have arisen the executive 
directors reviewed the draft report for 2006 which was then presented 
to discussed and approved by the group board on 21 june 2006
before producing the statement on internal control for the annual report 
and accounts for the year ended 30 april 2006 the board reconsidered 
the operational effectiveness of the group’s internal control systems  
in particular through the audit committee it received reports from the 
operational audit teams and considered the status of implementation  
of internal control improvement recommendations made by the  
group’s internal auditors and our external auditors 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 profit centres or elsewhere 
the audit committee also meets with the external auditors at least four 
times a year to discuss the results of their work 
in relation to internal financial control 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 profit centre
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
•
• 23  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
the preparation of a monthly financial report to the board including 
income statements for the group and each subsidiary balance sheet 
and cash flow statement
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 profit centre by equipment type 
independently checked on a sample basis by our operational 
auditors and external auditors
detailed internal audits at the group’s major accounting centres 
undertaken by internal audit specialists from a major international 
accounting firm 
comprehensive audits of all profit centres generally carried out on 
average at least once per year by internal operational audit a summary 
of this work is provided annually to the audit committee and
a review of arrangements by which staff may in confidence raise 
concerns about possible improprieties in matters of financial 
reporting or other matters
statement of directors’ responsibilities
the directors are responsible for preparing the annual report and  
the financial statements the directors are required to prepare financial 
statements for the group in accordance with international financial 
reporting standards ifrs and have also elected to prepare financial 
statements for the company in accordance with ifrs company  
law requires the directors to prepare such financial statements in 
accordance with ifrs the companies act 1985 and article 4 of  
the ias regulations
ias 1 presentation of financial statements requires that financial 
statements present fairly for each financial year the company’s  
financial position financial performance and cash flows this requires 
the representation of the effects of transactions other events and 
conditions in accordance with the definitions and recognition criteria  
for assets liabilities income and expenses set out in the international 
accounting standards board’s ‘framework for the preparation and 
presentation of financial statements’ in virtually all circumstances  
a fair presentation will be achieved by compliance with all applicable 
international financial reporting standards directors are also  
required to
properly select and apply accounting policies
present information including accounting policies in a manner  
that provides relevant reliable comparable and understandable 
information and
provide additional disclosures when compliance with the specific 
requirements in 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
•
•
•
•
•
•
•
•
•
the directors are responsible for keeping proper accounting records 
which disclose with reasonable accuracy at any time the financial 
position of the company for safeguarding the assets for taking 
reasonable steps for the prevention and detection of fraud and other 
irregularities and for the preparation of a directors’ report and directors’ 
remuneration report which comply with the requirements of the 
companies act 1985
the maintenance and integrity of the ashtead group plc website is the 
responsibility of the directors the work carried out by the auditors does 
not involve consideration of these matters and accordingly the auditors 
accept no responsibility for any changes that may have occurred to the 
financial statements since they were first published
legislation in the uk governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions
going concern
after making appropriate enquiries the directors have a reasonable 
expectation that the company and the group have adequate resources 
to continue in operational existence for the foreseeable future and that  
it is therefore appropriate to adopt the going concern basis in preparing 
the financial statements in forming this view the directors have reviewed 
the group’s budgets and cash flow forecasts for a period of more than 
12 months from the date of the approval of these financial statements 
and considered the sufficiency of the group’s banking facilities 
described on pages 42 to 43 of the business and financial review
by order of the board
eric watkins
company secretary
27 june 2006
  24  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
directors’ remuneration report
introduction
this report has been prepared in accordance with the directors’ 
remuneration report regulations 2002 the report also meets the 
relevant requirements of the listing rules of the financial services 
authority and describes how the board has applied the principles of 
good governance relating to directors’ remuneration as required by 
the regulations a resolution to approve the report will be proposed  
at the forthcoming annual general meeting of the company
the regulations require the auditors to report to the company’s 
members on the ‘auditable part’ 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 1985 as 
amended by the regulations the report has therefore been divided 
into separate sections for audited and unaudited information
unaudited information
remuneration committee
the company has established a remuneration committee ‘the 
committee’ in accordance with the recommendations of the  
combined code the members of the committee throughout the  
year were mr cole chairman mr etheridge and mr drabble none  
of the committee members has any personal financial interests  
other than as shareholders in the matters to be decided
the group’s chief executive mr burnett 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 nonexecutive chairman  
mr stenham the company secretary acts as secretary to the committee 
under mr cole’s direction the company secretary and mr burnett 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 if required and to publicly 
available reports and statistics external professional advice was obtained 
in the year from the zygos partnership
remuneration policy for executive directors
executive remuneration packages are designed to attract motivate  
and retain directors of the high calibre needed to achieve the group’s 
objectives and to reward them for enhancing value to shareholders the 
main elements of the remuneration package for executive directors and 
senior management are 
basic annual salary and benefits in kind 
annual performance related bonus plan
share related incentives and
pension arrangements
in assessing all aspects of pay and benefits the company compares 
packages offered by similar companies which are chosen having  
regard to
•
•
•
•
the size of the company revenues profits and number of people 
employed 
the diversity and complexity of its businesses 
the geographical spread of its businesses and 
their growth expansion and change profile
 
in making the comparisons the company takes into consideration the 
international scope complexity and speed of change of the group’s 
business and particularly its significant operations in the us where the 
company has a number of larger successful competitors who compete 
with it for top management talent 
the committee implements its remuneration policies by the design of 
reward packages for executive directors comprising the appropriate mix 
of salary performance related annual cash incentive bonuses and share 
related incentives mr burnett with the approval of the board holds  
two nonexecutive appointments outside the group he is chairman of 
henderson strata investments plc and is also chair of the governors of 
university college for the creative arts the latter position is unpaid and 
mr burnett is allowed to retain the fees arising from henderson strata 
investments plc amounting to £12500 in the past year none of the other 
executive directors holds any outside appointments
basic salary
an executive director’s basic salary is normally determined by the 
committee before the start of the year and when an individual changes 
position or responsibility in deciding appropriate levels the committee 
considers the group as a whole and seeks to be competitive but fair 
using information drawn from both internal and external sources 
in recognition of the substantial growth in the company’s market 
capitalisation achieved in the year ended 30 april 2005 the 
remuneration committee concluded that a significant upwards revision 
to the salaries of the executive directors was appropriate for the year  
to 30 april 2006 just as the salaries of mr burnett and mr robson had 
been adjusted downwards in 2003 in the light of the reduction in the 
company’s market capitalisation at that time accordingly effective 
1 may 2005 the following salary increases were implemented 
 
 percentage  revised 
 increase salary
george burnett 256 £428000
ian robson 256 £260000
sat dhaiwal 200 £180000
cliff miller 200 420000
annual performance related bonus plan
under the annual performance related bonus plan for executive directors 
except for the additional payment to mr robson discussed below 
payments for the year to 30 april 2006 were related directly to financial 
performance targets and were subject to a cap of 100 of salary the 
•
•
•
• 25  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
committee establishes the objectives that must be met for each financial 
year if a cash incentive bonus for that year is to be paid in determining 
bonus parameters the committee’s objective is to set targets that reflect 
appropriately challenging financial performance measures
for the year ended 30 april 2006 the group and sunbelt fully attained 
their respective financial targets and accordingly mr burnett mr robson 
and mr miller will be paid their 20056 performance related bonus in  
full in july 2006 in addition mr robson was paid a discretionary 
performance bonus during the year of £40000 in recognition of  
his performance in delivering the complete restructuring of the  
group’s debt finances over the 18 months culminating in last august’s 
successful capital reorganisation aplant partially attained its 20056 
targets and accordingly mr dhaiwal will be paid a proportionate bonus 
in july 2006
 
share related incentives
details of the company’s existing arrangements are set out below 
previous plans
executive share option schemes
until 2002 it was the committee’s policy to make regular awards under 
the company’s executive share plans to senior staff the value of the 
shares underlying the options awarded was assessed by reference  
to a number of factors including the employee’s salary seniority and 
length of service as well as both the company’s and the individual’s 
performance in the year prior to the award no further executive share 
option awards are planned
investment incentive plan
the investment incentive plan is a longterm incentive plan which 
provided for senior management who so elected to invest all or a 
portion of their annual cash bonuses in shares of the company and 
thus become eligible for matching awards in the form of shares which 
only vest subject to demanding performance conditions the company 
does not intend currently to make any further awards under this plan
matching awards were made in respect of investment shares acquired by 
participants with all or part of their bonus for the previous financial year 
the matching awards only vest in whole or part based on annual growth 
in the company’s earnings per share ‘eps’ in the three year period 
following the award over that of the year ended 30 april immediately prior 
to the date of the award and on the company’s total shareholder return 
‘tsr’ performance relative to a comparator group in respect of the 
remaining available matching awards the relevant performance period  
is the three years from 19 august 2004 when the share price was 485p 
to 18 august 2007 the comparator group comprises all of the ftse 250 
midcap stocks other than investment trusts
the above performance conditions were chosen because they were  
felt to align most closely the interests of senior management with the 
interests of shareholders by rewarding management for achieving 
superior relative total shareholder return performance compared with 
the ftse 250 as a whole excluding investment trusts at the time the 
awards were made the ftse 250 was considered to be the stock 
exchange index most appropriate to the size and scale of the 
company’s operations
 
vesting of the matching awards is based on the following required 
performance grid
real eps 
growth 
performance
tsr performance against peer group
below median tsr median
63rd 
percentile
75th 
percentile
upper range  
rpi  7 pa
10 x match
20 x 
match
25 x 
match
30 x 
match
target range 
rpi  5 pa
075 x match
15 x 
match
20 x 
match
25 x 
match
minimum range  
rpi  3 pa
05 x match
10 x 
match
15 x 
match
20 x 
match
no matching award vests
vesting operates on a scaled basis for performance between the target 
levels shown in the grid above performance is measured at the end of 
the three year performance period when the awards either vest in full  
or part or lapse completely for performance measurement purposes 
earnings per share is based on the profit before exceptional items 
measured under consistently applied accounting policies and using  
a 30 standardised tax rate
current plan
performance share plan
the performance share plan is a longterm incentive plan under which 
executive directors and other members of the senior management team 
may annually receive a conditional right to acquire shares ‘performance 
shares’ the vesting of which depends on the satisfaction of demanding 
performance conditions 
the maximum award of performance shares that may be made in any 
financial year of the company is limited under the rules of the plan to 
shares with a market value equal to 100 of the participant’s base 
salary at the time the award is made to date no award has exceeded 
70 of salary 26  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
300
250
200
150
100
50
0
april 2001 april 2002 april 2003 april 2004 april 2005 april 2006
— ashtead group – total return index
ftse 250 – total return index
source datastream
the extent to which the awards vest depends as to 50 of the award 
on growth in eps over the three year vesting period which runs for the 
awards granted in 2004 for the three years ending 30 april 2007 and for 
the awards granted in 2005 for the three years ending 30 april 2008
the vesting of the other 50 of the awards is dependent upon the 
company’s tsr performance over the three years commencing on 
award date 5 october 2004 for the 2004 awards and 16 august 2005 
for the 2005 awards against the relevant index for the 2004 awards 
this was the ftse smallcap index excluding investment trusts whilst 
for the 2005 awards it was the constituents of the ftse 250 index 
excluding investment trusts 
 
the part of each award relating to eps growth depends on the level of 
eps for the year ending 30 april 2007 for the 2004 award and for the 
year ending 30 april 2008 for the 2005 award for the 2004 award the 
award vests in full if eps for 20067 is 8p or greater and lapses if eps is 
5p or lower the equivalent thresholds for the 2005 award in the 20078 
year are 91p and 77p awards are scaled for performance between 
these points eps for this purpose is calculated on the group’s profit 
before exceptional items less a standardised 30 tax charge the eps 
targets noted above have not yet been adjusted by the committee to 
reflect the impact of the group’s subsequent application of international 
financial reporting standards but this will be considered by the 
committee at the time the awards mature
directors’ remuneration report continued
the part of each award linked to tsr vests in full if the company’s tsr 
growth over the three year vesting period ranks it in the top 25 of 
participants in the relevant index and will lapse if the company’s relative 
tsr growth is ranked at or below 50 of participants in the relevant 
index over the three year vesting period if relative tsr performance is 
between these points the tsr linked part of the award is scaled on a 
pro rata basis
employee share ownership trust
the group has established an employee share ownership trust esot 
to hold shares in the company to satisfy potential awards under the 
investment incentive plan and the performance share plan at 30 april 
2006 the esot held a beneficial interest in 4721490 shares the esot 
owned directly 2286959 of these shares and a further 2434531 shares 
were registered in the name of investment incentive plan or performance 
share plan participants on terms which require that the award shares are 
transferred back to the esot to the extent that the performance targets 
are not met
 
relative performance
the following graph compares the company’s tsr performance with 
the ftse 250 index excluding investment trusts over the five years 
ended 30 april 2006 the stock exchange index the committee 
considers to be the most appropriate to the size and scale of the 
company’s operations  27  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
directors’ pension arrangements
during the year the company agreed with mr burnett that his 
remuneration from 6 april 2006 would be nonpensionable and also that 
the company’s pension obligation to mr burnett at 6 april 2006 under 
the terms of his employment contract would be satisfied in full by the 
transfer to a private personal pension scheme established by mr burnett 
of all the assets then held by the ashtead group plc pension scheme of 
which mr burnett was the sole remaining member the value of these 
assets at 6 april 2006 was £103m and the transfer to mr burnett’s new 
personal pension plan was concluded on 29 april 2006
under the terms of his contract mr robson is entitled to retire at age  
60 on a pension equal to onethirtieth of his final salary for each year  
of pensionable service he is a member of the company’s retirement 
benefits plan which is a defined benefits scheme following the change 
in pension plan and inland revenue regulations effective 6 april 2006 
the company has agreed with the trustees of the retirement benefits 
plan that the retirement benefits plan will now be responsible for  
mr robson’s entire pension part of which was previously provided  
by the company mr robson’s contract also contains early retirement 
provisions allowing him to retire and draw a pension based on actual 
years of service but without deduction for early payment which take 
effect once he has completed 10 years’ service with the company or  
at any time after age 50 if there is a change of control mr robson pays 
contributions equal to 75 of his salary to the retirement benefits plan
mr dhaiwal’s pension benefits are also now provided entirely through 
the ashtead group plc retirement benefits plan his pension rights 
accrue at the rate of onesixtieth of salary as defined for each year  
of pensionable service and his normal retirement date is at age 65  
mr dhaiwal also pays contributions equal to 75 of his salary to the 
retirement benefits plan
except where otherwise stated above the retirement benefits plan 
provides
in the event of death in service or death between leaving service and 
retirement while retaining membership of the plan a spouse’s 
pension equal to 50 of the member’s deferred pension calculated 
at the date of death plus a return of his contributions
in the event of death in retirement a spouse’s pension equal to 50 
of the member’s pension at the date of death
•
•
an option to retire at any time after age 50 with the company’s 
consent early retirement benefits are reduced by an amount agreed 
between the actuary and the trustees as reflecting the cost to the 
plan of the early retirement after 2010 government regulations raise 
the minimum early retirement age to 55
pension increases in line with the increase in retail price inflation up  
to a limit of currently 5 a year and
transfer values do not include discretionary benefits
in february 2006 mr miller ceased contributing to sunbelt’s 401k defined 
contribution pension plan and joined sunbelt’s deferred compensation 
plan under the deferred compensation plan mr miller has elected to  
defer 6 of his annual salary and a proportion of his annual performance 
bonus which is retained by sunbelt in an account designated for his 
benefit to be paid to him on retirement sunbelt provides a comatch  
at the rate of 1 for every 1 deferred up to 7 500 per annum
executive directors’ service agreements
mr burnett’s service agreement dated 18 september 2003 provides  
for termination by either party by the giving of 12 months’ notice the 
contract further provides that mr burnett need give the company only 
six months’ notice if he wishes to retire on or after attaining the age of 
60 in september 2006 the service agreements between the company 
and mr robson dated 4 august 2000 mr dhaiwal dated 8 july 2002 
and mr miller dated 5 july 2004 are also terminable by either party 
giving the other 12 months’ notice the service agreements for each of 
the executive directors all contain noncompete provisions appropriate 
to their roles in the group
remuneration policy for nonexecutive directors
the remuneration of the nonexecutive directors is determined by the 
chairman and chief executive within limits set out in the articles of 
association the chairman has a service contract dated 22 october 
2003 with the company terminable on three months’ notice by the 
company or immediately by the members in general meeting the 
contract also provides for compensation following termination by reason 
of any change of control equal to 12 months’ fees none of the other 
nonexecutive directors has a service contract with the company and 
their appointment is therefore terminable by the board at any time
an ordinary resolution concerning the group’s remuneration policies will 
be put to shareholders at the forthcoming annual general meeting
•
•
• 28  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
audited information
directors’ emoluments
directors’ remuneration report continued
compensation for loss of office was paid to mr dressel following his 
departure in july 2003 under the terms of his contract with sunbelt 
whereby he was entitled subject to certain conditions including an 
obligation not to compete with sunbelt or to solicit any of its employees 
for a minimum of two years to continue to receive his annual salary of 
400000 for a matching two year period which expired on 28 july 2005
the emoluments of the directors excluding pension benefits  
which are included in staff costs in note 3 to the financial statements 
were as follows
   performance benefits  compensation total total 
   related in other for loss emoluments emoluments 
 salary fees bonus kind allowances
†
 of office 2006 2005 
name £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
executive        
gb burnett  428 – 428 1 13 – 870 584
ss dhaiwal   180 – 96 1 10 – 287 264
c miller  237 – 237 5 26 – 505 334
si robson  260 – 300 – 10 – 570 356
nonexecutive        
awp stenham  – 133 – – 15 – 148 145
c cole  – 33 – – – – 33 30
g drabble  – 27 – – – – 27 1
hc etheridge  – 32 – – – – 32 30
gi iceton  – 27 – – – – 27 16
pa lovegrove  – 27 – – – – 27 25
former directors        
jb dressel  – – – – – 55 55 215
  1105 279 1061  7 74 55 2581 2000
2005  856 232 621  7 69 215  2000
 benefits in kind comprise private medical insurance and subscriptions 
†  other allowances include car allowances a contribution to the chairman’s office costs and reimbursement of travel and accommodation costs for mr miller who continues to reside in 
virginia but is based at sunbelt’s head office in charlotte 29  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
key management 
as noted above all the assets then held by the ashtead group plc 
pension scheme of which mr burnett was the sole remaining member 
were vested in him on 6 april 2006 in full settlement of the company’s 
pension obligation to him under his employment contract and his 
employment subsequent to that date is nonpensionable the value  
of the assets so vested at 6 april 2006 was £103m 
mr miller contributed to the us defined contribution plan until february 
2006 to which his employer sunbelt contributed £5087 in the year  
in february 2006 mr miller joined the sunbelt deferred compensation 
plan to which sunbelt had allocated £2730 by 30 april 2006 and the 
amount due to mr miller at 30 april 2006 was £5445
in accordance with ias 24 related party disclosures key management 
personnel are those persons having authority and responsibility for 
planning directing and controlling the activities of the group directly  
or indirectly the group’s key management comprise the company’s 
executive and nonexecutive directors 
compensation for key management was as follows
        2006 2005 
        £’000 £’000
salaries and short term employee benefits        2526 1785
postemployment benefits        45 33
national insurance and social security        214 141
sharebased payments        770 660
        3555 2619
directors’ pension benefits
     
increase in
   transfer transfer  
  accrued  accrued 
annual pension
  value of  value increase 
  pensionable contributions annual 
during the year
   accrued of accrued  in transfer
 age at service at  paid by the pension at excluding total pension at pension at value over 
 30 april 2006 30 april 2006 director 30 april 2006 inflation  increase 30 april 2006 30 april 2005 the year 
 years years £’000 £’000 £’000 £’000 £’000 £’000 £’000
ss dhaiwal 37 12 15 32 4 4 155 114 26
si robson 47 6 20 49 16 17 579 336 223
notes
1  the transfer values represent the amount which would have been paid to another pension scheme had the director elected to take a transfer of his accrued pension entitlement at that date 
and have been calculated by the schemes’ actuaries in accordance with actuarial guidance note gn11 published by the institute of actuaries and the faculty of actuaries they are not 
sums paid or due to the directors concerned
2  the increase in transfer value in the year is stated net of the members’ contributions  30  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
directors’ interests in shares
directors’ remuneration report continued
the directors of the company are shown below together with their 
interests in the share capital of the company excluding interests in 
shares held subject to forfeiture if performance conditions under the 
company’s investment incentive plan and performance share plan are 
not achieved – see below
  30 april 2006 30 april 2005 
  number of ordinary number of ordinary 
  shares of 10p each shares of 10p each
       non  non 
      beneficial beneficial beneficial beneficial
gb burnett      12841472 1232223 12841472 1056192
pa lovegrove      446250 – 382500 –
si robson      430000 – 235457 –
awp stenham      233333 – 200000 –
ss dhaiwal      48393 – 48307 –
c miller      33000 – 33000 –
c cole      23333 – 20000 –
gi iceton      23333 – 20000 –
g drabble      11666 – 10000 –
hc etheridge      – – – –
investment incentive plan and performance share plan awards
conditional awards of matching shares under the investment incentive 
plan ‘iip’ and of shares under the performance share plan ‘psp’ held 
by executive directors are shown in the table below
 iip psp 
 held at 30 april held at 30 april
      2006 2005 2006 2005
gb burnett – granted in 20045     178554 178554 304219 304219
 – granted in 20056     na na 263965 na
ss dhaiwal – granted in 20045     51015 51015 133929 133929
 – granted in 20056     na na 111013 na
c miller – granted in 20045     na na 175394 175394
 – granted in 20056     na na 143159 na
si robson – granted in 20023     – 176469 na na
 – granted in 20045     204066 204066 184821 184821
 – granted in 20056     na na 160352 na
the award of 176469 shares granted to mr robson in 20023 vested  
in full on 17 august 2005 as the performance criteria attaching to the 
award were met 
awards held by mr burnett mr robson and mr dhaiwal are reflected  
in shares which have been conditionally transferred to them by the 
company’s employee share option trust on conditions under which  
the shares are automatically returned to the trust in the event that the 
performance conditions underlying the awards are not achieved 31  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
directors’ interests in share options
        earliest  
        normal  
    options at exercised options at exercise exercise  
    1 may 2005 during year 30 april 2006 price date expiry
discretionary schemes
gb burnett     487494  487494 – 72535p sep 1998 sep 2005
    200000  – 200000  132250p feb 2000 feb 2007
    350000  – 350000  184200p feb 2001 feb 2008
    166700 – 166700  172500p feb 2002 feb 2009
    300000 – 300000  102500p aug 2003 aug 2010
    90000 –  90000 125000p feb 2004 feb 2011
ss dhaiwal    40000 –  40000 132250p feb 2000 feb 2007
    32500 – 32500 184200p feb 2001 feb 2008
    50000 – 50000 172500p feb 2002  feb 2009
    35000 – 35000 125000p feb 2004 feb 2011
    100000 72000 28000 41500p feb 2005 feb 2012
    150000 – 150000 49500p aug 2005 aug 2012
c miller    30000 – 30000 132250p feb 2000 feb 2007
    24000 – 24000 184200p feb 2001 feb 2008
    13350 – 13350 172500p feb 2002  feb 2009
    50000 – 50000 102000p feb 2003 feb 2010
    35000 – 35000 102500p aug 2003 aug 2010
    50000 – 50000 125000p feb 2004 feb 2011
    100000 – 100000 41500p feb 2005 feb 2012
si robson    29500 –  29500 101670p aug 2003 aug 2010
    195500 – 195500 102500p aug 2003 aug 2010
    230000 – 230000 125000p feb 2004 feb 2011
    300000 – 300000 41500p feb 2005 feb 2012
saye scheme
gb burnett    24029 – 24029 24270p may 2006 oct 2006
    10792 – 10792 30740p oct 2007 mar 2008
ss dhaiwal    24029 – 24029 24270p may 2006 oct 2006
    10792 – 10792 30740p oct 2007 mar 2008
si robson    40049 – 40049 24270p may 2008 oct 2008
    10792 – 10792 30740p oct 2007 mar 2008 32  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
details of share options exercised by the executive directors and share awards vesting are as follows
        market price  
      number option at date  
      exercised price of exercise gain 
      awarded pence pence £’000
executive share options
gb burnett      487494 72535 14000 329
ss dhaiwal      72000 41500 11000 49
investment incentive plan    
si robson      176469 – 11425 202
note
on 23 september 2005 mr burnett exercised an option originally granted to him in september 1995 under the company’s executive share option plan to acquire 487494 shares at a price of 
72535p per share and sold all of the acquired shares on the same day at the then market price of 140p per share on 14 july 2005 mr dhaiwal exercised an option originally granted to him in 
february 2002 under the company’s executive share option plan to acquire 72000 shares at a price of 415p per share and sold all of the acquired shares on the same day at the then market 
price of 110p per share on 8 august 2005 following achievement of the relevant performance conditions the matching award granted to mr robson on 8 august 2002 under the investment 
incentive plan vested in full and accordingly 176469 shares were transferred to mr robson at a time when the market price was 11425p per share mr robson sold 50579 shares to partially 
fund the tax liability resulting from vesting of the matching award and retained 125890 shares 
directors’ remuneration report continued
exercise of certain of the above listed discretionary option awards were 
subject to performance conditions when originally granted all of which 
have been met subsequently the market price of the company’s 
shares at the end of the financial year was 235p and the highest and 
lowest prices during the financial year were 238p and 855p respectively
mr dhaiwal also holds 50000 units in the company’s cash incentive 
scheme which were granted to him on 22 february 2000 when he was 
not a director the performance criteria related to this award have been 
satisfied and accordingly mr dhaiwal may exercise the award in whole 
or in part at any time prior to 22 february 2010 when the award is 
exercised mr dhaiwal will be paid in cash an amount equal to the 
difference between the mid market price of ashtead group plc shares 
on the day of exercise and 102p multiplied by the number of units 
exercised the resultant sum will be paid to mr dhaiwal in cash less 
applicable taxes
this report was approved by a committee of the board of directors on 
27 june 2006 and signed on its behalf by
chris cole
chairman remuneration committee
27 june 2006
  33  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
business and financial review
introduction
this business and financial review discusses our financial results cash 
flows and balance sheet fluctuations as well as certain factors affecting 
our financial performance our critical accounting policies and certain 
market risks to which our operations subject us
business overview
the group is one of the largest equipment rental groups in the world with 
a network of 413 profit centres in the us the uk singapore and canada 
at 30 april 2006 equipment rental companies provide customers with a 
comprehensive line of equipment including larger equipment such as 
aerial work platforms backhoes excavators and forklifts as well as 
smaller equipment such as power tools and small pumps
operations
the group conducts its equipment rental operations in the us under the 
brand name ‘sunbelt’ and in the uk principally under the brand name  
‘aplant’ sunbelt is the fourth largest equipment rental company in the 
us and aplant is the third largest equipment rental company in the uk 
in each case measured by rental revenue the group offers for rent a 
wide range of equipment and during 2006 had total revenue of £638m
in the year ended 30 april 2006 approximately 72 of the group’s 
revenue was generated in the us by sunbelt which operates 209 profit 
centres in 27 states and the district of columbia and approximately 
25 of our revenue was generated by aplant which operates 193 
profit centres throughout the uk the group also has a specialised 
business that rents mainly electronic survey and testing equipment in 
the uk the us singapore and canada under the brand name ‘ashtead 
technology rentals’ which accounted for approximately 3 of our 
revenue in 2006 and operates 11 profit centres
sunbelt builds on the advantages of its geographical scale through a 
‘clustered market’ approach of grouping its rental locations into clusters 
of three to 15 locations in each of its developed markets throughout the 
us sunbelt has developed such ‘clustered markets’ in 22 major cities 
including washington dc baltimore charlotte atlanta jacksonville 
orlando and seattle 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 
in the uk aplant services its customers with a full range of equipment 
on a nationwide basis we believe aplant is one of only two companies 
able to provide such a comprehensive range of equipment and 
dedicated customer service throughout the uk which allows it to 
service fully the needs of its national customers
markets and competition
the us equipment rental market continues to expand as rental 
penetration increases historically the majority of construction 
equipment was owned by the contractors in the mid1990s it is 
estimated that only 5 of construction equipment was rented the 
amount of equipment rented has increased steadily since then with 
industry commentators indicating it is now around 38 the trend 
towards increased rental is expected to continue in the foreseeable 
future in contrast the uk is a mature market with rental penetration 
rates estimated in the 7080 range
reflecting the development of the market the us equipment rental 
industry is highly fragmented and sunbelt’s competitors include large 
companies operating nationally regional competitors that operate on  
a multistate basis small independent businesses with fewer than 10 
rental locations and equipment vendors and dealers who both sell and 
rent equipment directly to customers the more mature uk equipment 
rental market is highly competitive in the uk we face competition  
from large national operations as well as smaller local and regional 
operations in both markets we believe that the top 10 equipment rental 
companies accounted for approximately 30 of the total market in the 
year ended 31 december 2005
customers
the group’s diversified customer base includes construction industrial 
and homeowner customers as well as government entities and specialist 
contractors the rental equipment fleet comprises an extensive range of 
general construction equipment supplemented by more specialised 
product groups such as pumps welding equipment power generation 
equipment aerial work platforms scaffolding shoring equipment and 
temporary accommodation units 
as a large portion of our customer base comes from the commercial 
construction and industrial sectors the group is dependent on the  
level of commercial construction or industrial activity the factors  
which influence this activity include 
the strength of the us and uk economies over the long term 
including the level of government spending
the level of interest rates and
demand within the businesses that drive the need for commercial 
construction or industrial equipment 
however the group’s geographical scale and diversified customer base 
assist in mitigating the adverse impact of these factors on the group’s 
performance through
reducing the impact of localised economic fluctuations on our overall 
financial performance
reducing our dependence on any particular customer or group of 
customers and
enabling us to meet the needs of larger customers who have a wide 
range of equipment needs
•
•
•
•
•
• 34  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
suppliers
like other large participants in the industry the group purchases large 
amounts of equipment parts and other items from its suppliers the 
group’s capital expenditure on rental equipment for 20056 was £202m 
the group believes that this level of capital expenditure enables it to 
negotiate favourable pricing warranty and other terms with its suppliers 
which provide it with a competitive advantage over smaller competitors
across our rental fleet we seek to carry equipment from one or two 
manufacturers in each product range and to limit the number of model 
types of each product we believe that having such a standardised  
fleet results in lower costs because we obtain greater discounts by 
purchasing spare parts in bulk and reduce maintenance costs through 
more focused and therefore reduced training requirements for our 
workshop staff we are also able to share spare parts between profit 
centres which helps to minimise the risk of overstocking we purchase 
equipment from vendors with strong reputations for product quality and 
reliability and maintain close relationships with these vendors to ensure 
good afterpurchase service and support however management 
believes the group has sufficient alternative sources of supply for  
the equipment it purchases in each of its product categories
 
sales and marketing
each of sunbelt aplant and ashtead technology rentals has their  
own sales force focusing on establishing and expanding our national 
regional and specialisedequipment customers in various sectors  
in both the us and the uk we also have dedicated large account sales 
teams who are focused on building and reinforcing relationships with 
our larger customers particularly those with a national or multiregional 
presence in may 2005 the aplant sales force was restructured as a 
single national function to ensure the differing requirements of national 
regional and local customers were served in a more focused way  
the benefits of this restructuring have started to be realised with  
aplant returning to year on year sales growth in the third quarter of  
this financial year which continued in the fourth quarter
in addition to the efforts of our sales forces we market our business 
through direct mail campaigns print advertising telemarketing and 
industry trade publications all three of our businesses also maintain  
up to date website presences
employees
the group’s worldwide workforce consisted of 6465 employees full and 
parttime at 30 april 2006 of which 4323 were located in the us 2128 
were located in the uk and the remainder in canada and singapore
environmental and safety matters
our operations are subject to numerous laws governing environmental 
protection and occupational health and safety matters these laws 
regulate such issues as wastewater stormwater solid and hazardous 
wastes and materials and air quality under these laws we may be 
liable for among other things the cost of investigating and remediating 
contamination at our sites as well as sites to which we send hazardous 
wastes for disposal or treatment regardless of fault and also fines and 
penalties for noncompliance our operations generally do not raise 
significant environmental risks but we use hazardous materials to  
clean and maintain equipment dispose of solid and hazardous waste 
and wastewater from equipment washing and store and dispense 
petroleum products from underground and aboveground storage 
tanks located at some of our locations
based on the conditions currently known to us we do not believe that 
any pending or likely remediation and compliance costs will have a 
material adverse effect on our business 
legal proceedings
the group is party to certain legal proceedings arising in the ordinary 
course of business the results of such proceedings cannot be 
predicted with certainty but we do not believe any of these matters  
are material to our financial condition or results of operations
business strategy
the group’s goal is to establish a premium equipment rental business  
in all of the markets in which it operates in order to accomplish this its 
business strategy is to continue to provide topquality customer service 
and maintain a clear focus on the equipment rental business coupled 
with controlled growth in addition the group believes it has built a 
strong platform and achieved critical mass in its core markets enabling 
it to maximise returns on investment generate free cash flow and to 
maintain leverage at an average 2 to 3 times net debt to ebitda over 
the economic cycle
topquality customer service is the cornerstone of the group’s business 
strategy we seek to differentiate ourselves from our competitors 
through efforts to provide the highest level of customer service which 
includes employing specialist personnel motivating and empowering 
profit centre managers to forge strong relationships with customers  
in their service area ensuring that the group has an extensive  
highquality rental fleet and providing dependable customer support 
customer service initiatives include in particular focusing on reliable 
ontime delivery of equipment directly to customers’ job sites
business and financial review continued 35  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
the group focuses almost entirely on the equipment rental business 
during 2006 approximately 96 of revenue was derived from equipment 
rentals and rentalrelated services with the balance coming from sales of 
parts and associated goods such as equipment accessories we believe 
that equipment rental offers the opportunity to earn substantially higher 
returns than those which are earned by equipment dealers whose 
margins are effectively capped by the equipment manufacturer the 
group believes that this focused and dedicated approach improves  
the effectiveness of its rental sales force by encouraging them to build 
and reinforce relationships with customers and to concentrate on 
strong wholelife returns from our rental fleet rather than on shortterm 
returns from sales of equipment in contrast many of our competitors  
in the equipment rental industry especially in the us follow a mixed 
business approach providing rentals selling new equipment and 
trading used equipment
the group strives to maximise its return on investment through a 
combination of measures in addition to our monthly ‘profitshare’ 
programme we also encourage effective management of invested 
capital by
maintaining a concentration of higherreturn often specialised 
equipment within the overall rental equipment fleet
promoting the transfer of equipment to locations where maximum 
utilisation rates and returns can be obtained
monitoring the amount of invested capital at each of our profit 
centres and
empowering regional and local managers to adapt pricing policies  
in response to local demand in order to maximise the overall return 
achieved from our investment in our rental fleet
we also actively manage the composition and size of our rental fleet  
by continuing to assess and dispose of older or underperforming 
equipment and other assets and adapt the level of our capital 
expenditure to economic activity levels
the group’s flexible business model allows it to focus on generating  
free cash flow when the economy is expanding we utilise this free  
cash flow to increase investment in our rental fleet to support revenue 
ebitda and earnings growth and reduce the age of our rental fleet 
during a recessionary environment we reduce the rate at which we 
invest in new equipment and increase the age of our rental fleet which 
consequently increases free cash flow
factors affecting our financial performance and results
seasonality and cyclicality
our revenue and operating results are significantly dependent on  
activity in the commercial construction industry in the us and the uk 
commercial construction activity tends to decrease in the winter and 
•
•
•
•
during extended periods of inclement weather and increase in the 
summer and during extended periods of mild weather furthermore 
due to the incidence of public holidays in the us and the uk there are 
more billing days in the first half of our financial year than the second 
half this results in changes in demand for our rental equipment in 
addition the commercial construction industries in the us and the uk 
are cyclical industries with activity levels that tend to increase in line with 
gdp growth and decline during an economic downturn the seasonality 
and cyclicality of the equipment rental industry results in variable 
demand and therefore our revenue and operating results will fluctuate 
from period to period
currency translation
our reporting currency is the pound sterling however a majority of our 
assets liabilities revenue and costs are denominated in us dollars we 
have arranged our financing such that approximately 80 of our debt  
is also denominated in us dollars so that we have a natural partial  
offset between our dollardenominated net assets and earnings and  
our dollardenominated debt and interest expense fluctuations in the 
value of the us dollar with respect to the pound therefore have had  
and may continue to have a significant impact on our financial condition 
and results of operations as reported in pounds this impact is greatest 
on our revenue and operating profits but less significant on our profits 
before and after tax which are stated after deduction of our dollar
denominated interest expense
in the year ended 30 april 2006 the appreciation of the us dollar 
against the pound increased our total revenue by approximately 36 
and our pretax profits by approximately 45 in each case compared 
to the year ended 30 april 2005
accordingly throughout this business and financial review we  
also present the changes in our reported results in one period as 
compared to the equivalent prior period at constant exchange rates 
which assumes that the us dollar amounts for both periods were 
consolidated and translated at the average exchange rate applied  
in the financial statements for the year ended 30 april 2006 
presentation of financial information
revenue
our revenue is a function of our prices and utilisation of and the size 
and mix of our equipment rental fleet in turn the prices we charge are 
affected in large measure by utilisation and the relative attractiveness of 
our rental equipment while utilisation is determined by market size and 
our market share as well as general economic conditions utilisation is 
time based utilisation calculated as the original cost of equipment on 
rent as a percentage of the total value of equipment in the fleet at the 
measurement date in the us we measure time utilisation on those items  36  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
in our fleet with an original cost of 7 500 or more which constituted 90 
of our us serialised rental equipment at 30 april 2006 in the uk time 
utilisation is measured for all our serialised rental equipment the size  
mix and relative attractiveness of our rental equipment fleet is significantly 
affected by the level of our capital expenditure the main components of 
our revenue are
revenue from equipment rentals including related revenues such as 
the fees we charge for equipment delivery erection and dismantling 
services for our scaffolding rentals fuel provided with the equipment 
we rent to customers and loss damage waiver fees and
revenue from sales of new merchandise including sales of parts and 
revenues from a limited number of sales of new equipment 
costs
the main components of our total costs are
staff costs – staff costs at our profit centres as well as at our central 
support offices represent the largest single component of our total 
costs staff costs consist of salaries profit share and bonuses social 
security costs and other pension costs and comprised 374 of our 
total operating costs in the year ended 30 april 2006 profit share 
and bonuses earned in the year rose 42 to £162m 2005 £114m
other operating costs – comprised 415 of total costs in the year 
ended 30 april 2006 these costs include
− spare parts consumables and outside repairs costs – costs 
incurred for the purchase of spare parts used by our workshop 
staff to maintain and repair our rental equipment and outside 
repair costs 
− facilities costs – rental payments on leased facilities as well as 
utility costs and local property taxes relating to these facilities
− vehicle costs – costs incurred for the purchase maintenance and 
operation of our vehicle fleet which consist of our delivery trucks 
the light commercial vehicles used by our mobile workshop staff 
and cars used by our sales force profit centre managers and 
other management staff 
− other costs – all other costs incurred in operating our business 
including the costs of new equipment and merchandise sold 
advertising costs and bad debt expense
other income – profit on disposal of fixed assets which totalled 
£91m in the year ended 30 april 2006 2005 £71m
depreciation – the depreciation of our tangible fixed assets including 
rental equipment comprised 211 of total costs in the year ended 
30 april 2006 
our costs are significantly fixed in the short to medium term and 
material adjustments in the size of our cost base typically result  
only from openings or closures of one or more of our profit centres 
accordingly our business model is such that small increases or 
reductions in our revenue can result in little or no change in our  
costs and often therefore have a disproportionate impact on our  
profits we refer to this feature of our business as ‘operational leverage’
•
•
•
•
•
•
critical accounting policies
we prepare and present our financial statements in accordance  
with applicable international financial reporting standards ifrs in 
applying many accounting principles we need to make assumptions 
estimates and judgements these assumptions estimates and 
judgements are often subjective and may be affected by changing 
circumstances or changes in our analysis changes in these 
assumptions estimates and judgements have the potential to alter 
materially our results of operations we have identified below those  
of our accounting policies that we believe would most likely produce 
materially different results were we to change underlying assumptions 
estimates and judgements these policies have been applied consistently 
for a summary of these and our other significant accounting policies see 
note 1 to our audited consolidated financial statements
useful lives of property plant and equipment
we record expenditures for property plant and equipment at cost we 
depreciate equipment using the straight line method over its estimated 
useful economic life which ranges from 3 to 20 years with a weighted 
average life of 8 years we give effect to an estimated salvage value of 
10 of cost in respect of most types of our rental equipment zero for 
scaffolding and similar equipment 15 for aerial work platforms and 
20 for steel site accommodation units we establish our estimates  
of useful life and salvage value with the objective of allocating most 
appropriately the cost of each fixed asset to our profit and loss account 
over the period we anticipate it will be used in our business 
we may be required to change these estimates if experience shows that 
the current estimates are not achieving this objective if these estimates 
change in the future we may then be required to recognise increased or 
decreased depreciation expense our total depreciation expense in the 
year ended 30 april 2006 was £1136m
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 in the case of goodwill impairment is assessed at  
the level of the group’s three reporting units the recoverable amount  
is the higher of an asset’s fair value less costs to sell and value in use
management necessarily applies to its judgement in estimating  
the timing and value of underlying cash flows within the value in  
use calculation as well as determining the appropriate discount  
rate subsequent changes to the magnitude and timing of cash  
flows could impact the carrying value of the respective assets
business and financial review continued 37  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
selfinsurance
we establish provisions at the end of each financial year to cover our 
estimate of the discounted liability for uninsured retained risks on unpaid 
claims arising out of events occurring up to the end of such financial 
year the estimate includes events incurred but not reported at the 
balance sheet date the provision is established using advice received 
from external actuaries who help us extrapolate historical trends and 
estimate the most likely level of future expense which we will incur on 
outstanding claims these estimates may however change based on 
varying circumstances including changes in our experience of the costs 
we incur in settling claims over time accordingly we may be required  
to increase or decrease the provision held for selfinsured retained risk 
at 30 april 2006 the total provision for selfinsurance recorded in our 
consolidated balance sheet was £158m 2005 £125m
pensions
we account for the cost of pension plans for employees by charging  
the expected cost of providing pensions over the period during which 
we benefit from the employees’ services in respect of defined benefit 
plans actuarial valuations are made regularly and the contributions 
payable are adjusted in light of these valuations however these 
adjustments may be significant and may result in an increase or 
decrease in the cost of providing the defined benefit pensions in the 
year ended 30 april 2006 the total pension cost was £28m of which 
£18m was in respect of defined contribution plans
revenue recognition
revenue represents the total amount receivable for the provision of 
goods and services to customers net of returns and value added tax 
rental revenue including loss damage waiver fees is recognised on  
a straight line basis over the period of the rental contract because the 
terms and conditions of a rental contract can extend across financial 
reporting period ends the group records unbilled rental revenue and 
deferred revenue at the end of the reporting periods so rental revenue  
is appropriately stated in the financial statements
revenue from rental equipment delivery and collection is recognised 
when delivery or collection has occurred
revenue from the sale of new equipment parts and supplies retail 
merchandise and fuel is recognised at the time of delivery to or 
collection by the customer and when all obligations under the sales 
contract have been fulfilled
full year 2006 results compared with prior year
     2006   2005
    before   before   
    exceptional exceptional  exceptional exceptional  
    items and items and  items and items and  
    fair value  fair value   fair value fair value 
    remeasure  remeasure   remeasure  remeasure   
    ments ments total ments ments total 
    £m £m £m £m £m £m
revenue    6380 – 6380 5237 – 5237
staff costs    2004 03 2007 1729 – 1729
other operating costs    2220 13 2233 1884 – 1884
other income    91 150 241 71 – 71
ebitda    2247 134 2381 1695 – 1695
depreciation     1136 – 1136 1024 – 1024
operating profit    1111 134 1245 671 – 671
net financing costs    436 08 428 447 98 349
profit before taxation    675 142 817 224 98 322
taxation      
– current    01 54 55 07 – 07
– deferred    210 04 206 133 – 133
profit for the period    464 92 556 84 98 182
      
  ebitda is presented here as an additional performance measure as it is commonly used by investors and lenders  38  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
revenue increased 178 at constant 2006 exchange rates to £6380m 
and by 218 at actual rates ebitda before exceptional items grew by 
280 at constant exchange rates to £2247m and by 325 at actual 
rates total ebitda increased 405 at actual rates to £2381m
 
operating profit grew to £1245m from £671m before exceptional items 
operating profit increased to £1111m an increase of 586 at constant 
exchange rates and 655 at actual rates return on investment 
defined as operating profit before exceptional items divided by the 
business and financial review continued
weighted average capital employed shareholders’ funds plus net debt 
minusplus the pension fund surplusdeficit and less other financial 
assets – derivatives computed using a quarterly average improved to 
147 from 99 in 2005 return on investment excluding capitalised 
goodwill improved to 180 from 122
divisional performance
divisional results are summarised below and are stated before 
exceptional items
 
   operating 
 revenue ebitda profit
    2006 2005 2006 2005 2006 2005
sunbelt rentals in m    8187 6611 3079 2240 1755 1079 
sunbelt rentals in £m    4612 3550 1734 1203 989 579
aplant    1607 1563 489 482 139 113
ashtead technology    161 124 80 65 40 34
group central costs    – – 56 55 57 55
    6380 5237 2247 1695 1111 671
sunbelt
revenue increased 238 in the year to 8187m this was achieved 
through increased investment in the rental fleet which was on average 
11 larger than a year ago and by significant increases in rental rates 
which were increased approximately 12 in strong market conditions 
average utilisation remained high at 70 compared to 69 in the prior 
year revenue growth was broadly based with all regions and all major 
product areas trading ahead of last year last summer’s hurricanes are 
estimated to have added around 2 to revenues in a strong trading 
environment where us nonresidential construction rose 102 in  
the year to 30 april 2006 according to figures published by the us 
department of commerce sunbelt continued to take market share 
revenues from house builders where the short term outlook is less 
certain accounted for just 6 of sunbelt’s revenues the shift from 
ownership to rental continued with the us rental sector again growing 
faster than its key customer base nonresidential construction in 
calendar 2005
sunbelt continued to invest to reduce the age of its rental fleet and  
for growth spending 2579m in the year including the funding of  
six new greenfield stores a further 16 new general equipment rental 
stores were acquired during the year for a consideration including 
costs of approximately 100m the acquired stores were all 
immediately transferred onto sunbelt’s point of sale system and staff 
incentive programmes and began trading as sunbelt stores from their 
acquisition closing date their financial performance since acquisition 
has been strongly positive in august sunbelt also disposed of 12 
specialist scaffold stores on the west coast and in texas for 243m 
generating an exceptional disposal profit of 51m £29m the new 
stores continue sunbelt’s strategy of clustering stores in major 
metropolitan markets sunbelt also continues to emphasise organic 
growth with an increase in same store revenues for the year of 193
 
operating costs excluding depreciation rose 167 in the period  
to 5098m this reflected increased personnel costs and higher 
maintenance costs to service current activity levels as well as growth  
in fuel and insurance costs
reflecting these developments sunbelt’s ebitda for the year grew 
374 to 3079m and its ebitda margin improved to 376 from 
339 in 2005 divisional operating profit grew 627 to 1755m 
representing a margin of 214 2005 163 return on investment 
including capitalised goodwill increased to 176 from 124 in 2005 
excluding capitalised goodwill return on investment increased to 231 
from 163 in 2005
sunbelt’s results in sterling reflected the factors discussed above and 
the stronger us dollar  39  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
aplant
aplant’s revenue for the year was £1607m compared to £1563m last 
year the successful restructuring of aplant’s sales force undertaken  
in the first half of the year contributed to a significantly improved 
performance in the second half of the year and a particularly strong 
fourth quarter with revenues increasing by 8 rental rates average 
fleet size and utilisation for the year were all at similar levels to those  
of last year with average utilisation of 65 for the year 2005 65
aplant’s sales operations are now structured in a single national 
organisation to serve the differing requirements of national regional  
and local customers in a more focused way senior sales management 
resources have been increased as has the size of the sales force  
to ensure that aplant can address the needs of a uk construction 
market which continues to show solid growth the emphasis placed  
by customers on health  safety continues to increase and is driving 
increased outsourcing activity coupled with a need for the rental 
equipment provider to be able to monitor and measure its performance 
across a range of key performance indicators these trends are 
benefiting aplant which with its national presence and established  
it systems is one of only a few national providers able to meet 
customers’ needs revenues from its largest 150 customers continued 
to grow and represented 39 of the year’s total
careful management of operating expenses continued these increased 
by just 34 reflecting principally the full year impact of cost reduction 
measures taken last year consequently ebitda for the year increased 
15 to £489m representing an ebitda margin of 304 compared to 
308 in 2005 divisional operating profit increased 220 to £139m 
representing a margin of 86 2005 73 return on investment 
increased to 70 from 56 in 2005 excluding goodwill return on 
investment increased to 71 from 57 in 2005
ashtead technology
revenue for the year grew 260 at constant exchange rates to £161m 
and by 295 at actual exchange rates divisional operating profit 
increased by 175 at constant exchange rates to £40m and by 199 
at actual exchange rates this reflects increased investment by the oil 
majors which is delivering higher offshore exploration and construction 
activity as well as continued growth in ashtead technology’s onshore 
environmental business investment for future growth included a 
significantly enlarged onshore sales force and a new profit centre 
opened in chicago last november
exceptional items and fair value  
remeasurements of embedded derivatives
in addition to the trading results discussed above operating profit as 
reported in the consolidated income statement includes £134m of net 
exceptional profits these comprise the £113m received when sunbelt 
settled its litigation with head  engquist last november a £29m  
profit on disposal of sunbelt’s 12 scaffold stores less £08m of post 
acquisition integration costs included within finance costs is the £48m 
net cost of last summer’s capital reorganisation mainly relating to the 
12 premium payable on the £42m of sterling senior secured notes 
redeemed early out of the proceeds of the equity placing and the  
£56m 2005 £98m noncash fair value remeasurement of embedded 
derivatives in long term debt 
net financing costs 
net financing costs for the year increased to £428m from £349m in 
2005 due primarily to the effects of exceptional costs of £48m related 
to the capital reorganisation and fair market remeasurements of 
embedded derivatives of £56m 2005 £98m in longterm debt before 
exceptional costs and fair value remeasurements net financing costs 
decreased by 25 reflecting slightly lower average debt levels but 
similar average interest rates compared to the previous year the 
average interest rate benefited from the repayment of £420m of our 
12 notes and from a lower margin under our first priority asset based 
senior secured loan facility but these benefits have been offset by 
increases in us dollar interest rates payable under our floating rate 
senior facility 
profit before taxation
the profit on ordinary activities before taxation was £817m compared 
with £322m in 2005 underlying profit before tax was £675m more 
than triple last year’s £224m £242m at constant exchange rates after 
taxation the profit for the year was £556m compared to £182m in 2005
taxation
overall for the year the effective accounting tax rate on the underlying 
profit was 31 whilst the cash tax rate on the same basis remained 
minimal the tax charge for the year of £261m 2005 £140m comprises 
£211m relating to the profit before tax exceptional items and fair value 
remeasurements and £50m relating to the exceptional income and fair 
value remeasurements the charge for current tax was £55m of which 
£54m related to exceptional items and the charge for deferred tax was 
£206m except in relation to the exceptional gains substantially no cash 
tax was again paid reflecting the capital intensive nature of the group’s 
operations and the level of available prior year tax losses 
the recent increases in sunbelt’s profitability together with the head  
engquist litigation receipt mean however that sunbelt’s us federal tax 
losses have now been fully utilised and that consequently the group’s 
cash tax rate will rise into double digits next year 40  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
earnings per share
underlying basic earnings per share were 122p and basic earnings per 
share were 147p compared to 26p and 56p respectively a year ago 
on a cash tax basis earnings per share before exceptional items were 
178p 2005 67p cash tax earnings per share comprises earnings 
before exceptional items fair value remeasurements and deferred tax 
divided by the weighted average number of shares in issue cash tax 
earnings per share is considered to be a relevant measure of earnings 
per share as the deferred tax liability is not expected to crystallise in the 
foreseeable future
business and financial review continued
dividends
the directors are proposing to shareholders at the annual general 
meeting that a final dividend of 10p per share be paid making a total  
for the year of 15p per share 2005 nil under ifrs the financial 
statements now reflect only dividends paid in the year and therefore 
show only the £20m cost of the interim dividend paid in february  
the final dividend if approved by shareholders will be paid on 28 
september 2006 to shareholders on the register on 28 july 2006
balance sheet
property plant and equipment
  2006 2005
      rental  rental  
      equipment total equipment total 
      £m £m £m £m
opening balance      4529 5371 4697 5549
exchange difference      163 186 215 233
additions       2018 2202 1200 1384
acquisitions      322 353 – –
reclassifications      03 – 01 –
disposals at net book value      474 509 286 305
depreciation       962 1136 866 1024
closing balance      5599 6467 4529 5371
capital expenditure increased 59 to £2202m in 2006 of which £2018m was on the rental fleet
  2006 2005
      growth maintenance total total
sunbelt in m      811 1768 2579 1527
sunbelt in £m      446 973 1419 799
aplant      141 380 521 354
ashtead technology      58 20 78 47
total rental equipment      645 1373 2018 1200
other fixed assets        184 184
total additions        2202 1384
capital expenditure was increased significantly in the year mainly to 
enable sunbelt to take advantage of the improving economic conditions 
in the us £645m of the fleet expenditure was for growth with the 
remainder being spent to replace existing equipment this proportion  
is estimated on the basis of the assumption that maintenance capital 
expenditure in any period is equal to the original cost of equipment sold 
in that period expenditure on aplant’s rental fleet was also increased 
from £354m to £521m as its performance improved disposals 
amounted to £508m 2005 £376m in the year generating a profit  
on disposal of £91m 2005 £71m at a margin of 22 2005 23 
above book value the markets we use for disposing of used rental 
equipment continue to be healthy 
the average age of the group’s serialised rental equipment which 
constitutes the substantial majority of our fleet at 30 april 2006 was 37 
months on a net book value basis 2005 45 months at the same date 
sunbelt’s fleet had an average age of 38 months 2005 46 months 
comprising 49 months for aerial work platforms which have a longer life 
and 28 months for the rest of its fleet whilst aplant’s fleet had an average 
age of 36 months 2005 43 months 
in the year ending 30 april 2007 gross capital expenditure is expected 
to increase to approximately £250m 41  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
trade and other receivables
receivable days improved to 49 days 2005 53 days the bad debt 
charge as a percentage of total revenue was 07 in 2006 compared 
with 11 in 2005 
trade and other payables
group payable days decreased to 57 days at 30 april 2006 from 74 
days at 30 april 2005 capital expenditure related payables at 30 april 
2006 totalled £300m 2005 £359m payment periods for purchases 
other than rental equipment vary between 7 and 60 days and for rental 
equipment between 30 and 90 days 
other provisions
other provisions of £183m 2005 £150m relate principally to provision  
for self insured retained risk under the group’s self insurance policies  
the group’s business exposes it to 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 
liability insurance programmes provide that we can only recover the liability 
related to any particular claim in excess of an agreed excess amount of 
typically between 500000 and 2m depending on the particular liability 
programme in certain but not all cases this liability excess amount is 
subject to an annual cap which limits the group’s maximum liability in 
respect of these excess amounts to such annual cap our insured liability 
coverage is limited to a maximum of £100m per occurrence
pensions
the group operates a number of pension plans for the benefit of  
its employees for which the overall charge included in the financial 
statements was £28m 2005 £38m amongst these the group now 
has just one defined benefit pension plan which covers approximately 
350 employees in the uk and which was closed to new members in 
2001 all our other pension plans are defined contribution plans
in march 2006 the group contributed £171m to fully fund the uk 
defined benefit pension plan on an ongoing actuarial basis this has  
no significant impact on the group’s income statement but will reduce 
future payments to the plan
principally as a result of the foregoing the group’s defined benefit 
pension plan deficit which measured in accordance with ias 19 
employee benefits was £162m at the beginning of the year has 
become a surplus of £17m at the end of the year excluding the 
additional £171m contribution asset values increased by £53m over 
and above the expected return on plan assets of £22m included in  
the income statement however offsetting this benefit was the impact  
of changes in the required market linked discount rate which reduced 
from 525 in 2005 to 50 in 2006 adding £51m to the value of 
liabilities accordingly there was a net gain of £02m in the year which 
was credited direct to the statement of recognised income and expense
cash flow and net debt
free cash flow in the year ended 30 april 2006 which is defined to 
exclude exceptional costs and which comprises our net cash inflow from 
operations excluding exceptional items less net maintenance capital 
expenditure interest and tax is summarised below
 year to 30 april
 2006 2005 
 £m £m
ebitda before exceptional items 2247 1695
cash inflow from operations  
 before exceptional items 2152 1648
maintenance rental capital expenditure 1499 956
nonrental capital expenditure 168 54
proceeds from sale of used rental equipment 504 359
tax paid 28 06
free cash flow before interest 961 991
financing costs paid  387 302
free cash flow after interest 574 689
growth capital expenditure 626 102
acquisitions and disposals 442 05
issue of ordinary share capital  709 01
dividends paid 20 –
purchase of own shares by esot 28 –
pension plan funding 171 –
exceptional costs paid 22 57
increasereduction in total debt 26 536
cash inflow from operations reflected principally the growth in reported 
ebitda consequently cash inflow from operations increased 306 to 
£2152m and the cash efficiency ratio was 958 2005 972 as we 
continued to convert almost all our ebitda into cash
net maintenance rental capital expenditure increased to £995m 2005 
£597m as we spent ahead of depreciation to reduce the age of the 
rental fleet proceeds from the sale of fixed assets principally used 
equipment rose 404 to £504m 2005 £359m and represented  
34 2005 38 of maintenance capital expenditure expenditure on 
nonrental capital expenditure principally leasehold improvements 
vehicles and computer equipment was £168m with the increase over 
last year’s £54m reflecting principally high vehicle replacements cash 
tax payments in the year were just £28m but are set to increase next 
year as the us tax group has now utilised all its federal tax losses due to 
improved operating performance the head  engquist settlement and 
the scaffold disposal financing costs excluding exceptional financing 
costs paid this year were more in line with the accounting charge last 
year financing costs were unusually low compared to last year’s £447m 
accounting charge and reflected the timing of interest payments  42  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
reflecting this and the high fleet maintenance capital expenditure after 
interest free cash flow fell 167 to £574m 2005 £689m this free 
cash flow net proceeds of £709m from the issue of ordinary shares and 
a £26m draw under our bank facilities were applied
i to pay £626m in respect of growth capital expenditure
ii to fund acquisitions net of disposal proceeds of £442m
iii to fund the purchase of £28m of shares by the esot in connection 
with employee share plans 
iv to pay the interim dividend of £20m
v to make the onetime contribution of £171m to the defined benefit 
pension plan and
vi to pay net exceptional costs of £22m 
on 3 august 2005 the group completed a capital reorganisation which 
raised approximately £70m from an equity placing and open offer as well 
as 250m of new second lien 8625 senior secured notes due 2015 
the proceeds of the placing and the debt issue were applied to redeem 
early at an approximate 11 discount the £134m convertible loan note 
and to redeem £42m of the 12 second priority senior secured loan 
notes due 2014 after payment of transaction costs the remaining 
£265m of funds raised were applied to reduce outstandings under  
our asset based debt facility
based on current projections the group expects to be able to fund  
its cash requirements relating to its operations from existing sources  
of cash including its committed borrowing facilities for at least the next  
12 months it expects that the principal needs for cash relating to existing 
operations over the next 12 months will be to
fund operating expenses and working capital
fund the purchase of rental equipment and other capital expenditures 
and
service outstanding debt
while emphasising primarily internal growth the group also expects to 
continue to expand through making small acquisitions that it would expect  
to fund by using cash share capital andor the assumption of debt
net debt
 2006 2005 
 £m £m
first priority senior secured bank debt and overdraft 2632 2162
finance lease obligations 232 320
12 second priority senior secured notes due 2014 755 1158
8625 second priority senior secured notes due 2015 1327 –
525 unsecured convertible loan note due 2008 – 1204
 4946 4844
cash at bank and in hand  10 21
total net debt 4936 4823
•
•
•
net debt at 30 april 2006 was £4936m 2005 £4823m measured at 
constant 30 april 2006 exchange rates the increase in net debt from 
30 april 2005 was £25m although net debt has increased slightly  
the significant growth in ebitda has resulted in the ratio of net debt to 
ebitda before exceptional items reducing from 285 times a year ago  
to 22 times at 30 april 2006
 
bank loan facility
on 14 november 2005 the group agreed amended terms with the 
syndicate of lenders who make available its first priority asset based 
senior secured loan facility ‘the abl facility’ to increase the amount 
extend the maturity reduce the number of covenants and lower the cost 
of the facility following this amendment the abl facility consists of a 
525m revolving credit facility and a 272m term loan and is secured by 
a first priority interest in substantially all of the group’s assets pricing is 
based on the ratio of funded debt to ebitda according to a grid which 
varies depending on leverage from libor plus 250bp to libor plus 
175bp for term borrowings and from libor plus 250bp to libor plus 
150bp for revolver borrowings at 30 april 2006 the group’s borrowing 
rate was libor plus 175bp on the term loan and libor plus 150bp on 
the revolver loan 
the abl facility carries minimal amortisation of 1 per annum 275m 
on the term loan and is committed until november 2010 
the abl facility includes a springing covenant package under which 
quarterly financial performance covenants are only tested if available 
liquidity is less than 50 million these covenants comprise a maximum 
ratio of total debt to ebitda and a minimum fixed charge ratio the ratio 
of ebitda less capital expenditure net of disposal proceeds to the sum 
of cash interest taxes distributions to equity holders and scheduled 
principal debt repayments available liquidity under the abl facility at 
30 april 2006 was £156m 283m compared with £82m 157m at  
30 april 2005 as the abl facility is asset based the maximum amount 
available to be borrowed which includes drawings in the form of standby 
letters of credit depends on asset values receivables inventory rental 
equipment and real estate which are subject to periodic independent 
appraisal at 30 april 2006 the maximum amount available to be borrowed 
based on asset values exceeded the facility size by £25m 46m
because liquidity at 30 april 2006 much exceeded the 50m springing 
level together with the fact that neither of the group’s other debt 
facilities the senior secured notes due 2014 and 2015 contain regularly 
measured financial covenants the group does not currently have any 
quarterly monitored financial performance covenants to adhere to
business and financial review continued 43  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
12 second priority senior secured notes due 2014 having  
a nominal value of £120m
on 16 april 2004 the group through its wholly owned subsidiary 
ashtead holdings plc issued £120m of 12 second priority senior 
secured notes due 1 may 2014 the notes are secured by second 
priority security interests over substantially the same assets as the 
senior secured credit facility and are also guaranteed by ashtead  
group plc on 5 september 2005 £42m of the principal was repaid 
utilising some of the proceeds of last summer’s equity issue
8625 second priority senior secured notes due 2015 having a 
nominal value of 250m
on 3 august 2005 the group through its wholly owned subsidiary ashtead 
holdings plc issued 250m of 8625 second priority senior secured notes 
due 1 august 2015 the notes are secured by second priority security 
interests over substantially the same assets as the first priority senior 
secured credit facility and are also guaranteed by ashtead group plc
under the terms of the 12 and 8625 notes the group is subject to 
important exceptions restricted in its ability to incur additional debt pay 
dividends make investments sell assets enter into sale and leaseback 
transactions and merge or consolidate with another company interest is 
payable on the 12 notes on 1 may and 1 november of each year and on 
the 8625 notes on 1 february and 1 august of each year both senior 
secured notes are listed on the official list of the uk listing authority
 
minimum contracted debt commitments
the table below summarises the maturity of the group’s debt and also 
shows the minimum annual commitments under off balance sheet 
operating leases at 30 april 2006 by year of expiry
 payments due by year
   2007 2008 2009 2010 2011 thereafter total 
   £m £m £m £m £m £m £m
bank and other debt
1
   15 15 15 15 2572 – 2632
finance leases
2
    91 55 37 33 15 01 232
12 senior secured notes
3
   – – – – – 755 755
8625 senior secured notes
4
   – – – – – 1327 1327
   106 70 52 48 2587 2083 4946
cash at bank and in hand   10 – – – – – 10
net debt   96 70 52 48 2587 2083 4936
operating leases
5
   179 164 151 137 123 841 1595
total   275 234 203 185 2710 2924 6531
       
1  represents the scheduled maturities of our bank and other debt for the periods indicated
2 represents the future minimum lease payments under our finance leases
3 represents the carrying value of the £78m second priority secured notes
4 represents the carrying value of the 250m second priority secured notes
5  represents the minimum payments to which we were committed under operating leases
operating leases relate principally to properties most of which are 
leased which constituted 986 £1573m of our total minimum 
operating lease commitments there are also a few remaining  
operating leases relating to the vehicle fleet which constituted the 
remaining 14 £22m of such commitments
except for the off balance sheet operating leases described above 
£154m 279m of standby letters of credit issued at 30 april 2006 
under the first priority senior debt facility relating to the group’s self 
insurance programmes and a 19m performance guarantee facility 
utilised by sunbelt we have no material commercial commitments  
that we could be obligated to pay in the future which are not included  
in the group’s consolidated balance sheet 44  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
treasury policies
the group reports in sterling and pays dividends in sterling it is the  
role of the group treasury function to manage and monitor the group’s 
internal and external funding requirements and financial risks 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 
liquidity
the group generates significant free cash flow defined as cash flow 
from operations less replacement capital expenditure net of proceeds  
of asset disposal interest paid and tax paid this free cash flow is 
available to the group to invest in growth capital expenditure acquisitions 
and dividend payments 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 2006 availability under this facility was 283m £156m and  
the group’s objective is to maintain availability in excess of 100m 
throughout the economic cycle furthermore the group seeks to 
maintain leverage at an average of 2 to 3 times net debt to ebitda  
over the economic cycle
interest rate risk management
the group periodically utilises interest rate swap agreements to manage 
and mitigate its exposure to changes in interest rates at 30 april 2006 
the group had one swap agreement with an aggregate notional amount 
of 100m whose effect had been to fix the interest rate exposure at 
25 on 100m of us dollar borrowings this contract expired on 3 may 
2006 the group’s debt that bears interest at a variable rate comprises 
all outstanding borrowings under the senior secured credit facility the 
interest rates currently applicable to this variable rate debt are libor as 
applicable to the currency borrowed us dollars or pounds plus 175bp 
for term borrowings and 150bp for revolver borrowings
at 30 april 2006 based upon the amount of variable rate debt 
outstanding the group’s pretax profits would change by approximately 
£2m for each one percentage point change in interest rates applicable 
to the variable rate debt the amount of the group’s variable rate debt 
may fluctuate as a result of changes in the amount of debt outstanding 
under the revolving tranches of the senior secured credit facility 
currency exchange risk management
the group’s reporting currency is the pound sterling however a majority 
of our assets liabilities revenue and costs are denominated in us dollars 
the group has arranged its financing such that approximately 80 of its 
debt is also denominated in us dollars so that there is a natural partial 
offset between its dollardenominated net assets and earnings and its 
dollardenominated debt and interest expense 
based upon the level of us operations and of the us dollardenominated 
debt balance and us interest rates at 30 april 2006 a 1 change in  
the us dollarpound exchange rate would impact our pretax profits  
by 1 at 30 april 2006 the group had no outstanding foreign 
exchange contracts
the group’s exposure to exchange rate movements on trading 
transactions is relatively limited all group companies invoice revenues 
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 sterling foreign exchange risk on significant nontrading 
transactions eg acquisitions is considered on an individual basis
credit risk management
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 allowances for doubtful receivables 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 group has no significant 
concentration of credit risk with exposure spread over a large number 
of customers 
 
ian robson
finance director
27 june 2006
business and financial review continued 45  ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom
we have audited the group and individual company financial statements 
the ‘financial statements’ of ashtead group plc for the year ended  
30 april 2006 which comprise the consolidated income statement  
the consolidated and company balance sheets the consolidated  
and company cash flow statements the consolidated statement of 
recognised income and expense and the related notes 1 to 29 these 
financial statements have been prepared under the accounting policies 
set out therein we have also audited the information in the directors’ 
remuneration report that is described as having been audited 
 
this report is made solely to the company’s members as a body in 
accordance with section 235 of the companies act 1985 our audit 
work has been undertaken so that we might state to the company’s 
members those matters we are required to state to them in an auditors’ 
report and for no other purpose to the fullest extent permitted by law 
we do not accept or assume responsibility to anyone other than the 
company and the company’s members as a body for our audit work 
for this report or for the opinions we have formed
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report the 
directors’ remuneration report and the financial statements in 
accordance with applicable law and international financial reporting 
standards ifrs as adopted for use in the european union are set  
out in the statement of directors’ responsibilities
our responsibility is to audit the financial statements and the part of  
the directors’ remuneration report described as having been audited 
in accordance with relevant united kingdom legal and regulatory 
requirements and international standards on auditing uk and ireland 
 
we report to you our opinion as to whether the financial statements give 
a true and fair view in accordance with the relevant financial reporting 
framework and whether the financial statements and the part of the 
directors’ remuneration report described as having been audited have 
been properly prepared in accordance with the companies act 1985 
and article 4 of the ias regulations we report to you if in our opinion 
the directors’ report is consistent with the financial statements we also 
report to you if the company has not kept proper accounting records  
if we have not received all the information and explanations we require 
for our audit or if information specified by law regarding directors’ 
remuneration and other transactions is not disclosed 
 
we also report to you if in our opinion the company has not complied 
with any of the four directors’ remuneration disclosure requirements 
specified for our review by the listing rules of the financial services 
authority these comprise the amount of each element in the 
remuneration package and information on share options details of  
longterm incentive schemes and money purchase and defined  
benefit schemes we give a statement to the extent possible of  
details of any noncompliance
 
we review whether the corporate governance statement reflects  
the company’s compliance with the nine provisions of the 2003 frc 
combined code specified for our review by the listing rules of  
the financial services authority and we report if it does not we  
are not required to consider whether the board’s statements on  
internal control cover all risks and controls or form an opinion on  
the effectiveness of the group’s corporate governance procedures  
or its risk and control procedures
 
we read the directors’ report and the other information contained  
in the annual report for the above year as described in the contents 
section including the unaudited part of the directors’ remuneration 
report and we consider the implications for our report if we become 
aware of any apparent misstatements or material inconsistencies with 
the financial statements 
basis of audit opinion
we conducted our audit in accordance with international standards on 
auditing uk and ireland issued by the auditing practices board an audit 
includes examination on a test basis of evidence relevant to the amounts 
and disclosures in the financial statements and the part of the directors’ 
remuneration report described as having been audited it also includes 
an assessment of the significant estimates and judgements made by the 
directors in the preparation of the financial statements and of whether the 
accounting policies are appropriate to the company’s circumstances 
consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information 
and explanations which we considered necessary in order to provide us 
with sufficient evidence to give reasonable assurance that the financial 
statements and the part of the directors’ remuneration report described 
as having been audited are free from material misstatement whether 
caused by fraud or other irregularity or error in forming our opinion we 
also evaluated the overall adequacy of the presentation of information in 
the financial statements and the part of the directors’ remuneration 
report described as having been audited
independent auditors’ report to the  
members of ashtead group plc 46  ashtead group plc annual report and accounts for the year ended 30 april 2006 international equipment rental
opinion
in our opinion
the group financial statements give a true and fair view in 
accordance with ifrs as adopted for use in the european union  
of the state of the group’s affairs as at 30 april 2006 and of its  
profit for the year then ended
the individual company financial statements give a true and fair view 
in accordance with ifrs as adopted for use in the european union 
as applied in accordance with the requirements of the companies 
act 1985 of the state of the company’s affairs as at 30 april 2006 
the financial statements and the part of the directors’ remuneration 
report described as having been audited have been properly 
prepared in accordance with the companies act 1985 and article 4 
of the ias regulations and
the information given in the directors’ report is consistent with the 
financial statements 
separate opinion in relation to ifrs 
as explained in note 1 to the financial statements the group in addition 
to complying with its legal obligation to comply with ifrs as adopted for 
use in the european union has also complied with the ifrs as issued 
by the international accounting standards board accordingly in our 
opinion the financial statements give a true and fair view in accordance 
with ifrs of the state of the group’s and company’s affairs as at  
30 april 2006 and of the group’s profit for the year then ended 
deloitte  touche llp
chartered accountants and registered auditors
london
27 june 2006
notes  an audit does not provide assurance on the maintenance and 
integrity of the website including controls used to achieve this and in 
particular on whether any changes may have occurred to the financial 
statements since first published these matters are the responsibility of 
the directors but no control procedures can provide absolute assurance 
in this area
legislation in the united kingdom governing the preparation and 
dissemination of financial statements differs from legislation in other 
jurisdictions
•
•
•
•
independent auditors’ report to the 
members of ashtead group plc continued 47	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
	 	 	 	 	 2006	 	 	 2005
	 	 	 before	 	 	 before 	 	 	 	 exceptional exceptional	 	 exceptional	 exceptional 	 	 	 	 items and items and	 	 items 	 and	 items 	 and	 	 	 	 fair value fair value	 	 fair 	 value	 fair 	 value	 	 	 	 remeasure remeasure	 	 remeasure	 remeasure 	 	 	 	 ments
†
 ments
†
 total	 ments
†
	 ments
†
	 total 	 	 	 notes	 £m £m £m	 £m	 £m	 £m
revenue	 	 2	 6380 – 6380	 5237	 –	 5237
staff	 costs	 	 	 2004 03 2007	 1729	 –	 1729
other	 operating	 costs	 	 	 2220 13 2233	 1884	 –	 1884
other	 income	 	 	 91 150 241	 71	 –	 71
ebitda	 	 	 2247 134 2381	 1695	 –	 1695
depreciation	 	 	 1136 – 1136	 1024	 –	 1024
operating profit	 	 23	 1111 134 1245	 671	 –	 671
investment	 income	 	 	 27 78 105	 29	 98	 127
interest	 expense	 	 	 463 70 533	 476	 –	 476
net	 financing	 costs	 	 4	 436 08 428	 447	 98	 349
profit on ordinary  activities before taxation	 	 675 142 817	 224	 98	 322
taxation
–	 current	 	 6	 01 54 55	 07	 –	 07
–	 deferred	 	 617	 210 04 206	 133	 –	 133
	 	 	 211 50 261	 140	 –	 140
profit attributable to equity shareholders	 	 19	 464 92 556	 84	 98	 182
basic	 earnings	 per	 share	 	 8	 	 	 147p	 	 	 56p
diluted	 earnings	 per	 share	 	 8	 	 	 144p	 	 	 56p
	 ebitda 	 is	 presented	 here	 as	 an	 additional	 performance	 measure	 as	 it	 is	 commonly	 used	 by	 investors	 and	 lenders
†
	 fair 	 value	 remeasurements	 relate	 to	 embedded	 derivatives	 in	 long	 term	 debt
the	 group’s	 results	 are	 all	 derived	 from	 continuing	 operations
consolidated income statement 
for the year ended 30 april 2006 48	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
profit	 for	 the	 financial	 year	 	 	 	 	 	 	 556	 182
actuarial	 gainloss	 on	 defined	 benefit	 pension	 schemes	 	 	 	 	 	 	 02	 37
foreign	 currency	 translation	 differences	 	 	 	 	 	 154	 160
total recognised income and expense for the year	 	 	 	 	 	 	 712	 15
consolidated movements in equity  
shareholders’ funds 
for the year ended 30 april 2006
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
total	 recognised	 income	 and	 expense	 for	 the	 year	 	 	 	 	 	 	 712	 15
issue	 of	 ordinary	 shares	 net	 of	 expenses	 	 	 	 	 	 	 709	 01
dividends	 paid	 	 	 	 	 	 	 20	 –
credit	 in	 respect	 of	 share	 based	 payments	 	 	 	 	 	 	 13	 06
own	 shares	 acquired	 by	 esot	 	 	 	 	 	 	 28	 –
net increasedecrease in equity shareholders’ funds in the year 	 	 	 	 	 1386	 08
equity	 shareholders’	 funds	 at	 the	 beginning	 of	 the	 year	 	 	 	 	 	 1197	 1205
closing equity shareholders’ funds	 	 	 	 	 	 	 2583	 1197
consolidated statement of  
recognised income and expense 
for the year ended 30 april 2006 49	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 notes	 £m	 £m
current assets
inventories	 	 	 	 	 	 9	 127	 138
trade	 and	 other	 receivables	 	 	 	 	 	 10	 1104	 919
cash	 and	 cash	 equivalents	 	 	 	 	 	 23c	 10	 21
	 	 	 	 	 	 	 1241	 1078
noncurrent assets
property	 plant	 and	 equipment
–	 rental	 equipment	 	 	 	 	 	 11	 5599	 4529
–	 other	 assets	 	 	 	 	 	 11	 868	 842
	 	 	 	 	 	 	 6467	 5371
intangible	 assets	 –	 goodwill	 	 	 	 	 	 12	 1490	 1182
deferred	 tax	 asset	 	 	 	 	 	 17	 29	 –
other	 financial	 assets	 –	 derivatives	 	 	 	 	 	 15	 154	 98
defined	 benefit	 pension	 fund	 surplus	 	 	 	 	 	 22	 17	 –
	 	 	 	 	 	 	 8157	 6651
total assets	 	 	 	 	 	 	 9398	 7729
current liabilities
trade	 and	 other	 payables	 	 	 	 	 	 13	 991	 943
current	 tax	 liabilities	 	 	 	 	 	 	 33	 07
debt	 due	 within	 one	 year	 	 	 	 	 	 14	 106	 122
provisions	 	 	 	 	 	 16	 70	 71
	 	 	 	 	 	 	 1200	 1143
noncurrent liabilities
other	 payables	 	 	 	 	 	 	 –	 79
debt	 due	 after	 more	 than	 one	 year	 	 	 	 	 	 14	 4840	 4722
provisions	 	 	 	 	 	 16	 113	 79
defined	 benefit	 pension	 fund	 deficit	 	 	 	 	 	 22	 –	 162
deferred	 tax	 liabilities	 	 	 	 	 	 17	 662	 347
	 	 	 	 	 	 	 5615	 5389
total liabilities	 	 	 	 	 	 	 6815	 6532
equity shareholders’ funds
share	 capital	 	 	 	 	 	 18	 404	 326
share	 premium	 	 	 	 	 	 19	 32	 1008
nondistributable	 reserve	 	 	 	 	 	 19	 907	 –
equity	 element	 of	 convertible	 loan	 note	 	 	 	 	 	 19	 –	 243
own	 shares	 held	 in	 treasury	 through	 the	 esot	 	 	 	 	 	 19	 42	 16
cumulative	 foreign	 exchange	 translation	 differences	 	 	 	 	 	 19	 172	 326
distributable	 reserves	 	 	 	 	 	 19	 1454	 38
total equity shareholders’ funds	 	 	 	 	 	 	 2583	 1197
total liabilities and equity shareholders’ funds	 	 	 	 	 	 	 9398	 7729
these	 financial	 statements	 were	 approved	 by	 the	 board	 on	 27	 june	 2006
gb burnett  si robson
chief	 executive	 	 finance 	 director
consolidated balance sheet 
at 30 april 2006 50	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
	 	 2006	 2005
	 	 	 	 notes	 £m £m	 £m	 £m
cash flows from operating activities
cash	 generated	 from	 operations	 before	 exceptional	 items	 	 	 	 23a	 2152	 	 1648
exceptional	 items	 	 	 	 	 111	 	 57
pension	 payment	 	 	 	 	 171	 	 –
cash	 generated	 from	 operations	 	 	 	 	 	 2092	 	 1591
financing	 costs	 paid	 before	 exceptional	 items	 	 	 	 	 387	 	 302
exceptional	 financing	 costs	 paid	 	 	 	 133	 	 –
financing	 costs	 paid	 	 	 	 	 	 520	 	 302
tax	 paid	 	 	 	 	 	 28	 	 06
net cash from operating activities	 	 	 	 	 1544	 	 1283
cash flows from investing activities
acquisition	 of	 businesses	 	 	 	 24a	 	 570	 	 –
disposal	 of	 businesses	 	 	 	 24b 	 	 128	 	 05
payments	 for	 property	 plant	 and	 equipment	 	 	 	 	 	 2293	 	 1112
proceeds	 on	 sale	 of	 property	 plant	 and	 equipment	 	 	 	 	 	 504	 	 359
net cash used in investing activities	 	 	 	 	 2231	 	 748
cash flows from financing activities
drawdown	 of	 loans	 	 	 	 	 	 2575	 	 2446
redemption	 of	 loans	 	 	 	 	 	 2440	 	 2933
decrease	 in	 cash	 held	 as	 collateral	 	 	 	 	 	 –	 	 58
capital	 element	 of	 finance	 lease	 payments	 	 	 	 	 	 121	 	 123
purchase	 of	 own	 shares	 by	 the	 esot	 	 	 	 	 	 28	 	 –
dividends	 paid	 	 	 	 	 	 20	 	 –
proceeds	 from	 issue	 of	 ordinary	 shares	 	 	 	 	 709	 	 01
net cash fromused in financing activities	 	 	 	 	 	 675	 	 551
decrease in cash and cash equivalents	 	 	 	 	 	 12	 	 16
opening	 cash	 and	 cash	 equivalents	 	 	 	 	 	 21	 	 39
effect	 of	 exchange	 rate	 changes	 	 	 	 	 01	 	 02
closing cash and cash equivalents	 	 	 	 	 	 10	 	 21
consolidated cash flow statement 
for the year ended 30 april 2006 51	 ashtead group plc	 annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
1 accounting policies
the	 principal	 accounting	 policies	 adopted	 in	 the	 preparation	 of	 these	 financial	 statements	 are	 set	 out	 below	 these	 policies	 have	 been	 consistently	 applied	 to	 all	 the	 years	 presented	 unless	 otherwise	 stated
basis of preparation
these	 financial	 statements	 have	 been	 prepared	 in	 accordance	 with	 international	 financial	 reporting	 standards	 ifrs	 and	 ifric	 interpretations	 	 and	 with	 those	 parts	 of	 the	 companies	 act	 1985	 applicable	 to	 companies	 reporting	 under	 ifrs	 the	 disclosures	 required	 by	 ifrs	 1	 first	 time	 adoption	 of	 international	 financial	 reporting	 standards	 for	 the	 transition	 from	 uk	 gaap	 to	 ifrs	 are	 provided	 in	 note	 28	 accordingly	 the	 group	 complies	 with	 all	 ifrs	 including	 those	 adopted	 for	 use	 in	 the	 european	 union	 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	 a	 summary	 of	 the	 more	 important	 accounting	 policies	 is	 set	 out	 below
the	 group	 as	 a	 firsttime	 ifrs	 reporter	 has	 adopted	 early	 with	 effect	 from	 1	 may	 2004	 the	 following	 standards	 and	 interpretations	 as	 at	 30	 april	 2006	 the	 reporting	 date	 for	 the	 group’s	 first	 ifrs	 financial	 statements
ias	 19	 employee	 benefits	 amended
ifric	 4	 determining	 whether	 an	 arrangement	 contains	 a	 lease
at	 the	 date	 of	 authorisation	 of	 these	 financial	 statements	 ifrs	 7	 financial	 instruments	 disclosures	 and	 the	 related	 amendment	 to	 ias	 1	 presentation	 of	 financial	 statements	 on	 capital	 disclosures	 were	 in	 issue	 but	 not	 yet	 effective	 and	 have	 not	 been	 applied	 adoption	 will	 have	 no	 material	 impact	 on	 the	 financial	 statements	 of	 the	 group	 except	 for	 additional	 disclosures	 on	 capital	 and	 financial	 instruments	 when	 the	 standards	 come	 into	 effect	 for	 periods	 commencing	 on	 or	 after	 1	 january	 2007
the	 preparation	 of	 financial	 statements	 in	 conformity	 with	 generally	 accepted	 accounting	 principles	 requires	 management	 to	 use	 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	 actual	 results	 could	 differ	 from	 these	 estimates	 basis of consolidation
the	 group	 financial	 statements	 incorporate	 the	 financial	 statements	 of	 the	 company	 and	 all	 its	 subsidiaries	 for	 the	 year	 to	 30	 april	 each	 year	 the	 results	 of	 businesses	 acquired	 or	 sold	 during	 the	 year	 are	 incorporated	 for	 the	 periods	 from	 or	 to	 the	 date	 on	 which	 control	 passed	 and	 acquisitions	 are	 accounted	 for	 under	 the	 acquisition	 method	 control	 is	 achieved	 when	 the	 group	 has	 the	 power	 to	 govern	 the	 financial	 and	 operating	 policies	 of	 an	 entity	 so	 as	 to	 obtain	 the	 benefits	 from	 its	 activities
foreign currency translation 
assets	 and	 liabilities	 in	 foreign	 currencies	 are	 translated	 into	 sterling	 at	 rates	 of	 exchange	 ruling	 at	 the	 balance	 sheet	 date	 profit	 and	 loss	 accounts	 and	 cash	 flows	 of	 overseas	 subsidiary	 undertakings	 are	 translated	 into	 sterling	 at	 average	 rates	 of	 exchange	 for	 the	 year	 the	 exchange	 rates	 used	 	 in	 respect	 of	 the	 us	 dollar	 are
	 	 	 	 	 	 	 2006	 2005
average	 for	 year	 	 	 	 	 	 17751	 18624
year	 end	 	 	 	 	 	 	 18176	 19099
exchange	 differences	 arising	 from	 the	 retranslation	 of	 the	 opening	 net	 investment	 of	 overseas	 subsidiaries	 and	 the	 difference	 between	 the	 inclusion	 of	 their	 profits	 at	 average	 rates	 of	 exchange	 in	 the	 group	 income	 statement	 and	 the	 closing	 rate	 are	 recognised	 directly	 in	 a	 separate	 component	 of	 equity	 other	 exchange	 differences	 are	 dealt	 with	 in	 the	 income	 statement
•
•
notes to the consolidated financial statements 52	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
1 accounting policies continued
revenue
revenue	 represents	 the	 total	 amount	 receivable	 for	 the	 provision	 of	 goods	 and	 services	 to	 customers	 net	 of	 returns	 and	 value	 added	 tax	 rental	 revenue	 including	 loss	 damage	 waiver	 fees	 is	 recognised	 on	 a	 straight	 line	 basis	 over	 the	 period	 of	 the	 rental	 contract	 because	 the	 terms	 and	 conditions	 of	 a	 rental	 contract	 can	 extend	 across	 financial	 reporting	 period	 ends	 the	 group	 records	 unbilled	 rental	 revenue	 and	 deferred	 revenue	 	 at	 the	 end	 of	 the	 reporting	 periods	 so	 rental	 revenue	 is	 appropriately	 stated	 in	 the	 financial	 statements
revenue	 from	 rental	 equipment	 delivery	 and	 collection	 is	 recognised	 when	 delivery	 or	 collection	 has	 occurred
revenue	 from	 the	 sale	 of	 new	 equipment	 parts	 and	 supplies	 retail	 merchandise	 and	 fuel	 is	 recognised	 at	 the	 time	 of	 delivery	 to	 or	 collection	 by	 	 the	 customer	 and	 when	 all	 obligations	 under	 the	 sales	 contract	 have	 been	 fulfilled
currentnoncurrent 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	 receivable	 within	 one	 year	 from	 the	 reporting	 date	 all	 other	 assets	 are	 classified	 as	 noncurrent	 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	 noncurrent	 liabilities	 property plant and equipment
owned assets
property	 plant	 and	 equipment	 are	 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	 aerial	 work	 platforms	 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	 facility	 additionally	 depreciation	 is	 not	 charged	 while	 the	 asset	 is	 not	 in	 use	 during	 the	 rebuild	 period
leased assets
finance	 leases	 are	 those	 leases	 which	 transfer	 substantially	 all	 the	 risks	 and	 rewards	 of	 ownership	 to	 the	 lessee	 assets	 held	 under	 finance	 leases	 are	 capitalised	 within	 property	 plant	 and	 equipment	 at	 the	 fair	 value	 of	 the	 leased	 assets	 at	 inception	 of	 the	 lease	 and	 depreciated	 in	 accordance	 with	 the	 group’s	 depreciation	 policy	 outstanding	 finance	 lease	 obligations	 are	 included	 within	 debt	 the	 finance	 element	 of	 the	 agreements	 is	 charged	 to	 the	 income	 statement	 on	 a	 systematic	 basis	 over	 the	 term	 of	 the	 lease	 all	 other	 leases	 are	 operating	 leases	 the	 rentals	 on	 which	 are	 charged	 to	 the	 income	 statement	 on	 a	 straight	 line	 basis	 over	 the	 lease	 term	 depreciation
leasehold	 properties	 are	 depreciated	 on	 a	 straight	 line	 basis	 over	 the	 life	 of	 each	 lease	 other	 fixed	 assets	 including	 those	 held	 under	 finance	 	 leases	 are	 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	 the	 rates	 in	 use	 are	 as	 follows	 	 	 	 	 	 	 	 	 per 	 annum
freehold	 property	 	 	 	 	 	 	 	 2
rental	 equipment	 	 	 	 	 	 	 	 5 	 to	 33	 motor	 vehicles	 	 	 	 	 	 	 	 16 	 to	 25
office	 and	 workshop	 equipment	 	 	 	 	 	 	 	 20
residual	 values	 are	 estimated	 at	 10	 of	 cost	 in	 respect	 of	 most	 types	 of	 rental	 equipment	 zero	 for	 scaffolding	 and	 similar	 equipment	 15	 for	 aerial	 work	 platforms	 and	 high	 reach	 forklifts	 and	 20	 for	 steel	 site	 accommodation	 units
notes to the consolidated financial statements 
continued 53	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
1 accounting policies continued
gains	 and	 losses	 from	 the	 sale	 of	 used	 equipment	 are	 recognised	 in	 the	 income	 statement	 as	 other	 income	 on	 transfer	 of	 title	 in	 the	 equipment	 to	 the	 purchaser	 provided	 delivery	 has	 also	 taken	 place	 except	 in	 the	 case	 of	 sales	 of	 rental	 equipment	 lost	 when	 in	 the	 possession	 of	 the	 rental	 customer	 which	 are	 recognised	 when	 the	 loss	 is	 notified	 by	 the	 customer	 gains	 or	 losses	 in	 connection	 with	 tradein	 arrangements	 with	 certain	 manufacturers	 from	 whom	 the	 group	 purchases	 new	 equipment	 are	 accounted	 for	 at	 the	 lower	 of	 transaction	 value	 or	 fair	 value	 based	 on	 independent	 appraisals	 if	 the	 tradein	 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
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
business combinations and goodwill
acquisitions	 are	 accounted	 for	 using	 the	 purchase	 method	 goodwill	 represents	 the	 difference	 between	 the	 cost	 of	 the	 acquisition	 and	 the	 fair	 value	 of	 the	 net	 identifiable	 assets	 acquired	 including	 any	 intangible	 assets	 other	 than	 goodwill	 adjustments	 to	 the	 fair	 values	 of	 assets	 acquired	 made	 within	 12	 months	 of	 acquisition	 date	 are	 accounted	 for	 from	 the	 date	 of	 acquisition	 for	 business	 combinations	 prior	 to	 1	 may	 2004	 but	 after	 30	 april	 1999	 goodwill	 is	 included	 at	 its	 deemed	 cost	 which	 represents	 the	 amount	 recorded	 under	 uk	 gaap	 at	 the	 time	 as	 subsequently	 amortised	 up	 to	 30	 april	 2004	 under	 uk	 gaap	 goodwill	 arising	 on	 acquisitions	 prior	 to	 	 30	 april	 1999	 was	 eliminated	 against	 reserves	 the	 accounting	 treatment	 of	 business	 combinations	 occurring	 up	 to	 30	 april	 2004	 the	 date	 of	 transition	 to	 ifrs	 has	 not	 been	 reconsidered	 as	 permitted	 under	 ifrs	 1	 first	 time	 adoption	 of	 international	 financial	 reporting	 standards	 goodwill	 is	 stated	 at	 cost	 less	 any	 accumulated	 impairment	 losses	 and	 is	 allocated	 to	 the	 group’s	 three	 reporting	 units	 sunbelt	 rentals	 aplant	 	 and	 ashtead	 technology	 the	 profit	 or	 loss	 on	 the	 disposal	 of	 a	 previously	 acquired	 business	 includes	 the	 attributable	 amount	 of	 any	 purchased	 goodwill	 relating	 to	 	 that	 business	 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	 in	 the	 case	 of	 goodwill	 impairment	 is	 assessed	 at	 the	 level	 of	 the	 group’s	 three	 reporting	 units
the	 recoverable	 amount	 is	 the	 higher	 of	 an	 asset’s	 fair	 value	 less	 costs	 to	 sell	 and	 value	 in	 use	 in	 assessing	 value	 in	 use	 estimated	 future	 cash	 flows	 are	 discounted	 to	 their	 present	 value	 using	 a	 pretax	 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	 54	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
1 accounting policies continued
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	 it	 is	 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	 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	 liabilities	 are	 not	 recognised	 for	 temporary	 differences	 arising	 on	 investment	 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	 deferred	 tax	 assets	 and	 	 liabilities	 are	 offset	 when	 they	 relate	 to	 income	 taxes	 levied	 by	 the	 same	 taxation	 authority	 and	 the	 group	 intends	 to	 settle	 its	 current	 tax	 assets	 	 and	 liabilities	 on	 a	 net	 basis
inventories
inventories	 which	 comprise	 fuel	 merchandise	 and	 spare	 parts	 are	 valued	 at	 the	 lower	 of	 cost	 and	 net	 realisable	 value
trade receivables
trade	 receivables	 do	 not	 carry	 interest	 and	 are	 stated	 at	 nominal	 value	 as	 reduced	 by	 appropriate	 allowances	 for	 estimated	 irrecoverable	 amounts
trade payables
trade	 payables	 are	 not	 interest	 bearing	 and	 are	 stated	 at	 nominal	 value
cash and cash equivalents
cash	 and	 cash	 equivalents	 comprise	 cash	 balances	 and	 call	 deposits	 with	 maturity	 of	 less	 than	 or	 equal	 to	 three	 months
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	 the	 current	 and	 prior	 periods	 that	 benefit	 is	 discounted	 to	 determine	 its	 present	 value	 and	 the	 fair	 value	 of	 plan	 assets	 is	 deducted	 the	 discount	 rate	 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	 in	 accordance	 with	 ifrs	 1	 the	 group	 chose	 to	 recognise	 the	 full	 pension	 deficit	 on	 the	 balance	 sheet	 at	 30	 april	 2004	 the	 group	 also	 took	 the	 option	 of	 adopting	 early	 the	 amendment	 to	 ias	 19	 employee	 benefits	 issued	 on	 16	 december	 2004	 as	 a	 result	 actuarial	 gains	 and	 losses	 are	 recognised	 in	 full	 in	 the	 period	 in	 which	 they	 arise	 through	 the	 statement	 of	 recognised	 income	 and	 expense	 the	 increase	 in	 the	 present	 value	 of	 	 plan	 liabilities	 arising	 from	 employee	 service	 during	 the	 period	 is	 charged	 to	 operating	 profit	 the	 expected	 return	 on	 plan	 assets	 and	 the	 expected	 increase	 during	 the	 period	 in	 the	 present	 value	 of	 plan	 liabilities	 due	 to	 unwind	 of	 the	 discount	 are	 included	 in	 investment	 income	 and	 interest	 expense	 respectively
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	 scheme	 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	 notes to the consolidated financial statements
continued 55	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
1 accounting policies continued
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
investment income and interest expense
investment	 income	 comprises	 interest	 receivable	 on	 funds	 invested	 fair	 value	 gains	 on	 derivative	 financial	 instruments	 and	 the	 expected	 return	 	 on	 plan	 assets	 in	 respect	 of	 defined	 benefit	 pension	 plans
interest	 expense	 comprises	 interest	 payable	 on	 borrowings	 amortisation	 of	 deferred	 finance	 costs	 fair	 value	 losses	 on	 derivative	 financial	 instruments	 and	 the	 expected	 increase	 in	 plan	 liabilities	 in	 respect	 of	 defined	 benefit	 pension	 schemes
financial instruments
details	 of	 the	 group’s	 treasury	 policies	 are	 set	 out	 in	 the	 business	 and	 financial	 review	 on	 pages	 33	 to	 44
derivatives 
the	 group	 uses	 a	 limited	 number	 of	 derivative	 financial	 instruments	 to	 hedge	 its	 exposure	 to	 fluctuations	 in	 interest	 and	 foreign	 exchange	 rates	 these	 are	 principally	 swap	 agreements	 used	 to	 manage	 the	 balance	 between	 fixed	 and	 floating	 rate	 finance	 on	 long	 term	 debt	 and	 forward	 	 contracts	 for	 known	 future	 foreign	 currency	 cash	 flows	 the	 group	 does	 not	 hold	 or	 issue	 derivative	 instruments	 for	 speculative	 purposes
all	 derivatives	 are	 held	 at	 fair	 value	 in	 the	 balance	 sheet	 within	 trade	 and	 other	 receivables	 or	 trade	 and	 other	 payables	 changes	 in	 the	 fair	 value	 of	 derivative	 financial	 instruments	 that	 are	 designated	 and	 effective	 as	 hedges	 of	 future	 cash	 flows	 are	 recognised	 directly	 in	 equity	 the	 gain	 or	 loss	 relating	 to	 the	 ineffective	 portion	 is	 recognised	 immediately	 in	 the	 income	 statement	 amounts	 deferred	 in	 equity	 are	 recognised	 in	 the	 income	 statement	 in	 the	 same	 period	 in	 which	 the	 hedged	 item	 affects	 profit	 or	 loss	 changes	 in	 the	 fair	 value	 of	 any	 derivative	 instruments	 that	 are	 not	 	 hedge	 accounted	 are	 recognised	 immediately	 in	 the	 income	 statement
secured notes
the	 group’s	 secured	 notes	 contain	 early	 prepayment	 options	 which	 constitute	 embedded	 derivatives	 in	 accordance	 with	 ias	 39	 financial	 instruments	 recognition	 and	 measurement	 at	 the	 date	 of	 issue	 the	 liability	 component	 of	 the	 notes	 is	 estimated	 using	 prevailing	 market	 interest	 rates	 for	 similar	 debt	 with	 no	 prepayment	 option	 and	 is	 recorded	 within	 borrowings	 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	 with	 fair	 value	 remeasurement	 gains	 and	 losses	 being	 included	 in	 ‘investment	 income’	 	 or	 ‘interest	 expense’
convertible debt
convertible	 debt	 is	 regarded	 as	 a	 compound	 instrument	 consisting	 of	 a	 liability	 and	 an	 equity	 component	 at	 the	 date	 of	 issue	 the	 fair	 value	 of	 the	 liability	 component	 is	 estimated	 using	 the	 prevailing	 market	 interest	 rate	 for	 similar	 nonconvertible	 debt	 and	 is	 recorded	 within	 borrowings	 the	 difference	 between	 the	 fair	 value	 of	 the	 convertible	 debt	 at	 issue	 and	 the	 fair	 value	 assigned	 to	 the	 liability	 component	 representing	 the	 embedded	 option	 to	 convert	 the	 liability	 into	 equity	 of	 the	 group	 is	 included	 in	 equity
the	 interest	 expense	 on	 the	 liability	 component	 is	 calculated	 by	 applying	 the	 effective	 interest	 rate	 for	 similar	 nonconvertible	 debt	 to	 the	 liability	 component	 of	 the	 instrument	 the	 difference	 between	 this	 amount	 and	 the	 interest	 paid	 is	 added	 to	 the	 carrying	 amount	 of	 the	 convertible	 debt
exceptional items
exceptional	 items	 are	 those	 items	 that	 are	 material	 and	 nonrecurring	 in	 nature	 that	 the	 group	 believes	 should	 be	 disclosed	 separately	 to	 assist	 	 in	 the	 understanding	 of	 the	 financial	 performance	 of	 the	 group 56	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
1 accounting policies continued
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	 esot	 and	 shares	 registered	 in	 the	 name	 of	 employees	 but	 subject	 to	 forfeiture	 if	 performance	 targets	 are	 not	 achieved	 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	 antidilutive	 during	 the	 year
underlying	 earnings	 per	 share	 comprises	 basic	 earnings	 per	 share	 adjusted	 to	 exclude	 earnings	 relating	 to	 exceptional	 items	 and	 fair	 value	 remeasurements	 of	 embedded	 derivatives	 in	 longterm	 debt	 cash	 tax	 earnings	 per	 share	 comprises	 underlying	 earnings	 per	 share	 adjusted	 to	 exclude	 deferred	 taxation	 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
employee share ownership trust
shares	 in	 the	 company	 acquired	 by	 the	 employee	 share	 ownership	 trust	 in	 the	 open	 market	 for	 use	 in	 connection	 with	 employee	 share	 plans	 are	 presented	 as	 a	 deduction	 from	 shareholders’	 funds	 together	 with	 shares	 transferred	 by	 the	 esot	 to	 employees	 and	 registered	 in	 the	 employees’	 name	 but	 subject	 to	 mandatory	 return	 to	 the	 esot	 if	 performance	 targets	 are	 not	 achieved	 where	 these	 shares	 are	 subject	 to	 commitments	 to	 release	 them	 to	 employees	 subject	 to	 the	 attainment	 of	 performance	 targets	 in	 connection	 with	 the	 group’s	 long	 term	 incentive	 plans	 then	 provision	 is	 made	 by	 way	 of	 a	 charge	 against	 profits	 to	 write	 off	 the	 estimated	 cost	 of	 the	 shares	 over	 the	 performance	 period	 which	 is	 normally	 three	 years	 when	 the	 shares	 vest	 to	 satisfy	 share	 based	 payments	 a	 transfer	 is	 made	 from	 shares	 held	 in	 treasury	 to	 retained	 earnings	 noncurrent assets held for sale
noncurrent	 assets	 held	 for	 sale	 are	 measured	 at	 the	 lower	 of	 carrying	 amount	 and	 fair	 value	 less	 costs	 to	 sell	 such	 assets	 are	 classified	 as	 held	 for	 sale	 if	 their	 carrying	 amount	 will	 be	 recovered	 through	 a	 sale	 transaction	 rather	 than	 through	 continuing	 use	 such	 assets	 are	 not	 depreciated	 assets	 are	 regarded	 as	 held	 for	 sale	 only	 when	 the	 sale	 is	 highly	 probable	 and	 the	 asset	 is	 available	 for	 sale	 in	 its	 present	 condition	 management	 must	 be	 committed	 to	 the	 sale	 which	 must	 be	 expected	 to	 qualify	 for	 recognition	 as	 a	 completed	 sale	 within	 one	 year	 from	 the	 date	 of	 classification
borrowings
interest	 bearing	 bank	 loans	 and	 overdrafts	 are	 recorded	 at	 the	 proceeds	 received	 net	 of	 direct	 transaction	 costs	 finance	 charges	 including	 direct	 transaction	 costs	 are	 charged	 to	 the	 income	 statement	 using	 the	 effective	 interest	 rate	 method	 revolving	 tranches	 of	 borrowings	 and	 overdrafts	 which	 mature	 on	 a	 regular	 basis	 are	 classified	 as	 current	 or	 noncurrent	 liabilities	 based	 on	 the	 maturity	 of	 the	 relevant	 facility
notes to the consolidated financial statements 
continued 57	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
2 segmental analysis
business segments
the	 group	 operates	 one	 class	 of	 business	 rental	 of	 equipment	 operationally	 and	 managerially	 the	 group	 is	 split	 into	 three	 business	 units	 sunbelt	 aplant	 and	 ashtead	 technology	 these	 business	 units	 are	 the	 basis	 on	 which	 the	 group	 reports	 its	 primary	 segment	 information
	 	 	 	 	 	 	 ashtead	 corporate 	 	 	 	 	 sunbelt	 aplant	 technology	 items	 group 	 year ended 30 april 2006	 	 	 	 £m	 £m	 £m	 £m	 £m
revenue	 	 	 	 4612 1607 161 – 6380
operating	 costs	 before	 exceptional	 items	 	 	 	 2878 1118 81 56 4133
ebitda	 	 	 	 1734 489 80 56 2247
depreciation	 	 	 	 745 350 40 01 1136
segment	 result	 before	 exceptional	 items	 	 	 	 989 139 40 57 1111
exceptional	 items	 	 	 	 134 – – – 134
segment	 result	 	 	 	 1123 139 40 57 1245
net	 financing	 costs	 	 	 	 	 	 	 428
profit	 before	 tax	 	 	 	 	 	 	 817
taxation	 	 	 	 	 	 	 261
profit	 attributable	 to	 equity	 shareholders	 	 	 	 	 	 	 	 556
segment	 assets	 	 	 	 6670 2348 183 04 9205
cash	 	 	 	 	 	 	 	 10
deferred	 tax	 asset	 	 	 	 	 	 	 	 29
other	 financial	 assets	 –	 derivatives	 	 	 	 	 	 	 	 154
total	 assets	 	 	 	 	 	 	 	 9398
segment	 liabilities	 	 	 	 739 277 23 24 1063
corporate	 borrowings	 and	 accrued	 interest	 	 	 	 	 	 	 	 5057
taxation	 liabilities	 	 	 	 	 	 	 	 695
total	 liabilities	 	 	 	 	 	 	 	 6815
other	 noncash	 expenditure	 –	 share	 based	 payments	 	 	 	 05 07 04 03 19
capital	 expenditure	 	 	 2178 562 79 – 2819
capital	 expenditure	 represents	 additions	 to	 property	 plant	 and	 equipment	 and	 intangible	 assets	 and	 includes	 expenditure	 on	 acquisition	 of	 businesses	 58	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
2 segmental analysis continued
	 	 	 	 	 	 ashtead	 corporate 	 	 	 	 	 sunbelt	 aplant	 technology	 items	 group 	 year	 ended	 30	 april	 2005	 	 	 	 £m	 £m	 £m	 £m	 £m
revenue	 	 	 	 3550	 1563	 124	 –	 5237
operating	 costs	 	 	 	 2347	 1081	 59	 55	 3542
ebitda	 	 	 	 1203	 482	 65	 55	 1695
depreciation	 	 	 	 624	 369	 31	 –	 1024
segment	 result	 	 	 	 579	 113	 34	 55	 671
net	 financing	 costs	 	 	 	 	 	 	 	 349
profit	 before	 tax	 	 	 	 	 	 	 	 322
taxation	 	 	 	 	 	 	 	 140
profit	 attributable	 to	 equity	 shareholders	 	 	 	 	 	 	 	 182
segment	 assets	 	 	 	 5228	 2239	 135	 08	 7610
cash	 and	 cash	 equivalents	 	 	 	 	 	 	 	 21
other	 financial	 assets	 –	 derivatives	 	 	 	 	 	 	 	 98
total	 assets	 	 	 	 	 	 	 	 7729
segment	 liabilities	 	 	 	 649	 464	 25	 13	 1151
corporate	 borrowings	 and	 accrued	 interest	 	 	 	 	 	 	 	 5027
taxation	 liabilities	 	 	 	 	 	 	 	 354
total	 liabilities	 	 	 	 	 	 	 	 6532
other	 noncash	 expenditure	 –	 share	 based	 payments	 	 	 	 01	 05	 –	 01	 07
capital	 expenditure	 	 	 	 935	 401	 48	 –	 1384
there	 are	 no	 sales	 between	 the	 business	 segments	 segment	 assets	 include	 property	 plant	 and	 equipment	 goodwill	 inventory	 and	 receivables	 segment	 liabilities	 comprise	 operating	 liabilities	 and	 exclude	 taxation	 balances	 corporate	 borrowings	 and	 accrued	 interest
geographical segments
the	 group’s	 operations	 are	 located	 in	 north	 america	 united	 kingdom	 and	 singapore
the	 following	 table	 provides	 an	 analysis	 of	 the	 group’s	 revenue	 segment	 assets	 and	 capital	 expenditure	 including	 acquisitions	 by	 geographical	 market
	 revenue	 segment	 assets	 capital	 expenditure
	 	 	 2006	 2005	 2006	 2005	 2006	 2005 	 	 	 	 £m	 £m	 £m	 £m	 £m	 £m
north	 america	 	 4686	 3603	 6756	 5294 2205	 952
united	 kingdom	 	 	 1672	 1618	 2428	 2298	 606	 427
rest	 of	 world	 	 	 22	 16	 21	 18	 08	 05
	 	 	 6380	 5237	 9205	 7610	 2819	 1384
notes to the consolidated financial statements 
continued 59	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
3 operating costs and other income
	 	 	 	 	 2006	 	 	 2005
	 	 	 before	 	 	 before 	 	 	 exceptional exceptional 	 exceptional	 exceptional 	 	 	 	 items items total	 items	 items	 total 	 	 	 	 £m £m £m	 £m	 £m	 £m
staff	 costs
	 salaries	 	 	 1821 03 1824	 1562	 –	 1562
	 social	 security	 costs	 	 	 155 – 155	 134	 –	 134
	 other	 pension	 costs	 	 28 – 28	 33	 –	 33
	 	 	 2004 03 2007	 1729	 –	 1729
other	 operating	 costs
	 vehicle	 costs	 	 	 517 – 517	 420	 –	 420
	 spares	 consumables	 and	 external	 repairs	 	 	 453 – 453	 397	 –	 397
	 facility	 costs	 	 	 318 05 323	 278	 –	 278
	 other	 external	 charges	 	 	 932 08 940	 789	 –	 789
	 	 	 2220 13 2233	 1884	 –	 1884
other	 income
	 profit	 on	 disposal	 of	 fixed	 assets	 	 91 37 128	 71	 –	 71
	 other	 income	 	 	 – 113 113	 –	 –	 –
	 	 	 91 150 241	 71	 –	 71
depreciation
	 owned	 assets	 	 	 1050 – 1050	 939	 –	 939
	 leased	 assets	 	 	 86 – 86	 85	 –	 85
	 	 1136 – 1136	 1024	 –	 1024
	 	 5269 134 5135	 4566	 –	 4566
proceeds	 from	 the	 disposal	 of	 fixed	 assets	 amounted	 to	 £508m	 2005	 £376m	 other	 income	 relates	 to	 litigation	 proceeds	 from	 settlement	 of	 the	 head	 	 engquist	 litigation	 with	 head	 	 engquist	 paying	 sunbelt	 201m	 £113m	 net	 of	 costs
the	 costs	 shown	 in	 the	 above	 table	 include
	 	 	 	 	 2006	 	 	 2005
	 	 	 before	 	 	 before 	 	 	 exceptional exceptional 	 exceptional	 exceptional 	 	 	 	 items items total	 items	 items	 total 	 	 	 	 £m £m £m	 £m	 £m	 £m
operating	 lease	 rentals	 payable
	 plant	 and	 equipment	 	 	 36 – 36	 52	 –	 52
	 property	 	 	 176 05 181	 159	 –	 159
cost	 of	 inventories	 recognised	 as	 expense	 	 688 – 688	 571	 –	 571
bad	 debt	 expense	 	 	 43 – 43	 60	 –	 60
net	 foreign	 exchange	 gainslosses	 	 01 – 01	 04	 –	 04
the	 group’s	 key	 management	 comprise	 the	 company’s	 executive	 and	 nonexecutive	 directors	 details	 of	 their	 remuneration	 together	 with	 their	 	 share	 interests	 and	 share	 option	 awards	 are	 given	 in	 the	 directors’	 remuneration	 report	 and	 form	 part	 of	 these	 financial	 statements	 	 60	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
3 operating costs and other income continued
remuneration	 payable	 to	 the	 company’s	 auditors	 deloitte	 	 touche	 llp	 in	 the	 year	 is	 given	 below
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £’000	 £’000
audit	 services	 –	statutory 	 audit	 company	 	 	 	 	 	 	 20	 20
	 –	statutory 	 audit	 group	 	 	 	 	 	 	 508	 475
	 –	other 	 audit	 related	 reporting	 group	 	 	 	 	 	 	 130	 187
other	 services	 –	internal 	 audit	 uk	 	 	 	 	 	 	 –	 92
	 –	capital 	 reorganisation	 uk	 	 	 	 	 	 	 250	 –
	 –	other	 	 	 	 	 	 	 36	 37
	 	 	 	 	 	 	 	 944	 811
the	 fees	 for	 other	 audit	 related	 reporting	 in	 the	 year	 ended	 30	 april	 2006	 include	 interim	 review	 work	 and	 work	 in	 connection	 with	 the	 adoption	 of	 ifrs	 the	 fees	 for	 other	 services	 paid	 to	 deloitte	 	 touche	 llp	 are	 in	 respect	 of	 work	 done	 in	 connection	 with	 the	 capital	 reorganisation	 undertaken	 in	 august	 2005	 and	 preparing	 and	 filing	 property	 tax	 returns
4 net financing costs
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
investment income
interest	 and	 other	 financial	 income	 	 	 	 	 	 	 05	 01
expected	 return	 on	 assets	 of	 defined	 benefit	 pension	 plan	 	 	 	 	 	 	 22	 21
fair	 value	 gains	 on	 derivatives	 	 	 	 	 	 	 –	 07
	 	 	 	 	 	 	 27	 29
exceptional	 income	 and	 fair	 value	 remeasurements	 of	 embedded	 derivatives	 	 	 	 	 	 78	 98
total	 investment	 income	 	 	 	 	 	 	 105	 127
interest expense
bank	 interest	 payable	 	 	 	 	 	 	 163	 137
interest	 on	 second	 priority	 senior	 secured	 notes	 	 	 	 	 	 	 197	 145
interest	 payable	 on	 finance	 leases	 	 	 	 	 	 	 18	 19
funding	 cost	 on	 accounts	 receivable	 securitisation	 	 	 	 	 	 	 –	 21
525	 unsecured	 convertible	 loan	 note	 due	 2008	 –	 interest	 payable	 	 	 	 	 	 	 19	 76
–	 noncash	 unwind	 of	 discount	 	 	 	 	 	 	 10	 37
noncash	 unwind	 of	 discount	 on	 defined	 pension	 plan	 liabilities	 	 	 	 	 	 	 22	 25
noncash	 unwind	 of	 discount	 on	 insurance	 provisions	 	 	 	 	 	 	 04	 02
fair	 value	 losses	 on	 derivatives	 not	 accounted	 for	 as	 hedges	 	 	 	 	 	 	 03	 –
amortisation	 of	 deferred	 costs	 of	 debt	 raising	 	 	 	 	 	 	 27	 14
	 	 	 	 	 	 	 463	 476
exceptional	 costs	 and	 fair	 value	 remeasurements	 of	 embedded	 derivatives	 	 	 	 	 	 70	 –
total	 interest	 expense	 	 	 	 	 	 	 533	 476
net	 financing	 costs	 before	 exceptional	 items	 and	 fair	 value	 remeasurements	 of	 embedded	 derivatives	 	 	 	 436	 447
net	 exceptional	 income	 and	 fair	 value	 remeasurements	 of	 embedded	 derivatives	 	 	 	 	 08	 98
net	 financing	 costs	 	 	 	 	 	 	 428	 349
notes to the consolidated financial statements 
continued 61	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
5 exceptional items and fair value remeasurements 
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
litigation	 proceeds	 	 	 	 	 	 	 113	 –
capital	 reorganisation	 	 	 	 	 	 	 48	 –
fair	 value	 remeasurements	 of	 embedded	 derivatives	 	 	 	 	 	 	 56	 98
profit	 on	 sale	 of	 scaffolding	 	 	 	 	 	 	 29	 –
post	 acquisition	 integration	 costs	 	 	 	 	 	 	 08	 –
total	 pretax	 exceptional	 items	 	 	 	 	 	 	 142	 98
litigation	 proceeds	 relate	 to	 the	 head	 	 engquist	 settlement	 capital	 reorganisation	 costs	 include	 the	 premium	 paid	 to	 redeem	 35	 of	 the	 second	 priority	 senior	 secured	 notes	 due	 2014	 £50m	 the	 writeoff	 of	 the	 portion	 of	 deferred	 debt	 issue	 costs	 related	 to	 the	 notes	 redeemed	 £15m	 	 other	 refinancing	 costs	 £05m	 offset	 by	 a	 gain	 on	 the	 repayment	 of	 the	 rentokil	 convertible	 loan	 note	 £20m	 and	 interest	 received	 relating	 to	 the	 redemption	 of	 loan	 notes	 £02m	 fair	 value	 remeasurements	 relate	 to	 the	 changes	 in	 fair	 value	 of	 the	 embedded	 prepayment	 option	 in	 the	 second	 priority	 senior	 secured	 notes	 £56m	 profit	 on	 sale	 of	 scaffolding	 relates	 to	 the	 net	 gain	 on	 the	 disposal	 by	 sunbelt	 of	 12	 west	 coast	 and	 texas	 specialist	 scaffold	 locations	 post	 acquisition	 integration	 costs	 relate	 to	 costs	 incurred	 in	 integrating	 acquisitions	 during	 the	 period
exceptional	 items	 and	 fair	 value	 remeasurements	 are	 presented	 in	 the	 income	 statement	 as	 follows
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
other	 income	 	 	 	 	 	 150	 –
staff	 costs	 	 	 	 	 	 	 03	 –
other	 operating	 costs	 	 	 	 	 	 	 13	 –
credited	 in	 arriving	 at	 operating	 profit	 	 	 	 	 	 	 134	 –
investment	 income	 	 	 	 	 	 	 78	 98
interest	 expense	 	 	 	 	 	 	 70	 –
credited	 in	 arriving	 at	 profit	 before	 taxation	 	 	 	 	 	 	 142	 98
6 taxation
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
analysis of charge in period
current	 tax
–	 uk	 corporation	 tax	 at	 30	 2005	 30	 	 	 	 	 	 	 –	 –
–	 overseas	 taxation	 	 	 	 	 	 	 55	 07
	 	 	 	 	 	 	 55	 07
deferred	 tax	 	 	 	 	 	 	 206	 133
taxation	 	 	 	 	 	 	 261	 140
the	 tax	 charge	 comprises	 £211m	 2005	 £140m	 relating	 to	 tax	 on	 the	 profit	 before	 tax	 exceptional	 items	 and	 fair	 value	 remeasurements	 and	 £50m	 2005	 £nil	 relating	 to	 tax	 on	 exceptional	 items	 and	 fair	 value	 remeasurements
	 62	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
6 taxation continued
the	 tax	 for	 the	 period	 is	 higher	 than	 the	 standard	 rate	 of	 corporation	 tax	 in	 the	 uk	 30	 the	 differences	 are	 explained	 below
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
profit	 on	 ordinary	 activities	 before	 tax	 	 	 	 	 	 	 817	 322
profit	 on	 ordinary	 activities	 multiplied	 by	 the	 rate	 of
corporation	 tax	 in	 the	 uk	 of	 30	 2005	 30	 	 	 	 	 	 	 245	 97
effects	 of
adjustment	 to	 tax	 charge	 in	 respect	 of	 prior	 period	 	 	 	 	 	 	 04	 18
use	 of	 foreign	 tax	 rates	 on	 overseas	 income	 	 	 	 	 	 	 68	 29
deferred	 tax	 asset	 recognised	 	 	 	 	 	 29	 –
change	 in	 unrecognised	 deferred	 tax	 asset	 	 	 	 	 	 	 27	 07
other	 	 	 	 	 	 	 –	 11
total	 taxation	 	 	 	 	 	 	 261	 140
7 dividends
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
interim	 dividend	 paid	 on	 28	 february	 2006	 of	 05p	 2005	 nil	 per	 10p	 ordinary	 share	 	 	 	 	 20	 –
in	 addition	 the	 directors	 are	 proposing	 a	 final	 dividend	 in	 respect	 of	 the	 financial	 year	 ended	 30	 april	 2006	 of	 10p	 per	 share	 which	 will	 absorb	 	 £40m	 of	 shareholders’	 funds	 subject	 to	 approval	 by	 shareholders	 it	 will	 be	 paid	 on	 28	 september	 2006	 to	 shareholders	 who	 are	 on	 the	 register	 	 of	 members	 on	 28	 july	 2006
8 earnings per share
	 	 	 	 	 2006	 	 	 2005
	 	 	 	 weighted	 	 	 weighted 	 	 	 	 	 average no per share	 	 average 	 no	 per 	 share	 	 	 	 earnings of shares amount	 earnings	 of 	 shares	 amount 	 	 	 	 £m million pence	 £m	 million	 pence
basic earnings per share	 	 	 556 3790 147p	 182	 3230	 56p
effect	 of	 dilutive	 securities
share	 options	 and	 share	 plan	 awards	 	 	 – 84 03p	 –	 33	 –
diluted earnings per share	 	 556 3874 144p	 182	 3263	 56p
underlying	 and	 cash	 tax	 earnings	 per	 share	 may	 be	 reconciled	 to	 the	 basic	 earnings	 per	 share	 as	 follows
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 pence	 pence
basic	 earnings	 per	 share	 	 	 	 	 	 	 147	 56
exceptional	 items	 and	 fair	 value	 remeasurements	 	 	 	 	 	 	 38	 30
tax	 on	 exceptional	 items	 and	 fair	 value	 remeasurements	 	 	 	 	 	 	 13	 –
underlying	 earnings	 per	 share	 	 	 	 	 	 	 122	 26
other	 deferred	 tax	 	 	 	 	 	 	 56	 41
cash	 tax	 earnings	 per	 share	 	 	 	 	 	 	 178	 67
notes to the consolidated financial statements 
continued 63	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
9 inventories
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
raw	 materials	 consumables	 and	 spares	 	 	 	 	 	 	 81	 79
goods	 for	 resale	 	 	 	 	 	 	 46	 59
	 	 	 	 	 	 	 127	 138
10 trade and other receivables
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
trade	 receivables	 	 	 	 	 	 	 1049	 885
less	 provisions	 for	 impairment	 	 	 	 	 	 	 84	 79
	 	 	 	 	 	 	 965	 806
other	 receivables	 	 	 	 	 	 	 139	 113
	 	 	 	 	 	 	 1104	 919
11 property plant and equipment
	 rental	 equipment
	 office 	 and	 motor	 vehicles
	 land	 and	 	 held 	 under	 workshop	 other	 	 held 	 under	 	 buildings	 owned	 finance 	 leases	 equipment	 leases	 owned	 finance 	 leases	 total 	 	 £m	 £m	 £m	 £m	 £m	 £m	 £m	 £m
cost or valuation
at 1 may 2004	 621	 8010	 129	 226	 07	 40	 248	 9281
exchange	 differences	 19	 376	 10	 08	 –	 03	 –	 416
reclassifications	 –	 32	 36	 04	 –	 –	 –	 –
additions	 17	 1200	 –	 18	 –	 18	 131	 1384
disposals	 13	 946	 01	 08	 –	 15	 10	 993
at 30 april 2005	 606	 7920	 82	 232	 07	 40	 369	 9256
exchange	 differences	 13	 265	 02	 06	 –	 01	 12	 299
acquisitions	 04	 322	 –	 01	 –	 26	 –	 353
reclassifications	 –	 69	 65	 12	 07	 14	 23	 –
additions	 40	 2018	 –	 39	 –	 85	 20	 2202
disposals	 23	 1394	 –	 17	 –	 20	 15	 1469
at 30 april 2006	 640 9200 19 273 – 146 363 10641 64	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
11 property plant and equipment continued
	 rental	 equipment
	 office 	 and	 motor	 vehicles
	 land	 and	 	 held 	 under	 workshop	 other	 	 held 	 under	 	 buildings	 owned	 finance 	 leases	 equipment	 leases	 owned	 finance 	 leases	 total 	 	 £m	 £m	 £m	 £m	 £m	 £m	 £m	 £m
depreciation
at 1 may 2004	 130	 3439	 03	 142	 –	 02	 16	 3732
exchange	 differences	 04	 168	 03	 05	 –	 01	 02	 183
reclassifications	 –	 03	 –	 03	 –	 –	 –	 –
charge	 for	 the	 period	 35	 859	 07	 34	 03	 11	 75	 1024
disposals	 05	 661	 –	 07	 –	 08	 07	 688
at 30 april 2005	 156	 3466	 07	 167	 03	 04	 82	 3885
exchange	 differences	 03	 104	 –	 05	 –	 –	 01	 113
reclassifications	 –	 05	 04	 07	 05	 09	 12	 –
charge	 for	 the	 period	 32	 959	 03	 37	 02	 22	 81	 1136
disposals	 07	 920	 –	 14	 –	 13	 06	 960
at 30 april 2006	 184 3614 06 202 – 22 146 4174
net book value
at 30 april 2006 456 5586 13 71 – 124 217 6467
at	 30	 april	 2005	 450	 4454	 75	 65	 04	 36	 287	 5371
the	 amount	 of	 rebuild	 costs	 capitalised	 in	 the	 year	 was	 £41m	 2005	 £38m
12 intangible assets – goodwill
	 	 	 	 	 	 	 	 £m
at	 1	 may	 2004	 	 	 	 	 	 	 	 1262
exchange	 differences	 	 	 	 	 	 	 	 80
at	 1	 may	 2005	 	 	 	 	 	 	 	 1182
recognised	 on	 acquisitions	 during	 the	 year	 	 	 	 	 	 	 	 264
exchange	 differences	 	 	 	 	 	 	 	 44
at 30 april 2006        1490
goodwill	 acquired	 in	 a	 business	 combination	 was	 allocated	 at	 acquisition	 to	 the	 reporting	 units	 that	 benefit	 from	 that	 business	 combination	 	 as	 follows
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
sunbelt	 	 	 	 	 	 1438	 1131
aplant	 	 	 	 	 	 	 30	 30
ashtead	 technology	 	 	 	 	 	 	 22	 21
	 	 	 	 	 	 	 1490	 1182
for	 the	 purposes	 of	 determining	 potential	 goodwill	 impairment	 recoverable	 amounts	 are	 determined	 from	 value	 in	 use	 calculations	 using	 cash	 flow	 projections	 based	 on	 approved	 financial	 plans	 covering	 a	 three	 year	 period	 the	 growth	 rate	 assumptions	 used	 in	 the	 plans	 were	 based	 on	 past	 performance	 and	 management’s	 expectations	 of	 market	 developments	 the	 annual	 growth	 rate	 used	 to	 determine	 the	 cash	 flows	 beyond	 the	 three	 year	 period	 is	 2	 and	 does	 not	 exceed	 the	 average	 long	 term	 growth	 rates	 for	 the	 relevant	 markets	 the	 pretax	 rate	 used	 to	 discount	 the	 projected	 cash	 flows	 for	 sunbelt	 rentals	 is	 9
notes to the consolidated financial statements 
continued 65	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
13 trade and other payables
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
trade	 payables	 	 	 	 	 	 	 362	 390
other	 taxes	 and	 social	 security	 	 	 	 	 	 	 85	 64
accruals	 and	 deferred	 income	 	 	 	 	 	 	 544	 489
	 	 	 	 	 	 	 991	 943
trade	 and	 other	 payables	 include	 amounts	 relating	 to	 the	 purchase	 of	 fixed	 assets	 of	 £300m	 2005	 £359m	 14 borrowings
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
current
first	 priority	 senior	 secured	 bank	 debt	 	 	 	 	 	 	 15	 14
finance	 lease	 obligations	 	 	 	 	 	 	 91	 108
	 	 	 	 	 	 	 106	 122
noncurrent
first	 priority	 senior	 secured	 bank	 debt	 	 	 	 	 	 	 2615	 2146
finance	 lease	 obligations	 	 	 	 	 	 	 141	 212
12	 second	 priority	 senior	 secured	 notes	 due	 2014	 	 	 	 	 	 	 755	 1158
8625	 second	 priority	 senior	 secured	 notes	 due	 2015	 	 	 	 	 	 	 1327	 –
525	 unsecured	 convertible	 loan	 note	 due	 2008	 	 	 	 	 	 	 –	 1204
loan	 notes	 	 	 	 	 	 02	 02
	 	 	 	 	 	 	 4840	 4722
costs	 incurred	 during	 the	 year	 relating	 to	 the	 raising	 of	 debt	 amounted	 to	 £12m	 2005	 £107m	 and	 have	 been	 carried	 forward	 against	 the	 book	 value	 of	 the	 associated	 debt	 in	 accordance	 with	 the	 group’s	 accounting	 policies
senior	 secured	 bank	 debt	 and	 the	 senior	 secured	 notes	 are	 secured	 by	 way	 of	 respectively	 first	 and	 second	 priority	 fixed	 and	 floating	 charges	 over	 substantially	 all	 the	 group’s	 property	 plant	 and	 equipment	 inventory	 and	 trade	 receivables	 first priority senior secured credit facility
on	 14	 november	 2005	 the	 group	 agreed	 amended	 terms	 with	 the	 syndicate	 of	 lenders	 who	 make	 available	 its	 first	 priority	 asset	 based	 senior	 secured	 loan	 facility	 the	 “abl	 facility”	 to	 increase	 the	 amount	 extend	 the	 maturity	 reduce	 the	 number	 of	 covenants	 and	 lower	 the	 cost	 of	 the	 	 facility	 following	 this	 amendment	 the	 abl	 facility	 consists	 of	 a	 525m	 revolving	 credit	 facility	 and	 a	 272m	 term	 loan	 and	 is	 secured	 by	 a	 first	 	 priority	 interest	 in	 substantially	 all	 of	 the	 group’s	 assets	 pricing	 is	 based	 on	 the	 ratio	 of	 funded	 debt	 to	 ebitda	 according	 to	 a	 grid	 which	 varies	 depending	 on	 leverage	 from	 libor	 plus	 250bp	 to	 libor	 plus	 175bp	 for	 term	 borrowings	 and	 libor	 plus	 150bp	 for	 revolver	 borrowings	 	 at	 30	 april	 2006	 the	 group’s	 borrowing	 rate	 was	 libor	 plus	 150bp	 on	 revolver	 borrowings	 and	 libor	 plus	 175bp	 on	 term	 borrowings	 the	 abl	 facility	 carries	 minimal	 amortisation	 of	 1	 per	 annum	 275m	 on	 the	 term	 loan	 and	 is	 committed	 until	 november	 2010	 the	 abl	 facility	 includes	 a	 springing	 covenant	 package	 under	 which	 quarterly	 financial	 performance	 covenants	 are	 only	 tested	 if	 available	 liquidity	 is	 less	 than	 	 50	 million	 available	 liquidity	 at	 30	 april	 2006	 was	 £1559m	 2834m	 reflecting	 drawings	 under	 the	 facility	 at	 that	 date	 together	 with	 outstanding	 letters	 of	 credit	 of	 £154m	 279m	 as	 the	 abl	 facility	 is	 assetbased	 the	 maximum	 amount	 available	 to	 be	 borrowed	 which	 includes	 drawings	 in	 the	 form	 of	 standby	 letters	 of	 credit	 depends	 on	 asset	 values	 receivables	 inventory	 rental	 equipment	 and	 real	 estate	 which	 are	 subject	 to	 periodic	 independent	 appraisal	 the	 maximum	 amount	 which	 could	 be	 drawn	 at	 30	 april	 2006	 was	 limited	 to	 the	 facility	 size	 of	 7973m	 £4387m	 because	 the	 relevant	 asset	 values	 exceeded	 the	 facility	 size	 by	 460m	 £253m	 66	 ashtead group plc	 annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
14 borrowings continued
12 second priority senior secured notes due 2014 having a nominal value of £120 million
on	 16	 april	 2004	 the	 group	 through	 its	 wholly	 owned	 subsidiary	 ashtead	 holdings	 plc	 issued	 £120m	 of	 12	 second	 priority	 senior	 secured	 notes	 due	 1	 may	 2014	 the	 notes	 are	 secured	 by	 second	 priority	 security	 interests	 over	 substantially	 the	 same	 assets	 as	 the	 first	 priority	 senior	 secured	 credit	 facility	 and	 are	 also	 guaranteed	 by	 ashtead	 group	 plc	 on	 5	 september	 2005	 £42m	 of	 the	 principal	 was	 repaid	 out	 of	 the	 proceeds	 of	 an	 equity	 issue	 these	 notes	 rank	 equally	 with	 the	 8625	 notes	 discussed	 below
8625 second priority senior secured notes due 2015 having a nominal value of 250m
on	 3	 august	 2005	 the	 group	 through	 its	 wholly	 owned	 subsidiary	 ashtead	 holdings	 plc	 issued	 250m	 of	 8625	 second	 priority	 senior	 secured	 notes	 due	 1	 august	 2015	 the	 notes	 are	 secured	 by	 second	 priority	 security	 interests	 over	 substantially	 the	 same	 assets	 as	 the	 first	 priority	 senior	 secured	 credit	 facility	 and	 are	 also	 guaranteed	 by	 ashtead	 group	 plc
525 unsecured convertible loan note due 2008 having a nominal value of £134m
this	 loan	 note	 was	 redeemed	 early	 for	 £1195m	 on	 3	 august	 2005	 the	 proceeds	 were	 allocated	 to	 the	 debt	 element	 based	 on	 the	 fair	 value	 of	 the	 debt	 at	 the	 date	 of	 redemption	 resulting	 in	 a	 gain	 of	 £20m	 which	 is	 included	 in	 exceptional	 investment	 income
15 financial instruments 
the	 effective	 rates	 of	 interest	 at	 the	 balance	 sheet	 dates	 were	 as	 follows
	 	 	 	 	 	 	 	 2006	 2005
first	 priority	 senior	 secured	 bank	 debt	– 	 revolving	 advances	 in	 dollars	 	 	 	 	 	 625	 506
	 –	 term	 loan	 advances	 in	 dollars	 	 	 	 	 	 650	 506
	 –	 revolving	 advances	 in	 sterling	 	 	 	 	 	 608	 713
sterling	 secured	 notes	 	 	 	 	 	 	 	 120	 120
dollar	 secured	 notes	 	 	 	 	 	 	 	 8625	 –
convertible	 loan	 note	 	 	 	 	 	 	 	 –	 90
finance	 leases	 	 	 	 	 	 	 	 70	 80
a	 discussion	 of	 financial	 instruments	 used	 by	 the	 group	 and	 its	 approach	 to	 managing	 foreign	 exchange	 and	 interest	 rate	 risk	 is	 included	 in	 the	 business	 and	 financial	 review	 net fair values of derivative financial instruments
at	 30	 april	 2006	 the	 group	 had	 one	 interest	 rate	 swap	 with	 a	 notional	 principal	 of	 100m	 which	 is	 designated	 as	 a	 cash	 flow	 hedge	 and	 which	 matured	 on	 3	 may	 2006	 the	 fixed	 interest	 rate	 was	 25	 the	 net	 fair	 value	 of	 this	 derivative	 financial	 instrument	 at	 the	 balance	 sheet	 date	 was	 £03m	 2005	 £06m
at	 30	 april	 2006	 the	 group’s	 embedded	 prepayment	 options	 included	 within	 its	 secured	 loan	 notes	 had	 a	 combined	 fair	 value	 of	 £154m	 	 2005	 £98m
notes to the consolidated financial statements 
continued 67	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
15 financial instruments continued
fair value of nonderivative financial assets and liabilities
the	 table	 below	 provides	 a	 comparison	 by	 category	 of	 the	 carrying	 amounts	 and	 the	 fair	 values	 of	 the	 group’s	 nonderivative	 financial	 assets	 and	 liabilities	 at	 30	 april	 2006	 fair	 value	 is	 the	 amount	 at	 which	 a	 financial	 instrument	 could	 be	 exchanged	 in	 an	 arm’s	 length	 transaction	 between	 informed	 and	 willing	 parties	 and	 includes	 accrued	 interest	 where	 available	 market	 values	 have	 been	 used	 to	 determine	 fair	 values	 of	 financial	 assets	 and	 liabilities	 where	 market	 values	 are	 not	 available	 fair	 values	 of	 financial	 assets	 and	 liabilities	 have	 been	 calculated	 by	 discounting	 expected	 future	 cash	 flows	 at	 prevailing	 interest	 and	 exchange	 rates
	 	 at 30 april 2006	 at	 30	 april	 2005
	 	 	 	 	 book value fair value	 book 	 value	 fair 	 value	 	 	 	 	 	 £m £m	 £m	 £m
fair	 value	 of	 noncurrent	 borrowings
long	 term	 borrowings
–	 first	 priority	 senior	 secured	 bank	 debt	 	 	 	 	 2705 2705	 2240	 2240
–	 finance	 lease	 obligations	 	 	 	 	 141 137	 212	 213
–	 12	 senior	 secured	 notes	 	 	 	 	 780 925	 1200	 1356
–	 8625	 senior	 secured	 notes	 	 	 	 	 1375 1425	 –	 –
–	 525	 unsecured	 convertible	 loan	 notes	 	 	 	 	 – –	 1204	 1252
–	 other	 loan	 notes	 	 	 	 	 02 02	 02	 02
	 	 	 	 5003 5194	 4858	 5063
deferred	 costs	 of	 raising	 finance	 	 	 	 	 163 –	 136	 –
	 	 	 	 	 4840 5194	 4722	 5063
fair	 value	 of	 other	 financial	 instruments	 held	 or	 issued	 to	 finance	 the	 group’s	 operations
shortterm	 borrowings	 	 	 	 	 15 15	 14	 14
finance	 lease	 obligations	 due	 within	 one	 year	 	 	 	 	 91 88	 108	 108
trade	 and	 other	 payables	 	 	 	 	 991 991	 943	 943
trade	 and	 other	 receivables	 	 	 	 1101 1101	 913	 913
cash	 at	 bank	 and	 in	 hand	 	 	 	 10 10	 21	 21
maturity of financial liabilities
the	 maturity	 profile	 of	 the	 carrying	 amount	 of	 the	 group’s	 liabilities	 is	 as	 follows
	 	 	 	 30 april 2006	 	 	 30 	 april	 2005
	 	 	 	 finance	 	 	 finance 	 	 	 	 debt leases total	 debt	 leases	 total 	 	 	 	 £m £m £m	 £m	 £m	 £m
less	 than	 1	 year	 	 	 15 91 106	 14	 108	 122
1–2	 years	 	 	 15 55 70	 14	 83	 97
2–5	 years	 	 2602 85 2687	 3338	 118	 3456
more	 than	 5	 years	 	 	 2082 01 2083	 1158	 11	 1169
	 	 	 4714 232 4946	 4524	 320	 4844 68	 ashtead group plc	 annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
15 financial instruments continued
the	 minimum	 lease	 payments	 under	 finance	 leases	 fall	 due	 as	 follows
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
within	 one	 year	 	 	 	 	 	 	 103	 126
later	 than	 one	 year	 but	 not	 more	 than	 five	 	 	 	 	 	 	 157	 231
more	 than	 five	 years	 	 	 	 	 	 	 01	 11
	 	 	 	 	 	 	 261	 368
future	 finance	 charges	 on	 finance	 leases	 	 	 	 	 	 	 29	 48
present	 value	 of	 future	 finance	 lease	 payments	 	 	 	 	 	 	 232	 320
16 provisions
	 	 	 	 	 	 self 	 insurance	 other	 total 	 	 	 	 	 	 	 £m	 £m	 £m
at	 1	 may	 2005	 	 	 	 	 	 125	 25	 150
exchange	 differences	 	 	 	 	 	 05	 –	 05
utilised	 	 	 	 	 	 94	 25	 119
charged	 in	 the	 year	 	 	 	 	 	 118	 25	 143
amortisation	 of	 discount	 	 	 	 	 	 04	 –	 04
at 30 april 2006      158 25 183
	 	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
included	 in	 current	 liabilities	 	 	 	 	 	 	 70	 71
included	 in	 noncurrent	 liabilities	 	 	 	 	 	 	 113	 79
	 	 	 	 	 	 	 183	 150
self	 insurance	 provisions	 relate	 to	 the	 discounted	 estimated	 liability	 in	 respect	 of	 costs	 to	 be	 incurred	 under	 the	 group’s	 self	 insured	 programmes	 for	 events	 occurring	 up	 to	 the	 year	 end	 and	 are	 expected	 to	 be	 utilised	 over	 a	 period	 of	 approximately	 eight	 years	 the	 provision	 is	 established	 based	 on	 advice	 received	 from	 independent	 actuaries	 of	 the	 estimated	 total	 cost	 of	 the	 self	 insured	 retained	 risk	 based	 on	 historical	 claims	 experience
other	 provisions	 relate	 primarily	 to	 vacant	 property	 costs	 which	 are	 expected	 to	 be	 utilised	 over	 a	 period	 of	 up	 to	 five	 years
17 deferred tax 
deferred tax assets
	 	 	 	 	 	 	 other 	 	 	 	 	 	 	 	 temporary	 	 	 	 	 	 	 tax 	 losses	 differences	 total 	 	 	 	 	 	 	 £m	 £m	 £m
at	 1	 may	 2005	 	 	 	 	 	 238	 146	 384
exchange	 differences	 	 	 	 	 	 17	 06	 23
chargecredit	 to	 income	 statement	 	 	 	 	 	 241	 33	 208
	 	 	 	 	 	 14	 185	 199
less	 offset	 against	 deferred	 tax	 liability	 	 	 	 	 	 14	 156	 170
at 30 april 2006      – 29 29
notes to the consolidated financial statements 
continued 69	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
17 deferred tax continued
deferred tax liabilities
	 	 	 	 	 	 	 other 	 	 	 	 	 	 	 accelerated	 temporary 	 	 	 	 	 	 	tax 	 depreciation	 differences	 total 	 	 	 	 	 	 	 £m	 £m	 £m
at	 1	 may	 2005	 	 	 	 	 	 702	 29	 731
exchange	 differences	 	 	 	 	 	 34	 –	 34
acquisitions	 	 	 	 	 	 69	 –	 69
chargecredit	 to	 income	 statement	 	 	 	 	 	 01	 03	 02
	 	 	 	 	 	 806	 26	 832
less	 offset	 of	 deferred	 tax	 assets	 	 	 	 	 	 	 	 170
at 30 april 2006        662
following	 the	 capital	 reorganisation	 the	 group	 has	 recognised	 a	 deferred	 tax	 asset	 in	 the	 uk	 of	 £29m	 as	 it	 is	 considered	 probable	 that	 sufficient	 taxable	 profit	 will	 be	 available	 to	 utilise	 this	 deferred	 tax	 asset	 the	 unrecognised	 uk	 deferred	 tax	 asset	 of	 £343m	 2005	 £400m	 can	 be	 summarised	 as	 follows
	 	 	 	 	 	 	 other 	 	 	 	 	 	 	 	 temporary 	 	 	 	 	 	 	 tax 	 losses	 differences	 total 	 	 	 	 	 	 	 £m	 £m	 £m
at	 1	 may	 2005	 	 	 	 	 	 15	 385	 400
change	 in	 year	 	 	 	 	 	 05	 33	 28
recognised	 during	 year	 	 	 	 	 	 –	 29	 29
at 30 april 2006      20 323 343
at	 the	 balance	 sheet	 date	 the	 aggregate	 amount	 of	 temporary	 differences	 associated	 with	 undistributed	 earnings	 of	 subsidiaries	 for	 which	 deferred	 tax	 liabilities	 have	 not	 been	 recognised	 was	 £92m	 2005	 £76m	 no	 liability	 has	 been	 recognised	 in	 respect	 of	 these	 differences	 because	 the	 	 group	 is	 in	 a	 position	 to	 control	 the	 timing	 of	 the	 reversal	 of	 the	 temporary	 differences	 and	 it	 is	 probable	 that	 such	 differences	 will	 not	 reverse	 in	 	 the	 foreseeable	 future
18 called up share capital 
	 	 	 2006	 	 2005	 2006	 2005 	 	 	 	 number	 	 number	 £m	 £m
ordinary	 shares	 of	 10p	 each
authorised	 	 	 900000000	 	 900000000	 900	 900
issued	 and	 fully	 paid
at	 1	 may	 	 	 326074928	 	 325656564	 326	 326
allotted	 under	 share	 option	 schemes	 	 	 4908786	 	 418364	 05	 –
allotted	 through	 placing	 and	 open	 offer	 	 	 73350352	 	 –	 73	 –
at	 30	 april	 	 	 404334066	 	 326074928	 404	 326
on	 3	 august	 2005	 the	 group	 issued	 73350352	 ordinary	 shares	 of	 10p	 each	 at	 955p	 through	 a	 placing	 and	 open	 offer	 which	 raised	 £700m	 before	 issue	 expenses	 of	 £31m 70	 ashtead group plc	 annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
19 reconciliation of changes in shareholders’ funds
	 	 	 	 	 own	 cumulative 	 	 	 	 equity	 	 shares	 foreign 	 	 	 share	 element 	 of	 non	 held 	 in	 exchange 	 	 share	 premium	 convertible	 distributable	 treasury	 translation	 distributable 	 	 capital	 account	 loan 	 note	 reserve	 esot	 differences	 reserves	 total 	 	 £m	 £m	 £m	 £m	 £m	 £m	 £m	 £m
at	 1	 may	 2004	 326	 1007	 243	 –	 16	 166	 189	 1205
total	 recognised	 income	 and	 expense	 –	 –	 –	 –	 –	 160	 145	 15
shares	 issued	 –	 01	 –	 –	 –	 –	 –	 01
share	 based	 payments	 –	 –	 –	 –	 –	 –	 06	 06
at	 30	 april	 2005	 326	 1008	 243	 –	 16	 326	 38	 1197
total	 recognised	 income	 and	 expense	 –	 –	 –	 –	 –	 154	 558	 712
shares	 issued	 78	 662	 –	 31	 –	 –	 –	 709
dividends	 –	 –	 –	 –	 –	 –	 20	 20
share	 based	 payments	 –	 –	 –	 –	 –	 –	 13	 13
capital	 reduction	 –	 1638	 –	 938	 –	 –	 700	 –
vesting	 of	 share	 awards	 –	 –	 –	 –	 02	 –	 02	 –
own	 shares	 purchased	 –	 –	 –	 –	 28	 –	 –	 28
redemption	 of	 convertible	 loan	 note	 –	 –	 243	 –	 –	 –	 243	 –
at 30 april 2006 404 32 – 907 42 172 1454 2583
at	 the	 extraordinary	 general	 meeting	 of	 the	 company	 held	 on	 1	 august	 2005	 shareholders	 approved	 a	 resolution	 to	 cancel	 the	 amount	 standing	 to	 the	 credit	 of	 the	 share	 premium	 account	 subsequently	 the	 high	 court	 of	 justice	 approved	 the	 cancellation	 on	 24	 august	 2005	 accordingly	 of	 the	 total	 amount	 cancelled	 of	 £1638m	 £700m	 has	 been	 credited	 to	 distributable	 reserves	 while	 the	 balance	 of	 £938m	 has	 been	 credited	 to	 a	 non
distributable	 reserve
20 share based payments
the	 employee	 share	 option	 trust	 esot	 facilitates	 the	 provision	 of	 shares	 under	 certain	 of	 the	 group’s	 schemes	 it	 holds	 a	 beneficial	 interest	 in	 4721490	 ordinary	 shares	 of	 the	 company	 acquired	 at	 an	 average	 cost	 of	 873p	 per	 share	 the	 esot	 owned	 directly	 2286959	 of	 these	 shares	 and	 a	 further	 2434531	 shares	 were	 registered	 in	 the	 name	 of	 investment	 incentive	 plan	 or	 performance	 share	 plan	 participants	 on	 terms	 which	 require	 that	 the	 award	 shares	 are	 transferred	 back	 to	 the	 esot	 to	 the	 extent	 that	 the	 performance	 targets	 are	 not	 met	 the	 shares	 had	 a	 market	 value	 of	 £111m	 at	 30	 april	 2006	 the	 esot	 and	 the	 plan	 participants	 have	 waived	 the	 right	 to	 receive	 dividends	 on	 the	 shares	 they	 hold	 the	 costs	 of	 operating	 the	 esot	 are	 borne	 by	 the	 group	 but	 are	 not	 material	 the	 group	 has	 recognised	 the	 fair	 value	 of	 sharebased	 payments	 to	 employees	 based	 on	 grants	 of	 shares	 since	 7	 november	 2002	 the	 transitional	 date	 for	 ifrs	 2	 ‘sharebased	 payments’
notes to the consolidated financial statements 
continued 71	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
20 share based payments continued
cash incentive plan
the	 cash	 incentive	 plan	 ‘cip’	 is	 an	 award	 of	 units	 which	 are	 subject	 to	 the	 same	 performance	 conditions	 as	 apply	 to	 the	 company’s	 unapproved	 share	 option	 scheme	 awards	 were	 granted	 under	 this	 plan	 in	 2000	 and	 2001	 and	 are	 exercisable	 up	 to	 february	 2010	 and	 2011	 respectively	 as	 all	 performance	 conditions	 have	 been	 satisfied	 on	 exercise	 by	 the	 option	 holder	 the	 difference	 between	 the	 midmarket	 price	 of	 ashtead	 group	 plc	 shares	 on	 that	 day	 and	 the	 grant	 price	 of	 102p	 and	 125p	 for	 the	 2000	 and	 2001	 awards	 respectively	 multiplied	 by	 the	 number	 of	 units	 held	 will	 be	 paid	 by	 way	 of	 a	 cash	 award	 to	 the	 holder	 net	 of	 applicable	 taxes
in	 2006	 the	 charge	 in	 respect	 of	 the	 cip	 was	 £558000	 2005	 £140000	 the	 fair	 value	 of	 the	 awards	 at	 30	 april	 2006	 was	 based	 on	 the	 share	 price	 on	 that	 date
	 investment incentive plan
details	 of	 the	 investment	 incentive	 plan	 ‘iip’	 are	 given	 on	 page	 25	 the	 costs	 of	 this	 scheme	 are	 charged	 to	 the	 income	 statement	 over	 the	 vesting	 period	 based	 upon	 the	 fair	 value	 of	 the	 award	 at	 the	 grant	 date	 and	 the	 likelihood	 of	 allocations	 vesting	 under	 the	 scheme	 in	 2006	 the	 charge	 in	 respect	 of	 the	 iip	 was	 £160000	 2005	 £106000	 no	 awards	 were	 granted	 under	 the	 iip	 in	 2006	 the	 fair	 value	 of	 awards	 granted	 during	 2005	 	 was	 estimated	 using	 a	 blackscholes	 option	 pricing	 model	 with	 the	 following	 assumptions	 share	 price	 at	 grant	 date	 of	 4850p	 nil	 exercise	 price	 	 no	 dividend	 yield	 volatility	 of	 12541	 a	 risk	 free	 rate	 of	 4878	 and	 an	 expected	 life	 of	 three	 years	 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
performance share plan 
details	 of	 the	 performance	 share	 plan	 ‘psp’	 are	 given	 on	 pages	 25	 and	 26	 the	 costs	 of	 this	 scheme	 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	 scheme	 in	 2006	 the	 charge	 in	 respect	 of	 the	 psp	 was	 £828000	 2005	 £200000
the	 fair	 value	 of	 awards	 granted	 during	 the	 year	 is	 estimated	 using	 a	 blackscholes	 option	 pricing	 model	 with	 the	 following	 assumptions	 share	 price	 at	 grant	 date	 of	 1135p	 nil	 exercise	 price	 no	 dividend	 yield	 volatility	 of	 9790	 a	 risk	 free	 rate	 of	 4219	 and	 an	 expected	 life	 of	 three	 years	 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
discretionary share option schemes
details	 of	 the	 discretionary	 share	 option	 schemes	 are	 given	 on	 page	 25	 in	 accordance	 with	 the	 transitional	 provisions	 of	 ifrs	 2	 ‘sharebased	 payments’	 the	 group	 has	 not	 recognised	 any	 expense	 for	 these	 schemes	 as	 they	 were	 all	 granted	 prior	 to	 7	 november	 2002	 72	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
20 share based payments continued
saveasyouearn saye schemes
the	 costs	 of	 saye	 schemes	 are	 charged	 to	 the	 income	 statement	 over	 the	 vesting	 period	 based	 upon	 the	 fair	 value	 of	 the	 award	 at	 the	 grant	 date	 in	 2006	 the	 charge	 in	 respect	 of	 saye	 schemes	 was	 £400000	 2005	 £290000
the	 fair	 value	 of	 awards	 granted	 during	 the	 year	 is	 estimated	 using	 a	 blackscholes	 option	 pricing	 model	 with	 the	 following	 assumptions	 share	 price	 at	 grant	 date	 of	 13675p	 exercise	 price	 of	 11543p	 no	 dividend	 yield	 volatility	 of	 11000	 a	 risk	 free	 rate	 of	 4182	 and	 an	 expected	 life	 of	 three	 years	 expected	 volatility	 was	 determined	 by	 calculating	 historical	 volatility	 over	 the	 previous	 three	 years	 the	 expected	 life	 used	 in	 the	 model	 is	 based	 on	 the	 terms	 of	 the	 plan
	 discretionary	 schemes	 saye
	 	 	 	 weighted	 	 weighted 	 	 	 	 	 average	 	 average 	 	 	 	 	 exercise	 	 exercise	 iip	 psp 	 	 	 	 number	 price 	 p	 number	 price 	 p	 number	 number
20034
outstanding	 at	 1	 may	 2003	 	 	 17512892	 107712	 4767909	 34915	 2723460	 –
forfeited	 	 	 2214224	 108399	 79763	 37071	 650878	 –
exercised	 	 	 –	 –	 1400	 24270	 –	 –
expired	 	 	 –	 –	 1276470	 46929	 –	 –
outstanding	 at	 30	 april	 2004	 	 	15298668	 107613	 3410276	 30372	 2072582	 –
exercisable	 at	 30	 april	 2004	 	 	 –	 –	 42324	 104756	 –	 –
20045
outstanding	 at	 1	 may	 2004	 	 	15298668	 107613	 3410276	 30372	 2072582	 –
granted	 	 	 –	 –	 1960219	 30740	 987501	 1831500
forfeited	 	 	 2576686	 132400	 149112	 32150	 1896113	 –
exercised	 	 	 25000	 41500	 393364	 42872	 –	 –
expired	 	 	 887290	 61440	 584512	 36962	 –	 –
outstanding	 at	 30	 april	 2005	 	 	11809692	 105797	 4243507	 28413	 1163970	 1831500
exercisable	 at	 30	 april	 2005	 	 	 –	 –	 120245	 50748	 –	 –
20056
outstanding	 at	 1	 may	 2005	 	 	11809692	 105797	 4243507	 28413	 1163970	 1831500
granted	 	 	 –	 –	 398777	 115430	 –	 1899399
forfeited	 	 	 507234	 120544	 124396	 32369	 –	 88453
exercised	 	 	 4815598	 80813	 93188	 48774	 176469	 –
expired	 	 	 –	 –	 197774	 37403	 –	 –
outstanding	 at	 30	 april	 2006	 	 	 6486860	 123191	 4226926	 35637	 987501	 3642446
exercisable	 at	 30	 april	 2006	 	 	 6486860	 123191	 33674	 31233	 –	 –
notes to the consolidated financial statements 
continued 73	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
20 share based payments continued
options	 outstanding	 at	 30	 april	 2006
	 discretionary	 schemes	 saye
	 	 	 weighted	 	 	 weighted 	 	 	 	 average	 	 latest	 average	 	 latest 	 	 	 	 exercise	 number	 exercise	 exercise	 number	 exercise 	 year	 of	 grant	 	 	 price 	 p	 of 	 shares	 date	 price 	 p	 of 	 shares	 date
19967	 	 	 132566	 598700	 27 	 feb	 07	 –	 –	 –
19978	 	 	 184764	 1288800	 05 	 feb	 08	 –	 –	 –
19989	 	 	 174805	 746500	 26 	 feb	 09	 –	 –	 –
19992000	 	 	 101956	 334000	 08 	 mar	 10	 –	 –	 –
20001	 	 	 118179	 2224860	 16 	 aug	 10	 94800	 2492	 30 	 sep	 06
20012	 	 	 41500	 1144000	 26 	 feb	 12	 41600	 91495	 30 	 sep	 07
20023	 	 	 49500	 150000	 02 	 aug	 12	 24270	 2114116	 31 	 oct	 08
20034	 	 	 –	 –	 –	 –	 –	 –
20045	 	 	 –	 –	 –	 30740	 1626526	 31 	 mar	 08
20056	 	 	 –	 –	 –	 115430	 392297	 30 	 apr	 09
	 	 	 	 6486860	 	 	 4226926
	 the	 weighted	 average	 share	 price	 during	 the	 period	 for	 options	 exercised	 over	 the	 year	 was	 80813p	 2005	 41500p	 for	 discretionary	 schemes	 and	 48774p	 2005	 42872p	 for	 saye	 schemes	 the	 total	 charge	 for	 the	 year	 relating	 to	 employee	 share	 based	 payment	 plans	 was	 £19m	 2005	 £07m	 £14m	 of	 which	 related	 to	 equitysettled	 share	 based	 payment	 transactions	 and	 £05m	 related	 to	 cashsettled	 share	 based	 payment	 transactions	 after	 deferred	 tax	 the	 total	 charge	 was	 £17m	 2005	 £08m
21 operating leases 
minimum	 annual	 commitments	 under	 existing	 operating	 leases	 may	 be	 analysed	 by	 date	 of	 expiry	 of	 the	 lease	 as	 follows
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
land	 and	 buildings
	 expiring	 in	 one	 year	 	 	 	 	 	 	 09	 05
	 expiring	 between	 two	 and	 five	 years	 	 	 	 	 	 	 55	 45
	 expiring	 in	 more	 than	 five	 years	 	 	 	 	 	 	 105	 105
	 	 	 	 	 	 	 169	 155
other	 –	 motor	 vehicles
	 expiring	 in	 one	 year	 	 	 	 	 	 	 01	 –
	 expiring	 between	 two	 and	 five	 years	 	 	 	 	 	 	 09	 11
	 	 	 	 	 	 	 10	 11
total	 	 	 	 	 	 	 179	 166 74	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
21 operating leases continued
total	 minimum	 commitments	 under	 existing	 operating	 leases	 at	 30	 april	 2006	 through	 to	 the	 end	 of	 their	 respective	 term	 by	 year	 are	 as	 follows
	 	 	 	 	 	 	 land 	 and	 motor 	 	 	 	 	 	 	 buildings	 vehicles	 total 	 financial	 year	 	 	 	 	 	 £m	 £m	 £m
2007	 	 	 	 	 	 169	 10	 179
2008	 	 	 	 	 	 156	 08	 164
2009	 	 	 	 	 	 148	 03	 151
2010	 	 	 	 	 	 136	 01	 137
2011	 	 	 	 	 	 123	 –	 123
thereafter	 	 	 	 	 	 841	 –	 841
	 	 	 	 	 	 1573	 22	 1595
22 pensions
the	 group	 operates	 pension	 plans	 for	 the	 benefit	 of	 qualifying	 employees	 the	 major	 plans	 for	 new	 employees	 throughout	 the	 group	 are	 all	 defined	 contribution	 plans	 following	 the	 introduction	 of	 the	 new	 stakeholder	 pension	 plan	 for	 uk	 employees	 in	 may	 2002	 pension	 costs	 for	 defined	 contribution	 plans	 were	 £18m	 2005	 £15m
the	 group	 also	 has	 a	 defined	 benefit	 plan	 for	 uk	 employees	 which	 was	 closed	 to	 new	 members	 in	 2001	 this	 plan	 is	 a	 funded	 defined	 benefit	 	 plan	 with	 trustee	 administered	 assets	 held	 separately	 from	 those	 of	 the	 group	 it	 was	 valued	 by	 the	 actuaries	 under	 ias	 19	 employee	 benefits	 	 at	 30	 april	 2006	 the	 principal	 assumptions	 made	 by	 the	 actuary	 were	 as	 follows
	 	 	 	 	 	 	 2006	 2005
rate	 of	 increase	 in	 salaries	 	 	 	 	 	 	 400	 375
rate	 of	 increase	 in	 pensions	 in	 payment	 	 	 	 	 	 	 300 275
discount	 rate	 	 	 	 	 	 	 500	 525
inflation	 assumption	 	 	 	 	 	 300	 275
expected	 return	 on	 plan	 assets	 	 	 	 	 	 	 770	 700
the	 amounts	 recognised	 in	 the	 income	 statement	 are	 as	 follows
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
current	 service	 cost	 	 	 	 	 	 	 10	 18
interest	 cost	 	 	 	 	 	 22	 25
expected	 return	 on	 plan	 assets	 	 	 	 	 	 	 22	 21
total	 expense	 	 	 	 	 	 	 10	 22
the	 amounts	 recognised	 in	 the	 balance	 sheet	 are	 determined	 as	 follows
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
present	 value	 of	 defined	 benefit	 obligation	 	 	 	 	 	 	 505	 507
fair	 value	 of	 plan	 assets	 	 	 	 	 	 	 522	 345
net	 assetliability	 recognised	 in	 the	 balance	 sheet	 	 	 	 	 	 	 17	 162
notes to the consolidated financial statements 
continued 75	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
22 pensions continued
movements	 in	 the	 present	 value	 of	 defined	 benefit	 obligations	 were	 as	 follows
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
at	 1	 may	 	 	 	 	 	 	 507	 421
current	 service	 cost	 	 	 	 	 	 	 10	 18
interest	 cost	 	 	 	 	 	 	 22	 25
contributions	 from	 members	 	 	 	 	 	 	 06	 05
actuarial	 loss	 	 	 	 	 	 	 51	 42
benefits	 paid	 	 	 	 	 	 	 04	 04
settlements	 	 	 	 	 	 	 87	 –
	 	 	 	 	 	 	 505	 507
the	 actuarial	 loss	 in	 the	 year	 ended	 30	 april	 2006	 reflects	 the	 reduction	 in	 the	 required	 discount	 rate	 that	 for	 aa	 rated	 corporate	 bonds	 in	 the	 year	 from	 525	 to	 50	 which	 increased	 the	 discounted	 amount	 of	 accrued	 defined	 benefit	 obligations
movements	 in	 the	 fair	 value	 of	 plan	 assets	 were	 as	 follows
	 	 	 	 	 	 	 2006	 2005
at	 1	 may	 	 	 	 	 	 	 345	 294
expected	 return	 on	 plan	 assets	 	 	 	 	 	 	 22	 21
actual	 return	 on	 plan	 assets	 in	 excess	 of	 expected	 return	 	 	 	 	 	 	 53	 05
contributions	 from	 the	 sponsoring	 companies	 	 	 	 	 	 	 187	 24
contributions	 from	 members	 	 	 	 	 	 	 06	 05
benefits	 paid	 	 	 	 	 	 	 04	 04
settlements	 	 	 	 	 	 	 87	 –
	 	 	 	 	 	 522	 345
	 the	 analysis	 of	 the	 scheme	 assets	 and	 the	 expected	 rate	 of	 return	 at	 the	 balance	 sheet	 date	 was	 as	 follows
	 	 expected	 return	 fair	 value
	 	 	 	 	 2006	 2005	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
equity	 instruments	 	 	 	 	 80	 80	 396	 206
bonds	 	 	 	 	 51	 49	 73	 110
property	 	 	 	 	 80	 80	 52	 29
cash	 	 	 	 	 –	 –	 01	 –
	 	 	 	 	 	 	 522	 345 76	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
22 pensions continued
the	 history	 of	 experience	 adjustments	 is	 as	 follows
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
present	 value	 of	 defined	 benefit	 obligations	 	 	 	 	 	 	 505	 507
fair	 value	 of	 scheme	 assets	 	 	 	 	 	 	 522	 345
surplusdeficit	 in	 the	 scheme	 	 	 	 	 	 	 17	 162
experience	 adjustments	 on	 scheme	 liabilities
amount	 £m	 	 	 	 	 	 	 51	 42
percentage	 of	 scheme	 liabilities	 	 	 	 	 	 	 10	 8
experience	 adjustments	 on	 scheme	 assets
amount	 £m	 	 	 	 	 	 	 53	 05
percentage	 of	 the	 present	 value	 of	 the	 scheme	 assets	 	 	 	 	 	 	 10	 1
the	 estimated	 amount	 of	 contributions	 expected	 to	 be	 paid	 by	 the	 company	 to	 the	 plan	 during	 the	 current	 financial	 year	 is	 £08	 million
23 notes to the cash flow statement
a cash flow from operating activities 
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
operating	 profit	 	 	 	 	 	 	 1245	 671
depreciation	 	 	 	 	 	 	 1136	 1024
exceptional	 items	 	 	 	 	 	 	 134	 –
ebitda	 	 	 	 	 	 2247	 1695
profit	 on	 disposal	 of	 property	 plant	 and	 equipment	 	 	 	 	 	 	 91	 71
decrease	 in	 inventories	 	 	 	 	 	 	 22	 04
increase	 in	 trade	 and	 other	 receivables	 	 	 	 	 	 	 112	 03
increase	 in	 trade	 and	 other	 payables	 	 	 	 	 	 	 75	 15
exchange	 differences	 	 	 	 	 	 	 03	 04
other	 noncash	 movements	 	 	 	 	 	 	 14	 04
cash	 generated	 from	 operations	 before	 exceptional	 items	 	 	 	 	 	 	 2152	 1648
b reconciliation to net debt
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
decrease	 in	 cash	 in	 the	 period	 	 	 	 	 	 	 12	 16
increasedecrease	 in	 debt	 through	 cash	 flow	 	 	 	 	 	 	 14	 552
change	 in	 net	 debt	 from	 cash	 flows	 	 	 	 	 	 	 26	 536
exchange	 differences	 	 	 	 	 	 	 37	 151
non	 cash	 movements	 –	 deferred	 costs	 of	 debt	 raising	 	 	 	 	 	 	 40	 12
–	 convertible	 loan	 note	 	 	 	 	 	 	 10	 38
–	 capital	 element	 of	 new	 finance	 leases	 	 	 	 	 	 	 20	 138
movement	 in	 net	 debt	 in	 the	 period	 	 	 	 	 	 	 113	 499
net	 debt	 at	 1	 may	 	 	 	 	 	 	 4823	 5322
net	 debt	 at	 30	 april	 	 	 	 	 	 	 4936	 4823
notes to the consolidated financial statements 
continued 77	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
23 notes to the cash flow statement continued
c analysis of net debt 
	 	 	 	 1 	 may	 exchange	 cash	 noncash	 30 	 april	 	 	 	 	 2005	 movement	 flow	 movements	 2006 	 	 	 	 	 £m	 £m	 £m	 £m	 £m
cash	 and	 cash	 equivalents	 	 	 	 21	 01	 12	 –	 10
debt	 due	 within	 1	 year	 	 	 	 122	 05	 121	 100	 106
debt	 due	 after	 1	 year	 	 	 	 4722	 33	 135	 50	 4840
total	 net	 debt	 	 	 	 4823	 37	 26	 50	 4936
noncash	 movements	 relate	 to	 accrued	 interest	 on	 and	 gain	 on	 redemption	 of	 the	 convertible	 loan	 note	 the	 amortisation	 of	 prepaid	 fees	 relating	 to	 senior	 secured	 debt	 facilities	 and	 the	 addition	 of	 new	 finance	 leases	 in	 the	 year	 d exceptional financing costs paid
exceptional	 financing	 costs	 paid	 comprise	 £53m	 related	 principally	 to	 the	 premium	 payable	 on	 the	 redemption	 of	 the	 second	 priority	 senior	 secured	 loan	 notes	 due	 2014	 and	 £80m	 of	 accrued	 interest	 paid	 to	 rentokil	 on	 redemption	 of	 the	 convertible	 loan	 note	 payment	 of	 this	 interest	 had	 been	 deferred	 in	 2003	 by	 agreement	 with	 rentokil
24 acquisitions and disposals
a	 on 	 17	 october	 2005	 sunbelt	 acquired	 100	 of	 the	 issued	 share	 capital	 of	 northridge	 equipment	 rentals	 inc	 for	 cash	 consideration	 of	 £391m	 northridge	 equipment	 rentals	 traded	 through	 five	 stores	 located	 in	 central	 and	 southern	 california	 in	 addition	 sunbelt	 acquired	 the	 business	 	 and	 assets	 of	 11	 further	 stores	 in	 florida	 california	 nevada	 and	 tennessee	 and	 aplant	 acquired	 one	 store	 in	 bournemouth	 for	 a	 total	 cash	 consideration	 of	 £175m
	 the 	 acquired	 businesses	 have	 been	 integrated	 into	 sunbelt	 and	 aplant	 and	 the	 acquired	 rental	 fleets	 reorganised	 through	 additions	 disposals	 and	 transfers	 of	 equipment	 accordingly	 it	 is	 not	 practicable	 to	 disclose	 separately	 the	 revenue	 and	 profit	 of	 the	 acquired	 assets
	 the 	 goodwill	 arising	 on	 these	 acquisitions	 which	 relates	 to	 the	 excess	 of	 the	 consideration	 necessary	 to	 acquire	 these	 businesses	 over	 the	 fair	 market	 value	 of	 the	 net	 assets	 acquired	 is	 summarised	 in	 the	 table	 below
	 	 	 	 	 	 	 acquiree’s	 fair	 	 	 	 	 	 	 	 book 	 value	 value 	 	 	 	 	 	 	 	 	 £m	 £m
net	 assets	 acquired
property	 plant	 and	 equipment	 	 	 	 	 	 	 251	 353
inventories	 	 	 	 	 	 	 06	 05
trade	 and	 other	 receivables	 	 	 	 	 	 	 42	 42
trade	 and	 other	 payables	 	 	 	 	 	 	 17	 25
deferred	 tax	 liabilities	 	 	 	 	 	 	 33	 69
	 	 	 	 	 	 	 249	 306
goodwill	 	 	 	 	 	 	 	 264
total	 consideration	 	 	 	 	 	 	 	 570
satisfied	 by
cash	 	 	 	 	 	 	 	 566
directly	 attributable	 costs	 	 	 	 	 	 	 	 04
	 	 	 	 	 	 	 	 570 78	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
24 acquisitions and disposals continued
b	 on 	 15	 august	 2005	 sunbelt	 sold	 12	 specialist	 scaffold	 locations	 on	 the	 us	 west	 coast	 and	 in	 texas	 for	 cash	 consideration	 of	 £138m	 the	 profit	 on	 disposal	 is	 as	 follows
	 	 	 	 	 	 	 	 £m
disposal	 proceeds
–	 cash	 received	 	 	 	 	 	 	 	 138
–	 disposal	 related	 costs	 paid	 	 	 	 	 	 	 	 10
	 	 	 	 	 	 	 	 128
–	 further	 disposal	 related	 costs	 payable	 	 	 	 	 	 	 	 03
net	 consideration	 receivable	 	 	 	 	 	 	 	 125
net	 assets	 sold
–	 property	 plant	 and	 equipment	 	 	 	 	 	 	 	 95
–	 inventory	 	 	 	 	 	 	 	 01
exceptional	 profit	 on	 disposal	 	 	 	 	 	 	 	 29
25 contingent liabilities
the	 group	 is	 subject	 to	 periodic	 legal	 claims	 in	 the	 ordinary	 course	 of	 its	 business	 however	 the	 claims	 outstanding	 at	 30	 april	 2006	 net	 of	 provisions	 held	 are	 not	 expected	 to	 have	 a	 significant	 impact	 on	 the	 group’s	 financial	 position	 the	 company	 has	 guaranteed	 the	 borrowings	 of	 its	 subsidiary	 undertakings	 under	 the	 group’s	 senior	 secured	 credit	 and	 overdraft	 facilities	 	 at	 30	 april	 2006	 the	 amount	 borrowed	 under	 these	 facilities	 was	 £2720m	 30	 april	 2005	 £2254m	 additionally	 subsidiary	 undertakings	 are	 	 able	 to	 obtain	 letters	 of	 credit	 under	 these	 facilities	 which	 are	 also	 guaranteed	 by	 the	 company	 and	 at	 30	 april	 2006	 letters	 of	 credit	 issued	 	 under	 these	 arrangements	 totalled	 £154m	 us279m	 additionally	 the	 company	 has	 guaranteed	 the	 remaining	 outstanding	 12	 second	 	 priority	 senior	 secured	 notes	 with	 a	 par	 value	 of	 £78m	 and	 8625	 second	 priority	 senior	 secured	 notes	 with	 a	 par	 value	 of	 250m	 £1375m	 	 both	 issued	 by	 ashtead	 holdings	 plc
the	 company	 has	 guaranteed	 operating	 and	 finance	 lease	 commitments	 of	 subsidiary	 undertakings	 where	 the	 minimum	 lease	 commitment	 	 at	 30	 april	 2006	 totalled	 £771m	 2005	 –	 £631m	 in	 respect	 of	 land	 and	 buildings	 and	 £190m	 2005	 £214m	 in	 respect	 of	 other	 lease	 rentals	 	 of	 which	 £56m	 and	 £61m	 respectively	 is	 payable	 by	 subsidiary	 undertakings	 in	 the	 year	 ending	 30	 april	 2007
the	 company	 has	 guaranteed	 the	 performance	 by	 subsidiaries	 of	 certain	 other	 obligations	 up	 to	 £11m	 2005	 £16m	 26 capital commitments
at	 30	 april	 2006	 capital	 commitments	 in	 respect	 of	 purchases	 of	 rental	 and	 other	 equipment	 totalled	 £1190m	 2005	 £398m	 all	 of	 which	 had	 been	 ordered	 there	 were	 no	 other	 material	 capital	 commitments	 at	 the	 yearend
27 employees
the	 average	 number	 of	 employees	 including	 directors	 during	 the	 year	 was	 as	 follows
	 	 	 	 	 	 	 2006	 2005
north	 america	 	 	 	 	 	 4122	 3884
united	 kingdom	 	 	 	 	 	 2068	 2059
rest	 of	 world	 	 	 	 	 	 	 11	 11
	 	 	 	 	 	 	 6201	 5954
notes to the consolidated financial statements 
continued 79	 ashtead group plc	a nnual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
28 explanation of transition to ifrs
this	 is	 the	 first	 year	 that	 the	 company	 has	 presented	 its	 financial	 statements	 under	 ifrs	 the	 following	 disclosures	 are	 required	 in	 the	 year	 of	 transition	 the	 last	 financial	 statements	 under	 uk	 gaap	 were	 for	 the	 year	 ended	 30	 april	 2005	 and	 the	 date	 of	 transition	 to	 ifrs	 was	 therefore	 	 1	 may	 2004
reconciliation of equity at 1 may 2004 date of transition to ifrs
	 	 	 	 	 	 	 effect 	 of	 	 	 	 	 	 	 uk	 transition	 	 	 	 	 	 	 gaap	 to 	 ifrs	 ifrs 	 	 	 	 	 	 note	 £m	 £m	 £m
inventories	 	 	 	 	 	 151	 –	 151
trade	 and	 other	 receivables	 	 	 	 	 a	 419	 522	 941
cash	 and	 cash	 equivalents	 	 	 	 	 	 99	 –	 99
total	 current	 assets	 	 	 	 	 	 669	 522	 1191
property	 plant	 and	 equipment	 	 	 	 	 b	 5355	 194	 5549
goodwill	 	 	 	 	 c	 1429	 167	 1262
total	 noncurrent	 assets	 	 	 	 	 	 6784	 27	 6811
total	 assets	 	 	 	 	 	 7453	 549	 8002
trade	 and	 other	 payables	 	 	 	 	 	 861	 –	 861
current	 tax	 liabilities	 	 	 	 	 	 06	 –	 06
debt	 	 	 	 	 abd	 4844	 577	 5421
provisions	 	 	 	 	 	 147	 –	 147
deferred	 tax	 liabilities	 	 	 	 	 g	 277	 42	 235
defined	 benefit	 pension	 fund	 deficit	 	 	 	 	 h	 –	 127	 127
total	 liabilities	 	 	 	 	 	 6135	 662	 6797
share	 capital	 	 	 	 	 	 326	 –	 326
share	 premium	 	 	 	 	 	 1007	 –	 1007
equity	 element	 of	 convertible	 loan	 note	 	 	 	 	 d	 –	 243	 243
own	 shares	 held	 in	 treasury	 through	 the	 esot	 	 	 	 	 	 16	 –	 16
cumulative	 foreign	 exchange	 translation	 differences	 	 	 	 	 i	 01	 167	 166
distributable	 reserves	 	 	 	 	 	 –	 189	 189
total	 equity	 	 	 	 	 	 1318	 113	 1205 80	 ashtead group plc	 annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
28 explanation of transition to ifrs continued
reconciliation of equity at 30 april 2005 
	 	 	 	 	 	 	 effect 	 of	 	 	 	 	 	 	 uk	 transition	 	 	 	 	 	 	 gaap	 to 	 ifrs	 ifrs 	 	 	 	 	 	 note	 £m	 £m	 £m
inventories	 	 	 	 	 	 138	 –	 138
trade	 and	 other	 receivables	 	 	 	 	 eh	 918	 01	 919
cash	 and	 cash	 equivalents	 	 	 	 	 	 21	 –	 21
total	 current	 assets	 	 	 	 	 	 1077	 01	 1078
property	 plant	 and	 equipment	 	 	 	 	 	 5371	 –	 5371
goodwill	 	 	 	 	 c	 1340	 158	 1182
other	 financial	 assets	 –	 derivatives	 	 	 	 	 f	 –	 98	 98
total	 noncurrent	 assets	 	 	 	 	 	 6711	 60	 6651
total	 assets	 	 	 	 	 	 7788	 59	 7729
trade	 and	 other	 payables	 	 	 	 	 h	 1023	 01	 1022
current	 tax	 liabilities	 	 	 	 	 	 07	 –	 07
debt	 	 	 	 	 d	 4953	 109	 4844
provisions	 	 	 	 	 	 150	 –	 150
deferred	 tax	 liabilities	 	 	 	 	 g	 386	 39	 347
defined	 benefit	 pension	 fund	 deficit	 	 	 	 	 h	 –	 162	 162
total	 liabilities	 	 	 	 	 	 6519	 13	 6532
share	 capital	 	 	 	 	 	 326	 –	 326
share	 premium	 	 	 	 	 	 1008	 –	 1008
equity	 element	 of	 convertible	 loan	 note	 	 	 	 	 d	 –	 243	 243
own	 shares	 held	 in	 treasury	 through	 the	 esot	 	 	 	 	 	 16	 –	 16
cumulative	 foreign	 exchange	 translation	 differences	 	 	 	 	 i	 76	 250	 326
distributable	 reserves	 	 	 	 	 	 27	 65	 38
total	 equity	 	 	 	 	 	 1269	 72	 1197
reconciliation of profit for the year ended 30 april 2005
	 	 	 	 	 	 	 effect 	 of	 	 	 	 	 	 	 uk	 transition	 	 	 	 	 	 	 gaap	 to 	 ifrs	 ifrs 	 	 	 	 	 	 note	 £m	 £m	 £m
revenue	 	 	 	 	 	 5237	 –	 5237
staff	 costs	 	 	 	 	 hj	 1727	 02	 1729
other	 operating	 costs	 	 	 	 	 	 1884	 –	 1884
other	 income	 	 	 	 	 	 71	 –	 71
ebitda	 	 	 	 	 	 1697	 02	 1695
depreciation	 	 	 	 	 c	 1113	 89	 1024
operating	 profit	 	 	 	 	 	 584	 87	 671
net	 financing	 costs	 	 	 	 	 dfh	 420	 71	 349
profit	 before	 tax	 	 	 	 	 	 164	 158	 322
taxation	 	 	 	 	 	 140	 –	 140
profit	 attributable	 to	 equity	 shareholders	 	 	 	 	 	 24	 158	 182
notes to the consolidated financial statements 
continued 81	 ashtead group plc	a nnual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
28 explanation of transition to ifrs continued
explanation of reconciling items from uk gaap to ifrs
a	the 	 group’s	 revolving	 accounts	 receivable	 securitisation	 programme	 was	 disclosed	 under	 a	 linked	 presentation	 under	 uk	 gaap	 the	 application	 of	 ias	 39	 has	 removed	 the	 linked	 presentation	 and	 the	 funding	 received	 has	 been	 reclassified	 as	 debt	 this	 affects	 the	 opening	 balance	 sheet	 at	 30	 april	 2004	 by	 increasing	 trade	 receivables	 and	 debt	 by	 £522m	 the	 accounts	 receivable	 securitisation	 was	 refinanced	 through	 the	 group’s	 new	 first	 priority	 senior	 secured	 credit	 facility	 in	 november	 2004
b	 the	 group	 reclassified	 certain	 leases	 mainly	 related	 to	 our	 delivery	 fleet	 previously	 accounted	 for	 as	 operating	 leases	 as	 capital	 leases	 under	 uk	 gaap	 in	 the	 second	 half	 of	 20045	 under	 ias	 8	 accounting	 policies	 changes	 in	 accounting	 estimates	 and	 errors	 the	 prior	 period	 element	 of	 this	 adjustment	 has	 been	 recorded	 at	 the	 date	 of	 transition
c	 the	 group	 has	 taken	 the	 exemption	 from	 applying	 ifrs	 3	 business	 combinations	 to	 acquisitions	 occurring	 before	 1	 may	 2004	 the	 goodwill	 arising	 from	 acquisitions	 occurring	 before	 that	 date	 remains	 at	 the	 amount	 shown	 under	 uk	 gaap	 at	 1	 may	 2004	 except	 that	 the	 group	 has	 elected	 to	 translate	 foreign	 currency	 denominated	 goodwill	 at	 exchange	 rates	 ruling	 at	 the	 balance	 sheet	 date	 rather	 than	 the	 historical	 rate	 ruling	 at	 the	 time	 of	 the	 acquisition	 this	 reduces	 the	 amount	 of	 goodwill	 by	 £167m	 in	 the	 opening	 ifrs	 balance	 sheet	 and	 £247m	 at	 30	 april	 2005	 	 from	 that	 reported	 previously	 under	 uk	 gaap	 the	 goodwill	 amortisation	 under	 uk	 gaap	 of	 £89m	 was	 reversed	 at	 30	 april	 2005	 resulting	 in	 	 an	 overall	 reduction	 in	 goodwill	 at	 30	 april	 2005	 of	 £158m
d	 the	 group	 has	 elected	 to	 adopt	 ias	 32	 financial	 instruments	 disclosure	 and	 presentation	 and	 ias	 39	 financial	 instruments	 recognition	 and	 measurement	 from	 1	 may	 2004	 	 ias 	 32	 requires	 the	 debt	 and	 equity	 components	 of	 a	 compound	 financial	 instrument	 to	 be	 recognised	 separately	 in	 the	 financial	 statements	 	 the	 525	 unsecured	 convertible	 loan	 note	 is	 a	 compound	 financial	 instrument	 under	 uk	 gaap	 the	 loan	 note	 was	 recorded	 as	 debt	 at	 a	 fair	 value	 of	 £1213m	 when	 issued	 in	 june	 2000	 and	 was	 being	 accreted	 to	 the	 face	 value	 of	 the	 loan	 note	 £1340m	 over	 the	 life	 of	 the	 instrument	 	 ifrs 	 requires	 the	 fair	 value	 of	 the	 debt	 component	 of	 the	 instrument	 alone	 £970m	 to	 be	 recognised	 as	 debt	 when	 issued	 and	 accreted	 	 to	 the	 face	 value	 of	 the	 loan	 £1340m	 over	 the	 life	 of	 the	 instrument	 and	 the	 balance	 £243m	 to	 be	 recognised	 as	 equity	 at	 the	 date	 the	 	 loan	 note	 was	 issued	 consequently	 the	 interest	 charge	 is	 increased	 under	 ifrs	 to	 make	 the	 interest	 expense	 the	 525	 coupon	 plus	 debt	 amortisation	 equivalent	 to	 that	 for	 a	 similar	 instrument	 issued	 at	 the	 same	 time	 and	 with	 the	 same	 maturity	 but	 without	 equity	 conversion	 rights	 	 accordingly 	 the	 opening	 ifrs	 balance	 sheet	 at	 30	 april	 2004	 includes
the	 equity	 component	 of	 the	 instrument	 £243m	 and	 debt	 at	 amortised	 cost	 of	 £1168m	 being	 the	 £970m	 recognised	 on	 issue	 plus	 the	 accumulated	 discount	 amortisation	 to	 30	 april	 2004
	 as 	 a	 result	 debt	 at	 30	 april	 2005	 is	 £109m	 lower	 than	 reported	 previously	 under	 uk	 gaap	 in	 addition	 due	 to	 the	 amortisation	 of	 the	 discount	 interest	 expense	 for	 the	 year	 ended	 30	 april	 2005	 is	 £30m	 higher	 than	 reported	 previously	 under	 uk	 gaap
e	 the	 group	 has	 a	 100m	 fixedfloating	 interest	 rate	 swap	 to	 mitigate	 its	 exposure	 to	 increasing	 interest	 rates	 under	 uk	 gaap	 the	 swap	 was	 accounted	 for	 using	 hedge	 accounting	 principles	 under	 ifrs	 the	 group	 is	 required	 to	 fair	 value	 such	 instruments	 and	 reflect	 their	 fair	 value	 in	 its	 financial	 records	 the	 fair	 value	 gain	 or	 loss	 is	 taken	 through	 the	 income	 statement	 unless	 the	 instruments	 are	 designated	 as	 hedges	 at	 inception	 and	 satisfy	 the	 hedge	 effectiveness	 criteria	 when	 it	 is	 taken	 directly	 to	 equity	 the	 group	 has	 complied	 with	 the	 necessary	 documentation	 requirements	 set	 out	 in	 the	 standard	 with	 effect	 from	 29	 april	 2005	 and	 accordingly	 the	 effective	 portion	 of	 any	 unrealised	 gains	 or	 losses	 on	 	 the	 swap	 is	 taken	 directly	 to	 equity	 prior	 to	 29	 april	 2005	 the	 necessary	 documentation	 was	 not	 in	 place	 and	 for	 this	 period	 hedge	 accounting	 was	 not	 therefore	 available	 under	 ifrs	 consequently	 the	 change	 in	 fair	 value	 has	 been	 reflected	 in	 the	 income	 statement	 in	 the	 year	 ending	 	 30	 april	 2005
•
• 82	 ashtead group plc	 annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
28 explanation of transition to ifrs continued
f	 the 	 group	 has	 secured	 notes	 due	 in	 2014	 and	 2015	 which	 contain	 early	 prepayment	 options	 under	 uk	 gaap	 the	 prepayment	 option	 was	 	 not	 separately	 identified	 and	 the	 notes	 were	 included	 within	 borrowings	 at	 amortised	 cost	 under	 ifrs	 the	 early	 prepayment	 options	 constitute	 embedded	 derivatives	 which	 must	 be	 accounted	 for	 separately	 at	 the	 date	 of	 issue	 the	 liability	 component	 of	 the		 notes	 is	 estimated	 using	 prevailing	 market	 interest	 rates	 for	 similar	 debt	 with	 no	 prepayment	 option	 and	 is	 recorded	 within	 borrowings	 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	 with	 fair	 value	 remeasurement	 	 gains	 and	 losses	 being	 included	 in	 ‘investment	 income’	 or	 ‘interest	 expense’
	 as 	 a	 result	 ‘other	 financial	 assets	 –	 derivatives’	 of	 £98m	 increase	 total	 assets	 at	 30	 april	 2005	 and	 investment	 income	 for	 the	 year	 ended	 	 30	 april	 2005	 is	 £98m	 higher	 than	 under	 uk	 gaap
g	 ias	 12	 income	 taxes	 requires	 deferred	 tax	 to	 be	 provided	 on	 all	 temporary	 differences	 rather	 than	 timing	 differences	 under	 uk	 gaap	 deferred	 tax	 also	 needs	 to	 be	 provided	 where	 relevant	 on	 the	 other	 ifrs	 differences
	 the 	 total	 impact	 on	 the	 balance	 sheet	 is	 the	 net	 deferred	 tax	 liability	 reduces	 by	 £39m	 at	 30	 april	 2005	 compared	 with	 that	 reported	 previously	 under	 uk	 gaap	 due	 to	 the	 recognition	 of	 a	 deferred	 tax	 asset	 for	 tax	 deductible	 goodwill	 arising	 in	 the	 us	 there	 is	 no	 impact	 on	 the	 income	 statement	 h	 ias	 19	 employee	 benefits	 requires	 defined	 benefit	 pension	 schemes	 accounting	 to	 be	 based	 on	 fair	 values	 at	 the	 balance	 sheet	 date	 separate	 charges	 for	 operating	 and	 net	 financing	 costs	 based	 on	 actuarial	 assumptions	 in	 place	 at	 the	 start	 of	 the	 year	 are	 required	 through	 the	 income	 statement	 while	 recognition	 through	 the	 balance	 sheet	 is	 dependent	 upon	 the	 policy	 adopted	 for	 the	 recognition	 of	 actuarial	 gains	 and	 losses	 	 the	 group	 has	 elected	 to	 recognise	 all	 cumulative	 actuarial	 gains	 and	 losses	 in	 respect	 of	 employee	 benefit	 schemes	 at	 the	 date	 of	 transition	 	 to	 ifrs	 additionally	 the	 group	 has	 chosen	 to	 adopt	 early	 the	 amendment	 to	 ias	 19	 issued	 on	 16	 december	 2004	 and	 recognise	 actuarial	 	 gains	 and	 losses	 arising	 from	 the	 full	 year	 actuarial	 valuation	 in	 full	 through	 the	 statement	 of	 recognised	 income	 and	 expense	 in	 the	 period	 in	 which	 they	 arise	 	 the 	 balance	 sheet	 shows	 a	 total	 ias	 19	 pensions	 deficit	 of	 £162m	 at	 30	 april	 2005	 which	 compares	 with	 a	 prepayment	 of	 £05m	 and	 accrual	 	 of	 £02m	 reported	 previously	 under	 uk	 gaap	 in	 addition	 the	 operating	 charge	 through	 the	 income	 statement	 reduces	 by	 £02m	 while	 the	 net	 financing	 cost	 for	 which	 there	 was	 no	 equivalent	 under	 uk	 gaap	 ssap	 24	 is	 £04m
	 i	 ias	 21	 the	 effects	 of	 changes	 in	 foreign	 exchange	 rates	 requires	 cumulative	 translation	 differences	 to	 be	 reported	 as	 a	 separate	 component	 	 of	 equity	 and	 on	 disposal	 of	 a	 foreign	 operation	 the	 cumulative	 translation	 difference	 related	 to	 that	 operation	 forms	 part	 of	 the	 gain	 or	 loss	 on	 disposal	 the	 group	 has	 not	 used	 the	 exemption	 in	 ifrs	 1	 to	 set	 cumulative	 translation	 differences	 to	 zero	 at	 30	 april	 2004	 and	 will	 report	 cumulative	 translation	 differences	 from	 the	 date	 of	 acquisition	 of	 a	 foreign	 operation	 as	 a	 separate	 component	 of	 equity	 the	 aggregate	 amount	 	 at	 30	 april	 2005	 was	 £326m
j	 under 	 ifrs	 2	 sharebased	 payments	 where	 an	 entity	 receives	 goods	 or	 services	 in	 exchange	 for	 equity	 instruments	 such	 as	 shares	 share	 options	 and	 cashsettled	 share	 transactions	 the	 charge	 through	 the	 income	 statement	 is	 based	 on	 a	 fair	 value	 of	 share	 options	 and	 awards	 granted	 the	 fair	 value	 of	 the	 equity	 instrument	 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	 the	 share	 options	 and	 awards	 is	 measured	 using	 the	 blackscholes	 model	 taking	 into	 account	 the	 terms	 and	 conditions	 of	 the	 scheme	 the	 amount	 recognised	 as	 an	 expense	 is	 adjusted	 to	 reflect	 changes	 to	 the	 expected	 level	 	 of	 awards	 vesting	 except	 where	 the	 changes	 relate	 to	 the	 expected	 achievement	 of	 market	 based	 criteria	 	 ifrs 	 2	 requires	 a	 charge	 for	 all	 such	 grants	 including	 awards	 options	 and	 saye	 schemes	 unlike	 uk	 gaap	 which	 based	 the	 charge	 on	 the	 intrinsic	 market	 value	 of	 the	 underlying	 shares	 at	 the	 date	 of	 grant	 and	 so	 for	 the	 group	 the	 charge	 arose	 on	 awards	 under	 the	 saye	 schemes	 investment	 incentive	 plan	 and	 performance	 share	 plan	 notes to the consolidated financial statements 
continued 83	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
28 explanation of transition to ifrs continued
	 the 	 transitional	 provisions	 of	 ifrs	 2	 permit	 a	 company	 to	 apply	 ifrs	 2	 just	 to	 share	 based	 awards	 after	 7	 november	 2002	 which	 had	 not	 vested	 at	 1	 january	 2005	 the	 group	 has	 followed	 this	 option	 and	 accordingly	 earlier	 awards	 continue	 to	 be	 accounted	 for	 on	 the	 basis	 adopted	 under	 uk	 gaap	 the	 transitional	 arrangements	 of	 ifrs	 2	 do	 not	 however	 apply	 to	 cashsettled	 transactions	 and	 accordingly	 cashsettled	 phantom	 option	 awards	 granted	 in	 2000	 and	 2001	 have	 been	 accounted	 for	 in	 accordance	 with	 ifrs	 2
	 the 	 charge	 under	 ifrs	 is	 £04m	 higher	 for	 the	 year	 ended	 30	 april	 2005	 than	 under	 uk	 gaap	 there	 is	 no	 impact	 on	 the	 assets	 of	 the	 group	 	 as	 the	 charge	 to	 the	 income	 statement	 is	 matched	 by	 an	 equal	 credit	 through	 equity
k	the 	 group’s	 cash	 flows	 under	 ifrs	 are	 unchanged	 from	 those	 under	 uk	 gaap	 the	 ifrs	 cash	 flow	 format	 is	 similar	 to	 uk	 gaap	 but	 presents	 various	 cash	 flows	 in	 different	 categories	 and	 in	 a	 different	 order	 from	 the	 uk	 gaap	 cash	 flow	 statement	 all	 of	 the	 ifrs	 accounting	 adjustments	 net	 out	 within	 cash	 generated	 from	 operations	 except	 for	 the	 reclassification	 of	 the	 debtors’	 securitisation	 as	 debt	 under	 ifrs
29 parent company information
a balance sheet of the company ashtead group plc
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 note	 £m	 £m
current assets
prepayments	 and	 accrued	 income	 	 	 	 	 	 	 05	 08
noncurrent assets
investments	 in	 group	 companies	 	 	 	 	 	 e	 2776	 2776
total assets	 	 	 	 	 	 	 2781	 2784
current liabilities 
other	 taxes	 and	 social	 security	 	 	 	 	 	 	 01	 01
amounts	 due	 to	 subsidiary	 undertakings	 	 	 	 	 	 	 622	 12
accruals	 and	 deferred	 income	 	 	 	 	 	 	 22	 18
	 	 	 	 	 	 	 645	 31
noncurrent liabilities
other	 payables	 	 	 	 	 	 	 –	 79
525	 unsecured	 convertible	 loan	 note	 due	 2008	 	 	 	 	 	 	 –	 1204
loan	 notes	 	 	 	 	 	 	 02	 02
	 	 	 	 	 	 	 02	 1285
total liabilities	 	 	 	 	 	 	 647	 1316
equity shareholders’ funds
share	 capital	 	 	 	 	 	 g	 404	 326
share	 premium	 account	 	 	 	 	 	 g	 32	 1008
non	 distributable	 reserve	 	 	 	 	 	 g	 907	 –
equity	 element	 of	 convertible	 loan	 note	 	 	 	 	 	 g	 –	 243
own	 shares	 held	 in	 treasury	 through	 the	 esot	 	 	 	 	 	 g	 42	 16
distributable	 reserves	 	 	 	 	 	 g	 833	 93
total equity shareholders’ funds	 	 	 	 	 	 	 2134	 1468
total liabilities and equity shareholders’ funds	 	 	 	 	 	 	 2781	 2784
these	 financial	 statements	 were	 approved	 by	 the	 board	 on	 27	 june	 2006
gb burnett  si robson
chief	 executive	 	 finance 	 director 84	 ashtead group plc	 annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
29 parent company information continued
b cash flow statement of the company ashtead group plc
	 	 2006	 2005
	 	 	 	 note	 £m £m	 £m	 £m
cash flows from operating activities
cash	 generated	 from	 operations	 before	 exceptional	 items	 	 	 	 h	 	 636	 	 51
exceptional	 items	 	 	 	 	 	 –	 	 43
cash	 generated	 from	 operations	 	 	 	 	 	 636	 	 94
financing	 costs	 paid	 before	 exceptional	 items	 	 	 	 102	 	 76
exceptional	 financing	 costs	 paid	 	 	 	 	 –	 	 20
financing	 costs	 paid	 	 	 	 	 102	 	 96
net cash from operating activities	 	 	 	 	 	 534	 	 02
cash flows from financing activities
redemption	 of	 loans	 	 	 	 	 1195	 	 –
purchase	 of	 own	 shares	 by	 the	 esot	 	 	 	 	 	 28	 	 –
proceeds	 from	 issue	 of	 ordinary	 shares	 	 	 	 	 	 709	 	 02
dividends	 paid	 	 	 	 	 	 20	 	 –
net cash used in financing activities	 	 	 	 	 	 534	 	 02
decrease in cash and cash equivalents	 	 	 	 	 	 –	 	 –
c accounting policies
the	 company	 financial	 statements	 have	 been	 prepared	 on	 the	 basis	 of	 the	 accounting	 policies	 set	 out	 in	 note	 1	 above	 supplemented	 by	 the	 policy	 on	 investments	 set	 out	 below
investments	 in	 subsidiary	 undertakings	 are	 stated	 at	 cost	 less	 any	 necessary	 provision	 for	 impairment	 in	 the	 parent	 company	 balance	 sheet	 where	 an	 investment	 in	 a	 subsidiary	 is	 transferred	 to	 another	 subsidiary	 any	 uplift	 in	 the	 value	 at	 which	 it	 is	 transferred	 over	 its	 carrying	 value	 is	 treated	 as	 a	 revaluation	 of	 the	 investment	 prior	 to	 the	 transfer	 and	 is	 credited	 to	 the	 revaluation	 reserve
d income statement
ashtead	 group	 plc	 has	 not	 presented	 its	 own	 profit	 and	 loss	 account	 as	 permitted	 by	 section	 230	 3	 of	 the	 companies	 act	 1985	 the	 amount	 of	 the	 loss	 for	 the	 financial	 year	 dealt	 with	 in	 the	 accounts	 of	 ashtead	 group	 plc	 is	 £08m	 2005	 loss	 of	 £24m
e investments
	 	 	 	 	 	 shares	 in	 group	 companies	 	 	 	 	 	 	 £m
at	 30	 april	 2005	 and	 2006	 	 	 	 	 	 	 	 2776
the	 company’s	 principal	 subsidiaries	 are
	 	 	 	 	 	 	 principal	 country	 	 	 	 	 	 	 country 	 of	 in	 which	 subsidiary	 name	 	 	 	 	 	 incorporation	 undertaking 	 operates
ashtead	 holdings	 plc	 	 	 	 	 	 england	 united 	 kingdom
sunbelt	 rentals	 inc	 	 	 	 	 	 usa	 usa
ashtead	 plant	 hire	 company	 limited	 	 	 	 	 	 england	 united 	 kingdom
ashtead	 technology	 limited	 	 	 	 	 	 scotland	 united 	 kingdom
ashtead	 technology	 south	 east	 asia	 pte	 limited	 	 	 	 	 	 singapore	 singapore
ashtead	 technology	 inc	 	 	 	 	 	 usa	 usa
notes to the consolidated financial statements 
continued 85	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
29 parent company information continued
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	 the	 principal	 activity	 of	 ashtead	 holdings	 plc	 is	 an	 investment	 holding	 company	 the	 principal	 activity	 of	 each	 other	 subsidiary	 undertaking	 listed	 above	 is	 equipment	 rental	 ashtead	 group	 plc	 owns	 all	 the	 issued	 share	 capital	 of	 ashtead	 holdings	 plc	 which	 in	 turn	 holds	 all	 of	 the	 other	 subsidiaries	 listed	 above	 except	 for	 sunbelt	 rentals	 inc	 and	 ashtead	 technology	 inc	 which	 ashtead	 holdings	 plc	 owns	 indirectly	 through	 another	 subsidiary	 undertaking
f financial instruments
the	 book	 value	 and	 fair	 value	 of	 the	 company’s	 financial	 instruments	 are	 equal	 with	 the	 exception	 of	 long	 term	 borrowings	 which	 had	 a	 book	 value	 	 of	 £02m	 2005	 £1206m	 and	 a	 fair	 value	 of	 £02m	 2005	 £1254m
the	 company’s	 financial	 liabilities	 mature	 between	 25	 years
g reconciliation of changes in shareholders’ funds
	 	 	 	 equity	 	 own	 	 	 	 	 	 share	 element 	 of	 non	 shares 	 held	 	 	 share	 premium	 convertible	 distributable	 in 	 treasury	 distributable 	 	 	 capital	 account	 loan 	 note	 reserve	 esot	 reserves	 total 	 	 	 £m	 £m	 £m	 £m	 £m	 £m	 £m
at	 1	 may	 2004	 	 326	 1007	 243	 –	 16	 75	 1485
total	 recognised	 income	 and	 expense	 	 –	 –	 –	 –	 –	 24	 24
shares	 issued	 	 –	 01	 –	 –	 –	 –	 01
share	 based	 payments	 	 –	 –	 –	 –	 –	 06	 06
at	 30	 april	 2005	 	 326	 1008	 243	 –	 16	 93	 1468
total	 recognised	 income	 and	 expense	 	 –	 –	 –	 –	 –	 08	 08
shares	 issued	 	 78	 662	 –	 31	 –	 –	 709
share	 based	 payments	 	 –	 –	 –	 –	 –	 13	 13
capital	 reduction	 	 –	 1638	 –	 938	 –	 700	 –
vesting	 of	 share	 awards	 	 –	 –	 –	 –	 02	 02	 –
own	 shares	 purchased	 	 –	 –	 –	 –	 28	 –	 28
dividends	 	 –	 –	 –	 –	 –	 20	 20
redemption	 of	 convertible	 loan	 note	 	 –	 –	 243	 –	 –	 243	 –
at 30 april 2006  404 32 – 907 42 833 2134
	 h notes to the company cash flow statement
cash flow from operating activities 
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
operating	 lossprofit	 	 	 	 	 	 	 02	 46
depreciation	 	 	 	 	 	 	 01	 01
ebitda	 	 	 	 	 	 	 01	 47
decrease	 in	 receivables	 	 	 	 	 	 	 03	 –
increase	 in	 payables	 	 	 	 	 	 	 10	 12
increasedecrease	 in	 intercompany	 payable	 	 	 	 	 	 	 610	 12
other	 noncash	 movement	 	 	 	 	 	 	 14	 04
net	 cash	 inflow	 from	 operations	 before	 exceptional	 items	 	 	 	 	 	 	 636	 51 86	 ashtead group plc	 annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
29 parent company information continued
reconciliation to net debt 
	 	 	 	 	 	 	 2006	 2005 	 	 	 	 	 	 	 	 £m	 £m
net	 debt	 at	 1	 may	 	 	 	 	 	 1206	 1199
non	 cash	 movement	 –	 525	 unsecured	 convertible	 loan	 note	 due	 2008	 	 	 	 	 	 09	 07
decrease	 in	 debt	 through	 cash	 flow	 	 	 	 	 	 	 1195	 –
net	 debt	 at	 30	 april	 	 	 	 	 	 	 02	 1206
i explanation of company transition to ifrs
reconciliation of equity at 1 may 2004 date of transition to ifrs
	 	 	 	 	 	 	 effect 	 of	 	 	 	 	 	 	 	 transition	 	 	 	 	 	 	 	 uk 	 gaap	 to 	 ifrs	 ifrs 	 	 	 	 	 	 note 	 	 £m	 £m	 £m
prepayments	 and	 accrued	 income	 	 	 	 	 	 02	 –	 02
investments	 in	 group	 companies	 	 	 	 	 	 2776	 –	 2776
total	 assets	 	 	 	 	 	 2778	 –	 2778
other	 taxes	 and	 social	 security	 	 	 	 	 	 01	 –	 01
amounts	 due	 to	 subsidiary	 undertakings	 	 	 	 	 	 19	 –	 19
accruals	 and	 deferred	 income	 	 	 	 	 i	 09	 01	 10
total	 current	 liabilities	 	 	 	 	 	 29	 01	 30
other	 payables	 	 	 	 	 	 94	 –	 94
525	 unsecured	 convertible	 loan	 note	 due	 2008	 	 	 	 	 ii	 1306	 139	 1167
loan	 notes	 	 	 	 	 	 02	 –	 02
noncurrent	 liabilities	 	 	 	 	 	 1402	 139	 1263
total	 liabilities	 	 	 	 	 	 1431	 138	 1293
share	 capital	 	 	 	 	 	 326	 –	 326
share	 premium	 account	 	 	 	 	 	 1007	 –	 1007
equity	 element	 of	 convertible	 loan	 note	 	 	 	 	 ii	 –	 243	 243
own	 shares	 held	 in	 treasury	 through	 the	 esot	 	 	 	 	 	 16	 –	 16
distributable	 reserves	 	 	 	 	  iii	 30	 105	 75
total	 equity	 	 	 	 	 	 1347	 138	 1485
total	 liabilities	 and	 equity	 	 	 	 	 	 2778	 –	 2778
	 notes to the consolidated financial statements 
continued 87	 ashtead group plc	 annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
29 parent company information continued
reconciliation of equity at 30 april 2005
	 	 	 	 	 	 	 effect 	 of	 	 	 	 	 	 	 	 transition	 	 	 	 	 	 	 	 uk 	 gaap	 to 	 ifrs	 ifrs 	 	 	 	 	 	 note 	 	 £m	 £m	 £m
prepayments	 and	 accrued	 income	 	 	 	 	 i	 02	 06	 08
investments	 in	 group	 companies	 	 	 	 	 	 2776	 –	 2776
total	 assets	 	 	 	 	 	 2778	 06	 2784
other	 taxes	 and	 social	 security	 	 	 	 	 	 01	 –	 01
amounts	 due	 to	 subsidiary	 undertakings	 	 	 	 	 	 08	 04	 12
accruals	 and	 deferred	 income	 	 	 	 	 	 19	 01	 18
total	 current	 liabilities	 	 	 	 	 	 28	 03	 31
other	 payables	 	 	 	 	 	 79	 –	 79
525	 unsecured	 convertible	 loan	 note	 due	 2008	 	 	 	 	 ii	 1313	 109	 1204
loan	 notes	 	 	 	 	 	 02	 –	 02
noncurrent	 liabilities	 	 	 	 	 	 1394	 109	 1285
total	 liabilities	 	 	 	 	 	 1422	 106	 1316
share	 capital	 	 	 	 	 	 326	 –	 326
share	 premium	 account	 	 	 	 	 	 1008	 –	 1008
equity	 element	 of	 convertible	 loan	 note	 	 	 	 	 ii	 –	 243	 243
own	 shares	 held	 in	 treasury	 through	 the	 esot	 	 	 	 	 	 16	 –	 16
distributable	 reserves	 	 	 	 	 iii	 38	 131	 93
total	 equity	 	 	 	 	 	 1356	 112	 1468
total	 liabilities	 and	 equity	 	 	 	 	 	 2778	 06	 2784 88	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
29 parent company information continued
explanation of reconciling items from uk gaap to ifrs
i	 in 	 2003	 the	 company	 executed	 a	 100m	 fixedfloating	 interest	 rate	 swap	 to	 mitigate	 the	 group’s	 exposure	 to	 increasing	 interest	 rates	 under	 	 uk	 gaap	 the	 swap	 was	 accounted	 for	 using	 hedge	 accounting	 principles	 under	 ifrs	 the	 company	 is	 required	 to	 fair	 value	 such	 instruments	 and	 reflect	 their	 fair	 value	 in	 its	 financial	 records	 the	 fair	 value	 gain	 or	 loss	 is	 taken	 through	 the	 income	 statement	 unless	 the	 instruments	 are	 designated	 as	 hedges	 at	 inception	 and	 satisfy	 the	 hedge	 effectiveness	 criteria	 when	 it	 is	 taken	 directly	 to	 equity	 the	 change	 in	 fair	 value	 has	 been	 reflected	 in	 the	 income	 statement	 in	 the	 year	 ending	 30	 april	 2005
ii	 the 	 group	 has	 elected	 to	 adopt	 ias	 32	 financial	 instruments	 disclosure	 and	 presentation	 and	 ias	 39	 financial	 instruments	 recognition	 and	 measurement	 from	 1	 may	 2004	 	 ias 	 32	 requires	 the	 debt	 and	 equity	 components	 of	 a	 compound	 financial	 instrument	 to	 be	 recognised	 separately	 in	 the	 financial	 statements	 	 the	 525	 unsecured	 convertible	 loan	 note	 is	 a	 compound	 financial	 instrument	 under	 uk	 gaap	 the	 loan	 note	 was	 recorded	 as	 debt	 at	 a	 fair	 value	 of	 £1213m	 when	 issued	 in	 june	 2000	 and	 was	 being	 accreted	 to	 the	 face	 value	 of	 the	 loan	 note	 £134m	 over	 the	 life	 of	 the	 instrument	 	 ifrs 	 requires	 the	 fair	 value	 of	 the	 debt	 component	 of	 the	 instrument	 alone	 £97m	 to	 be	 recognised	 as	 debt	 when	 issued	 and	 accreted	 to	 the	 face	 value	 of	 the	 loan	 £134m	 over	 the	 life	 of	 the	 instrument	 and	 the	 balance	 £243m	 to	 be	 recognised	 as	 equity	 at	 the	 date	 the	 loan	 note	 was	 issued	 consequently	 the	 interest	 charge	 is	 increased	 under	 ifrs	 to	 make	 the	 interest	 expense	 the	 525	 coupon	 plus	 debt	 amortisation	 equivalent	 to	 that	 for	 a	 similar	 instrument	 issued	 at	 the	 same	 time	 and	 with	 the	 same	 maturity	 but	 without	 equity	 conversion	 rights	 	 accordingly 	 the	 opening	 ifrs	 balance	 sheet	 at	 30	 april	 2004	 includes
the	 equity	 component	 of	 the	 instrument	 £243m	 and	 debt	 at	 amortised	 cost	 of	 £1167m	 being	 the	 £97m	 recognised	 on	 issue	 plus	 the	 accumulated	 discount	 amortisation	 to	 30	 april	 2004
	 as 	 a	 result	 debt	 at	 30	 april	 2005	 is	 £109m	 lower	 than	 reported	 previously	 under	 uk	 gaap	 in	 addition	 due	 to	 the	 amortisation	 of	 the	 discount	 interest	 expense	 for	 the	 year	 ended	 30	 april	 2005	 is	 £30m	 higher	 than	 reported	 previously	 under	 uk	 gaap
iii	the 	 company’s	 cash	 flows	 under	 ifrs	 are	 unchanged	 from	 those	 under	 uk	 gaap	 the	 ifrs	 cash	 flow	 format	 is	 similar	 to	 uk	 gaap	 but	 presents	 various	 cash	 flows	 in	 different	 categories	 and	 in	 a	 different	 order	 from	 the	 uk	 gaap	 cash	 flow	 statement	 all	 of	 the	 ifrs	 accounting	 adjustment	 net	 out	 within	 cash	 generated	 from	 operations
•
•
notes to the consolidated financial statements 
continued 89	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
	 ifrs	 uk	 gaap
	 2006	 2005	 2004	 2003	 2002	 2001	 2000	 1999	 1998	 1997
in £m
revenue

	 6380	 5237	 5003	 5395	 5837	 5520	 3024	 2560	 2025	 1476
operating	 costs
•
	 4133	 3542	 3533	 3894	 3986	 3453	 1814	 1464	 1133	 852
ebitda
•
	 2247	 1695	 1470	 1501	 1851	 2067	 1210	 1096	 892	 624
depreciation
•
	 1136	 1024	 1028	 1110	 1178	 1176	 668	 633	 485	 332
operating	 profit
•
	 1111	 671	 442	 391	 673	 891	 542	 463	 407	 292
interest
•
	 436	 447	 366	 409	 491	 507	 109	 77	 50	 18
pretax	 profitloss
•
	 675	 224	 76	 18	 182	 384	 433	 386	 357	 274
operating	 profit
•
	 1245	 671	 162	 06	 725	 682	 571	 463	 407	 292
pretax	 profitloss
•
	 817	 224	 331	 422	 155	 111	 462	 386	 357	 274
net	 cash	 flow	 from	 	 operating	 activities	 1544	 1283	 1267	 2103	 2020	 1730	 1114	 933	 776	 565
capital	 expenditure
•
	 2202	 1384	 723	 855	 1138	 2377	 1582	 1505	 1534	 989
book	 cost	 of	 rental	 equipment
•
	 9219	 8002	 8139	 9458	 9719	 9628	 6295	 5279	 3941	 2456
shareholders’	 funds
•
	 2583	 1099	 1318	 1594	 1929	 2021	 2368	 2075	 1513	 1199
in pence
dividend	 per	 share	 050p	 nil	 nil	 nil	 350p	 350p	 316p	 270p	 230p	 183p
in percent
ebitda	 margin
•
	 352	 324	 294	 278	 317	 374	 400	 428	 440	 423
operating	 profit	 margin
•
	 174	 129	 88	 72	 115	 161	 179	 181	 201	 198
pretax	 profitloss	 margin
•
	 106	 48	 15	 03	 31	 70	 143	 167	 176	 186
people
employees	 at	 year	 end	 6465	 5935	 5833	 6078	 6545	 6043	 3930	 3735	 3174	 2268
locations
profit	 centres	 at	 year	 end	 413	 412	 428	 449	 463	 443	 352	 341	 275	 181
the	 figures	 for	 2005	 and	 2006	 are	 reported	 in	 accordance	 with	 ifrs	 figures	 for	 2004	 and	 prior	 are	 reported	 under	 uk	 gaap	 and	 have	 not	 been	 restated	 in	 accordance	 with	 ifrs
	 before 	 exceptional	 items	 and	 goodwill	 amortisation	 ebitda	 operating	 profit	 and	 pretax	 profitloss	 are	 stated	 before	 exceptional	 items	 but	 have	 been	 adjusted	 to	 allocate	 the	 impact	 of	 	 the	 us	 accounting	 issues	 and	 the	 change	 in	 self	 insurance	 estimation	 method	 reported	 in	 2003	 to	 the	 years	 to	 which	 they	 relate	 and	 to	 reflect	 the	 bet	 usa	 lease	 adjustment	 reported	 in	 2002	 in	 2001	 the	 directors	 believe	 these	 adjustments	 improve	 comparability	 between	 periods
•	 the 	 results	 for	 the	 years	 up	 to	 30	 april	 2000	 were	 restated	 in	 20001	 to	 reflect	 the	 adoption	 of	 new	 accounting	 policies	 and	 estimation	 techniques	 under	 frs	 18	 in	 that	 year	 
	 shareholders’ 	 funds	 for	 the	 years	 up	 to	 30	 april	 2003	 were	 restated	 in	 20034	 to	 reflect	 shares	 held	 by	 the	 employee	 share	 ownership	 trust	 as	 a	 deduction	 from	 shareholders’	 funds	 in	 accordance	 with	 uitf	 38
ten year history 90	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
sunbelt
cliff	 miller
doug	 bertz
russ	 brown
mark	 ellis
brendan	 horgan
lon	 jenkins
kurt	 kenkel	 charles	 miller
greg	 schamel
jake	 stout
brian	 tate
suzanne	 wood
aplant
sat	 dhaiwal
tony	 durant
paul	 fereday
stephen	 shaughnessy
gary	 thompson
richard	 winfield
ashtead technology rentals
rob	 phillips
andrew	 doggett
iain	 guthrie
andrew	 holroyd
peter	 simpson
corporate
george	 burnett
ian	 robson
michael	 pratt
eric	 watkins
auditors
deloitte  touche llp
hill	 house
1	 little	 new	 street
london
ec4a	 3tr
registrars  transfer office
lloyds tsb registrars
the	 causeway
worthing
west	 sussex
bn99	 6da
financial pr advisers
maitland
orion	 house
5	 upper	 st	 martin’s	 lane
london
wc2h	 9ea
solicitors 
slaughter and may
one	 bunhill	 row
london
e1y	 8yy
skadden arps slate 
meagher  flom llp
333	 west	 wacker	 drive
chicago	 il	 60606
parker poe adams  
bernstein llp 
three	 first	 union	 center
401	 south	 tryon	 street
charlotte	 nc	 28202
senior management and advisers 91	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
where we are
sunbelt
alabama
alabama	 pump	 	 power
birmingham
birmingham	 scaffolding
mobile	 pump	 	 power
mobile	 industrial	 resources
ocean	 springs
pelham
allegheny
ashland
charleston	 roanoke
capital
frederick
fredericksburg
gaithersburg
manassas
mclean
northern	 pile	 driving
springfield
sterling
winchester
central
charlotte
charlotte	 pump	 	 power
charlotte	 scaffolding
concord
gastonia
hickory
indian	 trail
mooresville
pineville
rock	 hill
central florida
east	 orlando
lake	 fairview
mid	 city	 orlando
orlando
orlando	 awp
orlando	 pump	 	 power
orlando	 scaffolding
orlando	 traffic	 safety
sanford
titusville
winter	 garden
coastal atlantic
charleston
charleston	 scaffolding
coastal	 pump	 	 power
hilton	 head
little	 river
myrtle	 beach
savannah
summerville
wilmington
wilmington	 industrial	 resources
wilmington	 scaffolding
delaware valley
pennsauken
philadelphia
southampton
south	 jersey	 pump	 	 power
swedesboro
florida gulf
ft	 myers
ft	 myers	 mast	 climbers
ft	 myers	 scaffolding
oldsmar
pinellas	 park
tampa
tampa	 awp
tampa	 pump	 	 power
tampa	 scaffolding
venice
inland mountain
boise
pasco
west	 valley
mid altantic
durham
fayetteville	 greensboro
raleigh
raleigh	 awp
raleigh	 pump	 	 power
wake	 forest
winston	 salem
winterville
mid central
chicago
chicago	 industrial	 resource
chicago	 pump	 	 power
countryside
fishers
indianapolis
joliet
kokomo
lansing
lafayette
north florida
brunswick
jacksonville
jacksonville	 awp
jacksonville	 pump	 	 power
jacksonville	 scaffolding
orange	 park
west	 jacksonville
north georgia
atlanta	 awp
atlanta	 pump	 	 power
atlanta	 scaffolding
covington
douglasville
duluth
kennesaw
lake	 lanier
macon
mid	 town	 atlanta
riverdale 92	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
north texas
arlington
austin
dallas
san	 antonio
northern
baltimore
finksburg
hunt	 valley
laurel
maryland	 pump	 	 power
parkville
upper	 marlboro
waldorf
washington
washington	 access
northern california
bakersfield
belmont
fowler
sacramento
ohio valley
cincinnati
clarksville
columbus
florence	 ky
lexington
louisville
louisville	 scaffolding
reynoldsburg
toledo
oregon
albany
eugene
gresham
hillsboro
portland
salem
vancouver
south florida 
boca	 raton
downtown	 miami
ft	 lauderdale
miami
miami	 north	 pembroke	 pines
plantation
south	 florida	 awp
south	 florida	 scaffolding
west	 palm	 beach
west	 palm	 beach	 pump	 	 power
southern va
chesapeake
chesapeake	 scaffolding
east	 richmond
hampton	 rds	 scaffolding
newport	 news
richmond
richmond	 awp
richmond	 scaffolding
virginia	 beach
va	 beach	 pump	 	 power
west	 creek
south texas
beaumont
houston	 awp
houston	 general	 tool
west	 houston
southern california
fontana
lompoc
los	 angeles
la	 mirada
northridge
orange
palmdale
san	 diego
southwest
deer	 valley	 henderson
las	 vegas
south	 las	 vegas
tempe
tennessee
clarksville	 decatur
knoxville
la	 vergne
nashville
nashville	 pump	 	 power
nashville	 scaffolding
rivergate
upstate south carolina
augusta
cayce
columbia
florence
greenville
spartanburg
washington
fife
fife	 industrial	 resources
kent	 awp
lakewood
lynwood
redmond
seattle	 pump	 	 power
woodinville
western central
bloomington
decatur
des	 moines
east	 peoria
evansville
granite	 city
moline
st	 louis
where we are
sunbelt
continued 93	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
where we are 
aplant 
specialist
access
avonmouth
birmingham
brentwood
bridgend
kendal
manchester
northampton
nottingham
southampton
stockton
accommodation
basildon
bedford
bridgend
coventry
exeter
kilmarnock
leeds
lincoln
link	 modular
maidstone
manchester
nottingham
penrith
southampton
acrow
aberdeen
cardiff
chesterfield
colnbrook
edinburgh
gateshead
glasgow
leeds
liverpool
manchester
norwich
romford
tavistock
walsall
rail
derby
manchester
norwich
perth
romford
west	 london
power generation and 
rentarc
barton	 on	 humber
birkenhead
carlisle
east	 london
glasgow
lowestoft
manchester
newport
north	 london
stockton
walsall
traffic
east	 london
east	 midlands
home	 counties
north	 east
north	 west
scotland	 central
scotland	 east
south	 east
south	 west
west	 london
west	 midlands
west	 yorkshire
plant and tools
east midlands 
boston
chesterfield
chesterfield	 north
derby	 north
derby	 south
grantham
heanor
lincoln	 mp
lincoln	 th
loughborough
newark
nottingham	 central
nottingham	 west
sleaford 94	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
home counties 
aylesbury
cambridge
colchester
hemel	 hempstead
ipswich	 long	 stratton
lowestoft
luton
milton	 keynes
norwich
oxford
waltham	 abbey	 watford
londonsouth east 
barking
battersea	 mp
battersea	 th
bow
canterbury
croydon
fareham
ford
gatwick
harlow
heathrow
leatherhead
maidstone
medway
romford
salford
southwark
staines	 staples	 corner
midlandssouth west 
birmingham
burton
coventry	 mp
coventry	 th
erdington
leicester
northampton	 nuneaton
oldbury
redditch
stoke	 mp
stoke	 th
telford
walsall	 wood
wolverhampton
scotland 
aberdeen
ayr
baillieston
dundee
earlston
edinburgh
falkirk
glasgow	 mp
glasgow	 th
inverness
irvine
kilmarnock
south west 
abergavenny
barnstaple
bodmin
bournemouth
bridgwater
bristol
bristol	 st	 philips
cardiff
exeter
milford	 haven
newport
plymouth
swansea
swindon
thatcham
weymouth
yorkshirenorth east 
bradford
doncaster
gateshead
hull	 east
hull	 mp
hull	 th
immingham
leeds	 mp
leeds	 th
leeds	 central
leeds	 city
middlesbrough
newcastle
rotherham
scunthorpe
sheffield	 th
stockton
sunderland
wetherby
york
north west 
astley
blackpool
carlisle
deeside
egremont
ellesmere	 port
kendal
liverpool
liverpool	 city
liverpool	 north
manchester
oldham
preston
reddish
salford
warrington
whitehaven
where we are 
aplant 
continued  95	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 wwwashteadgroupcom
where we are
ashtead technology rentals
uk
aberdeen
hitchin
usa
atlanta	 georgia
chicago	 illinois
hayward	 california
houston	 texas
irvine	 california	 pasadena	 texas
rochester	 new	 york
canada
mississauga	 ontario
singapore
singapore 96	 ashtead group plc	annual	report	and	accounts	for	the	year	ended	30	april	2006 international	equipment	rental
quarter	 1	 results	 5	 september	 2006
2006	 annual	 general	 meeting	 26	 september	 2006
quarter	 2	 results	 12	 december	 2006
quarter	 3	 results	 6	 march	 2007
quarter	 4	 and	 yearend	 results	 26	 june	 2007
registered number
1807982
registered office
king’s	 court
4151	 kingston	 road
leatherhead
surrey	 kt22	 7ap
future dates a snapshot 
of the business
renting specialised electronic 
equipment to the offshore oil and 
gas sectors and the environmental 
monitoring and testing industry 
from eleven locations in the uk  
the us canada and singapore
the uk’s third largest equipment 
rental company with 193 locations 
across britain operating in a mature 
stable market 
the fourth largest equipment rental 
business in the fragmented us 
market sunbelt continues to 
increase its market share rapidly 
sunbelt has 209 locations operating 
in 27 states 
a market leader in equipment 
rental serving the us and uk 
construction industrial and 
homeowner markets ashtead 
2006
wwwashteadgroupcom
ashtead group plc annual report and accounts for the year ended 30 april 2006 wwwashteadgroupcom ashtead group plc king’s court 4151 kingston road leatherhead surrey kt22 7ap tel 44 0 1372 362300
ashtead group plc annual report and accounts for the year ended 30 april 2006


Summary:
 chief executive’s 
review
the group achieved a record performance 
in 2006 and the board looks forward to 
reporting further significant progress  
in the coming year
overview
the	 group	 achieved	 a	 record	 performance	 in	 the	 year	 to	 april	 2006	 revenue	 increased	 by	 218	 to	 £6380m	 underlying	 profit	 for	 the	 year	 before	 tax	 of	 £675m	 was	 three	 times	 last	 year’s	 £224m	 while	 the	 pretax	 profit	 for	 the	 year	 was	 £817m	 underlying	 basic	 earnings	 per	 share	 were	 122p	 2005	 26p	 while	 basic	 earnings	 per	 share	 were	 147p	 2005	 56p	 on	 a	 cash	 tax	 basis	 earnings	 per	 share	 were	 178p	 2005	 67p	 the	 group	 now	 reports	 its	 results	 under	 international	 financial	 reporting	 standards	 ifrs	 and	 comparatives	 have	 been	 restated	 accordingly	 see	 note	 28	 to	 the	 financial	 statements
review of trading for the year to 30 april
	 	 	 underlying	 	 revenue	 ebitda	 profit
	 2006	 2005	 2006	 2005	 2006	 2005
sunbelt	 in	 m	 8187	 6611	 3079	 2240	 1755	 1079
sunbelt	 in	 £m	 4612	 3550	 1734	 1203	 989	 579
aplant	 1607	 1563	 489	 482	 139	 113
ashtead	 technology	 161	 124	 80	 65	 40	 34
group	 central	 costs	 –	 –	 56	 55	 57	 55
	 6380	 5237	 2247	 1695	 1111	 671
interest	 	 	 	 	 	 436	 447
underlying	 profit	 before	 tax	 	 	 	 	 675	 224
	 in	 2006	 before	 exceptional	 items
reflecting	 the	 group’s	 operational	 gearing	 the	 218	 revenue	 increase	 resulted	 in	 a	 325	 increase	 in	 ebitda	 before	 exceptional	 items	 to	 £2247m	 and	 an	 increase	 of	 655	 in	 operating	 profit	 before	 exceptional	 items	 to	 £1111m	 measured	 at	 constant	 exchange	 rates	 to	 eliminate	 currency	 translation	 effects	 revenue	 grew	 178	 ebitda	 before	 04	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 international	 equipment	 rental exceptional	 items	 grew	 280	 operating	 profit	 before	 exceptional	 items	 grew	 586	 and	 underlying	 profit	 before	 tax	 was	 still	 almost	 three	 times	 that	 of	 last	 year	 these	 improvements	 were	 reflected	 in	 the	 group’s	 margins	 ebitda	 margins	 grew	 from	 324	 to	 352	 and	 operating	 margins	 before	 exceptional	 items	 rose	 from	 128	 to	 174
sunbelt
in	 the	 year	 to	 30	 april	 2006	 revenue	 grew	 238	 to	 8187m	 this	 was	 achieved	 through	 increased	 investment	 in	 the	 rental	 fleet	 which	 was	 	 on	 average	 11	 larger	 than	 a	 year	 ago	 and	 by	 significant	 increases	 in	 rental	 rates	 which	 were	 increased	 approximately	 12	 in	 strong	 market	 conditions	 average	 utilisation	 remained	 high	 at	 70	 2005	 69	 revenue	 growth	 was	 broadly	 based	 with	 all	 regions	 and	 all	 major	 product	 areas	 trading	 ahead	 of	 last	 year	 last	 summer’s	 hurricanes	 are	 estimated	 to	 have	 added	 around	 2	 to	 20056’s	 revenues	 in	 a	 strong	 trading	 environment	 where	 us	 nonresidential	 construction	 rose	 102	 in	 the	 12	 months	 to	 end	 april	 according	 to	 figures	 published	 by	 the	 	 us	 department	 of	 commerce	 sunbelt	 continued	 to	 take	 market	 share	 revenues	 from	 house	 builders	 where	 the	 short	 term	 outlook	 is	 less	 certain	 accounted	 for	 just	 6	 of	 sunbelt’s	 revenues	 the	 shift	 from	 ownership	 to	 rental	 in	 the	 us	 continued	 with	 the	 rental	 market	 again	 growing	 faster	 than	 its	 key	 customer	 base	 nonresidential	 construction	 in	 calendar	 2005
for	 the	 full	 year	 sunbelt’s	 operating	 profit	 before	 exceptional	 items	 was	 up	 627	 to	 1755m	 representing	 a	 margin	 of	 214	 2005	 163
sunbelt	 continued	 to	 invest	 to	 reduce	 the	 age	 of	 its	 rental	 fleet	 and	 	 to	 invest	 for	 growth	 spending	 2579m	 in	 the	 year	 including	 the	 funding	 of	 six	 new	 greenfield	 stores	 a	 further	 16	 new	 general	 equipment	 rental	 stores	 were	 acquired	 during	 the	 year	 for	 a	 consideration	 including	 costs	 of	 approximately	 100m	 the	 acquired	 stores	 were	 all	 immediately	 transferred	 onto	 sunbelt’s	 point	 of	 sale	 system	 and	 staff	 incentive	 programmes	 and	 began	 trading	 as	 sunbelt	 stores	 from	 their	 acquisition	 closing	 date	 the	 financial	 performance	 since	 acquisition	 has	 been	 strongly	 positive	 in	 august	 sunbelt	 also	 disposed	 of	 12	 specialist	 scaffold	 stores	 on	 the	 west	 coast	 and	 in	 texas	 for	 243m	 generating	 	 an	 exceptional	 disposal	 profit	 of	 51m	 £29m	 the	 new	 stores	 continue	 sunbelt’s	 strategy	 of	 clustering	 stores	 in	 major	 metropolitan	 markets	 sunbelt	 also	 continues	 to	 emphasise	 organic	 growth	 with	 an	 increase	 	 in	 same	 store	 revenues	 for	 the	 year	 of	 193
in	 the	 fourth	 quarter	 sunbelt	 delivered	 revenue	 growth	 of	 271	 and	 growth	 in	 operating	 profit	 before	 exceptional	 items	 of	 632
aplant
aplant’s	 revenue	 for	 the	 year	 was	 £1607m	 compared	 to	 £1563m	 last	 year	 the	 successful	 restructuring	 of	 aplant’s	 sales	 force	 undertaken	 in	 the	 first	 half	 contributed	 to	 a	 significantly	 improved	 performance	 in	 the	 second	 half	 of	 the	 year	 and	 a	 particularly	 strong	 fourth	 quarter	 in	 which	 revenues	 increased	 by	 8	 to	 £418m	 and	 operating	 profit	 by	 471	 to	 £39m	 rental	 rates	 average	 fleet	 size	 and	 utilisation	 for	 the	 year	 were	 all	 at	 similar	 levels	 to	 those	 of	 last	 year	 revenues	 from	 aplant’s	 largest	 150	 customers	 continued	 to	 grow	 and	 represented	 39	 of	 the	 year’s	 total
operating	 expenses	 were	 again	 carefully	 controlled	 increasing	 by	 just	 34	 before	 depreciation	 as	 a	 result	 aplant’s	 operating	 profit	 for	 the	 year	 grew	 220	 to	 £139m	 2005	 £113m	 representing	 a	 margin	 of	 86	 2005	 73	 the	 investment	 aplant	 makes	 in	 developing	 its	 staff	 which	 is	 at	 the	 heart	 of	 its	 improving	 performance	 was	 recognised	 in	 may	 when	 hire	 association	 europe	 ‘hae’	 announced	 that	 aplant	 had	 won	 amongst	 competition	 from	 rental	 companies	 across	 europe	 hae’s	 ‘excellence	 	 in	 training’	 award
£638m
81 9m
£1 61 m
£1 6m
group	 revenue	 up	 218
sunbelt	 revenue	 up	 238
aplant	 revenue	 up	 28
ashtead technology	 revenue	 up	 295
05	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom chief executive’s 
review continued
over £200m invested in the rental fleet  
with £65m being for growth
ashtead technology
ashtead	 technology’s	 performance	 continued	 recent	 trends	 with	 revenue	 for	 the	 year	 up	 295	 to	 £161m	 2005	 £124m	 and	 operating	 profit	 up	 199	 to	 £40m	 2005	 £34m	 this	 reflects	 increased	 investment	 by	 the	 oil	 majors	 which	 is	 delivering	 higher	 offshore	 exploration	 and	 construction	 activity	 as	 well	 as	 continued	 growth	 in	 ashtead	 technology’s	 onshore	 environmental	 business	 investment	 	 for	 future	 growth	 included	 a	 significantly	 enlarged	 onshore	 sales	 force	 and	 a	 new	 profit	 centre	 in	 chicago	 opened	 last	 november
exceptional items and fair value remeasurements of  
embedded derivatives
in	 addition	 to	 the	 trading	 results	 discussed	 above	 operating	 profit	 as	 reported	 in	 the	 consolidated	 income	 statement	 includes	 £134m	 of	 	 net	 exceptional	 profits	 these	 comprise	 the	 £113m	 received	 when	 sunbelt	 settled	 its	 long	 standing	 litigation	 with	 head	 	 engquist	 in	 november	 2005	 a	 £29m	 profit	 on	 disposal	 of	 sunbelt’s	 12	 scaffold	 stores	 less	 £08m	 of	 post	 acquisition	 integration	 costs	 included	 	 within	 finance	 costs	 is	 the	 £48m	 net	 cost	 of	 last	 summer’s	 capital	 reorganisation	 mainly	 relating	 to	 the	 12	 premium	 payable	 on	 the	 £42m	 of	 sterling	 senior	 secured	 notes	 redeemed	 early	 out	 of	 the	 proceeds	 of	 the	 equity	 placing	 and	 the	 £56m	 2005	 £98m	 noncash	 fair	 value	 remeasurements	 of	 embedded	 derivatives	 in	 long	 term	 debt
taxation
overall	 for	 the	 year	 the	 effective	 accounting	 tax	 rate	 on	 the	 underlying	 profit	 was	 31	 whilst	 the	 cash	 tax	 rate	 on	 the	 same	 basis	 remained	 minimal	 the	 recent	 increases	 in	 sunbelt’s	 profitability	 together	 with	 the	 head	 	 engquist	 litigation	 receipt	 means	 however	 that	 sunbelt’s	 us	 federal	 tax	 losses	 have	 now	 been	 fully	 utilised	 and	 that	 consequently	 	 the	 group’s	 cash	 tax	 rate	 will	 rise	 into	 double	 digits	 next	 year
pensions
funding	 of	 the	 uk	 pension	 plan	 deficit	 as	 announced	 with	 the	 third	 quarter	 results	 was	 completed	 at	 the	 end	 of	 march	 with	 the	 payment	 of	 £171m	 the	 amount	 recommended	 by	 the	 actuary	 into	 the	 fund	 as	 a	 result	 the	 group’s	 pension	 obligations	 are	 now	 fully	 funded	 funding	 of	 the	 deficit	 had	 no	 significant	 effect	 on	 the	 group’s	 income	 statement
capital expenditure and net debt
capital	 expenditure	 in	 the	 year	 was	 £2202m	 2005	 £1384m	 of	 which	 £2018m	 was	 invested	 in	 the	 rental	 fleet	 £645m	 of	 the	 fleet	 expenditure	 was	 for	 growth	 principally	 in	 sunbelt	 with	 the	 remainder	 spent	 to	 replace	 existing	 equipment	 disposal	 proceeds	 were	 £508m	 2005	 £376m	 generating	 a	 profit	 on	 disposal	 of	 £91m	 2005	 £71m	 as	 indicated	 in	 march	 capital	 expenditure	 for	 the	 year	 to	 30	 april	 2007	 is	 currently	 expected	 to	 total	 approximately	 £250m
net	 debt	 at	 30	 april	 2006	 was	 £4936m	 an	 increase	 of	 £113m	 since	 	 30	 april	 2005	 at	 constant	 exchange	 rates	 the	 increase	 over	 the	 year	 was	 £25m	 net	 debt	 to	 ebitda	 leverage	 reduced	 from	 285x	 a	 year	 ago	 to	 22x	 at	 30	 april	 2006	 availability	 under	 the	 asset	 based	 loan	 facility	 was	 283m	 at	 30	 april	 2006	 157m	 at	 30	 april	 2005
dividends
the	 directors	 intend	 proposing	 to	 shareholders	 at	 the	 annual	 general	 meeting	 that	 a	 final	 dividend	 of	 10p	 per	 share	 be	 paid	 making	 a	 total	 	 for	 the	 year	 of	 15p	 per	 share	 2005	 nil	 under	 ifrs	 the	 financial	 statements	 now	 reflect	 just	 dividends	 paid	 in	 the	 year	 and	 therefore	 show	 only	 the	 £20m	 cost	 of	 the	 interim	 dividend	 paid	 in	 february	 	 the	 final	 dividend	 if	 approved	 by	 shareholders	 will	 be	 paid	 on	 	 28	 september	 2006	 to	 shareholders	 on	 the	 register	 on	 28	 july	 2006
06	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 international	 equipment	 rental current trading and outlook
all	 three	 of	 our	 businesses	 performed	 well	 in	 the	 past	 year	 each	 continues	 to	 benefit	 from	 good	 market	 conditions	 and	 has	 made	 an	 excellent	 start	 to	 the	 new	 financial	 year
in	 the	 us	 where	 the	 shift	 from	 ownership	 to	 rental	 continues	 we	 are	 encouraged	 by	 the	 strength	 of	 the	 nonresidential	 construction	 market	 which	 rose	 10	 in	 the	 12	 months	 to	 april	 2006	 and	 is	 forecast	 to	 grow	 strongly	 for	 at	 least	 the	 next	 two	 years	 and	 by	 sunbelt’s	 continuing	 gains	 in	 market	 share	 revenues	 from	 house	 builders	 where	 the	 short	 term	 outlook	 is	 less	 certain	 accounted	 for	 just	 6	 of	 sunbelt’s	 revenues	 last	 year	 the	 restructuring	 of	 aplant’s	 sales	 force	 at	 the	 start	 of	 last	 year	 delivered	 benefits	 on	 a	 rising	 scale	 as	 the	 year	 progressed	 a	 trend	 which	 has	 continued	 into	 our	 new	 financial	 year
with	 this	 strong	 broadlybased	 momentum	 the	 board	 looks	 forward	 	 to	 reporting	 further	 significant	 progress	 in	 the	 coming	 year
in	 closing	 i	 should	 like	 to	 express	 my	 thanks	 to	 everyone	 who	 has	 contributed	 to	 the	 growth	 of	 ashtead	 group	 over	 the	 last	 22	 years	 shareholders	 suppliers	 customers	 without	 whom	 we	 would	 not	 be	 here	 but	 most	 of	 all	 to	 our	 staff	 past	 and	 present	 we	 are	 a	 service	 business	 in	 a	 ‘hardwork’	 industry	 and	 it	 is	 the	 enthusiasm	 drive	 and	 commitment	 of	 the	 aplant	 sunbelt	 and	 ashtead	 technology	 teams	 backed	 up	 by	 the	 equally	 capable	 and	 committed	 ashtead	 group	 support	 staff	 that	 makes	 the	 difference	 my	 appreciation	 and	 best	 wishes	 go	 to	 all	 of	 them
i	 am	 delighted	 that	 geoff	 drabble	 will	 be	 joining	 the	 group	 in	 an	 executive	 capacity	 in	 october	 and	 very	 much	 look	 forward	 to	 working	 with	 him	 in	 effecting	 a	 seamless	 transition	 he	 will	 take	 over	 the	 best	 management	 team	 in	 the	 industry	 and	 will	 bring	 both	 a	 sense	 of	 continuity	 and	 fresh	 new	 ideas	 to	 the	 next	 phase	 of	 ashtead’s	 development	 i	 wish	 him	 and	 the	 entire	 board	 every	 success	 in	 taking	 the	 group	 forward	 to	 what	 i	 am	 sure	 will	 be	 a	 prosperous	 and	 exciting	 future
 
george burnett 
chief	 executive
27	 june	 2006
07	 	 ashtead group plc	 annual	 report	 and	 accounts	 for	 the	 year	 ended	 30	 april	 2006 wwwashteadgroupcom