Accounts error hits Ashtead

Plant hire group Ashtead has plunged into the red after being hit by the costs of an accounting blunder at its US subsidiary.

The debt-laden firm sank to a loss of £42.2m ($26.4m) in the year to April, including one-off costs of £31.4m, much of which related to the accounts error.

The problems at Sunbelt Rentals forced Ashtead to restructure its debt after it defaulted on banking arrangements.

That had cost the UK group another £7.5m in advisory fees, the firm said.

Damaged confidence

Chairman Henry Staunton said the problems came on top of difficult economic conditions, although he said these were being managed.

He added: "What had not been anticipated was the admission in early March by the financial controller of our US subsidiary Sunbelt Rentals that he had been failing to reconcile a number of balance sheet accounts."

The company, which owns the A-Plant tool hire chain, said that the issues had also damaged the confidence of customers and suppliers.

Ashtead shares were down 10% at 13.5p in mid-morning trade, having fallen by as much as a fifth earlier on Tuesday.