Ashtead hit by US accounting errors
Plant hire group, Ashtead, has disclosed accounting errors in a US subsidiary, which has cost the company in excess of £16m.
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Year-end results to April revealed a loss of £42.2m, with one-off costs of £31.4m. Of this the company disclosed that £9.4m related to an accounting issue at US subsidiary Sunbelt Rentals.
In addition a further £7.5m was spent on advisory services to resolve the defaults under Ashtead’s debt facilities resulting from the errors recorded at Sunbelt.
In early March, the financial controller of Sunbelt disclosed that he had failed properly to reconcile a number of balance sheet accounts. The effects of this admission were immediate, Ashtead said.
This financial controller has since left the Company, and a temporary replacement has been installed, while a forensic investigation was undertaken by KPMG reporting to the group and its banks. Deloitte & Touche was also employed to assist the company in the production and review of detailed business plans across the group.
The audit of Ashtead’s financial statements has now been concluded by PricewaterhouseCoopers and a new senior group position, director of financial reporting, has been created and filled from outside the group.
Henry Staunton, chairman of Ashtead, said that with the aid of its advisers, the Group’s management had ‘in the space of four months drawn a line under the accounting issue, committed significant additional resources to strengthening the group’s finance function, conducted a full commercial review of the business and of its balance sheet and negotiated renewed bank facilities with revised covenants reflecting the current trading environment’.