13.03.2017

Ashtead up 30

Last week Ashtead, owner of Sunbelt Rentals in the USA and A-Plant in the UK reported its third quarter results, posting strong growth in both the US and UK.

Total revenues for the nine months were £2.36 billion 25 percent up on the same period last year. Of this Sunbelt revenues in dollars were nine percent higher at $2.69 billion, with an operating profit of $840 million – also nine percent up on the year. In the UK A-Plant revenues increased almost 15 percent to £301.7 million, with an operating profit of £50.4 million more than seven percent higher than last year. Group pre-tax profits increased by more than 25 percent to £584 million.

Looking at the third quarter group revenues improved 31 percent to £804million pre-tax profits increased almost 29 percent to £171.2 million. Sunbelt revenues were 12 percent higher at $876 million, with operating profits 10 percent higher at $245 million.In the same period A-Plant revenues increased 20 percent to £102 million with an operating profit of £13 million four percent up on the year."

Capital expenditure for the nine months was £812 million or £716 million net of fleet disposals proceeds down from £932 and £790 million last year. This includes the Hewden assets acquired from the administrator for £29 million. The average fleet age is now 28 months up from 25 months this time last year.
The company anticipates full year capital of around £1.2 billion and then similar levels next year. Net debt at the end of January was £2.6 billion compared to £2.17billion last year.

Chief executive Geoff Drabble said: "The group continues to perform well and delivered a strong quarter with reported rental revenue increasing 30 percent (13% at constant exchange rates) for the nine months and underlying pre-tax profit of £605m. In the nine months, the reported results were positively impacted by weaker sterling (£82m). The underlying performance of the business continues to benefit from a clear and consistent strategy of organic growth supplemented by bolt-on acquisitions. We continue to grow responsibly, adhering to the capital allocation priorities we have outlined. We invested £812m by way of capital expenditure and a further £196m on bolt-on acquisitions. With the continuing opportunity for profitable growth, we expect capital expenditure this year to be towards the upper end of our guidance (c. £1.2bn)."

"As is customary, we have given our early guidance to growth for 2017/18. This is consistent with the strategic plan we recently outlined to the market which anticipates circa double-digit growth in the US through to 2021. Our end markets remain supportive and we continue to benefit from ongoing structural change as our customers increasingly rely on the flexibility of rental.”

“Both divisions continue to perform well. Accordingly, we expect full year results to be in line with our expectations and the board continues to look to the medium term with confidence."