Forecast-busting full-year figures from plant and machinery hire group Ashtead (AHT) pushed the share price up nearly 5 per cent on a day when the broader market was down sharply. Moreover, shareholders celebrated the return to healthy growth and a hefty dividend hike.
After adjusting for amortisation, pre-tax profit jumped 87 per cent to £246.7m - thanks to a robust performance from the US-based Sunbelt operation, where operating profits rose from £181.9m to £287.4m. The US economic recovery also helped boost revenue from the rental equipment unit - by 21 per cent to $1.61bn (£1.03bn) - while an improvement in operational efficiency boosted Sunbelt's cash profit margin from 35.9 per cent to a record 40.7 per cent. The group's much smaller A-Plant UK operation also performed well and operating profit there rose two-thirds to £12.2m.
To meet the increase in demand, Ashtead accelerated the level of its gross capital expenditure to £580m, with a further £560m of gross spending planned for the current year. The group also made a number of bolt-on acquisitions, although strong cash generation meant that the net free cash outflow was a modest £34m.
Broker Investec Securities expects adjusted pre-tax profit for 2014 of £340m, giving EPS of 43p (31.6p in 2013), rising to 51p in 2015.
| ASHTEAD (AHT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 655p | MARKET VALUE: | £3.3bn | |
| TOUCH: | 655-656p | 12-MONTH HIGH: | 675p | LOW: 236p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 136p* | NET DEBT: | 149% | |
| Year to 30 Apr | Turnover (£bn) | Pre-tax (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 1.07 | 0.80 | 12.5 | 2.58 |
| 2010 | 0.84 | 4.80 | 0.40 | 2.90 |
| 2011 | 0.95 | 1.70 | 0.20 | 3.00 |
| 2012 | 1.13 | 135 | 17.8 | 3.50 |
| 2013 | 1.36 | 216 | 27.7 | 7.50 |
| % change | +20 | +60 | +56 | +114 |
Ex-div: 14 Aug Payment: 6 Sep *Includes intangible assets of £430m, or 85p a share | ||||
