Ashtead Group's (AHT) full-year results are "vindication of not panicking in the short term", says chief executive Geoff Drabble. A buoyant US construction market and the UK recovery are driving earnings rapidly upwards at the tool hire specialist. Add to this the increasing popularity of hiring tools rather than buying them, and cash profits grew by a third to £908m during the year to April.
Operating profit for the group's core Sunbelt business in the US also rose by a third, to £521m, driven primarily by same-store growth. The group defines same-store growth - which typically accounts for more than 70 per cent of group profits - as increasing the fleet size in stores that have been existence for at least a year. The UK A-Plant business also showed strong growth, with revenues up a fifth to £323m.
Ashtead invested £1bn in its rental fleet during the year, and management has earmarked another £1bn for the current year. They also made 21 acquisitions with a combined price tag of £236m, mainly in the US. The group bought its first Canadian business, and Mr Drabble says he can see the group opening new stores there this year.
Broker Investec Securities expects adjusted EPS of 75.7p in FY16, up from 60.6p last year.
ASHTEAD GROUP (AHT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,108p | MARKET VALUE: | £5.6bn | |
| TOUCH: | 1,107-1,109p | 12-MONTH HIGH: | 1,231p | LOW: 816p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 221p* | NET DEBT: | 152% | |
| Year to 30 Apr | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 0.95 | 2 | 0.2 | 3.00 |
| 2012 | 1.13 | 135 | 17.8 | 3.50 |
| 2013 | 1.21 | 214 | 27.6 | 7.50 |
| 2014 | 1.63 | 357 | 46.1 | 11.50 |
| 2015 | 2.04 | 474 | 60.5 | 15.25 |
| % change | +25 | +33 | +31 | +33 |
Ex-div: 13 Aug Payment: 4 Sep *Includes intangible assets of £609m, or 121p a share | ||||
