Plant and machinery hire group Ashtead (AHT) grew half-year operating profit by a robust 41 per cent year-on-year to £234.1m and shareholders were rewarded with a hefty dividend hike. Trading since the period ended has remained strong, too, and full-year profits are now expected to be at the upper end of current expectations.
Once again, US unit Sunbelt was the main driver of growth - operating profit here grew 38 per cent to £221.5m. Rental revenue rose 23 per cent to $998m (£609m), too, driven by a 17 per cent increase in the fleet on rent, while the operating margin grew from 27.8 per cent to 31.1 per cent. Meanwhile, the group's much smaller A-Plant UK operation also benefited from an improved trading climate and rental revenue rose 35 per cent to £124m, thanks in part to the acquisition of Eve Trakway. Although, even without this, organic revenue growth reached an impressive 16 per cent, with a 10 per cent rise in the fleet on rent. Moreover, the operating margin here rose from 7 per cent to 12.6 per cent. In anticipation of growing demand next year, gross capital expenditure rose from £341m to £451m and guidance for full-year expenditure has been increased to £700m.
Broker Numis Securities expects full-year pre-tax profit of £350m, giving EPS of 43.8p (from £246.7m and 31.9p in 2013).
| ASHTEAD (AHT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 728p | MARKET VALUE: | £3.66bn | |
| TOUCH: | 726-728p | 12-MONTH HIGH: | 759p | LOW: 379p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 148p* | NET DEBT: | 166% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 680 | 112 | 14.1 | 1.50 |
| 2013 | 850 | 208 | 26.1 | 2.25 |
| % change | +25 | +86 | +85 | +50 |
Ex-div: 15 Jan Payment: 5 Feb *Includes intangible assets of £448m, or 89p a share | ||||
