Ashtead (AHT) continues with its very successful strategy of both investing in its established tool-hire stores and opening or acquiring new sites. The international equipment rental group has taken advantage of a strong recovery in US construction, with underlying pre-tax profit up one-third to £266m in the first half.
The group upgraded its full-year earnings guidance in September, following strong first-quarter results. Even so, these numbers beat expectations, sending the shares 9 per cent higher on results day.
Ashtead invested £107m on 10 bolt-on acquisitions during the half, predominately in the US, where it wants to grow its 6 per cent market share and plug some geographical gaps. Over the past 18 months the group has added 105 US locations across a range of sectors. Chief executive Geoff Drabble intends to add another 100 to 200 sites at a rate of 50 a year, and made his first step into Canada with a £16m acquisition after the period-end.
The group invested £588m in capital expenditure during the period, and intends to spend between £925m and £975m during the financial year - more than previously guided. Most of that goes into the equipment fleet, which has doubled in size since 2011, but Ashtead has also upgraded IT platforms and invested in logistics.
Following 7 per cent upgrades, broker Peel Hunt expects adjusted EPS of 59.5p this year, up from 46.6p in 2013-14.
ASHTEAD (AHT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,168p | MARKET VALUE: | £5.9bn | |
| TOUCH: | 1,167-1,168p | 12-MONTH HIGH: | 1,189p | LOW: 701p |
| DIVIDEND YIELD: | 1% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 191p* | NET DEBT: | 163% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 850 | 208 | 26.1 | 2.25 |
| 2014 | 987 | 259 | 33.0 | 3.00 |
| % change | +16 | +25 | +26 | +33 |
Ex-div: 15 Jan Payment:4 Feb *Includes intangible assets of £519m, or 103p a share | ||||
