Ashtead Group (AHT)

Sector:

Support

Index:

FTSE 100

5,788.00p
   
  • Change Today:
    -14.00p
  • 52 Week High: 6,104.00p
  • 52 Week Low: 4,694.00p
  • Currency: UK Pounds
  • Shares Issued: 451.35m
  • Volume: 776,483
  • Market Cap: £26,124m
  • RiskGrade: 116

Ashtead accelerates in third quarter

By Oliver Haill

Date: Tuesday 05 Mar 2019

LONDON (ShareCast) - (Sharecast News) - Revenue and operating profit growth sped up at Ashtead Group in the US-focused equipment rental group's third quarter of trading.


Underlying rental revenue increased 19% in the three months to 31 January to £1.05bn, operating profit 21% to £297.2m and profit before tax 17% to £254.3m, after the first half saw around 18% growth across the board.

As financing costs increased reflecting a higher average interest rate and higher average debt levels, offsetting a lower US federal tax rate, earnings per share were up 18% to 40.0p.

Chief executive Geoff Drabble said Ashtead, which generates around 85% of sales and 90% of profits from its Sunbelt American operations, continues to experience "strong end markets in North America and are executing well on our strategy of organic growth supplemented by targeted bolt-on acquisitions".

With £1.29bn of capital invested in the business in the nine-month period, up from £859m a year ago, and £491m spent on bolt-on acquisitions versus £315m last time, plus with £550m spend on a share buyback programme, reported net debt increased to £3.7bn from £2.6bn.

Investment has added 112 locations and resulted in rental fleet growth of 18%, which Drabble said "reflects the structural growth opportunity that we continue to see in the business as we broaden our product offering and geographic reach, and increase market share".

On the outlook, he said the continued performance of supportive end markets led to expectations that full-year results will be in line with previous targets, with confidence about the medium term too.

Capex for this year will be at the top end of the previous guidance range and guidance for the next year is for the same order of magnitude.

Shares in Ashtead fell almost 2% to 2,027p in early trading on Tuesday.

Broker Peel Hunt maintained its April 2019 pre-tax profit forecast of £1.1bn, in line with the wider City consensus, to give earnings per share of 178p that would represent growth of 36% over 2018.

The underwhelmed reaction of the shares on Tuesday, trading around 17% below the all-time peak reached last autumn, "probably reflects concern that the US economy is slowing down", said Russ Mould, investment director at AJ Bell.

Ashtead "provides a useful insight into the US economy and how it is performing", he added, with bullish investors likely to take comfort from yet another quarter of double-digit growth.

US fourth-quarter GDP growth rate of 2.6% was perfectly respectable, Mould added, even if it did represent a slowdown from the 3.4% and 4.2% increases seen in the second and first quarters, as the effects of President Trump's tax cuts began to wear off, trade worries gathered, the dollar rose and the US Federal Reserve increased interest rates.

But with the New York Fed now looking for GDP growth of just 0.9% in the first quarter of this year and the Atlanta Fed estimating just 0.3%, Mould added: "This loss of momentum partly reflects the base effect caused by the tax cuts but also a string of soft data, ranging from house sales, auto sales, durable goods orders and rising inventory. The first-quarter government shutdown is an additional complication, although that could at least mean there is some element of a snapback in the second-quarter, which may offer some comfort to bulls of Ashtead's stock and those who are looking for the US economy to keep on firing global growth in 2019 and beyond."

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

Ashtead Group Market Data

Currency UK Pounds
Share Price 5,788.00p
Change Today -14.00p
% Change -0.24 %
52 Week High 6,104.00p
52 Week Low 4,694.00p
Volume 776,483
Shares Issued 451.35m
Market Cap £26,124m
RiskGrade 116

Ashtead Group Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
20.82% below the market average20.82% below the market average20.82% below the market average20.82% below the market average20.82% below the market average
26.67% below the sector average26.67% below the sector average26.67% below the sector average26.67% below the sector average26.67% below the sector average
Price Trend
45.72% above the market average45.72% above the market average45.72% above the market average45.72% above the market average45.72% above the market average
25.25% above the sector average25.25% above the sector average25.25% above the sector average25.25% above the sector average25.25% above the sector average
Income
84.47% below the market average84.47% below the market average84.47% below the market average84.47% below the market average84.47% below the market average
79.66% below the sector average79.66% below the sector average79.66% below the sector average79.66% below the sector average79.66% below the sector average
Growth
14.83% above the market average14.83% above the market average14.83% above the market average14.83% above the market average14.83% above the market average
21.74% above the sector average21.74% above the sector average21.74% above the sector average21.74% above the sector average21.74% above the sector average

What The Brokers Say

Strong Buy 6
Buy 10
Neutral 3
Sell 1
Strong Sell 0
Total 20
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Ashtead Group Dividends

  Latest Previous
  Final Interim
Ex-Div 08-Aug-24 11-Jan-24
Paid 10-Sep-24 08-Feb-24
Amount 89.25¢ 15.75¢

Trades for 31-Oct-2024

Time Volume / Share Price
17:32 15,706 @ 5,754.25p
17:32 1,992 @ 5,754.25p
17:32 45,293 @ 5,760.21p
17:32 20,885 @ 5,754.73p
16:39 210 @ 5,788.00p

Ashtead Group Key Personnel

CEO Brendan Horgan
CFO Michael Pratt

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