Ashtead half year profits up 80 percent
Ashtead has reported half year revenues of £275 million, up two percent, from the same period in 2003. While profits jumped to £20 million from £11 million last year. In dollar terms the group’s largest business, Sunbelt rentals, saw its revenues rise by over 15 percent, but an 11 percent drop in the dollar/Sterling exchange rate converted this to only a four percent increase in sterling terms.
Sunbelt experienced a seven percent improvement in rental rates while utilisation grew from 67 to 72 percent. The net effect of the strengthening market was 50 percent improvement in Sunbelts operating income in dollars but this translated to a 35 percent uplift when converted to sterling..
A-Plant, the groups UK rental business saw revenues decline four percent to £81 million, due to the disposal of the Irish and other businesses, like for like (same store) sales increased by four percent with a fleet five percent smaller than last year.
Rental rates remained stable overall but utilisation rose from 60 to 66 percent. Operating income for the UK rental business rose by a whopping 52 percent to £8.5 million.
Group Capital expenditure for the first six month was £63 million £18.2 million of which was fleet expansion.
Net debt at 31 October was £509 million, a reduction of £17 million for the period and £66 million in the twelve months since 31 October 2003. At constant exchange rates these reductions were £10.2m and £38.4m respectively
Ashtead’s chief executive, George Burnett, commented:” The Group again performed strongly in the second quarter reflecting improving markets, increased market share and the shift from ownership to rental in the US. A-Plant also showed strong growth building on the improvements seen since the completion in January of its refocusing programme. Our new five-year senior debt facility, which was successfully completed just after the end of the period, provides us with greater flexibility to invest and a lower interest cost.
Current trading conditions in both our main markets remain strong. Whilst the continuing weakness of the US dollar and any further interest rate rises may adversely impact second half performance, the Board remains encouraged by the underlying performance of both our main businesses and by the Group’s long term growth potential.”