21.06.2012

Ashtead may sell A-Plant

Ashtead has said that it is open to all sensible alternatives regarding its UK business, A-Plant – including a sale or consolidation with another.

The comment was made by chief executive Geoff Drabble during the company’s conference call following the release of its full year results yesterday.

"The outlook for the UK market remains uncertain and whilst there are some bright hotspots around these areas such as utilities, the issue remains that the decline in the public sector work has not been filled by an improvement in the private sector."

"We continue to consider our strategic options around the UK and we have the benefit, unlike some others, of having a full range of options available to us.”

Vertikal Comment

Ashtead's UK business has improved significantly in the past 12 months, but now only represents just over 16 percent of group revenues, with US based Sunbelt making up the rest.

In the past there has been talk of relocating the holding company to the USA to better reflect the source of most of its revenues and profits. Although this seemed to have gone away.

The company could look at making a bid for HSS, which is currently open to offers, this would double the size of the business making it the UK market leader, at least in terms of revenues.

The fit might also be better than it at first seems, with HSS stronger in lighter equipment and A-Plant stronger with larger items. It would also make the UK business a significant part of the group again.

The big question is - where are the growth opportunities strongest – and at the moment that is probably North America.

Interesting times