17.06.2014

67% profits jump at Ashtead

Ashtead, owner of Sunbelt Rentals in the USA and A-Plant in the UK has unveiled strong full year numbers for its fiscal year ending March 31st.

Total revenues were 20 percent higher at £1.63 billion, while pre-tax profits jumped 67 percent to £356.5 million. Capital expenditure increased 28 percent in the year to £741 million, cutting the average age of the fleet from 32 to 28 months.

Looking at Sunbelt – in dollars of course – total revenues for the year increased over 20 percent to $2.19 billion, with an operating profit of 631 million 71 percent higher than in 2013. 17 percent of the higher rental revenues are due to fleet size, while a gain of four percent was made in overall yield. Physical utilisation was 71 percent.

In the final quarter revenues increased 16 percent to $530 million, while operating profit was 44 percent higher at 136.9 million.

Moving on to A-Plant, revenues improved 30 percent to £268.5 million, a good percentage of which is due to the acquisition of Eve Trakway. Fleet on rent was up 21 percent, while yield increased 9 percent – average physical utilisation was 72 percent. Operating profit for the period more than doubled from £11.9 to £25.2 million.

Looking at the fourth quarter revenues improved 27 percent to £66.9 million, with operating profits also increasing 27 percent to £3.8 million.
Net debt for the group edged up 13 percent to £1.15 billion.

Chief executive, Geoff Drabble said: "2013/14 was a very successful year for the group, enabling us to deliver record 12 month underlying pre-tax profits of £362m, up 50 percent from the prior year. It is particularly pleasing that we achieved this growth whilst also delivering on our long-stated commitments of return on investment progression, now 19 percent for the group, and maintaining debt leverage below two times EBITDA.”

“Our performance reflects the benefits of the consistent execution of our strategy focussed largely on organic growth, supplemented by greenfield openings and bolt-on acquisitions. We invested £741m in our rental fleet and a further £103m on acquisitions during the year. We anticipate growing our fleet in the coming year in the low to mid teens percent range and will continue to open greenfields and make bolt-ons to further grow our market share and profitability. Current planning suggests around 50 new locations in the new financial year, another measured step towards our medium term objective of 600 locations.”

“With both divisions performing well and beginning to enjoy recovering markets, we are well positioned for further growth and the board looks forward to the medium term with continued confidence."

Vertikal Comment

Another excellent set of numbers from Ashtead, including some solid improvement in the UK business. The rising rate of sterling may take the edge of the headline group result over the next couple of quarters, but the operating business both seem to be on a role and making solid progress.
There are still plenty of opportunities for growth and the company is very well placed now with a young fleet and barring any major upsets several years of strong economic growth ahead of it. The future looks bright for Ashtead.