03.03.2015

Ashtead continues to soar

Ashtead, owner of Sunbelt Rentals in the USA and A-Plant in the UK has reported strong growth in its nine month results.

Total revenue for the group jumped 23 percent to over £1.5 billion, while pre-tax profits jumped 33 percent to £369.1 million.

In North America Sunbelt saw revenues climb 24 percent to just over $2 billion for the nine months, while operating profits increased almost 31 percent to $646.9 million. utilisation improved slightly to 72 percent, while rental rates/yield grew two percent.

In the UK A-Plant revenues for the nine months grew by just over 20 percent to $242 million and operating profits leapt more than 76 percent to £37.7 million. with rental rates/yield rising by six percent on a fleet 13 percent larger. Capital expenditure so far this year was up almost 39 percent to £783 million – or £701 million net of disposals.

Looking at the third quarter, the group as a whole saw revenues rise by 23 percent to £512.9 million, with pre-tax profits up 33 percent to £109.9 million. Same store growth represented 17 percent of the revenue growth.

Sunbelt revenues increased by over 31 percent in the third quarter, while operating profits jumped more than 40 percent. In the UK A-Plant revenues improved 21 percent while profits jumped more than two and a half fold.

Ashtead chief executive, Geoff Drabble said: "It is pleasing to report another strong quarter enabling the Group to deliver record underlying pre-tax profits of £379m, up 33 percent on the prior year. Strong contributions came from both Sunbelt and A-Plant, with rental revenue growth of 25 and 18 percent, respectively”.

“We continue to execute on our strategy, focused on organic growth supplemented by bolt-on acquisitions. We invested £783 million in capital expenditure and £162 million on bolt-on acquisitions in the period and expect full year capital expenditure to be at the top of, or slightly above, our previously announced range of £925 to £975 million. Even with these significant levels of investment, we continue to grow responsibly, generating strong returns and maintaining leverage within our stated objectives”.

“We now anticipate a full year result ahead of our previous expectations and the Board looks forward to the medium term with continued confidence."

Vertikal Comment

Another very strong set of numbers from Ashtead which is growing rapidly in North America, while now positing increasingly strong improvements in the UK. The company looks set for another record year and is investing heavily in making sure that growth continues as the market improves, while some other major rental companies struggle.

As we have said before, it looks like Ashtead is ‘on a roll’