06.03.2018

Another 20% jump for Ashtead

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

Overall revenues are up 20 percent to £2.81 billion, of which around 15 percent was organic growth and five percent due to acquisitions. Pre-tax profits for the period were 18 percent higher at £687.4 million. In the fourth quarter revenues increased 22 percent to £916.1 million, with pre-tax profits rising 24 percent to £194.3 million.

Sunbelt had revenues of $3.1 billion, 18 percent up on the same period last year, while operating profits increased almost 20 percent to just over one billion dollars. Clean up work following the earlier hurricane damage pushed utilisation up a percentage point to 73% with rates holding strong.

In Canada, the fledgling business almost tripled its revenues for the period thanks to the CRS acquisition rising to C$161,000 while operating profits more than quadrupled to more than C$33 million.

In the UK, A-Plant reported nine month revenues up 17 percent to £354 million, with operating profits up 12.5 percent to £56.8 million. Group capital expenditure on the business/fleet was £859 million with a full year projection of £1.26 billion. At the end of December the average age of the fleet was just 32 months.

Chief executive Geoff Drabble said: "The group continues to perform well and delivered another strong quarter with reported rental revenue increasing 21 percent for the nine months and underlying pre-tax profit increasing by 24 percent at constant currency to £742 million.”

“Our end markets remain strong and a wide range of metrics have shown consistent improvement. We continue to execute well on our strategy through a combination of organic growth and bolt-on acquisitions, investing £859 million by way of capital expenditure and £315 million on bolt-on acquisitions in the period. With the continuing opportunity for profitable growth, we expect capital expenditure for the year to be towards the upper end of our guidance (c. £1.2bn). Looking forward to 2018/19, we anticipate a similar level of capital expenditure to this year as we execute on our strategic plan through to 2021.”

“All our divisions continue to perform well in supportive end markets. While currency continues to be a headwind, we expect this to be mitigated by the strong underlying performance in North America. Therefore, we anticipate full year results to be line with prior expectations.”

Vertikal Comment

Yet another stellar performance from Ashtead, which continues to grow at its own consistent pace, with smaller bolt on type acquisitions which it appears to incorporate quickly and efficiently. In the USA, while United continues to maintain its clear market leadership with major acquisitions, Sunbelt keeps doggedly chasing behind, remaining significantly more profitable than its big rival.

In the UK, A-Plant continues to make solid progress and looks set to achieve full year revenues approaching £500 million.

All in all, another impressive and encouraging set of results.