Upbeat Ashtead statement
Ashtead, owner of Sunbelt Rentals in North America and the UK, issued a brief trading update for its full year to the end of March at its virtual capital markets day yesterday.
The statement said: “The group has continued to perform well in the fourth quarter of the financial year ending 30th April and we now expect full year results to be slightly ahead of our previous expectations. The group also paused its greenfield openings, bolt-on acquisitions and share buyback programmes in March 2020 as we took action to optimise our cash flow and strengthen further our liquidity position due to the uncertainty arising from the Covid-19 pandemic.
“In accordance with our consistent capital allocation priorities we resumed greenfield openings towards the end of the first fiscal quarter and returned to bolt-ons in February. Given the group's trading performance, strong cash flow generation and the fact that we expect to be at the lower end of our target leverage range of 1.5 to 2 times at the end of April, the group intends to recommence its share buyback programme from the beginning of May.”
“Subject to ongoing shareholder approval, over the next two financial years the group anticipates buying back up to £1 billion in shares and intends to commence the programme at a run rate of around £75 million per quarter and to flex this amount taking into account such factors as: the macro-economic backdrop, the ongoing organic investment in the business, acquisition opportunities, cash generation, net debt and leverage.”
Chief executive Brendan Horgan added: "Global events over the last 12 months have demonstrated the benefits of our long term strategy to broaden and diversify our end markets and strengthen our balance sheet. The group has performed exceptionally well in all our end markets and we emerge from the pandemic in a position of strength. As we sunset Project 2021 and look to the years ahead, we set out today ambitious plans to deliver further growth and resilience, while embracing environmental, social and corporate governance, for the benefit of all our stakeholders."