06.07.2004

Ashtead sees return to growth

Ashtead has provided more detail on its 2003/4 results (see Vertikal.Net May 11th) following its trading statement in May. The groups profit before exceptionals, goodwill write-off and tax was £7.6 million compared to a loss of £1.8 million in 2002/3.

The result, after allowing for exceptional items of £31.5 milllion and goodwill amortization of £9.2 million, is a loss of £33 million, an improvement over last year's loss £42 million.

At constant dollar/sterling exchange rates, the result would have improved by over £10 million.

The company said that it does not expect any significant exceptional costs in 2004/5. This year, £20.6 million of exceptionals related to the costs involved with the default on its loans and refinancing.

Cash flow was extremely positive, generating free cash of £56.6 million. In total, the company managed to reduce total debt by almost £100 million. Operating costs were reduced by over £40 million.

Both A-Plant and Sunbelt have returned to a growth. In the US, Sunbelt posted the highest growth levels of any publicly quoted rental company, thus improving the company’s share of the market. This growth came from a significant jump in average utilisation, combined with a four percent increase in rental rates.

In the UK, same store profit rose from a loss of £2.4 million reported last year, to a profit of 1.5 million, with the fourth quarter to April 2004 showing a strong pickup. With a stable UK market and a strong economy, Ashtead is confident that 2004/5 will continue to see the return to growth that A-Plant experienced in the fourth quarter

Spending on new equipment for the rental fleet amounted to £64 million in 2003/4 and is expected to rise to £100 million this year. The average age of the group fleet in May was 46 months, 48 months for Sunbelt and 43 months for A-Plant.

If aerial lifts are stripped out of the equation the average fleet age drops to 35 months, suggesting an aerial fleet that is approaching an average age of five years, considerably older than most aerial specialists like to target.