The FTSE-100 listed equipment rental company on Tuesday posted a 23% rise in pretax profit to £274.4mln in the three months to the end of July on revenues 22% higher at £1.05bln. Earnings per share jumped 46% to 44.8p.
The group, which has operations in the US and Canada as well as the UK, said it had invested £465mln of capital expenditure and made five bolt-on acquisitions worth £145mln during the quarter.
Ashtead, whose equipment is often used to clear up debris from hurricanes and storms in the US, has spent £300mln to date under the share buyback programme it announced last December and announced plans to increase and extend its current buyback plans.
This will see the level of share buybacks increasing to £125mln per quarter, resulting in a total outlay of £675mln. The programme will be extended for financial year 2019/20 with an anticipated spend of at least £500mln, the company said.
“Our end markets remain strong and are supported by continued structural change as customers rely increasingly on rental while we leverage the benefits of scale,” Ashtead’s CEO Geoff Drabble said in a statement.
“Our business is performing well in supportive end markets. With the benefit of weaker sterling, we expect full year results to be ahead of our expectations and the Board continues to look to the medium term with confidence,” he added.
Analysts at Accendo Markets said in a note to clients that strong quarterly results, generous shareholder returns and a bright future outlook had “presented a veritable trifecta of delightful news” for Ashtead shareholders.
They added that the outlook for Ashtead’s equipment rental business in the US was positive given “the storm season is in full swing in the US and Hurricane Florence is set to hit the Eastern Seaboard and the Carolinas” which will boost demand for rental equipment to facilitate weather defence and clean-up efforts.
Shares in Ashtead, which have risen some 15% in the last six months, were 2.9% up at 2,346p in early morning trade, valuing the company at around £11bln.
-- updates with analyst comment and share price --