Proactive Investors - Run By Investors For Investors

Ashtead Group reveals revenue and profit growth but spending is at top end

Chief executive Geoff Drabble said: "We expect full year results to be in line with our expectations and the board continues to look to the medium term with confidence."
Ashtead equipment hire
The equipment hire firm described a "strong quarter"

Ashtead Group plc (LON:AHT) has revealed a positive trading performance as it reported third-quarter results, highlighting a 20% rise in revenue.

The equipment hire firm generated £1.143bn of statutory revenue in the three months ended 31 January, up from £916mln, while over the first nine months of the financial year it brought in £3.39bn, up 19% from £2.81bn in the comparative period of the preceding year.

Quarterly statutory pre-tax profit totalled £240.9mln, measuring a 17% improvement on the prior year. Earnings (underlying EBITDA) amounted to £517.4mln for the quarter, up 21% from £408.8mln in 2018’s third quarter.

READ: Ashtead Group boosted by UBS upgrade to ‘neutral’ from ‘sell’

Pre-tax profit for the nine months was reported at £850.9mln, up 23%, while the nine-month earnings figure was stated at £1.6bn, up 19%.

Ashtead highlighted sUBStantial investment during the period, with £1.29bn of capital invested, which was at the top end of guidance, and it spent some £491mln on bolt-on acquisitions.

"The group delivered a strong quarter with good performance across the group,” said Geoff Drabble, Ashtead chief executive.

“We continue to experience strong end markets in North America and are executing well on our strategy of organic growth supplemented by targeted bolt-on acquisitions.”

Drabble added: “Our business continues to perform well in supportive end markets. 

“Accordingly, we expect full year results to be in line with our expectations and the board continues to look to the medium term with confidence."

Russ Mould, investment director at AJ Bell, in a note said: “With around 85% of sales and 90% of profits coming from its American operation, Sunbelt, Ashtead provides a useful insight into the US economy and how it is performing,” said

“Investors who have a bullish view of the world will therefore take comfort from yet another quarter of double-digit percentage increases in both sales and profit, as Ashtead added to strong underlying growth with select acquisitions.”

 “Yet the shares price still seems a bit underwhelmed, especially as it trades around 17% below the all-time peak reached last autumn.

“This probably reflects concern that the US economy is slowing down.”

Ashtead shares were down 38p or 1.85% changing hands at 2,027p.

 

-- UPDATED to add broker commentary and share price details --

View full AHT profile View Profile

Ashtead Group Timeline

Article
December 11 2018

Related Articles

Investment papers and laptop
May 07 2019
The investment firm focuses on providing consultancy services to universities and other research organisations to help them commercialise any intellectual property arising from their research
Stobart
March 26 2019
“The company continues to make strong commercial progress in its core aviation and energy operating divisions and is trading in line with management expectations," Stobart said.
Online payment
April 02 2019
The company's payment services specialise in card-not-present transactions, payments made without face-to-face contact or verification, usually online or via mobile

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use