Ashtead ‘returns to growth’ with lofty shares up 143 per cent in final quarter
Equipment rental group Ashtead ‘returns to growth’ with lofty shares in the final quarter after a rocky year, with its total revenue up 23 per cent to £1.27bn.
Revenue raked in from rentals alone racked up to around £1bn, up 15 per cent in the three months to 30 April. While operating profits were down slightly by £89m to £1.1bn.
The UK brought in around £635.1m of the group’s revenue, while the US, its biggest market, earned an eyewatering £4.1bn.
“We returned to growth in the fourth quarter with rental revenue up 15 per cent over last year and up 14 per cent when compared with the fourth quarter of 2018/19, both at constant exchange rates,” chief executive, Brendan Horgan, said.
Ashtead’s share price lifted in this afternoon’s trading by 2.71 per cent, taking its overall share price to 5,224.
The group had a resilient performance, equity analyst at Hargreaves Lansdown Nicholas Hyett said, which “bodes well for 2022, especially as large government infrastructure development plans have yet to get underway.”
“The real stand out feature of full year results is how flexible Ashtead has proven, despite a relatively fixed operating cost base and deciding not to make any staff redundant.
“In particular delaying the replacement of old equipment has boosted free cash flow substantially, allowing the group to trim debt while still making extra acquisitions this year.”
Lofty shares
The group’s earnings per share rocketed 143 per cent since 2020 and now sits at 36.3p – up from 17.4p in 2020.
Its proposed final dividend is also in the same ballpark, at 35.p, making 42.15p for the full year.
AJ Bell investment director Russ Mould and financial analyst Danni Hewson said: “Ashtead’s shares trade near their all-time highs after more than doubling in the past year.
“The equipment hire giant gets around 90% of its sales from its American Sunbelt operation, with the bulk of the rest coming from the A-Plant business in the UK.
“An economic upturn in the US, president Biden’s infrastructure plans and a booming American housing market all seem to underpin that relentless share price rise.”
Chief executive Horgan said praised the “strength” of the group’s business model after a turbulent economic cycle.
“We have shown that our business can perform in both good times and more challenging ones. We enter the new financial year with clear momentum, strong positions in all our markets,” he added.