11th Dec 2018 08:32
LONDON (Alliance News) - Ashtead Group PLC on Tuesday said it expects annual results to be ahead of prior expectations following strong profit growth in the first half of its financial year.
Ashtead was trading 5.0% higher on Tuesday at 1,686.00 pence, the best performer in the FTSE 100 index in London.
The blue-chip industrial equipment rental company posted pretax profit of GBP633.4 million for the six months to the end of October, up 19% from GBP536.9 million reported for the same period a year earlier.
The result was driven by strong 18% revenue growth to GBP2.07 billion from GBP1.77 billion year-on-year.
On a divisional basis, revenue in the Sunbelt US rose by 19% to GBP1.90 billion, while revenue in the Sunbelt Canada jumped 80% to GBP97.7 million. On a constant currency basis, revenue improved by 20% and 84%, respectively.
The Sunbelt US's revenue growth continued to benefit from cyclical and structural trends, Ashtead noted. The company said it added 63 new stores in the US in the first half.
Meanwhile, the significant growth in the Sunbelt Canada reflects the impact of acquisitions, most notably, the company said, the acquisition of CRS Contractors Rental Supply in August last year.
In addition, Ashtead's A-Plant division in the UK delivered stable performance, with revenue growing by 2.2% to GBP250.5 million.
The improvements in all units were boosted by strong organic growth, supplemented by bolt-on acquisitions, Ashtead said.
The company declared an interim dividend of 6.5p a share, up 18% from 5.5p paid the year before.
Looking forward, Ashtead said it intends to continue to focus on operational efficiency and improving margins.
Ashtead highlighted that the Sunbelt Canada is in a growth phase as investments were made to expand the unit's network and develop the business.
"We expect full year results to be ahead of our prior expectations and the board continues to look to the medium term with confidence," said Chief Executive Geoff Drabble.
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