11th Sep 2018 09:11
LONDON (Alliance News) - Ashtead Group PLC on Tuesday said it will to increase and extend its current buyback plans following profit growth in the first quarter of its financial year, helped by a weak pound and a recent acquisition.
The industrial equipment rental company said revenue in the three months to the end of July rose 22% to GBP1.05 billion from GBP880.1 million reported a year earlier, pushing pretax profit up 23% to GBP274.4 million from GBP228.9 million.
Ashtead said the results were driven by strong organic growth, supplemented by bolt-on acquisitions, most notably the purchase of bulldozers retailer CRS in August last year.
As a result, the Sunbelt Canada division has tripled the size, with revenue jumping to CAD77 million, about GBP44.9 million, from CAD20 million a year before.
Meanwhile, the Sunbelt US unit added 30 new stores in the US in the quarter, the majority of which were specialty locations. Thus, revenue, including new and used equipment, merchandise and consumable sales, increased by 21% to USD1.2 million from USD968 million reported in the first quarter of 2017.
Rental unit revenue improved by 19% year-on-year to GBP961.0 million, while the A-Plant segment generated revenue of GBP126 million, up 5.9% year-on-year, both driven by increased fleet on rent.
During the quarter, the company said it bought back 4.1 million shares, totalling GBP94 million. To date, Ashtead has spent GBP300 million under the share buyback programme that it announced in December last year.
The company said Tuesday it intends to increase and extend its buyback plans, increasing the spend to GBP125 million per quarter and resulting in a total outlay of GBP675 million in financial 2019.
The company also revealed plans a new share buyback programme in financial 2020, with an anticipated spend of at least GBP500 million.
Looking forward, Ashtead said it continued to perform well, benefiting from a weaker pound.
"The group delivered a strong quarter," said Chief Executive Geoff Drabble. "We expect full-year results to be ahead of our expectations, and the board continues to look to the medium-term with confidence."
Ashtead shares were up 3.0% on Tuesday morning at 2,348.00 pence each, the best performer in the FTSE 100 index of London large-cap stocks.
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