4th Mar 2014 10:45
LONDON (Alliance News) - Ashtead Group PLC jumped to lead the FTSE 100 Tuesday after the firm reported a record pretax profit rise of over 50% as its programme of organic growth and acquisitions continued to pay off.
The British industrial equipment hire company said pretax profit rose 54% to GBP80.4 million from GBP53.5 million last year for the three months to January 31, 2014. Revenue was up 22% to GBP400.1 million from GBP333.9 million.
Operating profit for the three months was up 48% to GBP92.8 million from GBP64.2 million, and earnings before interest, taxation, depreciation and amortisation jumped 37% to GBP162.2 million from GBP121 million.
On a statutory basis, pretax profit was up 54% to GBP77.9 million from GBP52 million and earnings per share were up 50% to 9.7 pence per share from the 6.7 pence recorded for the comparable quarter last year.
The firm also reported strong results for the nine month period to the same date; profit before tax for the nine months to jumped 51% to a record GBP292.7 million from the GBP193.5 million reported for the comparable period in 2013. Revenue for the period also demonstrated strong growth, up 23% to GBP1.25 billion from GBP1.01 billion last year.
Operating profit during the period rose 43% to GBP326.6 million from GBP227.4 million and earnings before interest, taxation, depreciation and amortisation were lifted 33% to GBP531.4 million from GBP396.6 million.
Earnings per share for the nine months were buoyed 50% to 36.8 pence from 24.4 pence.
On a statutory basis, pretax profit was up 73% to GBP285.7 million from GBP164.2 million, and earnings per share was up 71% to 35.8 pence from 20.8 pence.
Ashtead's Chief Executive, Geoff Drabble, said, "The business continues to have strong momentum... It is particularly pleasing to see both our divisions performing so strongly. Our strategy continues to be focused largely on organic growth, supplemented by a range of bolt-on acquisitions. We invested GBP491 million in our rental fleet and a further GBP85 million on acquisitions during the period.
"Our markets remain strong and we anticipate growing the Group's fleet organically in the coming year in the low to mid teens percent range. We remain committed to our debt leverage target of below 2 times EBITDA," he added.
On a divisional basis, Ashtead's US construction equipment rental business, Sunbelt rental revenue grew 22% to USD1,484 million from USD1,213 million last year, driven by a 17% increase in fleet on rent and 5% improvement in yield, said the firm. Sunbelt's total revenue, including new and used equipment, merchandise and consumable sales, grew 21% to USD1,658 million from USD1,368 million last year.
Investment bank Jefferies suggests that given the boost to its revenue from Hurricane Sandy in the previous trading year due to recovery operations, the compatible numbers were challenging.
The A-Plant division also continues to perform well, said Ashtead, with the acquisition of Eve Trakway, delivering rental revenue of GBP181 million, up 33% on the prior years' GBP136 million; reflecting 21% more fleet on rent and a 10% improvement in yield. Yield has benefited from a change in mix over the period which includes Eve's events work, said Ashtead. Rental revenue growth excluding Eve was 18%, reflecting 10% more fleet on rent and 7% yield improvement.
During the period, a final dividend for the year ended April 30, 2013 of 6.0 pence, up from 2.5 pence per share was paid to shareholders, costing GBP30.1 million, up from the GBP12.5 million cost for the comparable period. The interim dividend for the year ended April 30, 2014 of 2.25 pence, up from 1.5 pence per share, announced December 10, 2013 was paid on February 4, 2014, said the firm.
Buoyed by the record results, looking ahead the firm said it now anticipates a full-year profit ahead of previous expectations, noting that its strong performance continued in February.
Shares in Ashtead were trading up 8.65% at 919.18 pence per share Tuesday morning, leading the FTSE 100.
By Alice Attwood; [email protected]; @AliceAtAlliance
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