Ashtead Group Increases Profits by 76%

LONDON -- Ashtead Group  (LSE: AHT.L  ) , the second largest equipment rental company in both the U.K. and U.S., this morning announced a pre-tax profits increase of 82% in actual terms, or 76% at constant rates, in its Q1 underlying results.

That resulted in a figure of £61.4 million, up from £33.8 million at the same stage last year. Revenue was up to £325 million from £268.6 million, an 18% jump at constant rates, while EBITDA rose 34% to £129.3 million from £93.9 million.

Chief executive Geoff Drabble said:

We are delighted with this record performance as we continue to benefit from the trends established in the business over a number of quarters. The markets in which we operate have performed as anticipated with gently improving conditions in the U.S. and a more challenging outlook in the U.K. We do not anticipate any significant changes to this environment in the short term.

Against this back-drop our continued market share gains are again reflected in our strong growth in fleet on rent and improving margins demonstrate our operational efficiency. Given the momentum established in the business, we now anticipate a full year result materially ahead of our previous expectations.

As a result, shares are up this morning over 11%, or 33 pence, at the time of writing to 315.50 pence, following the market's close of 282.50 pence. 

Seasonally stronger in the summer months, the company was able to refinance the terms of its long-term debt, which led to lower costs and longer maturities.

Ashtead recognizes that its business is "subject to significant fluctuations in performance from quarter to quarter as a result of seasonal effects," while the majority of its operations are denominated in U.S. dollars so are therefore performances that are exposed to any fluctuations in the value and exchange rate with pound sterling.

But, with the market still looking uncertain, is this the kind of share you want to trust your money in? That depends on your investing style. Here at The Motley Fool, our analysts recommend steady, dividend-paying stocks, ones that can avoid fluctuations in the market as much as possible. In our special free report "Top Sectors of 2012", they have earmarked three industries that they believe can offer favorable returns -- and pick a great company in each one. Click here to have it dispatched to your inbox immediately -- and remember, best of all, it's completely free!

If you're keen to earn superior stock market returns, this free Motley Fool report -- "10 Steps to Making a Million in the Market" -- could help you on your way. The report highlights how choppy markets can still provide the big winners to take you to that magic million.

Further Motley Fool investment opportunities:

Fool contributor Sam Robson does not own any of the shares listed above. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2005797, ~/Articles/ArticleHandler.aspx, 10/21/2014 4:11:46 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement