Ashtead profits rise 20%, led by strong revenues in North America
StockMarketWire.com - Plant-hire Group Ashtead saw annual profits jump by a fifth on the back of strong rental revenues in North America.
In the 12 months ended 30 April, statutory profit before tax rose 20% to £1.06bn, revenues rose 19% to £4.5bn.
Underlying pre-tax profit, which exclude the impact of exceptional items and intangible amortisation, rose 17% to £1.11bn, and rental revenues rose 18% to £4.14bn for the year.
The company attributed the upbeat results to 'strong end markets in North America,' and targeted bolt-on acquisitions. 'We invested £1.6bn in capital and a further £622m on bolt-on acquisitions in the period, which has added 146 locations across the Group,' it said.
The rise in rental revenues was driven by growth in each of the company's divisions as Sunbelt US, A-Plant and Sunbelt Canada delivered 20%, 4% and 66% rental-only revenue growth, respectively.
The 'significant growth' in Sunbelt Canada was boosted by acquisitions, most notably the acquisition of CRS in August 2017, the company said. Sunbelt US's revenue growth continued to benefit from cyclical and structural trends, it added.
The company proposed a final dividend of 33.5p, taking the full-year dividend to 40.0p, up 21% on last year.
Looking forward, the company said it anticipated a similar level of capital expenditure in 2019/20, consistent with its strategic plan.
'The Group delivered a strong quarter with good performance across the business. As a result, Group rental revenue increased 18% for the year and underlying pre-tax profit increased 17% to £1,110m, both at constant exchange rates,' said Ashtead's chief executive, Brendan Horgan.
'We remain focused on responsible growth. Our increasing scale and strong margins are delivering good earnings growth and significant free cash flow generation.'
'This provides significant operational and financial flexibility, enabling us to invest in the long-term structural growth opportunity and enhance returns to shareholders, while maintaining leverage within our target range of 1.5 to 2.0 times net debt to EBITDA.'
Story provided by StockMarketWire.com