2nd September 2015
As Ashtead reports its first quarter results, Ian Forrest, investment research analyst at The Share Centre, explains what they mean for investors...
Equipment rental group Ashtead posted some strong first quarter figures this morning. The group revealed to investors that both its US and UK businesses continue to perform well. Investors should note that rental revenue rose 20% to £539.6m, with pre-tax profits up 23% to £160.7m. The market welcomed the news – partly because profit warnings from other companies in the sector have raised some concerns. However, Ashtead’s subsidiary companies welcomed strong results. The group’s US business Sunbelt saw record levels of equipment used in July and continues to grow both in terms of capital expenditure on new equipment and the opening of new rental sites. The UK business, A-Plant, also increased revenue by 10% and the company said its markets are improving.
Overall these are good figures from Ashtead and, perhaps more importantly, very reassuring given the recent news from other parts of the sector. For investors, we are maintaining our ‘buy’ recommendation. This is due to both main businesses continuing to see healthy growth levels, further equipment investment and full year results expected to be in line with expectations.