Ashtead profits increase 197%
By Maria Hadlow08 December 2011
The Ashtead Group has recorded a half year profit of £84 million; up 197% over the same period in 2010 and profit for the second quarter up 186% to £50.6 million with a large contribution from the improving fortunes of the US Sunbelt operation.
The first half results (for the period ending 31 October 2011) reflect continued improvement in the US with Sunbelt's rental revenue growing 25% to $694m (2010: $557m). This comprised a 12% increase in fleet on rent, 7% higher yield and a first-time contribution from Empire Scaffold. In the UK, A-Plant's first half rental revenue grew by 11% to £86m (2010: £77m) including 2% growth in average fleet on rent and 6% yield improvement.
Ashtead's chief executive, Geoff Drabble, said "We are delighted to report record first half pre-tax profits of £84m in end markets which remain well below previous peaks.
"Market share gains, the on-going structural shift to rental in the US and operational efficiency meant we delivered a very strong performance across a broad range of metrics despite end construction markets being at a cyclical low point. This is encouraging for both the short-term, where we expect a continuation of current trends, and the longer term where, when cyclical recovery comes, we expect to benefit significantly.
"With our robust debt structure, substantial capacity to fund fleet growth and the well-established momentum in the business we now anticipate a full year profit substantially ahead of our earlier expectations."
Ashtead said it was, as usual, concentrating its capital expenditure into the first, second and fourth quarters of the year to maximise expenditure for the seasonally stronger summer months. First half expenditure was £253 million and together with some fleet disposal brought the average age of the Group's rental fleet at 31 October 2011 to 39 months compared to 44 months in the same period of 2010. Sunbelt's fleet size at 31 October was 8% larger than a year earlier with average utilisation growing to 73% (2010: 71%).
Ashtead expects to invest around £400 million over the financial year and dispose of around £100 million worth of fleet. Ashtead said, "The additional expenditure, much of which will only be received into the fleet in March and April next year will ensure we are positioned ready for the 2012 summer season."