Profits up 83% at Ashtead driven by Sunbelt performance
By Murray Pollok08 December 2011
Ashtead Group's operating profits jumped by 83% to £63.4 million for the three months to 31 October driven by an almost doubling of profits at Sunbelt Rentals in the US.
Revenues for the quarter increased by 25% to £306.9 million, with Sunbelt up 28% to £259.3 million, representing 85% of Ashtead's total revenues.
In the UK, A-Plant saw revenues rise by 11.1% to £47.6 million, with profits up to £2.6 million from £2.0 million in the same period last year.
The company is forecasting full year profits "substantially ahead" of its earlier expectations.
Ashtead's chief executive, Geoff Drabble, said; "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."
In the first six months of Ashtead's financial year Sunbelt's revenues have grown by 25%, reflecting a 12% increase on the amount of equipment on rent, a 7% higher yield (reflecting price and utilisation) and the additional contribution from recent acquisition Empire Scaffold.
A-Plant's first half rental revenue growth of 11% was put down to 2% growth in fleet on rent and 6% yield improvement.
The company will invest around £400 million in the current financial year (ending 30 April 2012). Much of this new equipment will be received into the fleet in March and April next year, ready for the 2012 summer season.