Ashtead Group plc (LON:AHT) hs announced its unaudited results for the nine months and third quarter ended 31 January 2024
| Third quarter | Nine months | |||||
| 2024 | 2023 | Growth2 | 2024 | 2023 | Growth2 | |
| $m | $m | % | $m | $m | % | |
| Performance1 | ||||||
| Revenue | 2,658 | 2,427 | 9% | 8,231 | 7,224 | 14% |
| Rental revenue | 2,356 | 2,189 | 7% | 7,317 | 6,572 | 11% |
| EBITDA | 1,168 | 1,092 | 7% | 3,752 | 3,338 | 12% |
| Operating profit | 591 | 609 | -3% | 2,093 | 1,947 | 7% |
| Adjusted3 profit before taxation | 473 | 535 | -11% | 1,785 | 1,778 | – % |
| Profit before taxation | 442 | 505 | -12% | 1,692 | 1,690 | – % |
| Adjusted3 earnings per share | 81.4¢ | 91.9¢ | -11% | 307.2¢ | 304.2¢ | 1% |
| Earnings per share | 76.1¢ | 86.9¢ | -12% | 291.4¢ | 289.3¢ | 1% |
Nine month highlights
· Group revenue up 14%2; US revenue up 15% with rental revenue up 12%
· Adjusted3 earnings per share of 307.2¢ (2023: 304.2¢)
· 106 locations added in North America
· $3.5bn of capital invested in the business (2023: $2.6bn)
· $906m spent on 26 bolt-on acquisitions (2023: $970m)
· Net debt to EBITDA leverage2 of 1.9 times (2023: 1.6 times)
| 1 | Throughout this announcement we refer to a number of alternative performance measures which provide additional useful information. The directors have adopted these to provide additional information on the underlying trends, performance and position of the Group. The alternative performance measures are not defined by IFRS and therefore may not be directly comparable with other companies’ alternative performance measures but are defined and reconciled in the Glossary of Terms on page 34. |
| 2 | Calculated at constant exchange rates applying current period exchange rates. |
| 3 | Adjusted results are stated before amortisation. |
Ashtead Group’s chief executive, Brendan Horgan, commented:
“The Group’s operating performance continues to be strong with revenue up 14% and rental revenue growth of 11%, both at constant currency. This performance is only possible through the dedication of our team members who deliver for all our stakeholders every day, while ensuring our leading value of safety remains at the forefront of all we do.
We are executing well against all actionable components of our strategic growth plan, in end markets which remain robust. In the period, we invested $3.5bn in capital across existing locations and greenfields and $906m on 26 bolt-on acquisitions, adding a combined 106 locations in North America. This investment is enabling us to take advantage of the substantial structural growth opportunities that we see for the business as we deliver our strategic priorities to grow our General Tool and Specialty businesses and advance our clusters. We are achieving all this while maintaining a strong and flexible balance sheet.
As outlined previously, our third quarter rental revenue growth in North America was affected by the lower level of emergency response activity related to natural disasters and the longer than anticipated actors’ and writers’ strikes. Taking into account Q3 performance, we now expect Group rental revenue growth for the full year to be at the low end of our 11 – 13% range and full year results broadly in line with expectations.
Our end markets in North America remain robust with healthy demand, supported in the US by the increasing number of mega projects and recent legislative acts. We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the opportunities arising from these market conditions and ongoing structural changes. Looking to 2024/25, our initial plan for gross capital expenditure is $3.0 – 3.3bn (2023/24: c. $4.2bn), of which US rental capital expenditure is $2.0 – 2.3bn (2023/24: c. $3.1bn). This, in conjunction with scope for increased absorption of this year’s investment in rental fleet, is expected to drive mid to high single digit US rental revenue growth with significant free cash flow generation.
We look forward to launching our next strategic growth plan, Sunbelt 4.0, during our capital markets event in late April, which will detail our runway for further success. The Board looks to the future with confidence.”
Brendan Horgan and Michael Pratt will hold a conference call for equity analysts to discuss the results and outlook at 10am on Tuesday, 5 March 2024. The call will be webcast live via the Company’s website at www.ashtead-group.com and a replay will be available via the website shortly after the call concludes. A copy of this announcement and the slide presentation used for the call are available for download on the Company’s website. The usual conference call for bondholders will begin at 3pm (10am EST).
Analysts and bondholders have already been invited to participate in the analyst and bondholder calls but any eligible person not having received details should contact the Company’s PR advisers, H/Advisors Maitland (Audrey Da Costa) at +44 (0)20 7379 5151.
