Ashtead Group (LON:AHT) has announced its unaudited results for the half-year and second quarter ended 31 October 2019.
Half-year highlights
· Revenue up 14%2; rental revenue up 13%2
· Operating profit of £771m (2018: £679m)
· Pre-tax profit3 of £690m (2018: £633m); £705m excluding the impact of IFRS 16
· Earnings per share3 up 11%2 to 111.8p (2018: 98.8p)
· £1,010m of capital invested in the business (2018: £1,063m)
· £231m spent on bolt-on acquisitions (2018: £362m)
· Net debt to EBITDA leverage2 of 1.9 times (2018: 1.8 times)
· Interim dividend increased by 10% to 7.15p per share (2018: 6.5p per share)
1 The results for the first half and Q2 2019 are not comparable directly to the prior year due to the adoption of IFRS 16, Leases. Further details are provided in note 2 to the interim financial statements where we set out the impact of IFRS 16 on the results and present the income statement on a comparable basis to the prior year.
2 Calculated at constant exchange rates applying current period exchange rates and excluding the impact of IFRS 16.
3 Underlying results are stated before intangible amortisation.
4 Throughout this announcement we refer to a number of alternative performance measures which are defined in the Glossary on page 39.
Ashtead Group’s chief executive, Brendan Horgan, commented:
“The Group continues to trade well with strong rental revenue growth. Rental revenue increased 13% in the half year and underlying earnings per share increased 11%, excluding the impact of IFRS 16, both at constant exchange rates.
Our North American end markets remain strong and we continue to execute well on our strategy of organic growth supplemented by targeted bolt-on acquisitions. In contrast, the UK market remains challenging and we are therefore refocusing A-Plant on leveraging its platform to deliver long-term sustainable results, while generating strong cash flow.
We invested £1bn in capital and a further £231m on bolt-on acquisitions in the period, which added 50 locations across the Group. This investment reflects the structural growth opportunity that we continue to see in the business as we broaden our product offering, geographic reach and end markets, thus increasing market share and diversifying our business.
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 excluding IFRS 16. We spent £250m under our share buyback programme in the period, in line with our expectation to spend a minimum of £500m on share buybacks in 2019/20.
Our business continues to perform well in supportive North American end markets, while we have taken decisive strategic action to refocus our UK business in the challenging market conditions. Thus, except for the UK and a currency headwind, we expect results to be in line with our expectations and the Board continues to look to the medium term with confidence.”
