Ashtead Share Discussion Threads

[fenners66] 16/6/2020 12:26

1 trillion over how long?

assuming say 5 years

$200bn /year

7% plant hire = $14bn

AHT 10% share

$1.4bn a year

or spread over X years....

[fenners66] 16/6/2020 11:07

Good and bad

"Receivable days at 30 April 2020 were 49 days (2019: 51 days). The bad debt charge for the last twelve months ended 30 April 2020 as a percentage of total turnover was 1.2% (2019: 0.6%)"

[fenners66] 16/6/2020 10:53

Just looking at the financing cost note and taking out the IFRS impact
it seems financing cost has risen by £42.3m which is would have been 8.8p a share if share capital had not been bought back

Meanwhile increased EPS for the capital reduction accounts for 7.9p a share

That is this years interest cost vs this years shares reduction.

Its not as simple as that as we cannot factor in the (would be) lower interest rate and not factored tax on interest cost.

However I would say that anyone arguing that buybacks demonstrate a clear increase in EPS is wrong.

They are always predicated on all things being equal and that is never the case.

[bracke] 16/6/2020 10:47

A 'chunky' spike up followed by a gradual decline as profit is taken. Will it be supported at 2600 for a launch back up or is it to be a drop back to fill the gap at 2417. Volume does not suggest a breakaway.

Mr Powell speaks to-day.

[discodave4] 16/6/2020 10:44

Ps meant to say, I imagine most of today's rise is down to the Tango man and his vote catching infra spend promises!.

[discodave4] 16/6/2020 10:36

Seem better than I thought in terms of underlying earnings anyway (I thought c 163p not the 175p).So current price is a PE of 15.Still don't know why they are hanging onto A Plant / Sunbelt UK.Fenners - agree completely about the dividend.

[fenners66] 16/6/2020 10:35

Exceptional Items !

As I asked at the time - how much were "this year's" exceptional items for refinancing going to cost

The irony of calling something that happens as a matter of course with every loan they ever negotiate....

Answer-

The costs associated with the redemption of the $500m 5.625% senior notes in November 2019 have been classified as exceptional items. The write-off of deferred financing costs consists of the unamortised balance of the costs relating to the notes. In addition, an early redemption fee of GBP11m ($15m) was paid to redeem the notes prior to their scheduled maturity. The call period interest represents the interest charge on the $500m notes for the period from the issue of the new $1.2bn notes to the date the $500m notes were redeemed. Of these items, total cash costs were GBP12m.

£12m - that is 2.5p a share and would represent a dividend increase of 6%

When I discussed the cost of the extra debt this highlights one of the not so obvious elements

More debt =
1, volume related interest
2, higher interest rate applied
3, greater need to keep re-financing along with associate early settlement fees.

[fenners66] 16/6/2020 10:19

"In terms of the income statement impact, the application of IFRS 16 resulted in a decrease in other operating expenses and an increase in depreciation and interest expense compared to IAS 17"

I have not read through IFRS16 - but am getting the idea that it - is taking a view that leasing assets was always a way of taking the financing for assets off balance sheet.
Charging a lease payment directly to operating expenses even when it was known that the cost of financing that asset was built into the lease - IFRS is trying to reflect what was always going on.

I guess if you lease say a new £30k vehicle and ask how much a month its going to cost - one element of that cost is the interest on borrowings by the lessor.

The effect above suggests to me that there is less expense charged to EBITDA - therefore the fake metric of our profits for the year were X ( provided we conveniently ignore A, B and C) is even more fake now.

And Directors bonuses based upon EBITDA will be even more lucrative.

Whilst I understand perhaps splitting out the interest element from the lease operating cost - not really sure about the idea of adding in assets and lease liabilities to the balance sheet.

[fenners66] 16/6/2020 10:02

"with an additional $2,147m of suppressed availability - substantially above the $460m level at which the Group's entire debt package is covenant free. "

Whilst I get the idea that there should be headroom - everyone likes to have a pre-arranged overdraft just in case, does this cost a fortune in fees for something that is (hopefully) never going to be used ?

[fenners66] 16/6/2020 09:54

This is supposed to be good.....

"we accessed an additional $500m of liquidity through the Group's senior secured credit facility, increasing the facility size to $4.6bn for the next twelve months. "


Not necessary if they had not burned a £bn + on buying shares back.

The debt and share buyback are inextricably linked - espousing that they had looked to protecting the business by securing MORE debt is not responsible.

If the results had instead said that they had paid off over £1bn in debt in the last 2 years, had increased the dividend and saw no need to increase borrowings whilst looking forward to having the highest ever cash generation as investment is scaled back this year how would they have been received.

Furthermore a clear strategy is to consolidate the US fragmented plant hire market.
What better time to snap up bargains then when plant hire business falls 15% and small competitors may be short of cash ?

[fenners66] 16/6/2020 09:40

"maintain its progressive dividend policy and to recommend a final dividend of 33.5p"

Final dividend UNCHANGED how can that be progressive ?

[fenners66] 16/6/2020 09:36

Instead of giving a shareholder every reason to hold on to the shares - that would reduce supply and arguably increase the share price as well.

[fenners66] 16/6/2020 09:34

At First glance - seriously disappointed at final dividend.

Essentially shareholders only being rewarded today - if they are selling their shares!

[riley109] 16/6/2020 09:27

Stunned into silence.

[mac15] 16/6/2020 08:08

Looking good!

[amaretto1] 16/6/2020 07:44

Good results

[bracke] 15/6/2020 13:26

Good day Disco

A drop to fill the gap was not unexpected but there is an obvious desire to keep the share price above 2400. We await tomorrow for likely direction.

[discodave4] 15/6/2020 12:00

Morning bracke, it's looking lively.Good luck all holders tomorrow.

[bracke] 15/6/2020 11:27

2315 gap filled and support at 2300. A fast rise to 2400. Tomorrow should decide whether it's back into the range or not.

[discodave4] 13/6/2020 12:53

Https://www.cmcmarkets.com/en-gb/news-and-analysis/the-week-ahead-uk-unemployment-retail-sales-ashtead-boohoo-carnival-resultsTuesday: Ashtead's share price has seen an almost V-shaped rebound this year. After falling sharply from record highs in February, the share price collapsed in March, falling over 60%, before rebounding to recover all of its losses and trading back close to breakeven for the year. As a barometer of economic activity, this leasing and equipment rental company has a presence in both US and UK markets, and in March reported a pre-tax profit for Q3 of £225m, which is slightly down from the year before, though revenues were higher. At the end of April, the company issued a profit warning, with its US market expected to see a 15% decline in revenue as a result of the US shutdown. Profit is expected to come in lower at £1.05bn, while the company said it would be cutting capital expenditure from £1.2bn to £500m.

[thompsonnic] 12/6/2020 23:31

Bracke, Thank you for your reply. Hopefully it will open low on Monday morning as it does not seem to have to fall too much to fill the gap at 2315 (around 46 points). There seems to be a similar occurrence on the 3 month candle chart around mid May when it finished at 2200 and the next day fell to around 2100 before ending at 2150 and then rising up the next few days. Maybe that pattern could happen again, although hopefully not that low.
Once again Thanks for your reply.

[bracke] 12/6/2020 18:38

Good day Thompsonnic

You will notice that the share price opened low and closed low. The upper wick is relatively long indicating an attempt to take it higher but to no avail. You will also notice that the trend over the last five trading days has been down and that each close has been lower than the previous close.

Based on the above I expect the gap to fill on Monday or Tuesday. If the results on Tuesday are good and the outlook not too negative it may move back into the 2400 - 2500 range. It will require something special to take it above 2600 and keep it there.

[thompsonnic] 12/6/2020 17:31

Bracke with regard to AHT dropping this morning to try and fill the gap at 2315 and failing, it appeared to also drop again this afternoon to do the same thing before rising at the end of business. Will this be the trend at the moment until it finally fills the gap at 2315 before rising to its higher levels. Hope that you don't mind me asking.

[bracke] 12/6/2020 16:09

Good day Diso

It's difficult to understand what 'normal' is these days. Even before 'the virus' the markets were in another dimension courtesy of The FED and Mr Trump. British High Streets were thinning out and the virus has accelerated that trend.

Then we have 'the virus'. I presume it is here to stay ie. we will not be able to eliminate it. We will require a vaccine to protect us from it in the same manner as measles, mumps, etc. Plus those who have been infected by it and recovered will likely have gained at least partially immunity from it Eventually the markets will ignore it.

Economies. The prospects do not appear good.