Ashtead Share Discussion Threads

[bracke] 20/6/2020 14:05

The share price held above 2700 at the close with above average volume. Following the close US Indices fell following FED Officials concerns and virus concerns.

Unless the US Indices Futures pull back up I would expect the share price to test 2700.

[riley109] 20/6/2020 09:07

That's cleared it up then!

[dcarn] 20/6/2020 00:18

British Standard. The rules of the game.

[mach100] 19/6/2020 22:01

Riley post 58127 when not uttered by politicians BS means British Standards.

[riley109] 19/6/2020 21:21

According to BS 6465-1 every construction site should have one toilet per seven people over a 40 hour working week.I'm not sure what BS stands for.

[fenners66] 19/6/2020 18:18

Nearest car park Covid testing centre, has a mass of "A-plant " on hire. portable offices , toilets , barriers , signs etc.
I reckon it could cost about £10k a week in hire costs.
If that set up is repeated all around the country......

On second thoughts its coming out of NHS budgets with an NHS procurement team.....
..... make that £100k a week.

[jimohno] 19/6/2020 17:34

With Mr Drabble taking over as Chairman at DS Smith from September, are they now worth serious consideration for investment?
Or am I putting too much importance on a Chairman?

www.sharesmagazine.co.uk/news/market/6965487/DS-Smith-appoints-former-Ashtead-CEO-Geoff-Drabble-as-chairman

[bracke] 19/6/2020 14:37

A good move up to-day so far. It's been trying to close above 2700 since the gap up from 2400. The volume will be interesting.

[discodave4] 17/6/2020 12:18

Thanks bracke, no doubt I will regret my decision here but to be honest this was my largest holding and the last 3 months or so have not been easy!......some of my AIM stocks have been less volatile lol.All the best.

[bracke] 17/6/2020 12:08

Good day Disco

Good luck with the rebalancing and trimming.

As for the "chuffing gaps" that's a chunky one down to 2400 but it doesn't appear ready to be filled just yet.

Strong volume yesterday and the bulls have held the share price above 2600 which I suspect they will aim to be the new support level.

[discodave4] 17/6/2020 11:24

No problem.Must confess I sold some of my holding here in March (panicked a bit) and the rest this morning. Thought I'd hedge by putting a small short on leading up to results but should have known better with AHT!.First bought at £3.90 and kept averaging up to £11 so more than happy (this was my first multibag). This is an excellent business and I've only sold because I'm trying to rebalance my portfolio and trim cyclicals. I may buy again at some point.Just wanted to say thanks for all the regular posters on here, it's an amazing thread compared to the majority on this site, whether long, short or no position everyone is treated fairly and with respect. Hopefully you won't mind me popping in every now and again as AHT and learning from you guys has been a wonderful experience.Mind those chuffing gaps!.

[fenners66] 16/6/2020 22:10

Cheers Dave

[discodave4] 16/6/2020 18:55

fennersYour post about eps / buyback, point well made, thanks.

[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 ?