Ashtead Share Discussion Threads

[riley109] 10/9/2020 17:11

This from 2007 SHARES in Speedy Hire, the north west tool and equipment hire giant have continued to rise after this week's bullish trading statement.

News that trading in the first 11 months of the year has been strong with reveues up 34 per cent prompted investment bank UBS to raise it share price expectation from 1200p to 1300p. The stock has risen nearly four per cent this week to 1224p.

The company said its equipment division - boosted by acquisitions - had seen its revenue shoot up by 58 per cent.

Depots

Newton Le Willows-based Speedy Hire is the UK's largest tool rental company with more than 350 depots in the UK and Ireland.

As well as small tools, the company rents out portable accommodation units, pumps, material handing gear, survey and measurement instruments and electric generators.

Finance director Neil O'Brien said the strength of the construction market was under-pinning Speedy's growth: "When our major clients are busy, we will be busy." This from 2007.That's what stopping in the uk has done plus going East instead of West [onward and upward].I think they also had relatively few shares in issue at the time.I won't be buying any.

[bracke] 10/9/2020 10:43

A drop back this morning to have another test of 2800 and then back up.


"Now if it settles back to rising a penny a day for a few years I'll be content for a while...."
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Wishful thinking fenners. We aren't in that type of market. It seems to be all or nothing. Maybe the markets will settle after the US Election.....maybe.

[fenners66] 10/9/2020 07:14

Speedy Hire update

"We have permanently closed 13 depots in the UK and further depots will be consolidated into larger operating locations. "

With their hire revenue now running at -8% that is not a good sign for the industry - but the closure of 13 depots will one assumes work well for AHT

[fenners66] 09/9/2020 18:09

4 days of just about rising volume then.
A huge rise.

Now if it settles back to rising a penny a day for a few years I'll be content for a while....

[bracke] 09/9/2020 13:34

A large move up over the past four days, particularly to-day. It will be interesting to see the volume at the end of the day.

Not quite an all time high which is 2879 but not far off at 2843 so far.

Following to-day's high it retraced to test 2800 which held and is now in the process of moving back up. The next move will be interesting. A break out and hold above 2879 or failure to do so and another test of 2800.

[netcurtains] 08/9/2020 11:37

I sold took profit. Thanks. Its near pre-covid highs and I felt that was fair value for me.
Thanks for all the information.

[fenners66] 08/9/2020 10:49

From the cash flow

Financing costs paid (net) 2020 (47.5) 2019 (30.1)

So increase of £17.4m

With £1bn less debt that should have been a decrease not increase.

[fenners66] 08/9/2020 10:35

" Net defined benefit pension plan liability 12.2 1.0"

This yr vs last yr up 1200% why ?

Who increases defined pensions in 2020 ?

[fenners66] 08/9/2020 10:12

" net debt reduced in the quarter by GBP541m

Net debt at 31 July 2020 was GBP4,822m (2019: GBP5,161m), resulting in a net debt to EBITDA ratio of 2.2 times (2019: 2.2 times) on a constant currency basis. The Group's target range for net debt to EBITDA is 1.9 to 2.4 times following the adoption of IFRS 16. Excluding the effect of IFRS 16, net debt at 31 July 2020 was GBP3,726m, while the ratio of net debt to EBITDA was 1.8 times (2019: 1.8 times) on a constant currency basis. The Group's borrowing facilities are committed for an average of six years at a weighted average cost of 4%. "


So without the free cash flow the ratio would have increased from 2.2x

Weighted average cost at 4% so there is the argument that the worst part of this is in excess of 4%.

I believe £1bn has been spent on buybacks - ostensibly this increases EPS

However I said ALL along this only increases EPS where all other things remain equal and all other things never remain equal !

So instead of increases in EPS we have falls.

ok so 1 quarters worth of interest on reduced debt - would be only £10m+ but what is the highest rate that would be removed?
What would the overall average rate have been reduced to if there was £1bn less borrowing?
Lower borrowing ratio of debt to EBITDA means a lower rate across the board.
Lower borrowing means - lower borrowing going forward as less interest compounds.

Less renegotiating fees which are a feature of the debt - regardless of whether they want to call them exceptionals or not.

Even £10m less tax at 25% would be an Increase in EPS of 4.8% on this quarter's earnings.

They remarked on lessons learned "in the last recession"....

Yes and they were companies with low debt come out much stronger.

Operate with low debt , when recession comes pick off some competitors on the cheap !

[amaretto1] 08/9/2020 07:30

The world was basically shut for 3 months ....So I'd say better than expected imo.Like fenners says ....Pay down debt !

[lasata] 08/9/2020 07:26

Better than expected?

[lasata] 08/9/2020 07:17

Are these decent results?

[fenners66] 08/9/2020 07:11

Profit down far more than revenue.

Says rental rates have fallen.

OK so generating record cash - SO now pay off debt , not buying own shares!

Get the debt down, reduce funding costs.

IF Enterprise value remains the same then QED share price rises anyway.

EPS -33% but more than capable of an Increased dividend.

[netcurtains] 07/9/2020 11:46

Word is USA buying up the worlds supply of timber (I guess to do a lot of storm repairs)....
Perhaps this will help Ashtead if they are involved in the repairs.

Lumber shortage:
"Lumber producers didn't anticipate the resurgence of the housing sector being as strong
as it has been, and the massive increase in this do-it-yourself demand, Logan said."

[fenners66] 07/9/2020 11:36

£ falling vs $ seems to be helping

[fenners66] 06/9/2020 20:11

There might be some DIY going on in Louisiana...

Last I heard was speculation of $15bn insurable damage from the hurricane.
They say (I believe ) that 7% of construction is plant hire.

So $1.05bn

Sunbelt has a market share of what 7-9% ? Maybe more in the right areas ?
So possible $73-94m at stake ?

[bracke] 06/9/2020 13:23

net

I see your point....we await the results.

[netcurtains] 06/9/2020 12:32

The SUNBELT (USA subsidiary company) sounds very DIY (in weird USA way -
eg bigger scale then us):




Sunbelt Rentals is here to support all of your fall construction, landscape, and facility
projects. From mini excavators to stump grinders, we are your one-stop source to
quickly and easily provide the equipment, solutions, and services you need

[bracke] 06/9/2020 12:20

Good day net

My understanding is that 95% of AHT t/over comes from the US. As far as I am aware that business is not diy.

[netcurtains] 06/9/2020 10:45

thanks bracke - with less people going on holiday there definitely would have been a DIY
boom in July and August
(compared to any other year). Some of Ash's rentals are for the DIY market. So lets see.

[bracke] 06/9/2020 10:34

The Q1 results on Tuesday will be the first quarter fully covered by virus conditions.

In the meantime the share price continues to be supported at 2500

[bracke] 03/9/2020 12:05

net

Yes and AGM same day.

[netcurtains] 03/9/2020 11:28

Are Q1 results due on Tuesday?
Should be interesting reading

[bracke] 03/9/2020 10:17

Good day fenners

Viewing an AHT/URI comparison chart shows very similar rises and falls until the start of August. URI then started to pull away.

I strongly suspect that the weak $ is affecting AHT. URI is riding the wave of the Fed pumping money into the economy and buying assets. There is also the probability that they may buy shares. Plus low interest rates and bond yields pushing people into shares for better returns.

The US government are expected to apply more stimulus and a virus vaccine is probably not far away so things may become 'hotter' yet in the US.

Mr Trump will want the markets pushed as far as possible before 03 November.

Just a thought....if Mr Trump wins it will be his last term in office so no more re-election. That could be interesting!