Ashtead Share Discussion Threads

[essentialinvestor] 22/11/2023 13:34

CRH update and outlook yesterday pretty exceptional.

[disc0dave46] 22/11/2023 13:34

Should help their UK business.Business taxationA tax break allowing companies to reduce their tax by up to 25p for every ?1 they spend on plant and machinery has been made permanent. The move, which had been due to come to an end in April 2026, will cost ?10 billion a year. It has been billed by the chancellor as the biggest tax cut for businesses in modern British history.

[disc0dave46] 22/11/2023 13:08

Their (SDY) interest rate on debt is 5.2% (Sonia) plus 1.9% margin.AHT's weighted average interest is 5% and they reduced BB by 82% in Q1.Please change the record, it's boring and adds nothing IMO. If you don't like what they do, clearly you don't, sell up and invest elsewhere.

[fenners66] 22/11/2023 12:31

And ... ( you will not like the reference m but) they spent a load of cash buying back their own shares....
who would have thought they would be blaming higher interest costs after that ?

[disc0dave46] 22/11/2023 10:36

Thanks perfido Looks like Speedy have cited numerous reasons for their profit warning (although they don't say how much they've lowered expectations by): higher interest on debt, higher corp tax, higher wages, also noted that their fuel sales took a hit due to wholesale prices. That said their comment about H2 weighting was interesting.Interesting also that KGF (B&Q - JV with SDY) have issued Q3 update this morning and lowered their profit forecast for the year by 5%. Which is about the amount of share price decline today (so far) for both companies.

[perfido] 22/11/2023 08:28

Speedy Hire shares dropped, down by around 8%, as it said its results are likely to hit the lower end of expectations in another sign of weakness in the construction sector.

The firm -- which has a partnership with Kingfisher’s TradePoint unit within B&Q -- said it has seen demand soften as their construction industry customers deal with higher interest rates and inflationary pressures. (….Bloomberg)

… Speedy Hire first half results RNS today is worth a look IMHO
.
.

[disc0dave46] 21/11/2023 15:58

Good day Mr b
Would expect URI have been impacted also by reduced abnormal weather, they don’t report until late Jan so they could be issuing a profit warning prior to that? - guess US companies are under similar regs as UK in terms of notifying the market.
According to Wikipedia they do serve the TV and film industry but don’t how much.

The market always seems to sell off prior to Mr P saying anything….guess because he’s never dovish and always says too much! lol

[bracke] 21/11/2023 12:16

Good day disc0

One would think that reduced abnormal weather events would also impact URI but apparently not given their close yesterday at -1.91%. As for TV and film operations I know not.

The market knows best......maybe.


FOMC Minutes to-day. I get the impression the US Market is poised to take off which I doubt is what the FED want. So maybe 'wet blanket' minutes?

[disc0dave46] 21/11/2023 11:29

Just re-read (again!) their Q1 and they did flag issues for their TV and film operations due to the strikes, but zero mention of any impact due to reduced abnormal weather events - believe peak hurricane season is Sept so possibly Q1 reporting wouldn't pick that up. I've always thought that such events were a bonus to earnings rather than actually factored in to their forecasts, so has this changed under Horgan?.

[disc0dave46] 20/11/2023 19:13

Hi EIDoubt it will get to there again, that was just immediate panic selling IMO.Analysis / Opinion from H&L is that the fall was overdone and they remain positive. They mentioned that adjusted pbt was forecast to be $2.5bn (prior to today's revised guidance downgrade) but now how much lower?. Over the years this has provided very decent returns to holders, myself included, but the reasons given today make me question how Horgan is managing their own forecasts - will URI cite the same issues prior to their finals in January?, their Q3 last month doesn't seem to suggest they will.

[bracke] 20/11/2023 18:57

AHT close -10.49%

URI as I type -1.74%

[essentialinvestor] 20/11/2023 18:27

Today's low under £44.40, might be worth a look IF it gets back there?.

[disc0dave46] 20/11/2023 18:16

Yes you were filtered up until today, because bored of your constant moaning about BB and debt year after year but still holding....and not much has changed! :)That said I will agree about what you posted, (62297), I too did some calcs early doors and sold half (was hoping for US bounce to sell the rest but didn't happen).Looking back EBITDA growth to Rev growth has varied over the last 5 years but generally is on a par with income growth. So would assume worst case a +11% growth in EBITDA is forecast for the year (as per Rev growth). That gives circa $4941m, deducting the additional costs for I & D ($522m) and taking the last two years adj pbt to EBITDA margin of 50% (5 year average is about 47% but skewed due to Covid), that's an adj pbt of $2210m down c3% to last year. With fx that's about 305p eps, they stated the BB this FY will be $500m which could enhance their eps by 1.5% (to c 310p) but Capex is also up this FY so guess it depends on their adjustments to get to the pbt / eps.From Stocko I note the forecast eps growth for this FY is now -9%, whereby I think they've used the pbt growth ratio is 3 times less than the EBITDA growth from todays H1 forecasts (thus -3% EBITDA = -9% pbt) which isn't the case on an annualised basis. Taking the worst case though and the non adjusted Investors Chronicle forecast less 9% is an eps of 398 cents (315p at todays fx) which isn't too far from my quick calcs - so basically looks like not much growth in earnings, if any at all - recommend fenners you DYOR as I'm no good at maths!.

[fenners66] 20/11/2023 13:41

Director's remuneration was already getting some pushback as it included $3.8m or 350% bonus...
only 32.5% of that award was vesting for target performance ? whatever that line means

But I'm guessing the rewards and bonuses will just keep coming even if the results don't keep improving ....

[fenners66] 20/11/2023 13:35

Just looking back at 2023 accounts I had not noticed this in previous accounts - don't know if it was already there

"A change in control of the Company (defined, inter alia, as a
person or a group of persons acting in concert gaining control of
more than 30% of the Company’s voting rights) leads to an
immediate event of default under the Company’s asset-based
senior lending facility. In such circumstances, the agent for the
lending group may, and if so directed by more than 50% of the
lenders shall, declare the amounts outstanding under the facility
immediately due and payable."

That's $4.6 bn redeemable at 101%

Essentially building in a poison pill for any future bid defence.
No I didn't expect anyone to be bidding for AHT - but it looks like the BOD have decided to make sure...

[fenners66] 20/11/2023 13:21

I just played around with some numbers to see what they are telling us for the full year 2024


It depends very much on how much the EBITDA % changes with the increase in revenue.

In my calculations if the EBITDA % remains the same then given

Depreciation cost moving from $1772m to $2120m
and Interest from $366m to $540m

The result is going to be very similar to last year !

That is on an EBITDA 11% ahead with the higher turnover.

Bear in mind that the interest cost over the last 2 years will have gone from $233m to $540m
whilst they have been spending cash on buying shares instead of reducing potential debt (and interest).

So what does that mean for the shares ?
Ignore the earning stagnation and concentrate on higher EPS ?

Or examine the actual profitability of the company , remove the growth multiple and trash the share price ?

Look at what has happened so far today !

[fenners66] 20/11/2023 13:07

EssentialInvestor : So if you're not a BOD or II just shut up and buy sell or hold - ?


I guess if one is not an MP then there is no point in getting political or complaining or protesting after all everyone gets their say when they vote.

Essentially if anyone disagrees with anything they either have the power to change it or just shut up ?

Pretty defeatist especially on a forum which exists for people to add their point of view about company results and prospects.

Strangely enough for advfn - its ON topic as well.

[fenners66] 20/11/2023 13:03

disc0dave45 - you will likely not be reading me agreeing with you about not expecting AHT to blame the weather ,
since you probably still have me on filter - because I do not swoon over share buybacks.

But you are right. What is the point of endlessly trotting out adjusted EBITDA adjusted this that and the other if the adjusted figures STILL include exceptional weather events !

I have "banged on" about adjusted earnings in the past as they like to take costs out and call them exceptional - eg
the finance renewal costs even though they know they are repeatable - but leaving in hurricane events and blaming them for not happening ? Crass.

[sevenccc] 20/11/2023 12:36

Interesting comparison in the growth in sales for United Rentals v AHT. Their last trading update in October says sales up 21%. AHT only guiding 11-13%. Why?

The weather/disaster recovery issues are presumably similar opportunities for both as they have such broad and similar cover. Or are AHT more skewed to this type of activity? The Film and TV area is more specialised but even there Facilities by ADF has recovered strongly already in the UK.

The comments on BB policy absolutely right but the policy is in vogue with the power brokers. Had watched the share price moving up nicely and was considering a sale and reallocation to small/mid cap as don't expect this share to move particularly quickly if markets have a dramatic move up. Let's see how recovery goes now! It's still a sound business and should surely benefit in the medium term from the inappropriately named Inflation Reduction Act.

[bracke] 20/11/2023 12:19

Nasty, very nasty!

But looking on the bright side that is a very large gap to fill at 5244 and AHT does like to fill its gaps.

It will be interesting to see where URI opens later to-day.

I make no apologies for posting a chart but those of a sensitive nature may prefer not to view it.

AHT DAILY

[essentialinvestor] 20/11/2023 11:39

Re buybacks (in UKX constituents) - unless you are a member of the BOD or a large institutional Investor, any view on buy backs makes no difference. The only power available to you as a PI is whether to buy, hold or sell a particular stock.

[disc0dave46] 20/11/2023 09:23

Didn't expect that the weather would ever be included as a reason for a PW for AHT.

[fenners66] 20/11/2023 09:04

Will the brainwashed ever listen?
Buybacks do nothing to improve the profitability of the company
and when push comes to shove that's what matters not a construct EPS metric.
The wrecked share price this morning tells it starkly

[trt] 20/11/2023 08:59

Cut in dividend too no doubt.

[trt] 20/11/2023 08:34

Could see £40 at this rate