Ashtead Share Discussion Threads

[disc0dave46] 22/11/2023 19:21

FennersIt took 4 or so posts of moaning before you actually posted up anything useful (that's a compliment by the way, and not for the first time!) - which I'd already done similar calcs hours earlier (despite you saying I'm thick some time ago) and I then sold half my holdings based on the numbers.I've already posted my concerns and in particular that it now looks like emergency weather events are factored into their forecasts, which I definitely don't like. Not much more to say tbh.All the best

[fenners66] 22/11/2023 17:31

disco - there are other things to discuss with AHT

E.g. my view on the numbers the other day.

I have also mentioned about exceptionals and as we said exceptionals that don't allow for exceptional weather events
in the adjusted figures !

However I find it far easier to pick holes in accounts and read between the lines and add details of what companies
are omitting from their reporting - after all a company should be the best propagandist for what they are doing well.

Until recently I did not have much of that ilk for AHT.

Dividend could be stronger but growing earnings and dividends for years was fine and the share price has reflected this for what seems decades now.

But the first dismaying operating thing that caught my eye was buying an operation in the Bahamas (or whichever holiday island it was).
Now I add to that a perceived lack of prudence compared to Drabble with the reporting weather gains - I am sure they were always reported as a bonus.
Then we have very large directors remuneration and bonuses.
Now we have what is received as a profit warning.

I am beginning to wander if there is a change of culture at the top. That worries me.
Did I read you sold half the other day ?
Absolutely don't want to say it , but that may well have been a smart move - I hope I am wrong.

[perfido] 22/11/2023 15:06

Berkshire Hathaway are still regularly doing buybacks which is at variance with post 62313

However perhaps the answer is for fenners to sell AHT and buy NYSE BRK.A shares, dd, I note that the share is currently priced at only 548,082.42 USD

:-)
.

[disc0dave46] 22/11/2023 14:43

"To me they could do a lot better without - but selling good companies to buy bad ones because of one area of difference is not an investment strategy."Didn't say sell and invest in a "bad company", just bored of you constantly focussing on just BB and debt. You have a lot more you could focus on and contribute that would no doubt benefit folks here but instead it's the same old same old.

[fenners66] 22/11/2023 14:28

disco - If you look at the market there are an awful lot of "good" companies buying their own shares over the last few years - its comes with the territory of being "successful" these days .

There are a load of reasons why they do it - we have been through it before - but the simple point is , if a company is doing everything else right ( not saying they are ) and doing BB - you don't throw the baby out with the bath water.

You might well say - then just shut up and accept it they do great with BB's

To me they could do a lot better without - but selling good companies to buy bad ones because of one area of difference is not an investment strategy.

I believe in the past you or someone else on here has touted Warren Buffets BB as an example of how it HAS to be good. I note that the smart Mr Buffet now has $157bn of cash on Berkshire's balance sheet....

Difference is he can differentiate when BB is good and when its good to hold onto cash...and the last thing he's going to do is use debt to do it. BH is now making getting on towards $8bn a year just from its deposits...

[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.