Ashtead Share Discussion Threads

[discodave4] 19/6/2018 16:23

Fairly balanced view from H&L:hTTp://www.hl.co.uk/shares/share-research/201806/ashtead-solid-growth-as-us-construction-boomsDD

[ianwwwhite] 19/6/2018 14:21

Good post, thanks grupo

[grupo] 19/6/2018 13:48

How a little known UK company has cleaned up in America

FTSE 100-company Ashtead plans to invest up to £1.3bn this year on growth after posting a near £1bn profit.

13:17, UK, Tuesday 19 June 2018
The devastation caused by Hurricane Harvey in Houston, Texas
Image: The devastation caused by Hurricane Harvey in Houston, Texas

By Ian King, Sky News Business Presenter

It is an ill wind that blows nobody any good - as the equipment rental company Ashtead has shown today with its results.

Ashtead, which this December will celebrate the fifth anniversary of its admission to the FTSE-100, reported a 13% rise in full-year pre-tax profits to £862.1m.

That was due in part to some extra $100m worth of sales arising from clean-ups in the wake of hurricanes Harvey, Irma and Maria.

Yet the benefits of that unexpected uplift should not be exaggerated when total sales during the year rose by 20% to £3.7bn.

Of greater benefit during the year was President Trump's tax cuts, which generated a one-off tax credit worth £106.7m to the company, meaning that profits after tax surged by 93% to £968.8m.

The size of that tax credit serves to highlight that, despite having a British chief executive, being listed on the London Stock Exchange and taking its name from the Surrey village in which it was founded 72 years ago, Ashtead these days is largely an American company.

Its Sunbelt business is the second largest equipment rental firm in North America, with 712 stores in 46 US states and in Canada.

It accounted for 88% of group sales in the most recent financial year and 93% of group operating profits.

And the US is trading strongly, not just in the traditional construction markets Sunbelt serves, but also in newer non-construction sectors and in new product lines such as power equipment.

Chief executive, Geoff Drabble, highlighted America's low unemployment rate, the pick-up in consumer spending and recent evidence that housebuilding is picking up as significant factors.

But he insisted this was not the only reason why he was confident of further growth: "To me, the most important factor driving our growth expectations are the continued structural changes in our market. The big are just going to get bigger."

Pointing out that Sunbelt's share of the US market had doubled since 2010, he predicted further consolidation in the market felt "inevitable", which he said was why Ashtead had recently been investing in its central operations. He said this was to support a larger company in coming years.

Mr Drabble, who has been chief executive since January 2007 is now the Footsie's sixth-longest serving boss, added: "What really excites me is that we have still only got 8% market share. There's tons to go at. We see significant growth ahead."

In the UK, where the company's A-Plant arm is the market leader, he said the market was tougher, reflecting an over-supply of equipment, but added he could see the market "turning the corner".

Gateshead-born Mr Drabble added: "We seem to be in a bit of a hiatus, as we wait for some significant infrastructure projects to kick in, while other projects seem to have scaled back a bit. So there is this almost waiting for the next wave of construction."


He said there were signs the market was starting to correct itself and insisted he still saw the UK as an important market.

All of this growth potential means the company will invest between £1.1-£1.3bn this year, roughly in line with the last few years, with organic growth the priority rather than buying out rivals.

[ianwwwhite] 19/6/2018 12:04

Bracke

Lol!

[bracke] 19/6/2018 11:53

You imagine incorrectly as far as this shorter is concerned.

One only has to look at the chart to see that they have done an excellent job, credit where credit is due. (Please Mr AHT can I have some free shares too).

[ianwwwhite] 19/6/2018 11:36

Good day bracke

Re post 55380, praise where praise is due, although I can imagine my sentiments may not necessarily be shared by the 'shorters' on the board :-)

[bracke] 19/6/2018 11:21

Goo day ian

Ref Post 55380

You hoping to receive a few free shares?

[2flatpack] 19/6/2018 11:20

May be worth having a punt on URI, they always seem to do better on AHT's results .
Cheers

[ianwwwhite] 19/6/2018 11:05

(duplicated post removed)

[ianwwwhite] 19/6/2018 11:03

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
To Geoff and the rest of the 'Ashtead Team'
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Congratulations on another great set of results!

Well done and thank you!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[ianwwwhite] 19/6/2018 10:57

Hi kilgallp,

I can but agree, and last year as bracke pointed out it took until July for the share price to recover.

However, if our investment horizon is measured in years rather than days, then the fact that the share price subsequently rose by roughly 50% in the following twelve months provides a measure of comfort, although I wouldn't bet on it happening again quite so spectacularly!

Nevertheless, the fundamentals look good to me, so I am content to hold for the long term, until the story changes..

[fredfishcake] 19/6/2018 10:43

In fairness, everything's down today - our chum Trump being the responsible party.

[kilgallp] 19/6/2018 10:29

Ianw, you wrote, 'Unbelievable!! Hopefully this time it will be different...'. If only! Once again, it seems to me to be a great set of figures, great dividend announcement and we're down 136p as I type.

I'm tempted to add a few, but....

[bracke] 19/6/2018 10:22

From Post 55214

"My thought is........how big will the retrace be when it occurs. As a minimum I would expect it to drop back to test the previous high at 2185 but that is just the thought of sell, grabit and run merchant rather than a buy and hold investor."
=================================================================================

That's exactly what it has done and what a time to do it. Good results and down it goes. In a previous post I gave three possibilities for price action, I should have given a fourth, wait for good results then take it down so it can then be bought more cheaply. 2300 is likely to give resistance.

It will be interesting to see how long it takes the share price to return to 2400, assuming it does.

In the meantime this '!*!&$£!' share has once again had another laugh on me.

One day, one day!!

AHT DAILY

[ianwwwhite] 19/6/2018 10:20

Hi 2flatpack,

Thanks, and for sharing your 'shorting' experience too, a glimpse into another world for me! Good luck with your purchase!
.

[ianwwwhite] 19/6/2018 10:12

Hi bracke

Sorry that your shorts did not deliver as we had hoped this time, but thanks for sharing the experience with us, most enlightening for us more staid investors, and at 50p a point, at least you have contained the loss! :-)

[2flatpack] 19/6/2018 10:10

Good trading Ian.
|I have re bought my shares back for 50p more than I sold and happy to be back in ,even with Trump.
Cheers

[ianwwwhite] 19/6/2018 10:09

Thanks DD,

I think we may see some short term gyrations, as some of the more transitory holders are shaken out, but having watched the webcast, it seems like long term AHT prospects are still good. (imho)

[discodave4] 19/6/2018 09:09

Agree Ian.Crazy overreaction as usual.Pee Hunt increases target price to £25 and retains buy rating.DD

[ianwwwhite] 19/6/2018 08:21

Results look excellent - I think 4th quarter is generally a bit weaker so no worries there.

I have bought back the small number of shares I sold at 2368p on the 22nd May at 2222p this morning for a modest gain (i.e. reduction in cost of holding), and long term hold.
.

[fenners66] 19/6/2018 08:06

Bracke - closed the shorts a few days early?
I was worried that expectations were too high and share price had run ahead...

[fenners66] 19/6/2018 08:05

nice to see a decent rise in the dividend though

[fenners66] 19/6/2018 08:00

Missed my 129.5 earnings then
And markets forecast down as well

[discodave4] 19/6/2018 08:00

Excellent numbers, annual growth rate increasing, although on a PE of 18, PEG is only 0.69.Free cash flow £386m! and £200m on share buyback.Capex to remain at £1.2bn which is very positive IMO.DD