Ashtead Share Discussion Threads

[ianwwwhite] 11/9/2019 11:10

In the meantime, I bet Momma Bracke is wishing she had held on to her AHT shares, and benefited from Fridays dividend and the current rise?

[ianwwwhite] 11/9/2019 11:07

Bracke,

I thought that we all did, but statements like 'And after buyback the debt covenant test moves to 1.9 to 2.4 x EBITDA' are clearly wrong and shouldn't go unchallenged.

It doesn't mater whether we agree or not, the fact is there was an overwhelming majority of votes in favour of the buyback. Seems to me that is pretty final, but apparently not....

[bracke] 11/9/2019 10:56

A higher high this morning and a gap. Off to 2400 or will profit taking be too irresistible?

ian

Some weeks ago you posted that you would end posting about buy backs?

Each to their own. Those in favour and those opposed will not agree similar to Brexit.

[perfido] 11/9/2019 10:36

I have never held Debenhams shares, but I would guess the moral of your post is that companies should not be encouraged to pay dividends at a level which is not sustainable.

In this respect Ashteads policy of paying dividends at a level sustainable through the cycle would appear to be prudent.

Turning back to the buyback, fenners, to my knowledge you have been posting your buyback views here since at least 2008 on a regular basis, but nothing has changed.

Time to change the record?

[fenners66] 11/9/2019 10:05

And Debenhams shareholders voted by a substantial majority to pay unaffordable dividends for a few years.....did not make them or it, right , as history now shows.

[perfido] 11/9/2019 09:31

Nice to see AHT has set off at a gallop this morning, making another attempt on the '2300' resistance level and currently +66p at 2321p (9.39am)

It is also worth mention that the authority to make market purchases of shares under Sect 701 of the Companies Act was passed at the Ashtead AGM yesterday by a substantial margin:

Votes for: 329,045,548
% of votes for: 98.37%

Votes against: 5,449,717
% of votes against: 1.63%

It seems that the anti-buyback brigade are 'wasting their breath' here

[bracke] 10/9/2019 12:11

The share price has attempted to break and hold above 2300 on four occasions since July. If to-days results and the advantageous £/$ have been unable to bring success one has to ponder what will.

The chart suggests that the share price needs to be supported at 2220, failure to hold this level is likely to lead to a drop to next support at 2120.

[fenners66] 10/9/2019 11:25

Could be; but for those of us whom have been shareholders long enough we are well aware of times past when high debt levels led to smashed share prices.
Now share price trading at heady levels and debt increasing again - not a surprise that some holders don't like it.

I expect at least a 15% dividend increase on the back of better results and the diminished number of shares.


However the interest charge above for the higher debt level in the first qtr alone was :

£54m-31m-10m = £13m

We can therefore forecast at least 4x£13m for the year (and with increasing debt compared to the comparison as it has already been rising, and continued rises with buybacks, we can expect even higher).

So that is £52m

Ok you may argue there is a tax charge on that 25% so that would still leave a net £39m available for dividends _ and that is the last 12 months debt increase.


What would that do for dividends per share ?

39/477 = 8p/share
Which is an increase of 8/40 = 20% on current

Whereas the "buyback" has reduced the shares in issue by about (not looked this up) 23/500 = 4.6% !!

You know which I would rather have !!

[hatfullofsky] 10/9/2019 11:16

No hoping my side, just a different approach to cash management. I prefer paying down debt in an elevated valuation and buying back stock in a depressed / undervalued situation.

[bracke] 10/9/2019 11:05

A spike on the results but the opposite direction to that expected. I've had a search round various financial sites but unable to find a reason for the drop which is odd as they all report the results as good.

I presume it was simply profit taking. Perhaps people were holding for a spike up and were going to sell whatever the result.

[perfido] 10/9/2019 09:10

hatfull

If that's what you are pinning your hopes to, I fear that you will be disappointed. I would expect the buyback strategy to be influenced by free cash flow levels, currently good.

In the meantime the AHT webcast is currently in progress - worthwhile if you have the time.

(Edit 9.30am: webcast now ended, but recording still available through AHT Investor Relations website)

[hatfullofsky] 10/9/2019 09:04

Hard to reverse such a decision but simple enough not to repeat the programme once complete. Solid results though.

[perfido] 10/9/2019 08:30

fenners
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
And after buyback the debt covenant test moves to 1.9 to 2.4 x EBITDA ???
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Q1 Results - the facts:
'Our increasing scale and strong margins are delivering good earnings growth and significant free cash flow generation. This provides significant operational and financial flexibility, enabling us to invest in the long-term structural growth opportunity and enhance returns to shareholders, while maintaining leverage within our target range of 1.9 to 2.4 times net debt to EBITDA (1.5 to 2.0 times excluding IFRS 16). We spent £125m under our share buyback programme in the quarter, and expect to spend a minimum of £500m on share buybacks in 2019/20.'

It was the move to IFRS16 that impacted the leverage target range, and it looks like buybacks are here to stay :-)

[hatfullofsky] 10/9/2019 08:19

They need to stop the buyback programme.

[fenners66] 10/9/2019 07:26

"Net financing costs increased to GBP54m (2018: GBP31m) reflecting the impact of the adoption of IFRS 16 which resulted in an incremental interest charge of GBP10m in the quarter, and higher average debt levels."


And after buyback the debt covenant test moves to 1.9 to 2.4 x EBITDA

As we can see there is a direct relationship between buybacks, debt and interest .....

Other than that - good results again.

[smcni1968] 10/9/2019 07:26

Jeffries raises target to £32 from £27.50- do I assume they like the results

[bracke] 09/9/2019 18:05

fido.......I suppose 'bad dog' is also an option.

Spikes whether they be caused by Trump, NFP, FED, etc are all good to trade.

[perfido] 09/9/2019 17:57

Good day bracke,

Interesting, glad to hear someone is benefiting from Trumps 14,000 tweets in 1,300 days!

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
'BTW Your new name has something of the canine about it.'?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Glad to see you have moderated your opinion from 'perfidious, wicked, malicious' , give a dog a bad name springs to mind!

[bracke] 09/9/2019 17:44

Good day perfido

BTW Your new name has something of the canine about it.

For intra and day traders Trumps tweets are like gold dust. You can either jump in quick following the direction and/or wait for the indices to reach the zenith or nadir and then trade the reverse.

If you are in a trade when the tweet is made your stop loss should deal with it or if you have failed to use one hold and wait for the reverse but you may need a healthy account to cover the draw down.

[perfido] 09/9/2019 17:33

Something I've wondered about - how do Trump's tweets affect the Stock Market?



Now if only we could get an early insight into his tweets, we could definitely benefit, although the window of opportunity is quite short apparently.... food for thought?
.

[perfido] 06/9/2019 21:46

Whether you are in favour or not, the cost of the share buyback has now reached a round £800m according to my calculations, with a notional profit of £84.3m on the current value of shares purchased over cost to date.

I expect Tuesdays AGM will confirm this

[perfido] 06/9/2019 17:56

After a promising start AHT failed to capitalise, and subsequently fell below resistance around 2300 again.

I think progress is not being aided by the whipsawing of the sterling/dollar rate. Lets see whether the AGM next week gives further encouragement, in particular confirmation of trading conditions would be welcomed.

[perfido] 05/9/2019 17:50

Thanks bracke

Fingers crossed for an AHT Friday rally tomorrow then!

:-)

[bracke] 05/9/2019 16:14

The rising £/$ has not assisted the cause to-day.....now if Boris was to be victorious perhaps it would help.

BTW

To break into new ground it would need to move above the last high which was 2461 intraday and 2437 closing on 27 Sept 2018.

[perfido] 05/9/2019 16:00

Still struggling to overcome resistance above 2300

In the meantime RNS confirms 1st quarter results for the period ended
31st July 2019 will be announced on Tuesday 10th September 2019.

Will this provide the impetus we need we to break new ground and reach new highs?

We live in hope...