Just saw it pop up on sharepad this morning, will look later and find the details |
 About "exceptionals", albeit taking carcosa's comments, AT is a (part) M&A company, having 17%+ growth from inorganic acquisitions (plus adherent restructuring costs) on a regular basis.
Like its bigger sibling AHT it seems to go with the rental business territory. To my mind, while its M&A strategy continues in this growth phase these costs/benefits, being regular, are not exceptional.
That said, when working my analysis for forward growth estimates in "growth stocks", I do separate the different business "activities" otherwise one can be deceived where growth originates and what the costs/benefits are. The "costs" don't just appear in the "adjusted" figures they also appear in the Balance Sheet as increased equity or, in this case, increased use of Debt, or vice versa less Debt with increased "profits". This impacts ROIC which, commendably, the management of this company uses as an appropriate measure of returns.
The CFO said:
"Our 51% revenue growth was derived from organic growth (35%), M&A (17%) (being the full year impact of the WeSubsea and Hiretech acquisitions completed in 2022 plus one-month trading from our most recent acquisition, ACE Winches), with a small decrease from FX rates (-1%)."
The issue is what will the proportion of growth due to M&A be in FY2024 and its impact on ROIC.
Anyone guess?
(PS. I am not a fan of modern accounting and its potential to be manipulated, if only in presentation, by managements potentially hiding the true nature of their businesses... whether "standard" or not. I don't think these are "standard" By the way.)
Reminder: if one investor accepts "standards", or doesn't, in measurement and buys/sells on those "standards", or others, they may do themselves an injustice compared to other investors' views on performance metrics. This creates arbitrage and risk; an example of which happened yesterday... and may persist!! |
Show me...
Talk, as usual, is cheap. |
Upgrades already coming through |
With reference to the above posts, herewith are the pre-results 7 analyst consensus figures, as of 15 February 2024, compared to the (results)
Revenue 107.2 (110.5)
Underlying EDITDA 47.2 (48.3)
Underlying Operating Profit 34.7 (34.8)
Underlying PBT 31.5 (33.0)
Underlying EPS 29.7 (33.4)
Net Debt 73.5 (61.7)
In all instances Ashtead beat forecasts.
The analyst figures are taken from Ashtead's website
As is typical, Analyst data is adjusted '...Underlying figures exclude exceptional costs, FX gain/loss and amortisation.' This is industry standard.
The argument over adjusted v statutory figures is a valid concern and investors have to make their own mind up as to the validity of the adjustments and, for me, whether or not a company is making large adjustments over many years. After all 'exceptional costs' should by their very nature be 'exceptional'.
In Ashtead's case those exceptionals relate to FX, acquisition Costs, Restructuring, Software and deferred finance costs. So in my book I'll say that's ok. Others may have differing opinions.
As for potential future revenue growth I'd agree with Whittler100's views. Additionally we may see further acquisition activity.
The Full Year Results Presentation can be downloaded from |
BERENBERG RAISES ASHTEAD TECHNOLOGY PRICE TARGET TO 775 (700) PENCE - 'BUY' |
I quoted Sharescope figures above, which are statutory. The Eps was down 8.5%, profit before tax was down 10% and the share price is down about 10%. All those are based on consensus. Adjusted gives a rosier picture but not actual. Having said that T/O was ahead by GDP3m.
So, for next year the actual forecasts are:-
PTP - 39.19
EPS - 36.99
TO - 161.6
Meanwhile I hope we get update forecasts. |
Sharepad, the online version of Sharescope, showed consensus forecasts for 2023 from seven analysts. These include revenue, EBIT, EBITDA, PTP, ATP, EPS. I believe these forecasts are presented on an adjusted basis where appropriate. Assuming this to be the case, all forecasts were exceeded by the announced results.
However the consensus target price from these same analysts was 679p, which is very close to where we are now.
In view of the speed at which the price was marked down at the open, I cannot escape the conclusion that something was going on prior to the open which persuaded market makers that the pre-results price had got well ahead of itself.
Like others above, I feel very comfortable about holding at this price. |
The impatient selling to the patient today. |
On a Pro-Forma 12 month basis for ACE acquisition, assuming additional 11 months' Revenue from ACE (£3.55m x 11) for Total £149.516m, no increase in Finance Costs (£4m) and constant tax rate (21.5%) the EPS comes in at 37.56p.
Assuming a Forward PER of 28x the share price would then be 1051p for FY2024 at no growth. P/S would revert to 2022's 4x.
Assuming G&A did not increase proportionately, say only by 50% (from £55.291m to £64.827m instead of £74.363m), then Pro-Forma FY2024 no growth EPS would come in at 47p. |
My stop loss triggered, sold at 680.47What are people's view on where oversold territory will be price wise? |
The sales are usually split out more clearly but if assume winches contributed 3.3m then growth in ongoing slowed in H2, but still good.Expenses up 53% when sales 51% is not good though.Sales fc on Stocko 162 looks about right that indicates 10% growth in lfl business.If costs not brought under control then forward PE stays over 20, not cheap hence sell off.Long term positive but cost growth needs to come down lower than sales growth. I should have sold last week. I will watch on Friday and decide from there. |
Slogsweep... I doubt it but given the share price reaction the company broker might likely issue something soon! |
Support at 600p |
Sogoesit thanks I'm already registered on Invstormeet through TIG and so easy to add AT. Do you think there will be an analyst comment/upgrade before then? |
@Slogsweep...
Yes, following the link in the RNS asks you to authenticate otherwise there is an error message.
Go direct to the Investors Meet site, register for free, and then within that site you can register for the meeting.
Investors Meet site here: |
For 2023 Actuals Financing Costs looks like the issue.
Up 174% from £1.459m to £4.000m which then hit Net Margin growth.
(CFO : "Net debt increased from £28.7m to £61.7m as a result of the ACE Winches acquisition being funded through the RCF").
If Finance Costs had remained constant, for illustration, Net Margin growth would have been double (i.e. 29% instead of 15%). EPS would have come in at 30p instead of 27p.
At 780p share price the PER is now 29x.
At 655p share price it's 24x.
So, pending further research, for me it's an accumulate. |
Analysts meeting on at moment may be that will show some light on what accounts actually are telling us. Tried to sign up for investors meeting on 19th but got an error message, anyone else tried? |
Good to add a few though if your average is 345 though |
Given ACE did 35m rev's & 11m operating profit in 2023 the FY24 forecasts currently in the market look pretty light given organic growth for the FY was +35%. I can understand the sell off given the run up of the last 6 mths but it just looks to me like management are being prudent this early in the new FY. |
Likewise. Just added a few |
Oh, and never catch a falling knife. |
Yep, also guidance difficult to fathom... quote:
"The Board is encouraged by the Group's performance in Q1 2024 and our full year 2024 expectation remains unchanged."
If ACE had been a full year Revenue would have been £149m too.
(CFO :"If ACE Winches had been acquired on 1 January 2023 rather than 30 November 2023, full year revenue would have been £149.6m."). That's a 50% uplift on £110m, right there. |
BBD, they were not in line, doh! |
Register for real-time alerts, custom portfolio, and market movers
Hot Features
Premium
