Ashtead Technology Raised to Buy at Deutsche Bank |
This had a sharp dip after the April in line statement and went on to recover.
Will continue to hold. |
Simon Thompsons' take on it:
"...It also means that earnings forecasts are well underpinned, too. Deutsche Numis forecasts double-digit annual growth in earnings per share (EPS) to 36.5p (2024), 42.1p (2025) and 46.3p (2026), implying a current-year prospective price/earnings (PE) ratios of 18.5 could drop to 14.6 within two years. That’s not expensive.
Ashtead’s shares have performed well since I initiated coverage at 257p (‘Alpha Research: Profit from the great energy reset’, 9 September 2022) and the share price hit a record high of 893p after I last rated the shares a hold at 806p (‘This company’s share price has trebled and still has further upside’, 29 April 2024). The profit taking following the results is overdone. Hold." |
Coverage of results:
Ashtead Technology said it achieved a “record” performance in the first half of the year as it looks to build out its merger and acquisition (M&A) pipeline.
“Headwind in 2H24 likely due to slowdown of activity in North Sea, but portfolio is well diversified, and this could offer new M&A opportunities.” |
have to renew their fleet one supposes, reaction this morning appears rather extreme. |
>> ... but this is a capital intensive business and extra costs come before the profits flow.>>
Yes, that's quite a step up in capex from last year:
"Year to date investment of £16.4m in rental fleet capital expenditure (HY23: £8.0m) with full year forecast of £30m." |
"Administration costs (excluding depreciation, amortisation and exchange gain/loss) for HY24 were £30.5m (HY23: £18.8m), a £11.7m increase on HY23 of which £8.4m was due to the addition of ACE Winches". Admin costs (exc ACE) +17.5% vs organic growth +16%. |
Head count is increasing and the significant capital expenditure will affect depreciation costs, but this is a capital intensive business and extra costs come before the profits flow. It's an expanding business with a lot more scope than many others. Their customers would have limited choice of supplier, but perhaps I'm disappointed margins have reduced. |
Yes, I think FY 38-40 is achievable. Not sure what P/E the market will give it now.
Probably not more than 20x imv. |
>>Disappointing that costs have risen out of line with revenue>>
I haven't got that far yet, but I've posted elsewhere:
This morning's lacklustre reaction is perhaps explained by 2024 H1 adjusted earnings (19.1p) coming in a shade under those of 2023 H2 (19.2p).
This happened a couple of years ago (2022 H1 earnings of 8.3p were less than 2021 H2 earnings of 9.1p) so it's not without precedent, although I'm only looking at figures from the last 3 years.
If 2024 H2 earnings were the same as last year then FY earnings would be 38.3p, ahead of the current forecast of 37.6p, so broker upgrades seem likely. |
Disappointing that costs have risen out of line with revenue, squeezing margins.
Don't know if this is a temporary working capital issue or a structural cost issue (G&A). Will have to dig deeper.
I expect it to rate lower. |
Thanks zho... I think you're right about getting to the 41.4p but, as you say that's at worst(?) a PEG of 1. The share price returns are much higher.
As you say "The drawback with this thinking..." is future growth forecast to be 12%.
This is where I have problems. As you rightly say, I don't think a growth stock in its current, fairly early stages, would have such low growth prospects. Something wrong... maybe analysts, like us, just don't know but at least they're "all wrong together" whereas PIs can be more optimistic.
We shall see, indeed.
Cheers! |
Sogoesit,
Yes, AT. is highly rated, but perhaps not quite as highly as you are suggesting.
To get a figure for 12 month trailing earnings we could take 4 months from 2023's eps 37.6p and 8 months from 2024's forecast 43.3p to get 41.4p, and a corresponding current PE of 18.8.
Working out the growth in the same way gives us 21% for a historic PEG of under 1.
The drawback with this thinking is that eps growth in 2026 is only forecast to be 12%, but AT. has a profitable niche, it is acquisitive, and it may be that investors expect forecasts to be raised.
Anyway …. interims tomorrow, so we should be a little wiser. |
 Ashtead Technology, a leading provider of subsea technology and services, has further expanded its service offering through a new rental agreement with Voyis Imaging Inc, a Canadian-based company providing versatile optical solutions to expand underwater capability and enhance understanding of remote, challenging environments.
The global rental partnership includes Voyis’’ Discovery Stereo ROV cameras, integrated with Nova Mini LEDs, which can operate at a depth of up to 4,000 metres. Recognised as the best-in-class photogrammetry solution for subsea 3D modelling, the Discovery Stereo is a complete vision system delivering low-latency 4K piloting video, crisp stills images, and accurate colourised 3D reconstructions for detailed asset inspection. The proven technology facilitates cost effective and high confidence inspections of critical infrastructure in offshore energy installations.
The Discovery Stereo rentals will be handled through Ashtead Technology’s global network of twelve hubs, supported by experienced personnel with comprehensive training, able to support system operation and data collection as well as data processing, analysis and reporting. In signing this strategic agreement Ashtead Technology becomes the primary company offering the Discovery Stereo on a rental basis, and Voyis becomes Ashtead Technology’s only supplier of high-accuracy optical 3D modelling vision systems.
The Discovery Stereo will enable offshore oil and gas and wind energy customers to capture low latency 4K video for smart ROV piloting while simultaneously recording high-resolution stills images that can be processed into 3D models for general inspection use. The subsea cameras also have an ultra-wide, 75°x75° field of view for complete situational awareness.
Ross MacLeod, Head of Asset Integrity at Ashtead Technology, said: “Our latest investment in Voyis’ vision systems for our rental and services portfolio is a great addition for our customers around the world, providing them with access to state-of-the-art equipment and expertise. The Discovery Stereo solution reinforces our commitment to provide the latest and best technology, and to continue to grow the range and depth of our offering.”
Commenting on the partnership, Chris Gilson, CEO of Voyis, stated “The only limitation of the game-changing 3D modelling sensors we have developed is our global reach. With their experience and technical capabilities, Ashtead Technology is the perfect partner to expand our existing rental capacity as we continue to push the limits of what is possible with this technology.”
This latest investment in the company’s rental and services portfolio is part of Ashtead Technology’s commitment to delivering high-quality subsea technology and services, supporting customers across the offshore energy sector. The business has expanded rapidly completing eight acquisitions in the past seven years. With a headcount of over 600 people and 23,000 items in its technology portfolio, it serves its customers from twelve strategic hubs across the globe. |
Just looking at the 1 May 2024 Analyst Consensus on AT's site with EPS growth:
2024 on 2023 at 39%
2025 on 2024 at 14%
2026 on 2025 at 12%
At 770p TTM P/E is 28 and Forward (FY 2024) P/E is 20.
Can't make sense of these numbers myself when the share price is trend growing at 56%pa. |
19 August 2024
Ashtead Technology Holdings plc
("Ashtead Technology" or the "Group")
Notice of Results
&
Analyst and Investor Presentations
Ashtead Technology (AIM: AT.), a leading subsea equipment rental and solutions provider for the global offshore energy sector, will announce its results for the half year ended 30 June 2024 on Monday, 2 September 2024.
Analyst briefing
A briefing for sell-side analysts will be held on Monday, 2 September 2024 at 8.30 a.m. BST. If you are a sell-side analyst and would like to join, please email ashteadtechnology@vigoconsulting.com to register.
Retail investor presentation
Ashtead Technology management will also host a presentation and Q&A for retail investors on Friday, 6 September 2024 at 10.30 a.m. BST to discuss the company's half year results.
The presentation will be hosted on the Investor Meet Company platform and is open to all existing and potential shareholders. Questions can be submitted online in advance or at any time during the live presentation. |
Thanks for posting BBD... interesting since Norway also wanting to deliver substantial new offshore wind energy.
The other thing that struck me is that AT's headcount is only 600. This seems to be quite low to me and therefore cost efficient from an Opex point of view. Long may this continue. |
Ashtead Technology, a leading provider of subsea technology and services, has further invested in the Norwegian market by opening a new facility in Stavanger.
Norway’s rich history of innovation in offshore energy presents significant opportunities for Ashtead Technology to enhance its service offerings for customers locally, building on strong foundations having previously supported the region remotely for many years.
The new facility serves as a strategic hub, initially offering a comprehensive suite of ROV tooling and subsea survey technology. Coupled with valuable local expertise and support, the new operation delivers faster response times for customers in the region.
This expansion follows the acquisition of ACE Winches in 2023 which provided Ashtead Technology with its first facility in Stavanger for managing lifting, pulling, and deployment services. This additional investment reinforces Ashtead Technology’s commitment to serving the energy sector in this key European market with plans to further expand its Norwegian team and service offering over the next year.
Brett Lestrange, COO of Ashtead Technology, said: “Norway has long been at the forefront of technological innovation in the offshore energy industry, and we are thrilled to be a part of this dynamic market. Our latest investment in Stavanger underscores our commitment to providing unparalleled support and expertise to our Norwegian customers.”
This latest investment in Norway is part of Ashtead Technology’s commitment to delivering high-quality subsea technology and services, supporting customers across the offshore energy sector. The business has expanded rapidly completing eight acquisitions in the past seven years. With a headcount of over 600 people and 23,000 items in its technology portfolio it serves its customers from twelve strategic hubs across the globe. |
Problem is that "people" tend to live onshore... whether a BIMBY or a NIMBY someone will get in the way.
Anyone ever lived near a Wind Turbine?
Won't be long before someone will be measuring the noise pollution and comparing it to fracking inconvenience. |
'The government is set to use British seabed...'
Plenty of existing windfarms already on Royal Family/Crown Estate and there have been plans to extend that for years. Of course the real problem is that last year investors failed to put in a single bid for offshore wind projects in the auction because it was uneconomical to do so. Now tax payers are going to have to stump up billions in subsidies to make it economically attractive. To meet the governments overall goals the vast majority of new offshore wind will have to be agreed in this year's and next year's auctions; which is simply an impossibility. £8.3bn over five years is a drop in the ocean (get it?).
More feasible to extend onshore windfarms at a lower cost and accept lower energy generation efficiency. |
Results first week in September last 2 years, might start to firm as we get closer to that date. |
The government is set to use British seabed owned by the Royal Family to help build windfarms which it hopes will power 20 million homes.
It is the first major plan to be announced by Great British Energy, the government's new company aimed at increasing renewable energy which will receive £8.3bn in state funding over the next five years. |
Ashtead Technology, a leading provider of subsea technology and services, is pleased to announce the appointment of Brett Lestrange to the position of Chief Operating Officer (COO).
As COO Brett is responsible for overseeing and optimising the company’s day-to-day operations, as well as implementing best practices to enhance efficiency and productivity across all of Ashtead Technology.
Brett joined Ashtead Technology seven years ago, bringing extensive experience and a proven track record in subsea technology. His expertise and dedication have been pivotal to the company’s success and growth.
Allan Pirie, CEO of Ashtead Technology, commented on the appointment: “We are thrilled to have Brett step into the role of COO. His contributions over the years have been invaluable, and his vision and commitment align perfectly with our strategic goals. Brett’s promotion comes at a pivotal time as Ashtead Technology expands its capabilities and market presence. His appointment reflects the company’s commitment to nurturing talent and promoting from within, ensuring continuity and stability.”
“I am honoured to take on the role of COO”, said Brett Lestrange.“ I look forward to working closely with our talented team to build on our strong foundation, continue delivering exceptional service to our customers and drive sustainable growth in the years ahead.”
Ashtead Technology is committed to delivering high-quality subsea technology and services, supporting customers across the offshore energy sector. The business has expanded rapidly over recent years with eight acquisitions in seven years. It now has a headcount of over 600 people, over 23,000 items in its technology portfolio, and serves its customers from twelve strategic hubs across the globe. |
The new Government wants to quadruple the nation’s offshore wind capacity ... this decade. This is equivalent to scaling the UK’s generation capacity for offshore wind to around 60GW. |
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