The market is pricing in the impact of what looks likely to be a sustained period of low global oil prices (Trump's 'drill baby drill' being the final nail in coffin).
Low oil prices = less offshore development due to CAPEX requirements being higher.
That means less work for AT.
Yes, they are somewhat diversified via renewables & decommissioning, but considering the market has been buoyant over the last few years, I think they will struggle to meet / beat expectations.
They also have major debt obligations now & the higher for longer rate environment won't help their EPS ambitions.
All IMO. |
What is going on with the share price on a continuous decline. The only thing I can think of is the Labour government opening up On-Shore wind development. |
Gap @ £5.09 on the chart for those that follow TA. |
One persons problem is another's opportunity. Let's see where this drops to with ACE settling in and Seatronics coming on board we are looking at a significant revenue increase, 50% FY24 and 40% FY25. If they make them fit and it works the share price will look very cheap. Stocko has them qualifying for Jim Slater principle always a good sign. Peg 0.7 ROCE 18 ROE 25. |
Probably Octopus now IHT exemption compromised people pulling out of their fund . Hope it doesnt trash the whole Aim market. Some growth Budget seems determined to wreck all small businesses which are the main growth drivers in the economy. |
And just like that the "budget gains" are gone.
Probably now safe to assume there's an insti seller that needs to clear? |
Budget done then, everyone buying back now! |
Hopefully get the Budget out of the way and AT. should go north, no matter what tax measures are in it it's the uncertainty which is holding everything back. |
At 51, I would be. |
What a ridiculous comment, he's 51 and he's got 7m quid's worth. You think you'd be adding shares in the circumstances ? |
Shame the CEO only sells shares. Doesn't inspire confidence. |
“Ashtead Technology is delivering, says Peel Hunt
The latest acquisition by Ashtead Technology (AT) is further evidence of its ability to deliver its strategy, says Peel Hunt.
Analyst Andrew Nussey reiterated his ‘buy’ recommendation and target price of 850p on the subsea equipment rental group, which climbed 8.6% to 589.5p yesterday after announcing the conditional acquisition of Seascan for £63m, which enhances its capability and provides a platform for international growth.
‘The acquisition looks to be the right transaction at the right time, although some investment is required to bring the business up to Ashtead Technology’s high standards,’ said Nussey.
He added that the ‘highly complementary’ purchase is ‘yet another proof point of Ashtead Technology’s ability to deliver strategically, operationally, and financially accretive M&A’, as well as providing ‘strong organic growth’.” |
BERENBERG RAISES ASHTEAD TECHNOLOGY PRICE TARGET TO 800 (775) PENCE - 'BUY' |
 Nice trade this morning, however this strikes me as a very risky deal.
You can review the Seatronics & J2 financial information on companies house;
In their last filed accounts, Seatronics stated that 'a landscape of a general increase in the oil price helped the company return to growth'
The first listed principal risk is that of a slowdown in the offshore O&G industries due to either falling oil prices or the broader energy transition
There is little doubt that the threat of Saudi increasing production in December is weighing on global prices and if oil does fall below $70 there will be a lot less exploration & development work for AT. to go after. Based on this risk, I'm amazed they have parted with £70m for companies producing EBITA of £9m last year.
That £70m increase in the RCF also has to be accounted for. In the HY accounts they disclosed that it cost SONIA + 2.25%, so 7.2% at present. So this deal will potentially cost over £5m per annum. And they are also going to spend a further £10m on fleet investment!
My guess is the retail investor push will soon die off, hedge funds will update their numbers and this will get pushed back down. If Saudi do proceed with their planned output increase in December then AT. could be in for a challenging 2025/26 IMO. |
Tricky one AT bouncing on lows but increased revenue with ACE and now Seatronics. FY25 revenue should be 245m which is huge growth in cash but profit TBC. It's the debt that worries. It's interesting that their competitor is getting out and cashing in. Can they integrate both ACE and Seatronics and keep focussed. Not as much room for mistakes if any tightening up on revenues. |
Summary from LinkedIn:
THE MARINE TECHNOLOGY SPECIALISTS
Seatronics, an Acteon company, supplies specialist subsea solutions pursuing excellence both in engineering capability and customer support. Our continually developing expertise allows us to provide full service capability on demand encompassing rental, sales, service and repair, calibration, personnel and asset management.
Seatronics service the following markets:
Subsea Construction
Inspection, Maintenance & Repair
Decommissioning
Renewables
Dredging
Ports and Harbours
Defence
Metocean
Recognised as the market leaders in their field Seatronics are part of the Acteon group of companies.
Seatronics have offices globally in Aberdeen, Abu Dhabi, Houston and Singapore offering 24/7 technical support as well as partners located in Norway and Perth.
Website:
Industry: Oil and Gas
Company size: 51-200 employees
Headquarters: Westhill, Scotland
Type: Privately Held
Specialties
Subsea Inspection, Environmental, Geophysical, Metocean, ROV and Diving, Cable Moulding, Calibration, Decomissioning, Hydrographic, and Oceanography |
Contact in the Industry tells me Seatronics are/were Ashtead's biggest competitor. |
So at first glance that provides:
EV/Revenue = 1.22x
EV/EBITDA = 5.2x
EV/EBITA = 7.0x
EV/Gross Assets = 2.0
Expected to be earnings-enhancing. Specifically, the announcement states that the acquisition of Seatronics and J2 Subsea will be "mid-to-high single digit earnings enhancing" in the first full year of ownership. This means it is anticipated to increase Ashtead Technology's earnings per share (EPS) by a percentage in the mid-to-high single digits within the first year after the acquisition is completed.
Additionally, the return on invested capital (ROIC) is expected to exceed the group's weighted average cost of capital (WACC) within the first year, further supporting the positive financial impact of the acquisition. |
Ashtead Technology Holdings plc (AIM: AT.), a leading subsea equipment rental and solutions provider for the global offshore energy sector, is pleased to announce that it has reached an agreement to acquire Seascan Limited and its subsidiaries (otherwise known as Seatronics), along with its sister company, J2 Subsea Limited (together "Seatronics and J2 "), an international subsea electronics and ROV tooling rental and services business for total consideration of £63m in cash (on a cash and debt free basis) (the "Acquisition"). Seatronics and J2 are owned by Acteon Group Operations (UK) Limited ("Acteon"), which is majority owned by One Equity Partners LLC and Buckthorn Partners LLP. The Acquisition will be funded by a £70m increase in the Group's revolving credit facility ("RCF"). |
Been watching Ashtead for months now and finally taken the plunge. For those stockopedia subscribers it’s just popped up on the Slater Zulu growth screen. |
WCM Investment Management take 3% |
Let's hope it VOOMS back up to 700 soon in that case!
We need one of those catalysts, at accretive margins, to appear soon to jolt everyone into action (and regain trust)... imo. |
It's a V shaped bowl Zho! |
Not the best place to be short these last few days. |
Well spotted. Up from 0.51% to 0.69% on Thursday. |
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