Ashtead Technology Share Discussion Threads

[faz] 07/5/2024 16:27

deutsche might just have to revise that figure tomorrow!

[sogoesit] 07/5/2024 11:19

Ok, cheers!

[sogoesit] 07/5/2024 10:41

Thanks for that broker input, carcosa...

QUOTE
"This model helps to drive strong pricing power, margins and returns," said Berenberg, which also issued the stock a 405.0p target price.
UNQUOTE

Can you edit your "405.0p" TP quote, please?

[carcosa] 07/5/2024 08:35

*Removed - Duff quote* Sorry. Berenberg actually initiated coverage in Feb 2024

[bigbigdave] 07/5/2024 08:23

DEUTSCHE BANK RESEARCH STARTS ASHTEAD TECHNOLOGY WITH 'HOLD' - PRICE TARGET 835 PENCE

[whittler100] 02/5/2024 09:37

CEO's sale was simply selling his award under the LTIP, another LTIP was was announced in an RNS dated 24th April and this one vests from end of 2026.

"1 May 2024, Allan Pirie, CEO and Executive Director, has exercised options for 270,926 ordinary shares under the IPO LTIP at nil cost, and has sold 270,926 shares. Following this exercise, and sale, Allan Pirie retains a beneficial interest in 1,341,600 ordinary shares representing approximately 1.7% of the Company's issued share capital!.

[bigbigdave] 02/5/2024 07:44

CEO offloading a few yesterday, maybe reason for the dip. He still has plenty.

[villarich] 30/4/2024 07:18

I doubled up on results day

[bigbigdave] 29/4/2024 17:49

Wonder if those that sold out on results day at 14% off have been buying back.

[zho] 29/4/2024 13:28

This company’s share price has trebled and still has further upside

A subsea services group is benefiting from strong growth drivers and is primed to deliver double-digit growth for years to come

[slogsweep] 29/4/2024 09:52

4 big trades gone though 4x20625=82500 shown as sells but probably buys as share price unmoved, looks like institutional buying, bit late small investors have been here since 160!

[solarno lopez] 29/4/2024 09:07

Will it hold ?

[wilmdav] 28/4/2024 17:30

I have now had a closer look at how AT is likely to have arrived at an ROIC figure of 28.6% for 2023.

My post 399 above noted that three different formulae provided by Investopedia produce three different figures for the denominator of ROIC. This remains the case but the figures are all in the same rather wide ball park.

Having read the Morgan Stanley 44 page article I am going to settle for the following Investopedia definition of Investment Capital, while bearing in mind that the MS article demonstrates how ROIC can be significantly affected by various adjustments that might be necessary.

IC = Total assets - cash - non interest bearing current liabilities (including tax and account payables)

The denominator is the average of IC over the reported year. This would normally be calculated by adding figures for the reported year and its predecessor and dividing by 2. In AT's case this would be problematic because of the final one month increase of investment in Ace Winches. To calculate the 2023 IC the company appears to have taken the 2022 figure and added one twelfth of the difference between figures for the two years - or something along those lines.

However IC for 2024 will be affected by Ace Winches for the whole year. Hence an indication of ROIC for 2024 can be gleaned by simply using the 2023 IC as denominator. During the analyst presentation the company said it was looking for an ROIC going forward of high teens.

The numerator is NOPAT (net operating profit (EBIT) after tax). In AT's case they appear to have used adjusted EBITA minus tax, which would be in accordance with Morgan Stanley's advice. AT has conveniently provided a figure for adjusted EVITA of 36.2m. My calculations suggest they have also followed MS advice in adding the interest component of operating lease expense, which brings the NOPAT figure up to 37.4m or 29.9m after deduction of a notional 20% tax.

The outcome of all this is an ROIC of 26.9% and around 18% going forward, which is close enough for the purpose of showing the kind of calculations the company is likely to have made.

I should add that MS makes a point that companies need some cash in their working capital to operate. They suggest a figure between 2% and 5%, depending on the company's size and maturity. Adding this back would reduce the outcome of ROIC calculations somewhat.

The current p/e on 2023 earnings is 24.3 and 21.4 for 2024 earnings. The PEGs are 1.8 and 1.4 respectively.

[wilmdav] 27/4/2024 13:55

Sagoesit

Doesn't that assume that the current P/E is oblivious to 2023 ROIC?

Is it not also true that if the price goes up the P/E will also go up and your formula would provide a higher price target?

[sogoesit] 26/4/2024 16:32

Well, let's hope it gets back to its senses and continues a trend towards £10.50 approx. from next week onwards.... ;-))

[33.4 x 1.28 (ROIC) x 24 (P/E)]

[bigbigdave] 25/4/2024 13:39

Looks like it wants to go back to the previous high.

[bigbigdave] 23/4/2024 16:52

Very nice :o)

[solarno lopez] 23/4/2024 16:25

A nice end to the day

[wilmdav] 22/4/2024 22:59

Thanks, bertiebibingo

Just what was required.

[sogoesit] 22/4/2024 21:09

Excellent... thank you.

[bertiebingo] 22/4/2024 19:46

Morgan Stanley 44 pager on ROIChttps://www.linkedin.com/posts/kadir-tas-a1106a22_return-on-invested-capital-activity-7101540087573676032-tu8k?utm_source=combined_share_message&utm_medium=member_ios

[wilmdav] 22/4/2024 16:42

Sagoesit

According to Investopedia, the numerator is NOPAT (Net operating profit after tax), not NPAT (Net profit after tax).

My impression is that they include all equity in the denominator, together with net debt..

One of the other formulas does involve working capital.

I am going to have a good look at the subject over the next week or so and will report back on findings. Of particular interest to me will be how my other holdings/positions stand up in comparison to AT in terms of ROIC.

Thank you very much for your input.

[sogoesit] 22/4/2024 12:14

ROIC to get near management's figure:

= NPAT / (Debt - Cash + Equity)

= 21.579 / (69.673 - 10.824 + 3.997 + 14.115) = 28.04%

Should Retained Earnings be considered Equity and, if so, what other adjustments would be required (eg working capital etc.)?

[wilmdav] 22/4/2024 11:16

I thought it would be instructive to try to replicate AT's quoted ROIC ratio of 28.6% for 2023.

The numerator is normally straightforward (EBIT - tax).

Investopedia gives three alternative method's for calculating the denominator. These should all arrive at the same figure. My attempts to follow the instructions produce three different figures for 2023 between £168.6m and £159.3m and between £103.6m and £105.8m for 2022. Closer inspection and consideration will no doubt iron out the variations.

At present the only way I can get near an ROIC of 28.6% is to use AT'S 2023 adjusted EBIT (EVITA minus amortisation) minus tax for the numerator and my lowest figure for the 2022 denominator.

On this basis ROIC comes out at just above or below 28.6% depending on what tax figure is used (paid/charged).

I had expected the denominator utilised would be an average between that of 2022 and 2023, which would result in an ROIC in the region of 21.8%. It would be further reduced to around 18.8% if reported EBIT minus tax is used for the numerator.

Obviously the crucial thing in comparing one company's ROIC with another is to be consistent in one's own calculations.

Edited at 11:36am