Ashtead Group delivered a strong quarter with rental revenue up 22%

Investors

Ashtead Group Plc (LON:AHT) has announced its unaudited results for the first quarter ended 31 July 2021.

First quarter

20212020Growth1
$m$m%
Revenue1,8521,50521%
Rental revenue1,6691,35222%
EBITDA86068524%
Operating profit47731153%
Adjusted2 profit before taxation43726068%
Profit before taxation41624174%
Adjusted2 earnings per share71.5¢43.4¢66%
Earnings per share68.0¢40.1¢71%

Highlights3

·       Strong quarter with clear momentum

·       Revenue up 21%1; rental revenue up 22%1

·       Operating profit of $477m (2020: $311m)

·       Adjusted pre-tax profit of $437m (2020: $260m)

·       Adjusted earnings per share of 71.5¢ (2020: 43.4¢)

·       $551m of capital invested in the business (2020: $122m)

·       Free cash flow of $420m (2020: $558m)

·       $123m spent on bolt-on acquisitions (2020: $nil)

·       Net debt to EBITDA leverage1,3 of 1.3 times (2020: 1.8 times)

·       Refinancing marks debut investment grade issuance

·       Board now expects full-year results ahead of its earlier expectations

1 Calculated at constant exchange rates applying current period exchange rates.

2 Adjusted results are stated before exceptional items and amortisation.

3 Throughout this announcement we refer to a number of alternative performance measures which provide additional useful information. The directors have adopted these to provide additional information on the underlying trends, performance and position of the Group. The alternative performance measures are not defined by IFRS and therefore may not be directly comparable with other companies’ alternative performance measures, but are defined and reconciled in the Glossary on page 28.

Ashtead Group’s chief executive, Brendan Horgan, commented:

“The Group delivered a strong quarter with rental revenue up 22% over the prior year, but more importantly up 12% when compared with the first quarter of 2019/20, both at constant currency.  This reflects continued market outperformance across the business.  I never cease to be impressed by all our dedicated team members who have enabled this performance, delivering for each of our stakeholders, while ensuring our leading value of safety remains at the forefront of all we do.

Our performance continues to illustrate the benefits of our long-term strategy to broaden and diversify our end markets, while maintaining a strong balance sheet.  In the quarter, we invested $551m in capital across existing locations and greenfields and $123m on five bolt-on acquisitions, adding a combined 29 locations in North America.  This investment takes advantage of the ongoing structural growth opportunity that we continue to see in the business as we execute our Sunbelt 3.0 strategy.

Our business is performing well in supportive markets with strong momentum.  The benefit we derive from the diversity of our products, services and end markets, our investment in technology and ongoing structural change, enhanced by the environmental and social aspects of ESG, enables the Board to look to the future with confidence and we now expect business performance this year to be ahead of our previous expectations.”

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