10 December, 2013

Unaudited results for the half year and second quarter ended 31 October 2013

Read and download the half year and second quarter results for the Ashtead Group. You can also view the latest webcast

Financial summary

 Second quarterFirst half
 2013 20121Growth22013 20121Growth2
Underlying results3      
Operating profit123.789.437%234.1163.241%
Profit before taxation112.878.942%212.3140.049%
Earnings per share14.3p9.9p44%26.7p17.6p50%
Statutory results      
Profit before taxation110.477.641%207.8112.282%
Earnings per share14.0p9.6p44%26.1p14.1p81%
1   prior year figures restated for the adoption of IAS 19 'Employee Benefits' (revised)
     (see explanatory note below)
2   at constant exchange rates
3   before exceptionals, intangible amortisation and fair value remeasurements


  • Group revenue increase of 23%2
  • Record first half pre-tax profit3 of £212m, up 49% at constant exchange rates
  • Group EBITDA margin improves to 43% (2012: 41%)
  • £451m of capital invested in the business (2012: £341m) and full year guidance increased
  • Group RoI of 18% (2012: 14%)
  • Net debt to EBITDA leverage2 of 2.1 times (2012: 2.4 times)
  • Interim dividend raised 50% to 2.25p per share (2012: 1.5p)

Ashtead’s Chief Executive, Geoff Drabble , commented:

"The momentum within the business continued through the second quarter, resulting in record half year pre-tax profits of £212m, up 49% from the prior year. Once again, Sunbelt in the US was the main driver of our growth but it was pleasing to see another strong performance from A-Plant.

Our strategy continues to be focused largely on organic growth, supplemented by a range of bolt-on acquisitions. We invested a net £401m in our fleet during the first half and a further £61m on acquisitions. However, at the same time, our strong margins allowed us to reduce leverage to 2.1 times EBITDA.

Activity on the ground and lead indicators remain very healthy and, as a result, we have increased our full year capital guidance to £700m to support our customers during an anticipated strong Spring of 2014.

As a result, we now anticipate a full year profit towards the upper end of current expectations and the Board looks forward to the medium term with increasing confidence."


Geoff DrabbleChief executive020 7726 9700
Suzanne WoodFinance director020 7726 9700
Brian HudspithMaitland020 7379 5151

Geoff Drabble and Suzanne Wood will host a meeting for equity analysts to discuss the results and outlook at 9.30am on Tuesday, 10 December at the offices of UBS at 1 Finsbury Avenue, London, EC2M 2PP. This meeting will be webcast live via the link at the top of this release and a replay will be available from shortly after the meeting concludes. A copy of this announcement and the slide presentation used for the meeting are also available for download at the top of this release. The usual conference call for bondholders will begin at 3pm (10am EST).

Analysts and bondholders have already been invited to participate in the meeting and conference call but any eligible person not having received dial-in details should contact the Company's PR advisers, Maitland (Astrid Wright) at +44 (0)20 7379 5151.

Explanatory note

Prior year figures have been restated following the adoption of IAS 19 'Employee Benefits' (revised). Adoption of the revised standard has decreased the Group's reported operating profit and has increased net financing costs. The net effect is to reduce profit before taxation by £1.3m for the year ended 30 April 2013. See note 1 for further information.


Forward looking statements

This announcement contains forward looking statements. These have been made by the directors in good faith using information available up to the date on which they approved this report. The directors can give no assurance that these expectations will prove to be correct. Due to the inherent uncertainties, including both business and economic risk factors underlying such forward looking statements, actual results may differ materially from those expressed or implied by these forward looking statements. Except as required by law or regulation, the directors undertake no obligation to update any forward looking statements whether as a result of new information, future events or otherwise.

First half results

 RevenueEBITDAOperating profit
Sunbelt in $m1,107.5913.2514.8394.8344.8254.1
Sunbelt in £m711.5576.8330.8249.5221.5160.5
Group central costs  -  -(4.8)(4.5)(4.8)(4.5)
Net financing costs    (21.8)(23.2)
Profit before tax, exceptionals,remeasurements and amortisation212.3140.0
Exceptional items  -(18.0)
Fair value remeasurements  -(7.4)
Amortisation    (4.5)(2.4)
Profit before taxation    207.8112.2
Taxation    (77.1)(41.6)
Profit attributable to equity holders of the Company130.770.6
Sunbelt  46.5%43.2%31.1%27.8%
A-Plant  31.3%29.7%12.6%7.0%
Group  43.4%40.5%27.6%24.0%

Group revenue increased 25% to £850m in the first half (2012: £680m) with strong growth in both businesses. This revenue growth, combined with ongoing operational efficiency and lower financing costs generated record underlying profit before tax of £212m (2012: £140m).

Sunbelt continues to drive the Group's performance. Rental revenue grew 23% to $998m (2012: $811m), driven by a 17% increase in fleet on rent and 6% improvement in yield. Sunbelt's total revenue, including new and used equipment, merchandise and consumable sales, grew 21% to $1,108m (2012: $913m) as it sold less used equipment this year.

A-Plant performed well and, with the acquisition of Eve Trakway ('Eve'), delivered rental revenue of £124m, up 35% on the prior year (2012: £92m). This reflects 23% more fleet on rent and a 10% improvement in yield. Yield has benefitted from a change in mix over the period which includes Eve's peak period of events work. Rental revenue growth excluding Eve was 16%, reflecting 10% more fleet on rent and 5% yield improvement.

Sunbelt's strong revenue growth, combined with continued operational efficiency resulted in a record first half EBITDA margin of 46% (2012: 43%) as 61% of revenue growth dropped through to EBITDA. This contributed to an operating profit of $345m (2012: $254m). A-Plant's EBITDA margin improved to 31% (2012: 30%) and operating profit increased to £17m (2012: £7m).

As a result, statutory profit before tax was £208m (2012: £112m). After a tax charge of 37% (2012: 37%) of the underlying pre-tax profit, underlying earnings per share increased 52% to 26.7p (2012: 17.6p), whilst basic earnings per share were 26.1p (2012: 14.1p).

Capital expenditure

Capital expenditure in the first half of the year was £451m gross and £401m net of disposal proceeds (2012: £341m gross and £288m net) as we maximised the benefit of new fleet investment during the seasonally stronger summer months. As a result of this investment, the Group's rental fleet at 31 October 2013 at cost was £2.5bn with a reduced age of 29 months (2012: 32 months).

Sunbelt's fleet size at 31 October was $3.3bn. This larger fleet supported strong fleet on rent growth of 17% year on year. Average first half physical utilisation was 73% (2012: 72%).

Capital expenditure is under constant review, based on market conditions. As a result of the good market conditions, we now anticipate gross capital expenditure for the year of around £700m and net payments after disposal proceeds of around £600m.

Return on Investment 1

Sunbelt's pre-tax return on investment (excluding goodwill) in the 12 months to 31 October 2013 continued to improve to 25.6% (2012: 22.2%), well ahead of the Group's pre-tax weighted average cost of capital. In the UK, return on investment (excluding goodwill) improved to 8.5% (2012: 3.9%). For the Group as a whole, returns (including goodwill) are 17.8% (2012: 14.2%).

Cash flow and net debt

As expected, debt increased during the first half as we invested in the fleet, made a number of bolt-on acquisitions and experienced the usual seasonal increase in working capital. We expect the working capital increase to largely reverse in the second half. Net debt at 31 October 2013 was ��1,230m (2012: £1,069m) whilst the ratio of net debt to EBITDA was 2.0 times (2012: 2.4 times) on a reported basis and 2.1 times (2012: 2.4 times) on a constant currency basis.

The Group's debt package remains well structured and flexible, enabling us to take advantage of prevailing end market conditions. The Group's debt facilities are committed for an average of 6 years. At 31 October 2013, ABL availability was $463m, with an additional $540m of suppressed availability - substantially above the $200m level at which the Group's entire debt package is covenant free.


In line with its policy of providing a progressive dividend, having regard to both underlying profit and cash generation and to sustainability through the economic cycle, the Board has increased the interim dividend 50% to 2.25p per share (2012: 1.5p per share). This will be paid on 5 February 2014 to shareholders on record on 17 January 2014.

Current trading and outlook

Our strong performance continued into November. With this continuing momentum in the business we now anticipate a full year profit towards the upper end of current expectations and the Board looks forward to the medium term with increasing confidence.

1 Operating profit divided by the sum of net tangible and intangible fixed assets, plus net working capital but excluding net debt, deferred tax and fair value remeasurements.

Directors' responsibility statement in respect of the interim financial report

We confirm that to the best of our knowledge:

  • the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';
  • the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
  • the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

By order of the Board of Directors
9 December 2013