4 March, 2014

Unaudited results for the nine months and third quarter ended 31 January 2014

Read and download the nine months and third quarter results for the Ashtead Group. You can also view the latest webcast

Financial summary

 Third quarterNine months
 2014 20131Growth22014 20131Growth2
Underlying results3      
Operating profit92.564.248%326.6227.443%
Profit before taxation80.453.554%292.7193.551%
Earnings per share10.1p6.8p51%36.8p24.4p50%
Statutory results      
Profit before taxation77.952.054%285.7164.273%
Earnings per share9.7p6.7p50%35.8p20.8p71%
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 nine month pre-tax profit3 of £293m, up 51% at constant exchange rates
  • Group EBITDA margin improves to 43% (2013: 39%)
  • £564m of capital invested in the business (2013: £427m)
  • Group RoI of 18% (2013: 15%)
  • Net debt to EBITDA leverage2 of 2.0 times (2013: 2.2 times)

Ashtead’s Chief Executive, Geoff Drabble , commented:

"The business continues to have strong momentum, resulting in record nine month pre-tax profits of £293m, up 51% from the prior year. It is particularly pleasing to see both our divisions performing so strongly.

Our strategy continues to be focused largely on organic growth, supplemented by a range of bolt-on acquisitions. We invested £491m in our rental fleet and a further £85m on acquisitions during the period. Our markets remain strong and we anticipate growing the Group's fleet organically in the coming year in the low to mid teens percent range. We remain committed to our debt leverage target of below 2 times EBITDA.

As a result, we now anticipate a full year profit ahead of our previous expectations and the Board looks forward to the medium term with continued confidence."


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

Geoff Drabble and Suzanne Wood will hold a conference call for equity analysts to discuss the results and outlook at 9.00am on Tuesday, 4 March. The call will be webcast live via the link at the top of this release and a replay will also be available via the same link shortly after the call concludes. A copy of this announcement and the slide presentation used for the meeting are available 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 analyst call and conference call for bondholders 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.

Nine months' results

 RevenueEBITDAOperating profit
          (restated) (restated)
Sunbelt in $m1,658.11,368.0755.2571.5494.2357.6
Sunbelt in £m1,048.2860.9477.4359.6312.3225.0
Group central costs  -  -(7.1)(6.5)(7.1)(6.5)
Net financing costs    (33.9)(33.9)
Profit before tax, exceptionals,remeasurements and amortisation292.7193.5
Exceptional items  -(18.0)
Fair value remeasurements  -(7.4)
Amortisation    (7.0)(3.9)
Profit before taxation    285.7164.2
Taxation    (106.2)(60.2)
Profit attributable to equity holders of the Company179.5104.0
Sunbelt  45.5%41.8%29.8%26.1%
A-Plant  30.3%28.4%10.6%5.9%
Group  42.5%39.1%26.1%22.4%

Group revenue increased 23% to £1,250m in the nine months (2013: £1,014m) with strong growth in both businesses. This revenue growth, combined with ongoing operational efficiency, generated record underlying profit before tax of £293m (2013: £193m).

In Sunbelt, rental revenue grew 22% to $1,484m (2013: $1,213m), driven by a 17% increase in fleet on rent and 5% improvement in yield. Sunbelt's total revenue, including new and used equipment, merchandise and consumable sales, grew 21% to $1,658m (2013: $1,368m).

A-Plant continues to perform well and, with the acquisition of Eve Trakway ('Eve'), delivered rental revenue of £181m, up 33% on the prior year (2013: £136m). This reflects 21% 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 events work. Rental revenue growth excluding Eve was 18%, reflecting 10% more fleet on rent and 7% yield improvement.

Sunbelt's strong revenue growth, combined with continued operational efficiency resulted in a record nine month EBITDA margin of 46% (2013: 42%) as 63% of revenue growth dropped through to EBITDA. This contributed to an operating profit of $494m (2013: $358m). A-Plant's EBITDA margin improved to 30% (2013: 28%) and operating profit increased to £21m (2013: £9m).

Group profit before amortisation of intangibles and taxation was £293m (2013: £193m). After a tax charge of 37% (2013: 37%) of the underlying pre-tax profit, underlying earnings per share increased 51% to 36.8p (2013: 24.4p). Statutory profit before tax was £286m (2013: £164m) and basic earnings per share were 35.8p (2013: 20.8p).

Capital expenditure

Capital expenditure in the nine months was £564m gross and £480m net of disposal proceeds (2013: £427m gross and £349m net). As a result of this investment, the Group's rental fleet at 31 January 2014 at cost was £2.5bn with an average age of 29 months (2013: 32 months).

Sunbelt's fleet size at 31 January was $3.4bn. This larger fleet supported strong fleet on rent growth of 17% year on year. Average nine month physical utilisation was 71% (2013: 71%).

Capital expenditure is under constant review, based on market conditions. For the full year, we continue to expect gross capital expenditure of around £700m and net payments after disposal proceeds of around £600m.

Our expectation for next year is that the percentage growth in our fleet will be in the low to mid teens with capital expenditure at a similar level to this year. This level of expenditure is consistent with our strategy at this stage in the cycle of investing in organic growth, opening greenfield sites and continuing to reduce our leverage. As always, our capital expenditure plans remain flexible depending on market conditions and currently, our principal focus is on fleet deliveries through the first quarter of fiscal 2015.

Return on Investment 1

Sunbelt's pre-tax return on investment (excluding goodwill) in the 12 months to 31 January 2014 continued to improve to 26.0% (2013: 23.9%), well ahead of the Group's pre-tax weighted average cost of capital. In the UK, return on investment (excluding goodwill) improved to 9.1% (2013: 4.4%). For the Group as a whole, returns (including goodwill) are 18.3% (2013: 15.3%).

Cash flow and net debt

As expected, debt increased during the nine months as we invested in the fleet and made a number of bolt-on acquisitions and due to increased working capital to support higher activity levels. Net debt at 31 January 2014 was £1,266m (2013: £1,077m) whilst the ratio of net debt to EBITDA was 2.0 times (2013: 2.2 times) on a constant currency basis and 1.9 times (2013: 2.2 times) on a reported basis.

The Group's debt package remains well structured and flexible, enabling us to take advantage of prevailing end market conditions. Following the $400m add-on to the 6.5% senior secured notes due in 2022, the Group's debt facilities are committed for an average of six years. At 31 January 2014, ABL availability was $790m, with an additional $645m of suppressed availability - substantially above the $200m level at which the Group's entire debt package is covenant free.

Current trading and outlook

Our strong performance continued in February. With this continuing momentum in the business we now anticipate a full year profit ahead of our previous expectations and the Board looks forward to the medium term with continued confidence.

1 Underlying 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.